rasmus fleischer on Thu, 15 Jul 2004 06:03:40 +0200 (CEST)

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<nettime> "Content Flatrate" and the Social Democracy of the Digital Commons


Recently, the communities of IP critics and P2P filesharers has been  
hit by a wave of demands for an "alternative compensation system". June  
2004 was a month of European breakthrough for the idea of "content  
flatrate", as a solution intended to save filesharing, whilst  
"compensating" copyright holders who feel that their traditional means  
of income are slipping out of hand due to technological development.

Here I will discuss this new tendency, its premises, weaknesses and its  
relation to anti-copyright-activism, polemically arguing that  
"flatrateism" is a mistake. My observations are based mainly on German  
discussions, but also on Swedish, French and American proposals of  
"alternative compensation systems".

Of all the different topics on the conference program for Wizards of OS  
3 (WOS3), held in Berlin 10-12 June, two things stood out as objects of  
some hype. The first was the launch of Creative Commons in Germany, and  
the other was the "Berlin Declaration on Collectively Managed Online  
Rights". [1] Both these projects can be regarded as examples of what  
one could term the "social democracy of the digital commons". But  
despite their many similarities, they demarcate two clearly  
incompatible strategies.

"DRM and mass-prosecution of filesharers is not a solution acceptable  
to an open and equitable society". That's the opening statement of the  
Berlin Declaration, which was finalized at WOS under direction from its  
two "fathers": Nettime moderator Felix Stalder and Volker Grassmuck,  
project lead for Wizards of OS. It is in order to stop DRM (Digital  
Rights/Restrictions Management) that the signers of the declaration  
recognize an imminent need to come up with a plausible "alternative  
compensation system".

The authors of the declaration compare the current development of P2P  
with what happened when the tape recorder hit the consumer market in  
the 1950s. Instead of trying to control its use, many European  
countries chose to levy the sales of empty audio tapes, letting  
collecting societies (like the German GEMA, Swedish STIM or American  
ASCAP) channel the collected money to copyright holders. "This system  
that worked well for forty years holds the solution for the digital  
online realm as well", writes Volker Grassmuck. [2] Today, the flatrate  
supporters say, the situation is actually not so different – so let's  
cool the whole thing down and try to make a compromise that prevents  
full-scale confrontation between filesharers and the copyright  

According to the Berlin Declaration, the "Primary goal of copyright  
lawmaking must be a balance between the rights of creators and those of  
the public." Well, the problem with such a premise is not only that one  
will have to ignore the consequences of an evolution that Walter  
Benjamin as early as 70 years ago described as that "the distinction  
between author and public is about to lose its basic character",  
becoming "merely functional; varying from case to case". [3] More  
problematic is that the authors of the Berlin Declaration do not stop  
at trying to balance "the rights of creators and those of the public",  
but also want to "compensate" the whole crowd of non-creative copyright  
holders, from music publishers to heirs of dead creators. A  
"compensation" system channeling money from Internet infrastructure to  
dinosaurs from a past era – isn't that exactly "to protect an outmoded  
business model of a handful of players in a relatively small industry",  
something that the same declaration text defines as "bad policy"?

There are many more questions regarding who to "compensate". In the  
declaration sketches written before Wizards of OS, the concept was  
named "music flatrate", but then in some weeks it underwent a change.  
"Content flatrate" is the new term, as well as the name of an upcoming  
campaign to collect signatures for the Berlin Declaration. [4] Well,  
What is "content"? Music and film seem obvious. What about Oracle  
software at $10.000, should sharing of that be legalized as well as  
covered by a flatrate? Of course not, as such a flatrate would be damn  

All kinds of pictures and textz, from lolita_anal_teen.jpg to  
adorno.txt via PDF versions of daily newspapers, are already being  
distributed in P2P networks. Consequently, those copyright holders must  
also have their part of the money. The proposed collecting societies  
must include an array of book publishers, magazines, picture bureaus,  
music publishers, journalists, media conglomerates... Now it appears  
that quite a high flatrate must be put on every Internet connection,  
every CD burner and every iPod in order to please them all. And the  
economic question of how to weigh all those types of digital "content"  
against each other – the download quantity in kilobytes obviously would  
not work as measure – that question has not even been raised yet.

"Content" seems to be a category entirely defined by the cultural  
industry, to which it simply means anything that you can fill  
one-directional mass media with. But, as Florian Cramer has pointed out  
on the German WOS-list in some very critical posts about the Berlin  
Declaration [5], all talk about "content" is really diffuse.

What about music in the shape of generative software? Does it really  
make sense not to classify a videogame as content, but do it with an  
interactive DVD? Why distinguish between form and content anyway, and  
how to? Florian Cramer also refers to works like the circumventionist  
"The Conceptual Crisis of Private Property as a Crisis in Practice", as  
examples of how any kind of digital media can be packaged into any  
other kind – making the "content"-category even harder to define. [6]

While the flatrateists want to compensate for reproduced "content",  
"free culture" is a key term for the other kind of "social democracy of  
the digital commons" mentioned earlier. The latter tendency could be  
noticed at many parts of Wizards of OS 3, from Lawrence Lessig's and  
Eben Moglen's pompous speeches to small workshops on free media  
projects. Broadening the concepts of free software onto other cultural  
and social domains has in fact been one of WOS' characteristics from  
its start. This year's conference also, as an initiative from its own  
project lead, became a forum for introducing quite a different set of  
ideas. Unfortunately, the tensions between two strategies "free  
culture" and "flatrate" do not seem to have been discussed there at  
depth, nor recognized in the scheduling. Neither did De:Bug, the  
monthly Berlin “magazine for electronic life-aspects", in their issue  
on filesharing and Creative Commons that came out just prior to WOS3.  
[7] After presenting a scenario where one has to choose between the two  
sole alternatives DRM and "Pauschalvergütung", De:Bug of course comes  
to the conclusion to support the latter.

The incompatibility may in fact be a reason for why we today have free  
software, but almost no music that may be freely distributed and  
legally sampled. One important reason is that we do not have a software  
monopoly, but in practice a music monopoly.

The present situation for "free culture" is tantamount to this  
hypothetical scenario: Imagine if every time someone installed any kind  
of free software on a computer, s/he would have to pay a special fee.  
The collected money (minus the share consumed by a pretty big  
bureaucracy) would then be given to programmers that had registered  
themselves at the collecting society, divided in accordance with  
statistics over what software most people use. That would mean, every  
time you would install Linux, you would have to pay a flatrate fee  
going mainly to Microsoft. It's obvious that such an "alternative  
compensation system" would not provide a productive climate for the  
Free Software-movement.

The scenario may sound unrealistic, but resembles the current state of  
the music business. If a song is played on radio, the radio station has  
to pay a fee to the collecting society, representing different kinds of  
copyright holders. It makes no difference if the song is in the public  
domain. Neither if the author of the song actually wants to allow  
non-profit radio stations to play his song without charge – the radio  
station will in any case receive a bill from the music monopoly with a  
fixed sum of money printed on it.

If the artist thinks that this situation sucks and chooses not to be a  
member of these monopolistic organizations, it will still not change  
the status of her/his music much: S/he will earn a little less, while  
Elvis' grandchildren and other big copyright holders will get a little  
bigger piece of the cake. The non-profit radio station will still have  
to pay the same amount, and they can't really choose to play  
exclusively free music - simply because there almost is none. There is  
almost none because the state-sanctioned music monopoly makes it quite  
dumb for a musician not to join a collecting society. As a member, your  
copyrights are impossible to restrict, you can't just tell your friend  
running a café that she can play your music for free is she wants – no,  
now the collecting society is responsible for enforcement of your  
copyrights. This rigid system makes it harder to build an  
infrastructure around "freer" culture, e.g. every "free radio station"  
must pay something of a penalty fee – going directly to the "unfree"  
big copyright holders.
The paradox with collecting societies is that the greater part of the  
played/downloaded content that is "free" (public domain or GPL-style  
licensed), the more money will go to the remainders in the shrinking  
"proprietary" part.

Think about the situation for a while. What I am trying to say is that  
the possibility to offer culture "free as in free beer" can sometimes  
be a necessary prerequisite to achieve the "free as in freedom"  

According to Creative Commons international coordinator Christiane  
Aschenfeldt, the collecting societies are the biggest obstacles for the  
spread of freer licensing in Europe. [8] The Berlin Declaration, on the  
other hand, praises the music monopolies as an ideal solution, able to  
chill down every clash between the development of digital reproduction  
and the prevailing socio-economic structures. "We encourage the  
[European] Commission in its efforts to strengthen the role of  
collecting societies in the digital age", they write.

Even if "Free culture" and "flatrate" are both at the moment gaining  
weight, and that largely through the same channels, they seem like  
incompatible strategies in the long run. What happened last month was  
that quite a lot of people chose to prioritize the latter at expense of  
the former.

June 2004 was a veritable come-out month for the flatrate supporters,  
maybe culminating the 25th when The New York Times published not one  
but two op-eds by American professors calling for music flatrate.  
Referring to a flatrate paper put forward by the EFF in February this  
year, Kembrew McLeod proposed a monthly Internet license fee at about  
$5 that would legalize filesharing while "compensating" the music  
industry with the same amount of money as that they claim they are  
losing. [9]

At the same time, support for the Berlin Declaration was given by a  
"coalition of German civil society", featuring the globalization  
critics Attac, the hacker-alliance CCC, Privatkopie.net and others, in  
the statement "Kompensation ohne Kontrolle". [10] Also this year, a  
German Grüne Jugend (Young Greens) campaign demands a flatrate and  
calls for "safeguarding the balance between authors and consumers".  
[11] Just a couple of days after WOS3, the German section of Attac  
declared its intention to begin a huge informational campaign for a  
content flatrate. [12] That was precisely the same day as another  
conference was held in Paris, where the two French collecting societies  
for performing musicians, Spedidam and Adami, made a common proposal  
for an "alternative compensation system" utilizing a music flatrate.  
While Spedidam wants to legalize P2P uploads too, Adami wants to keep  
them illegal but still collect "compensation" for legalized downloads.  
Anyway, the other representatives of the music industry at the  
conference were against the idea, preferring DRM-protected downloading  
services. [13]

The same positions within the music sector were taken in Sweden last  
year, when Roger Wallis, chairman of the Swedish performing rights  
society SKAP, proposed a kind of flatrate solution, saying that the  
record industry should demand compensation through the ISPs instead of  
attacking filesharers. But also in Sweden, representatives of the  
record industry's IFPI aggressively opposed the idea (with a typical  
Swedish formulation about the terrible dangers of "legitimizing"  
morally objectionable behavior).

Commenting a recent university study on the topic, Roger Wallis however  
noted, somewhat resigned, that "The stupid thing to do was to stop  
Napster, where the traffic was registered. With new P2P-varieties, it  
is much harder to get a grip of what's actually happening." [14]
The surveillance part is just another really problematic part of the  
flatrate concept. P2P filesharing has become much more diverse and  
decentralized since the fall of Napster. Even if companies like  
BigChampagne make statistics on what is downloaded through the dominant  
protocols, the demands for accuracy would be much greater if the  
surveillance provided the economic basis for the entire "content"  
industry. Under a flatrate, it's quite sure that some people would like  
to hide some of their transactions in "darknets", and some would even  
try to manipulate the statistics for profit, raising their own download  
count. And then the industry probably would demand a ban on P2P  
programs without state certification. (In such a hypothetical situation  
we would have to ask ourselves how far from the current DRM discourse  
the flatrate actually gets us.)

According to Florian Cramer, the flatrate demands are based upon  
outdated technical categories. It's getting harder to distinguish  
between local transfers of data, e.g. in wireless environments, and  
"filesharing" between different systems. [15] One could also point at  
the development of portable MP3 devices designed for wireless P2P  
streaming of music between users in public spaces [16] – should those  
downloads also be counted and those WiFi-connections also be taxed with  
monthly fees?

But flatrateism is not characterized by its interest for possible  
advances of P2P technology. If anything it is a relatively resigned  
position; a good illustration is when Felix Stalder explains why he  
finds the flatrate strategy necessary on WOS' German mailing list. [17]  
He depicts a very pessimistic view of the future, where it is quite  
certain that the industry really succeeds eliminating big-scale P2P  
filesharing in five years, at the same time calling himself "relatively  
optimistic" regarding the possibilities to stop DRM.

Felix Stalder writes: "The usefulness of the Declaration is, in my  
opinion, not so much that it proposes a formulated solution, but more  
that it opens a door for the argument, that there is an acting space  
[Gestaltungsraum] beyond DRM and piracy."

The only question left for him now is how to introduce this  
"alternative system" – "through lobbying or through a radical  
practice". It seems implicit that other kinds of  
anti-copyright-activism should be subsumed under the party line of  
"content flatrate", and not mess too much with the music monopoly.

According to Felix Stalder, there is a lack of alternatives to our  
current copyright regime. Except for "content flatrate", the only one  
that has been presented is a rather silly one about "alternative value  
production" and a "clear separation between copyright and copyleft as  
two communication-universes, which run parallel to each other". (He  
mentions as an example the ideas of Oekonux, a German Marxist group  
standing close to the ex-communist party PDS. Oekonux regards the GNU  
GPL as a model for the transformation of society, and their front-man  
Stefan Merten has been very critical of the Berlin Declaration. Some  
"techies" anyway regards Oekonux as mere political infiltrators trying  
to use the free software movement.[18])

This "other alternative" of copyleft as a communication-sphere external  
to traditional copyright, and more explicitly the hype around Creative  
Commons, was also discussed at the seminar "Art as anti-copyright  
activism" at Wizards of OS 3, where Sebastian Lütgert said something  
like this: "Personally, I understand Creative Commons more like a part  
of the social democracy of the digital commons. Kind of 'Let us keep  
some rights and not be too dramatic'."

I think that is perfectly valid also for the Berlin Declaration and the  
"content flatrate" tendency. Flatrate and "free culture" constitutes  
two similar kinds of "social democracy for the digital commons" – but  
that is not to say that they can be allies. Both currents promise that  
they provide methods for mediating the social/economic conflicts set  
off by the rise of digital reproduction. Like always, social democracy  
is about preventing capital from committing suicide in the pursuit of  
short-term profit.

It is characteristic of many flatrateists to downplay the revolutionary  
aspects of digital reproduction, placing P2P on a par with older,  
analogue copying techniques like the cassette recorder. The "creative  
commies", on the other hand, tend to go in the other direction,  
expanding licensing concepts from the field of free software onto other  
"old" forms of culture.

Flatrateism also is keener to demand political action from the state,  
while the people believing more in juridically based licenses like  
Creative Commons and GPL have more of a tendency to oppose every  
political intervention in form of new legislation. They prefer letting  
the technological evolution realize its own immanent potential,  
sometimes described as a return to a previous "pure" state of free  
information flows (Eben Moglen's keynote at WOS3 was an example of  
To say the least, these are sweeping generalizations between two  
tendencies. I am not trying to say that these are two distinct groups  
of people. Rather two different discourses that sometimes flow  
together, but in a near future presumably more often will find  
themselves contradicting each other.

While the "free culture/free software" wing, has rapidly gained  
strength in countries like India and Brazil (whose minister of culture  
is an outspoken supporter of Creative Commons), I have never heard  
about any demands for "flatrate" raised outside Europe and North  
America. That's not strange at all, as Europe and the US would remain  
net exporters of musical "intellectual property" also under a flatrate  
system. The online collecting societies proposed by the Berlin  
Declaration would constitute ideal institutions for channeling large  
amounts of money from Internet users in developing countries, to the  
copyright industry. I don't know if the flatrateists have discussed  
this, although lobbying for flatrate in WIPO has been considered by  
them as a strategy. Anyway, all the processes of copyright law and  
"compensation", piracy and anti-piracy already are global, and will  
continue to be.

The declaration of support for the flatrate, composed by an "alliance  
of German civil society”, is impregnated with an astonishing degree of  
nationalism. "The German copyright has the character of an ideal", they  
write, aiming at the system with collecting societies and fees on  
recording media that now exists in most of Europe. In fact, they don't  
seem to have words enough to describe how fantastic conditions this  
"unique innovation of German copyright", maintaining a "tradition of  
socially committed regulations", have managed to produce (that is,  
before the age of digital reproduction). "The federal government ...  
should live up to their role as ideal and work for the preservation of  
the progressive traditions of German copyright in EU and WIPO." [19]

Oh, this old boring copyright nationalism! Americans praises their  
"fair use" as universal principle, Germans their "Pauschalvergütung"  
and the French the particularities of their "droit d'auteur"...

"Why do you want to intervene in our business?", was the spontaneous  
reaction of German IFPI chairman Gerd Gebhardt when confronted with the  
flatrate proposal, in a debate with Attac arranged by die Tageszeitung.  
[20] Indeed, the Berlin Declaration slogan "compensation without  
control" does not seem to please some of the ones that the  
"compensation" was aimed to please. And if we agree not to please the  
music industry, one could ask, why then propose a new system for  
channeling them money?

The record industry builds its power and its business model upon the  
ability to control people's musical preferences, and it's damn  
important for them not to loose their grip over that. It seems unsure  
how long they could go on motivating their existence in a situation  
where they do not themselves control how music is packaged and  
presented, what kinds of collection albums and boxes are marketed, when  
the different singles of an album is released in different parts of the  
world etc. In fact, one could say that the music industry needs the  
money that current copyright laws grant them precisely in order to  
exercise control. Filesharing undermines the industry's control not  
less than its source of income. If this loss of control would be  
legalized under a flatrate, as the Berlin Declaration suggests, it  
seems really strange why one should keep "compensating" the record  

The call for "Compensation without control" also seems to connect to  
the problem definition of the Free Bitflows conference in Vienna, held  
just one week before WOS3 and co-produced by Felix Stalder. The  
conference was supposed to depart from a problematic that I find very  
well formulated: "there is lots of sharing, but little in terms of  
making a living. Money remains squarely in the hands of the old  
industry. ... In short, the question is how do innovative production  
and distribution come together to support each other. Free Software  
seems to have found a way to do just that, but what about the rest of  
cultural production?" A seminar on "Alternative compensation systems"  
was held there, with Volker Grassmunck holding a lecture titled "In  
Favor of Collectively Managed Online Rights" and EFFs Wendy Selzer  
speaking for their similar but voluntarily based model. [21]

But I'm afraid that this talk about "compensation" obscures the truth  
about the social production of culture, and replaces it with the  
already all-to-common myth that copyright money is functioning (or at  
least functioned, until P2P came into play) as a "wage" for today's  
artists. In fact, nothing could be more wrong. The payments from the  
collecting societies are huge for people holding rights to several  
radio hits made some years ago, but they are insignificant for most of  
the living people involved in "innovative production" of culture right  
now. Nothing of this would be changed by a flatrate.

Cultural producers are making their living in a true multitude of ways.  
The sale of reproductions is just one. People have other jobs part- or  
full-time, they have subsidies of different kinds, some are students,  
many get money by performing live and giving lessons. In general,  
"workfare"-type political measures on the labor market [22] is a far  
bigger threat against most artists than any new reproduction technique.  
That is the far from perfect situation of today, but one has to make  
some conclusions from that: The problems with copyright can't be  
"solved" inside the copyright system. The problems of how to support  
innovative production of culture can't be solved just through reforming  
the distribution of culture.

Other workshops at Wizards of OS probably succeeded better than the  
flatrate workshop in promoting economic support of "innovative  
production and distribution". E.g. the free networks movement,  
represented at WOS3 with workshops on how to set-up wireless  
mesh-routed networks, exemplified with projects already connected to  
Berlin independent art institutions. A possibility for some free  
culture producers to get the necessary Internet connection cheap or  
without cost, eliminating some of those monthly bills that are the  
greatest enemy of all culture. The Berlin Declaration, in contrast,  
demands more expensive Internet connections, so that money can be  
re-distributed to a smaller group of culture producers who has already  
succeeded in making their living.

Bifo, asking "What is the Meaning of Autonomy Today?”, puts some light  
on this whole problematic. The ongoing process of strengthening the  
conditions for a "self-organization of cognitive work" is, according to  
Bifo, "so complex that it cannot be governed by human reason ... We  
cannot know, we cannot control, we cannot govern the entire force of  
the global mind." [23]
This argument is not only based on a radical refusal of cybernetics,  
but also (reminding of Walter Benjamin) on the premise that we are not  
facing a problem to be "solved", but an expression of a social conflict  
encompassing all of society, all kinds of production, reproduction and  
distribution. The authors of the Berlin Declaration, on the other hand,  
seem to suggest the opposite: That human reason can and should propose  
economic "solutions", based on re-organizing the "content"-producing  
sector. The result is a strategy that has a totalizing character,  
proposing a strengthening of the music monopoly rather than its  



Berlin Declaration on Collectively Managed Online Rights: Compensation  
without Control

Compensation Decentral, workshop at Free Bitflows

Walter Benjamin: Das Kunstwerk im Zeitalter seiner technischen  
Reproduzierbarkeit (Suhrkamp 2003), p. 29
English version:
Remixed verion:




Robert Luxemburg: The Conceptual Crisis of Private Property as a Crisis  
in Practice

De:Bug #83. The whole section "Lizenzen ohnr Grenzen", including the  
text "Filesharing zwischen DRM und Pauschalabgabe" is now online at:


The New York Times, June 25. Kembrew McLeod: Share the Music; William  
Fisher: Don't Beat Them, Join Them

EFF: A Better Way Forward: Voluntary Collective Licensing of Music File  
The EFF proposal is similar to the Berlin Declaration in its demands.  
Except that EFF talks about "music" and not "content", the only  
substantial difference is that EFF emphasizes an ambition to minimize  
state intervention, preferring to make the flatrate voluntary. EFF also  
wants the compensation for rights holders to be "based on the  
popularity of their music", while the Berlin Declaration formulation  
is: "based on the actual use of their files by end users".

Kompensation ohne Kontrolle

"Copy for freedom", the campaign website of the Grüne Jugend:  

Attac: Informationskampagne über alternatives Vergütungssystem geplant.  
Stiftung "bridge" fördert Attac-Kampagne zur "Music-Flatrate",  

"Franzosen wollen P2P legalisieren", 2004-06-21

"Musikerverbände wollen Tauschbörsen legalisieren", 2004-06-22


Dagens Nyheter: "Gratis nätmusik långt från gratis", 2003-03-18

"Telia vägrar betala för nätmusik", 2003-03-19

This year in Canada, the music industry has in fact tried to demand  
"compensation" from ISP:s. However the Supreme Court rejected their  
claim on June 30.
Wired: "Canada Nixes Internet Royalties"


Wired: "TunA Lets Users Fish for Music", 2003-12-04



Kompensation ohne Kontrolle

Quoted in a footnote of this civil society declaration is this piece  
from a study (Hugenholtz et al., 2003): "The notion of ‘equitable  
remuneration’, which is rooted in notions of natural justice and based  
on the theory, developed particularly in German copyright doctrine,  
that authors have a right to remuneration for each and every act of  
usage of their copyrighted works (‘Vergütungsprinzip’)."

Die Tageszeitung: "Gläsern sind wir schon längst". 2004-05-25
In the same article, Gerd Gebhardt also makes an astonishly stupid  
statement, trying to compare MP3 piracy with car theft.


See for example Aufheben: "Dole Autonomy versus the Re-imposition of  
Work: Analysis of the Current Tendency to Workfare in the UK"

Franco Berardi Bifo: "What is the Meaning of Autonomy Today?  
Subjectivation, Social Composition, Refusal of Work"

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