Another Fare Hike?

With little more than a year past since the MTA raised fares, the MTA is once again planning to make the commute more expensive. The MTA released its 2005 preliminary budget which predicts that, without a fare increase, the MTA operating deficits will increase drastically. The NY Times reports: Proposal Would Raise Fares and Tolls in New York. The fare hike and/or service cuts “are needed to close an anticipated $436 million deficit in 2005.” The Daily News reports: Fare hikes loom.
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Remember the story of the boy who cried wolf? Last year, during the run-up to the previous fare hike, state comptroller Alan Hevesi discovered that the MTA kept two sets of books– one accurate, the other which massaged the number to create a more dire financial outlook for the MTA. Instead of deficits, forecasts projected surpluses using the accurate accounting. However, the Appellate Division found that the projection was sufficiently accurate to satisfy the MTA’s duty to the public, even though it took into account the increased debt service payments due starting in 2004:

the MTA records were not “fictional.” Even though the MTA’s request for a fare increase was based on combined 2003 & 2004 financial projections, such notice was neither “fictional” nor otherwise “false and misleading.” Even in the Hevesi report, the MTA faced a projected deficit of over $2 billion for 2003 and 2004 combined. The MTA is not required to base its finances on a single-year basis

These new deficits are due to debt service payments coming due. While previously, the state had contributed to the capital campaign, in order to fund the the last capital program, the MTA needed to borrowing more money.
Additionally, MTA revenues since the fare hike have fallen short of expectations. Apparently, subway riders are using the system more and getting more value for their $70. With Metrocard discount, the average cost of a subway ride is $1.26. Increasing the cost of the monthly Metrocard to $76 and the weekly to $24 would cost riders and average of $1.33 per ride.
The MTA new $27.8 billion capital program will keep the system in an adequate state of repair, upgrade security in the system and embark on the largest expansion of the system in decades with the Second Avenue Subway and the 7 line westward extension.
Gothamist: MTA Admits to New Fare Hikes

File Sharing, Piracy and DRM

Jeevan Jaising: Piracy on file sharing networks: Strategies for recording companies

We find that total music sales and profit of firm is higher, and total piracy (demand on file sharing network) is lower, when the firm sells a downloadable version. We look at the firm’s optimal choice of Digital Rights Management (DRM) protection, and find that revenue decreases with increased protection, and so it is optimal for the firm not to employ any DRM, in the absence of network effects. Listening to music or watching video protected by DRM is cumbersome to users. They have to download license files, there are restrictions on the number of times the file can be copied, and restrictions on the type of devices that can play the file. As a result there is a disutility to the legal consumer, because of which the firm charges lower prices. Loss in revenue due to decreased prices cannot be compensated by the increase in demand, and hence revenue decreases with higher protection. When network effects (NE) is high, and a nominal search cost is above a certain threshold, then non-zero protection becomes optimal. This result is exactly the opposite of what was found in previous research (Conner and Rumelt 1991), where protection was found to be optimal in the absence of NE, and zero protection was optimal if NE is high enough.

DRM subtracts value and is less desirable for the consumer.

In the Trash

Last night, I caught The Bamboo Kids at Trash and they played a good, raucous, fun set. What I saw of openers The Blackouts was solid, but not that memorable.
I was there with Krikor and Phil and we will all be back there next Wednesday, Aug. 4, when The Bosch play Trash, along with The Walk-Ons.
The show starts at 9 PM and readers of this blog will be able to take advantage of an open bar between 9 and 10. Free drinks and live music form a potent combination well worth trekking out to the wilds of Williamsburg.

Post-hoc Parody

In re-evaluating whether the Jib Jab “This Land” animation is parody or satire, Chris Cohen wonders whether a post-hoc evaluation of a work’s parodic content is justifiable: Am I to be labeled a flip-flopper?

The four factor parody inquiry is essentially an objective one because it utilizes this post hoc reasoning – the best stuff your attorney can come up with after the fact. But actually this appears to be an attempt to get at a very subjective question: just what was the author thinking when doing the work, even if the thoughts were in the background or subconscious. In the end what the author was thinking really can be irrelevant to the the legal finding.

The threshold question in evaluating a work’s status as a fair-use parody is “whether a parody may reasonably be perceived.” Campbell v. Acuff-Rose Music. The parody need not even be in good taste. Whether a work is parody must be considered by using an objective, post-hoc evaluation rather than an evaluation of intent. Judging parodic content based on an author’s original intent creates an evidentiary problem, if it doesn’t make a finding of parody nearly impossible to establish. Allowing a post-hoc justification of parodic content serves society by encouraging, rather than chilling, speech and creativity.
It is unfeasible, if not impossible to accurately document the creator’s intent regarding parody. Even for works created with the explicit goal of parodying another work, a creator may not have any evidence to prove that was her intent. Rather (especially in the age of the blog) the creator may have merely written and published a first draft, without notes, without discussion, but with explicit parodic intent. By using an objective standard, courts avoid ruling on insufficient evidence.
Even if it is possible to document the creator’s parodic intent (or lack thereof) beforehand, if a work is unintentionally parodic, it has inherent social value and that expression should be protected by the First Amendment, rather than prohibited by copyright. A work created with satire, comedy, or mere vanity as the creative impetus may yet provide biting insight into the original work and be a most effective parody. With the objective standard, the public is not deprived of such works and any chilling of speech is reduced to a minimum.
In order to support a finding of parody, the work need not have been created with explicit parodic intent, but still must have more than a bare minimum of parodic content. In granting summary judgment and finding fair use parody in Mastercard v. Nader, the court noted that the parodic “message need not be popular nor agreed with. It may be subtle rather than obvious. It need only be reasonably perceived.”
The post-hoc, “lawyer’s best argument” evaluation of parody is used not only because of the evidentiary necessity, but because it encourages, rather than chills speech.

JibJab link roundup

Previously: This Use is Fair Use
Wired News: Sue You: This Song Is Our Song

As far as money is concerned, JibJab hasn’t made much from the popularity of This Land. Spiridellis said the company made about $1,000 from donations in the past week — an option that’s come and gone from the site before. Pitted against an estimated $20,000 in recent Web-hosting costs, it would appear This Land has cost JibJab about $19,000.

Reason: Jabbing JibJab

Nothing says more about the awful state of copyright law today than the fact that this threat actually carries some legal weight. In the 1997 case Dr. Seuss Enterprises v. Penguin Books, the Ninth Circuit of the U.S. Court of Appeals ruled that The Cat NOT in the Hat!, a book by “Dr. Juice” that recounted the O.J. Simpson trial in the style of The Cat in the Hat, violated the Seuss estate’s copyright. Ordinarily the fair use doctrine permits parody, but in this case the court was unmoved: This was a satire, it ruled, not a parody. A parody would be a commentary on the Seuss book, it explained, whereas this borrowed Seuss’s creation to mock something completely different. The obvious retort—that it was a parody of both—didn’t carry any water.

Eugene Volokh: JibJab SoSue

The copyright owners have a pretty good case. If JibJab were making fun of the song, then the cartoon would likely be a fair use. But JibJab seems to be just using the song to make fun of Bush and Kerry, rather than making much of a comment about the song itself — that makes the fair use defense much weaker.

EFF has taken JibJab on as a client

Rather than addressing JibJab’s free speech and fair use rights, Ludlow’s lawyers have now sent threat letters to JibJab’s hosting provider, AtomFilms, as well as to AtomFilm’s upstream provider — evidently in an effort to get “This Land” censored right off the Internet.

Ludlow Music’s demand letter to Jibjab: Re: JibJab Media Unauthorized Use of ‘This Land is Your Land’

Mr. Guthrie’s musical composition is an iconic portrait of the beauty of the American landscape and the disenfranchisement of the underclass. As both a populist anthem and an ironic metaphor, ‘This Land Belongs to You and Me’ contrasts a view of the ‘sparkling sands of her diamond deserts’ and the sun shining on ‘wheat fields waving’ with the city’s working class in the ‘shadow of the steeple near the relief office’ who grumble and wonder if such natural treasures embody their own experience with this country. The Unauthorized Movie does not comment on those themes.

Jibjab (EFF) reply to Ludlow: Re: Jib Jab Media, Inc. and Ludlow Music, Inc.

Jib Jab’s parody addresses, among other things, the lack of national unity that characterizes our current political climate (ending with te optimistic hope that unity might be rediscovered). In short, ‘This Land’ explores exactly the same themes as the Guthrie original, using the parodic device of contrast and juxtaposition to comment on the original.

The Importance Of: EFF Defends JibJab Animation as Parody
Fred von Lohmann learns that Ludlow may not have a defensible copyright on the music: Props to The Carter Family

Turns out Woody Guthrie lifted the melody of “This Land is Your Land” essentially note-for-note from “When the World’s on Fire,” a song recorded by country/bluegrass legends, The Carter Family, ten years before Guthrie wrote his classic song.

See also Salon.com: Class politics, JibJab-style

Hey! You! Get off of my Pod

Today, Apple released a statement responding to Real’s announcement of Harmony:

We are stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod(R), and we are investigating the implications of their actions under the DMCA and other laws. We strongly caution Real and their customers that when we update our iPod software from time to time it is highly likely that Real’s Harmony technology will cease to work with current and future iPods.

Translated: “The next software update to the iPod will prevent Harmony-DRM’ed files from playing on the iPod.”
Derek Slater: Apple Threatens Real

Along with piracy rhetoric, we now get evil hacker rhetoric. Since when is reverse engineering unethical? Oh right – since the DMCA, which Apple is predictably waving around. Let me remind you that Real was one of the first companies to sue the creator of an interoperating product under the DMCA, so it’s not as if they’re the innocent defenders of innovation here. This could make for a fine DMCA battle royale, with copyright holders caught in between. Or it could fade away – we’ll see.

Ernest Miller: Apple Gets Real Serious About Harmony

As if being a hacker is a bad thing. What do you call those two guys who built a computer in their garage and started a little computer company named after a fruit?

BusinessWeek: For Apple, Harmony Is Off-Key

Apple CEO Steven P. Jobs should clearly and firmly squelch Real’s attempt to infiltrate Apple’s music empire. GartnerG2 analyst Mike McGuire sums it up: “At some point, Apple may decide to license [its iPod technology] to others. But they should do it for good business reasons, not because a rival issues a press release or some beta software.”

Doe, ID, and P2P*

Judge Denny Chin ruled that the First Amendment does not protect the anonymity of uploaders of copyrighted files on a p2p system Sony Music Entertainment Inc v. Does 1-40, 04 Civ. 473 (pdf). Sony will be able to obtain from Cablevision the identities of 40 users of the FastTrack p2p network who shared files using their cable modems. The First Amendment does not protect anonymity in this case:

Anonymus speech, like speech from identifiable sources, does not have absolute protection. The First Amendment, for example, does not protect copyright infringement, and the Supreme Court, accordingly, has rejected First Amendment challenges to copyright infringement actions.

While the use of P2P to download, distribute, or make available for distribution copyrighted sound recordings, without permission, is an exercise of speech, that speech is not uniquely expressive enough to deserve the protection of anonymity and thwart the interests of copyright owners.
The discovery request was allowed because: this is a prima facie claim of copyright infringement; the discovery request is sufficiently specific to obtain the desired information (defendant’s identities); no alternative means exist to obtain subpoenaed information; central need for subpoenaed information in order to the case to proceed; defendants have minimal expectation of privacy.
Tech Law Advisor: Up/Downloaders Identities Not Protected by First Amendment

The court in finding against the Doe defendants found that although the First Amendment’s protection extends to the internet, it does not protect copyright infringement. See e.g. Harper & Row and Universal v. Reimerdes. Nor does anonymous speech enjoy absolute protection.

News.com: Judge: RIAA can unmask file swappers

This ruling is the latest decision to clarify what legal methods copyright holders may use when hunting down people who are trading files on peer-to-peer networks. Courts have spent the last few years grappling with how to reconcile Americans’ right to be anonymous with the entertainment industry’s own right to sue people who violate copyright law.

Ernest Miller: RIAA Subpoenas for John Does Valid

Although this is a decision by a single district court, it is likely to be persuasive in other courts though it isn’t binding…. The most important argument involved the First Amendment right to anonymity of the file sharers. While the judge recognized the First Amendment interest, he concluded that it was not sufficient to protect anonymity for filesharing of copyrighted files without any additional speech. This was the right decision.

*read to the tune of “doe, a deer, a female deer”

GAO on E-Voting

GAO: Electronic Voting Offers Opportunities and Presents Challenges (pdf):

Looking toward to the upcoming 2004 national election and beyond, the challenges confronting local jurisdictions in using electronic voting systems are not unlike those facing any technology user. These challenges include (1) performing those security, testing, and maintenance activities needed to minimize risk and adequately ensure that the system operates as intended; (2) managing the system, the people who interact with the system, and the processes that govern this interaction as interrelated and interdependent parts; (3) having reliable measures and objective data to know whether the system is meeting the needs of the jurisdiction’s user community (both the voters and the persons who administer the elections); and (4) making choices about future system changes in light of whether a given system will provide benefits over its useful life commensurate with life-cycle costs, and ensuring that these costs are affordable.