The wrong alternative for digital music

Don Tapscott: “As CD’s sales declined, a digital musical surcharge, or something similar, could be assessed by Internet providers.”

So let me get this straight.  To deal with the conflicts between
record companies and their customers over P2P file-sharing, we should
turn ISPs into government-regulated collectors of a mandatory music
tax.  This is an innovative new business model? 

Some sort of compulsory license makes sense for Internet radio, for the
same reason it works for conventional radio.   But radio is
not the same is my personal collection, even in a world where every
piece of music is instantly available from a hard drive in the
sky.  One is broadcasting, an inherently collective
activity.  One is personal.  It is reasonable to use
statistical approximations to allocate broadcast revenue flows, because
that’s the only way to tie them back to individuals.  But my
relationship with my content providers is something different. 
The endpoints of the transaction are easy to identify; the problem is
just the mechanism in the middle. 

iTunes and other second-generation licensed online music services are
getting closer to a workable alternative for the majority of users who
are willing to pay for digital downloads if given a reasonable price
and experience.  A music tax would take all the pressure off the
industry to deliver the product their customers want.  It puts
government in the position of guaranteeing the record companies current
revenue stream, and ISPs in the position of tax collectors.

Anyone who thinks a “digital music surcharge” makes sense should
consider the effect of universal service charges in
telecommunications.  Decades ago, these mechanisms did help people
get phone service in rural areas.  For the past thirty years,
though, universal service charges have been an albatross making true
phone competition nearly impossible.  They created vested
interests who will do anything to keep the subsidy gravy train going.

Tapscott’s article is positively scary.  I know he and those he
quotes, such as Jim Griffin, mean well.  They are looking for a
win-win solution to the current impasse.   But this isn’t
it.