As we say RIP to the laboratories which invented fibre optic cable, what should be the government response?

The UK government's stated policy is that  the communications infrastructure should support future economic growth.  So should  it let  a once-proud UK telecoms company be broken up into mere products? Nortel  - whose laboratories developed the  fibre optic cable on which 21st century communications depend - is being sold off. Its staff, who possess the skills essential for the Digital Economy,  accuse the administrators of breach of contract, and government support is seriously lacking.

In 2020, will the Internet be a restricted, censored and licenced Internet available only to the rich and the techies? Or a neutral open platform protected by EU law? 

10 years ago we were in the  middle of an exciting  e-commerce revolution - or so we thought. Telecoms became  sexy. Everyone wanted to

The law suit of L'Oreal v eBay could result in an onslaught of rights-holder litigation against ISPs, according to a UK copyright lawyer. It all depends on what the European Court of Justice decides.

Is the L'Oreal v eBay law suit holding holding a perfumed gun at the ISPs heads? The case of L'Oreal v eBay was heard in the UK High Court in May this year, and the judge made a referral to the European Court of Justice on some key questions related to the case.  In particular, the UK court asked the ECJ for an opinion  on the matter of eBay's liability in respect of alleged trademark infringements.

According to a report on the Out-law.com website, a UK copyright lawyer believes that if  the ECJ were to

A court ruling in favour of eBay last week in the UK High Court puts the IPR Enforcement directive, known as IPRED, to the  test. The case, brought by cosmetics firm L'Oreal,  is likely to go to the European Court for a further ruling.

The complaint brought by L'Oreal concerned  sales of alleged counterfeit goods on the eBay online auction site. The judge ruled that eBay is not liable for infringements by eBay users, and that was the headline in most of the media coverage. However, reading the judgement, it is evident that there are other issues at stake here.

In particular, the L'Oreal case rests on Article 11 of the IPR Enforcement directive. This says, in plain English,  that

‘Long Tail’ author Chris Anderson, and Duke University law professor James Boyle, discussed the economics of ‘free’ and the merits of the Creative Commons, in a BBC Radio programme yesterday evening. But to find out why the headline, I’m afraid you’ll have to read the whole article.

Anderson, who uncovered how digital economics means that selling a large catalogue of niche products in small volumes can be profitable, has a new theory. That businesses can give up to 90 per cent of their products and services away free, and still make a profit.

Taken at face value, Anderson’s theory will cause apoplexies among music and entertainment industry executives. But when you think about what he says more carefully, he is

According to reports in the Italian media, Italy's prime minister, Silvio Berlusconi, has come up with a proposal to regulate the Internet. He wants to put it to a meeting of the G8 - the club of the world's leading economies -   which he will be chairing from January. The rationale appears to be that the G8 already oversees the financial markets, and the Internet has no regulation. Berlusconi  is also suggesting that Italy could take the lead.

However, it should not be overlooked that Berlusconi owns a large media empire, which is threatened by developments on the Internet. 

Read the reports here:

Corriere della Sera

Repubblica

A report from the management consultancy firm Booz and Company says that the losses to the telecoms industry from a 3  strikes / graduated response measures, would be much higher than any potential gains to the music industry.

The report, entitled Digital Confidence, securing the next wave of digital growth, carries out a calculation for a hypothetical  scenario of terminating internet access to persistent filesharers in the UK (I stress it is a hypothetical scenario, because the UK government has not said it has plans to implement the 3rd strike - termination of access). 

The report says:

"One aspect often overlooked in public discussions on the merits of “three strikes” is the damage to the overall digital economy as the result of disconnecting significant numbers of users from the Internet. Implications of “three strikes” would need to be understood more holistically. A high-level sensitivity calculation, for the

Report from the ISP Future Content  Models and Enforcment Strategies Summit 2008, Kensington, London

The Motion Picture Association (MPA)  - the  Hollywood trade association -  has weighed into the debate around an Internet levy to pay for publicly-funded entertainment with a clear 'no'. Speaking at the  ISP Future Content  Models and Enforcement Strategies Summit 2008, Ted Shapiro, MPA  legal counsel, warned against "turning the Internet into one big compulsory licence".  Expanding on what he meant, he said "you pay your ISP a few Euros per month and we all get a cheque. 

The possibility of a levy on the Internet is being quietly floated by a number of people as an option to deal with file-sharing, and to generate money for content production. I have mostly heard it from members of the rights-holder community, such as the British music industry, and the French cultural lobby. The people more likely to oppose it, are the ISPs themselves - and that could make for an interesting partnership option for the MPA. 

The Walt Disney Co, one of the leading lobby-ists for 'riposte graduee' in the EU and in France, has had a "fantastic quarter"  for the first three months of 2008.  According to Reuters. Disney outperformed the analysts expectations, with a a 17 per cent rise in operating income, and a 22 per cent rise in profits. Its broadcasting arm, ABC, has claimed a 'double digit' rise in advertising income. The company  was rewarded by the markets with a 1.6 per cent rise in the share price on the day the results were announced.

 Analysts are even saying that Disney is "recession resistant" and is showing more signs of a going through a boom market  than a troubled one. 

The question for the legislators should therefore be whether  such a firm really needs political support like the French 'riposte graduee' proposals, to underpin it, especially to the extent of changing some fundamental European legal principles such as data protection and mere conduit?  

New technologies to improve peer-to-peer (P2P) technologies are appearing behind the scenes - and they offer a pointed  reposte  to the content industries about how to deal with P2P downloading.  They demonstrate ways to solve the problem by technical means. And when you consider this carefully, it means you can  demolish the IFPI / MPAA argument that the only way to reduce P2P traffic on the networks is through litigation and sanction - or that P2P traffic can be reduced at all.  

P4P is a way for ISPs to tidy up the P2P traffic and reduce the amount of bandwidth it users - P4P is, if you like, a technically neater way to transmit P2P traffic, and will help reduce the network management overhead for ISPs.   The core group of companies developing P4P*  consists of a number of ISPs, mostly American, hand in glove with P2P companies like BitTorrent and Limewire, plus a few stalwart equipment manufacturers like Cisco. And  - this is where  it gets really interesting - on the list of observers is - well, you guessed didn't you? - the Motion Picture Association of America, NBC Universal (part-owned by Vivendi), Time Warner and Turner Broadcasting - all the content industry heavyweights. 

The music industry's woes - tumbling CD sales and the competition from online  - get short shrift from  that august organ of the money men, the Financial Times .  Prompted by the £4 billion sale of recording industry giant EMI to private equity company Terra Firma, it asked:

"Is a brash but brainy outsider what the industry needs at a moment of crisis or will such culture clashes make him the latest wealthy amateur to fail on its glittering stage?". The question refers to the financier Guy Hands, who heads up Terra Firma, and who is, according to the FT, creating a number of cultural changes within the company.

The article does nothing to offer to offer comfort to industry executives and in fact offers a rather glum outlook for the immediate future. It  predicts that retail shelf space for CDs will dramatically reduce in 2008, and  that some record labels will disappear as online music promotion grows.

 In a related piece , the FT describes how EMI's new owners are asking for EMI executives to provide greater financial justification for new projects including the provision of business plans before signing new artists or undertaking promotional activity. 

From a policy-making perspective, the two articles provide food for thought at a time when  the music industry continues to lobby heavily for  a  clampdown on music downloading.  The general suggestion is that the industry's  problems are caused  as much by  internal, as   external, factors - and that the solutions will also be found internally.