Princeton CS Prof Edward W. Felten (Almost) Live 175
1) From your discussions with them...
by burgburgburg
...do you perceive that legislators are aware of the extraordinarily broad negative implications of these new telecommunications laws that are being proposed/enacted?
Also, if you are aware of it, have the hardware/software manufacturers who will be affected joined together to fight these laws, or has it flown under their radar?
Prof. Felten:
Let me take the second part of the question first. Yes, various manufacturers have opposed the bills. The Consumer Electronics Association, for example, has opposed them. The MPAA has now changed the bills in an attempt to make some of the big manufacturers happier.
As to the first part of the question:
No, I don't think the legislators who support these bills really understand the harm they would do. In my experience, if you can explain to them what the problem is, they will want to do the right thing. (They may not kill a bad bill entirely, but they will at least try to amend it to fix problems.) The hard part is to get their attention, and then to explain the problem in a manner that non-geeks can understand.
The underlying problem, I think, is that geeks think about technology in a different way than non-geeks do. The differences have sunk deeply into the basic worldviews of the two communities, so that their consequences seem to be a matter of common sense to each group. This is why it often looks to each group as if members of the other group are idiots.
Here's an example. Geeks think of networks as being like the Internet: composed of semi-independent interoperating parts, and built in layers. Non-geeks tend to think of networks as being like the old-time telephone monopoly: centrally organized and managed, non-layered, and provided by a single company. It's not that they don't know that the world has changed -- if you ask them what the Internet is like, they'll say that it's decentralized and layered. But the *implications* of those changes haven't sunk deeply into their brains, so they tend not to see problems that are obvious to geeks.
Geeks will look at proposed network regulation and immediately ask "How will this affect interoperability?" or "Is this consistent with the end-to-end principle?" but non-geeks will look at the same proposal and think of different questions. They know what interoperability is, but it's just not at the front of their minds.
2) What sort of positive legislation?
by Viperion
Dr. Felten, do you have a suggestion as to what sort of legislation could be introduced that would soothe the minds of reactionary lawmakers while preserving the rights that we currently enjoy?
Prof. Felten:
Intellectual property policy is in a crisis right now, caused by widespread infringement and the excesses of the legal backlash against it. The biggest problem is hasty legislation that makes the crisis worse by overregulating legitimate behavior without preventing infringement. Obviously, it would be a positive step to repeal some of the bad laws that are already on the books. Part of the problem is a mindset that no matter what the problem is, the solution must be legislative.
But you asked about positive legislative steps, which is a harder question. The holy grail here is a non-harmful proposal that reassures legislators about the continued viability of the music and movie industries.
If you want positive legislation in this area, the best hope is a compulsory license, which would charge all users of the Net a small, mandatory fee. In exchange for this, it would become totally legal to distribute and use any audio and video content on the Net. The revenue from the fees would be split up among the creators according to a formula, based on how many times each work was downloaded or played. If you do the math, the fees can be pretty small while still replacing the revenue the music and movie industries would otherwise lose.
This is a controversial proposal. It does have drawbacks, and I'm not quite endorsing it at this point. But if you want to cut the Gordian knot and end the piracy wars, a compulsory license is one way to do so.
3) Network Identity
by Rick.C
One of the rumored new restrictions is that you may not mask the identity of a network connection. In your opinion, does this refer to the identity of each machine or the identity of the subscriber (who might be responsible for several machines behind a firewall, e.g.)?
In other words, are we talking about "people" or "boxes"?
Prof. Felten:
Some proposed bills would make it a crime to "conceal the place of origin or destination of a communication" from "any communication provider." I'm not sure whether "place" means a geographic location (such as my house) or a network address (such as my IP address) or an identifier (such as a DNS address or email address, either of which might correspond to a person). As far as I know, supporters of these bills haven't said clearly which meaning they intend.
Under any of these three readings, such a ban would cause huge problems. Lots of ordinary security and privacy measures, such as firewalls, VPNs, encrypted tunnels, and various proxies conceal the origin or destination of messages, either to protect privacy or as a side-effect of what they do.
4) Prohibition of what got us here?
by Xesdeeni
Do I completely misunderstand the scope of the DMCA, or would it have actually prohibited the actions of clone manufacturers, starting with Compaq, when they reverse-engineered the IBM PC BIOS in 1984?
It seems this simple fact alone would highlight the ludicrous nature of a law which would prohibit precisely the actions that provided the current state of the industry.
Prof. Felten:
The effect of the DMCA on reverse engineering is complicated. The DMCA does not flatly ban reverse engineering, but if you have to circumvent a technical protection measure in order to do your reverse engineering, then the DMCA will be an issue. The DMCA does have a limited safe harbor for reverse engineering, but it has been widely criticized as too narrow.
I hate to dodge your question, but I'm not really qualified to say whether what the clone makers did would be legal under 2003 law.
5) Signal to Noise
by sterno
One of the problems I see with efforts to try to get the DMCA and similar legislation revoked and prevented in the future, is a matter of signal to noise. Most voters don't care about the DMCA or even know about it, and those who do usually have to worry about more important priorities like the state of the economy or the war in Iraq. So, my question is, how can we possibly make the DMCA and its kin important issues to our legislators? Sure, I can write them, but if they are given the choice of voting for the DMCA and getting some campaign money, or voting against and pleasing a handful of constituents, which will they choose?
It's unlikely that the handful of consitutents is going to vote against the candidate purely because of their DMCA stance. Personally, I'm very against the DMCA but when the election time comes around, I'm not voting for the anti-DMCA candidate, I'm voting for the guy who's going to fix the economy and patch our international relationships. So how can somebody like myself really get their voice heard by the right people when the threat of "voting for the other candidate" isn't credible?
Prof. Felten:
In the short run, I think it's more productive to convince legislators than to threaten them. As you say, there won't be many single-issue DMCA voters.
But even if technological freedom issues like the DMCA aren't the only factor in a voting decision, they still might tip the balance for some voters in some races. Even that is enough to make a difference. Legislators do seem to care what their constituents think, and they do seem to have a fear of doing something that looks stupid afterward.
In the long run, I hope the public comes to see how technological improvement flows from the freedom of technologists to learn and create.
If average voters view censorship of technologists in the same way they view other forms of censorship, we'll be in much better shape.
6) DMCA and EUCD
by Brian Blessed
In your opinion, do residents of Europe and other US-friendly (business-wise) areas have a hope of avoiding being adversely affected by the DMCA (or superDMCA) or its foreign implementations (e.g. EUCD) and is technological civil disobedience the best form of activism to follow?
Prof. Felten:
There is still hope in Europe, but they seem to be heading for the same kind of regulatory regime we see here in the U.S. Parts of the U.S. government have been working hard for years to export the U.S. version of intellectual property law to the rest of the world. All indications are that Europe will follow us down this path.
7) Our position in the world
by TooTechy
Do you see this new legislation altering our ability to work remotely? Will these restrictions place undue hardship on US workers when compared with facilities in other countries? Is it likely that other countries will evolve faster technologically as a result of these draconian measures?
Prof. Felten:
The new regulations on technology will impose a drag on our technological capabilities, and hence on our productivity. If other countries are foolish enough to impose the same regulations on their citizens (and it seems that many will be), then we'll come out even from a competitive standpoint. More importantly, we'll all be worse off than we could have been had we all followed better policies.
8) Strategy
by Meat Blaster
Our current methods of informing the public and the government about the evils of the DMCA seem to be reactive and passive -- defending a lawsuit, writing public responses to the librarian of Congress periodically about the DMCA, setting up resources where the public if they were so inclined could stop by and learn about the problem.
Do you feel that it would be a good time for a shift in strategy towards more active measures such as forming a group to lobby representatives directly, issuing mailings about the DMCA particularly to those whose representatives support legislation like the DMCA/UCITA/SSSCA, or beginning a television ad campaign? Such an endeavor is bound to cost a bit, but I can't help but feel that particularly with 2004 coming up having a bit of organized PR on our side of the debate would be quite helpful.
Prof. Felten:
I agree that positive action is important. I view this as a two-track process.
The first track is the one you suggest, of building up lobbying muscle to challenge harmful regulations. This is challenging, given who is on the other side, and given the tendency of our opponents to buy off important players with special-purpose exceptions to their legal regulations. (For example, the DMCA has special carve-outs for ISPs and device makers.) We're really just starting in this area, but we need to remember how much progress has been made since the passage of the DMCA, which met very little organized resistance at the time.
The second track is to get better at explaining ourselves and at persuading people that they should support our positions. Especially, we need to do a better job of finding folks out there who are our natural allies, and convincing them to join us on these issues, even if we disagree about some other issues.
An example: auto parts manufacturers are worried by recent DMCA developments, such as the case where Lexmark has successfully (so far) used the DMCA against a maker of replacement parts for Lexmark printers. Auto parts manufacturers are worried that the DMCA mindset, which treats unauthorized analysis and interoperation as improper, will leak into their world.
9) Roadblocks to IP protections?
by Xesdeeni
Doesn't the DMCA prohibit a company from investigating a violation of their IP if the violation exists on the other side of encryption?
For example, if company M utilized a software algorithm (putting aside the argument about software patents for the moment) inside an encrypted data stream (audio file, video file, etc.) that was actually patented by company A, wouldn't it be a violation of the DMCA for company A to investigate this violation of their patent rights? And wouldn't any evidence they uncovered in violation of the DMCA be inadmissible if they tried to enforce their patent rights against company M?
Prof. Felten:
This sounds like a likely DMCA violation, but you'll have to consult your lawyer to be sure.
This is just one instance of a more general problem. Laws like the DMCA that limit the flow of information will inevitably make it harder to find out about certain types of misbehavior. Sometimes the misbehavior will be patent infringement. Sometimes it will be a manufacturer misleading their customers about the quality of their product.
We value free speech because vigorous public discussion benefits everybody, though many of those benefits are subtle and indirect. So far, the legal system has not fully realized that speech about technology needs to be valued as highly as speech about other topics. I think the law will eventually catch on, as it becomes clearer to the average person that their experience of the world, and their interaction with the world, is mediated by technology.
10) Tell me...
by Dicky
For the love of God, man, why???
Or to put it slightly less sillily, what was (and is!) your motivation for getting involved in this side of the Computer Science world, say, as opposed to the nice safe, clean theoretical stuff?
Prof. Felten:
I'm not entirely sure myself. Here's the best answer I can manage:
In deciding what to work on, I really just follow my own quirky sense of what is interesting and important. If others find the things I do interesting and important, that's a lucky accident.
But that can't really be the answer to your question, because many of my colleagues follow the same rule, and they end up working on different sorts of things than I do. So I must have a different sense of taste than they do, but I'm not sure why.
The answer doesn't lie in my personal life. When I leave work, I am not at all a rebel or nonconformist. I have a stable, boring, happy suburban life, which I wouldn't change for anything.
I should also point out that I do some work that fits into the traditional academic computer science framework. But you won't read about that on Slashdot.
This says it all... (Score:5, Insightful)
That's too bad, really - I'm sure something like that could squeeze out a couple Evil Bit dupes or the odd M$ bug...
Professor Felten! (Score:0, Insightful)
BURNINATION!!!!!!!!!!!!!!!1~!~ @!1
Professor Felton, the optimist... (Score:5, Insightful)
Average view of Censorship? (Score:5, Insightful)
Given the prevalence of the "if you don't support the war you should shut up and stop supporting terrorism", I'm not sure I agree that the average voter really cares one whit about any censorship that doesn't directly and immediately impact them.
When would it stop? (Score:4, Insightful)
If something like this passes, forced licensing won't likely stop with music; mandated contracts for e-books, movies and even software could be next.
So... the "math" could suddenly get much larger.
And suddenly you could be paying for the downloading of a whole bunch of music, e-books, movies that you never actually downloaded.
Just a thought.
Re:Wouldn't it be nice if (Score:5, Insightful)
Why can't we get a straight answer? (Score:4, Insightful)
I thought he was a lawyer?
The real answer is that not even your lawyer can give you a straight answer. The only way you'll ever find out is if the event actually occurs, parties sue, they don't settle out of court, and the rulings keep getting appealed until it gets to the Supreme Court.
I've had a couple years experience with new technology and the Americans with Disabilities Act (ADA) compliance. While the ADA representatives in Washington would deny vehemently that the law was unclear, the only way you'd really know if you were in violation was if you (or someone else in the same position) were sued and lost.
Re:This says it all... (Score:4, Insightful)
Most readers are probably not going to understand (or care to understand) the majority of current CS research. This isn't because Slashdot readers aren't smart enough, it's just simply because a lot of them don't have the background.
Things like small improvements on the runtime complexity of an obscure clustering algorithm might be important...but they don't necessarily belong on the headlines in your local newspaper.
If you want news like this, simply join the Association for Computing Machinery or subscribe to some other Computer Science journal.
Compulsory Licensing (Score:3, Insightful)
First, as a producer of content: there's some content I want to give away for free. I don't want any recompense for documentation I write, or for some software. I just want it out there getting used. Other stuff I want much stricter protections on -- some of my security-related work, for example. Compulsory licensing schemes I've seen proposed prevent me from doing either of these. In addition, they typically compel a license for distribution, but not for modification. In the case of CDDA files, which must be modified (into MP3s) to be useful, this is useuless.
That ties into the second problem: advocating a compulsory licensing regime without closly tying that advocacy to an inverse DMCA is very dangerous. Imagine a compulsory licensing world where Palladium and TPM-backed digital restrictions management prevent you from copying or modifying the files you acquire. In order for compulsory licensing to be even worth considering, it has to be tied to a ban on opaque formats and on technical measures to prevent modification and distribution.
My Room mate... (Score:5, Insightful)
She does understand, and becomes quite annoyed when I explain to her in the future she won't be able to rip her CDs to MP3 format or download missed episodes of her favorite television show off the internet. The average user does not understand technical details, but they do understand consequences and inconvenience. Don't forget that when explaining a problem to the people, you have to start where the people are at.
Not viable solution (Score:5, Insightful)
This is a dangerous assumption, and I have lobbied against the instantiation of such a system as being too easily abused, ignoring independent artists, and lacks adequate measurements.
Let's start with the 3rd point, that it is too hard to measure. In the Napster universe, this might have been possible, but in a truly peer-to-peer universe like Kazaa, there is no way to adequately measure the downloads. And even if there were, there is no way to associate a download with the semantically acquisition worthy of remuneration; if I download something I already own, rather than burn it again, does that indicate demand? Worse, it is possible to spoof acquisition to boost perceived demand through which remuneration is measured; record companies would just set up Vanatu companies and download copyrights of vested interests.
We have two problems: how to measure downloads that are valid and worth remuneration, and how to not measure downloads that are not valid and worth remuneration. I have proven, I think, in the mathematical sense (I am a mathematician), that these problems cannot be solved in peer to peer like Gnutella; that no application of encryption, authentication and verification can guarantee valid measurements, while still retaining the policies of open peer to peer (ie. no centralization). The question then becomes: If one restricts peer to peer to closed or centralized models that cost money, why would people not just use free open peer-to-peer? It is a question, then, of incentive to use my bandwidth to facilitate a distributed commercial download model, which undermines (mostly) the ability to uniquely distribute end-point secure copyrighted materials; one inherently has the ability to redistribute. Content industries want to control the content, but to implement peer to peer, with download accounting, they must facilitate the one control they most wish to restrict: copying. It seems like flying in the face of a dragon.
The ignoring of independent artists and abuse of the system tie together in that conglomerates can monopolize the remuneration much like they monopolize radio, as a result of the spoofing mentioned above. This happens now, in Canada, as the CPCC (Canadian Private Copying Collective) bases remuneration to the copyright industry from a levy on CD's, tapes, etc., based on radio play time. But radio play time is a function of multinational conglomerates such as ClearChannel, which in turn prohibits independent artists inasmuch as it artificially promotes artists of vested interest.
Great QA, btw.
Re:Mandatory Licensing (Score:3, Insightful)
It seems like you're thinking that auditing for disbursement would have to be perfect, rather than representative. There are lots of ways imaginable for gathering statistical impressions of the traffic on P2P nets without mandatory loss of privacy:
* Paid Nielsen families who run spyware on their own HDDs
* Request monitoring at super-peers
* Network spidering
* A standards-defined API that clients can send an XML ping to, describing the tracks downloaded without any personal info
* Etc.
The anonymity argument is circular: we have no deployed technology in the field that can audit P2P networks without compromising anonymity *because* we have no compulsory license that demands such a system.
DRM is an enormous business that's sucking billions of dollars in capital and millions of talented engineer hours. If the need for DRM were obviated and a business were created for P2P auditing, do you really think that those engineers will be unable to come up with an anonymity-respecting system for deriving a good approximation of the relative popularity of digital music files on P2P nets?
Missing the point.. (Score:5, Insightful)
The assumption that the existing music and movie industries NEED to be viable any longer is the biggest mistake of all. Until this assumption is torn down, we'll continue see all sorts of garbage legislation to try to prop up failing businesses. Let capitalism run it's course for crying out loud! The music industry (read: RIAA members) is already dying due to independent artists, lack of big name album successes, and the general public's unwillingness to pay for old music that ought to be public domain by now. Hollywood may not be too far behind considering how many independent films have recently enjoyed smash successes. Compare also, the proprietary software industry is headed for total collapse due to the Open Source movement. Microsoft is already going down in flames, looking at its stock, the continual bad PR, industry alliances forming against it. (IBM/HP/etc.) Face it, society is striving to become more open! I know it's an overused analogy, but we're seeing the "printing press" revolution all over again.
If you want positive legislation in this area, the best hope is a compulsory license, which would charge all users of the Net a small, mandatory fee.
So basically, the aging big-shot players get to impose a tax on everyone using the internet to prop up failing businesses since their customers have already left for greener pastures. And regardless of whether I partake in the crappy content, I still have to pay. This type of system is straight out socialism. Great idea, Felten. Not.
Re:Mandatory Licensing NOT GOOD (Score:3, Insightful)
As far as I know as of last Christmas none of the 17Million collected has gone to any copyright holder.
The reason I don't think this is good for the Internet, is that it will become a creeping cost that gradually goes up and up. It's also a cost that may have nothing to do with what you are buying! If you are just looking at slashdot, and not looking at music or movies then why should you pay for this tax?
The Internet should be viewed as air. Free to all, and if you pollute it you should pay to clean it.
Natural allies (Score:4, Insightful)
The second track is to get better at explaining ourselves and at persuading people that they should support our positions. Especially, we need to do a better job of finding folks out there who are our natural allies, and convincing them to join us on these issues, even if we disagree about some other issues.
I am a conservative, a libertarian, and a laissez-faire capitalist. I believe in minimizing government control. As such, the DMCA is clearly something I must stand against on principled as well as practical grounds. I am your natural ally.
Sure, we disagree on some things. But is it worth it to let those stand between us when it comes to opposing the DMCA? Is it worth it to drive off people like me by alienating them on slashdot? I really do believe the principle of least government control is what you want ... and you will find that in conservatism and libertarianism. And even if we never agree on that principle, we agree on many, many of the specific issues (intellectual property laws, DMCA, internet regulation, free speech)
Court conservatives. Make them see that draconian laws like this just build up big government. Court libertarians. Make them see that intellectual property laws abuse state power to impose an artificial and damaging scarcity. Minds are changing, one at a time.
Re:Mandatory Licensing (Score:2, Insightful)
1) I don't see it working on the international level. I cannot imagine (say) France paying the record companies in the US, for example.
2) I don't think a fair solution to dividing the money exists. Any solution based on measurement of downloads or similar will instantly create a small industry around 'download boosting'.
3) Why should it be limited to music and video's? Why not software, books, patents, etc.?
4) Would this just be for personal accounts, or also for professional accounts? Would Microsoft have to pay a charge for every employee that has an account on their system (or do we simply assume that noone ever downloads anything at work?)? What if I had a one-man company?
5) Who decides how much money the record industry will get? The record industry themselves? The US government? The UN? How will we stop them from lobbying for ever-increasing income (which they will be sure to do)? How will we respond to lesser economic conditions, like now?
6) What incentive will exist for the record companies to create saleable songs? They might just as well sell white-noise (song argue they already do, but that's another point), once they have a guaranteed income.
Re:When would it stop? (Score:3, Insightful)
Mod parent up! (Score:2, Insightful)
Re:Why can't we get a straight answer? (Score:1, Insightful)
It is perfectly reasonable for him to teach a course that considers law issues in broad strokes, while still declining to answer specific legal questions. And I'm sure he could always walk across campus and consult one of his colleagues in the law school when necessary.
Re:Mandatory Licensing (Score:2, Insightful)
Excellent quote (Score:1, Insightful)
I'm not sure if any comments are even needed with this one...
Re:Mandatory Licensing (Score:3, Insightful)
Mandatory licensing is unfair because people are forced to pay a fee even if they don't take advantage of what they are paying for. Everyone would be paying for music and movies and whatever other content people start pirating, even if they don't partake of those sources of entertainment.
(This is assuming that everyone is charged this "content tax" just to use the net. If we try to inspect what people download to see if it's music, etc., that just raises enormously more problematic issues in terms of privacy, restrictions on encryption, and a host of other negative consequences.)
Mandatory licensing is misguided because it throws in the towel prematurely. We don't know, yet, whether technological means for protecting content are going to succeed. The situation is still in flux, with proposals like Palladium and DRM, or the new ideas from Cryptography Research [cryptography.com] still offering the potential for letting content producers get paid.
Mandatory licensing is unimplementable because there is no way to fairly divide up the funds. Realize that the amount of money raised by the modem tax, excuse me, the content tax, would have to be comparable in size to the combined revenues of the music, movie, game and software industries, if we accept that those goods are all going to be pirated and this tax will replace their current sources of funding. We're talking probably $50 billion or more. What do you think is going to happen when you put that pot of money on the table and try to allocate it based on how many times things get downloaded?
People are going to cheat! They'll build all kinds of download bots and use other methods to get their statistics inflated. It's hard enough to measure popularity today; once you have tens of billions of dollars riding on the outcome it's going to be impossible.
That's one thing markets are good at: by making people pay for what they get, they reveal very clearly which items are worth more to the public than others. Trying to replicate this information service using some kind of polling or sampling of downloads is not only going to be invasive, it is just not going to work.
I wish we could nip this stupid idea in the bud, but apparently it is the best the "freedom" community can do. Taxing net users so the government can subsidize the arts is the worst possible solution to our problem.
Re:Average view of Censorship? (Score:3, Insightful)
Conservative judges are pro-states rights? Bah. That's why the enforcement of federal drug laws against the state legalized marijuana clubs for medical marijuana have all been thrown out, right? (that's sarcasm). Conservatives such as Bush and the conservative judiciary etc are all in favor of states rights when it suits them, and turn the concept on its head when it doesn't. Some of the most amazing judicial brain twisters have come from the Supreme Court (Scalia for example) trying to justify how a given restriction on the states doesn't really violate the idea of state's rights. I'm all for "strict construction" in constitutional interpretation, except that the idea seems to be used more frequently as a proxy for "states rights to allow discrimination". I've followed a lot of S.C. decisions and dissents and it's amazing how the politics of a situation seem to turn directly analogous situations into diametric opposites in the view of the members of the court (and that applies to both sides of the political aisle, so don't let me give you the idea that I think only conservatives do this--but only conservatives use "strict construction" as their excuse).
Re:This says it all... (Score:4, Insightful)
Thats because the amount of basic background knowledge required to comment on something like a legal viewpoint, or express an opinion on DMCA isn't as much as it would be when it comes to talking about the Poincaré Conjecture or Finite Automata Theory
Besides, a legal viewpoint is more of a personal expression - it might just affect you tomorrow, but Spintronic Devices [slashdot.org] aren't really gonna affect any of us tomorrow, contrary to whatever you may want to believe.
I guess its more of a social thing.
Re:Erosion of traditional conservative values (Score:1, Insightful)
Not that the other lot is much better. In a few respects, it could actually be worse, as (unlike most big, powerful corporations) the copyright cartels seem to favor the Democrats over the Republicans. However, most lobbyists divide their bribes between parties, ensuring that they get what they want whoever wins. Every senator voted for the DMCA.
Compulsory license (Score:3, Insightful)
I have three big problems with it:
1) Unfairness in the collection - How will they possibly be able to determine a fair method of determining which bits you download are restricted from distribution by copyright, and which ones aren't? You know damned well that this will just end up being a $/mb tax that will be charged to the ISP, who will have to pass this charge on to all consumers. Workers just doing business over an encryted tunnel all day (working on no content that applies to the piracy debate) will be charged far more than the occasional Kazaa user, who is actually doing the illegal/unethical (pick your adjective) act.
2) Unfairness in the Distribution - There will never be a just method of distribution of these funds. Obviously, the MPAA/RIAA will be first in line at the trough. With them most assuredly getting the lion's share of the payments from this tax (with no reliable data to prove what percentage of their content was distributed), they will be in all the better position to put the squeeze on distributors not in their organizations (ie. the Indies). Such as regime would take away an Indie's ability to find a way to profitably distribute their content online, and receive only crumbs from the tax grab.
3) The bad precident - Once this is set up and enacted into law, how difficult do you think it would be to increase the tax rate up a few notches? Or to add more beneficiaries (think software companies, book publishers, magazine publishers, etc.) to the line-up with their hands out for free money? It will not be very long before the idea of the Internet to be used as a decentralized method of sharing information from one computer to another will be just too expensive to use in this fashion.
If you need a good idea on how bad it can be already for this kind of idea, look up information on Canada'a experience with taxing CD-Rs. Currently, there is debate over an amendment to increase this tax, and levying new taxes on removable hard drives and flash memory. As an example, the Creative Nomad player will more than double in price, and Creative has said that it will pull the product if this passes. All the while, not a penny of the money that has already been collected (millions of dollars) has been distributed because of arguments over the formulas.