“A key component of Microsoft’s new technology is the ‘nexus,’ a minisystem that runs in a sealed-off area in the computer’s memory, where private transactions can be conducted, and where designated security and copyright policies would be enforced.” – Chronicle of Higher Education, Feb. 21, via a great post in Slashdot.

The TeleRead take: You think that the RIAA’s war against file-sharing is a threat to fair use? You ain’t seen nothing yet. Read the Chronicle article if you want the scary details in plain English. An excerpt:

“Colleges would decide whether to buy Palladium-capable software and hardware, and then whether to activate Palladium’s security functions. But practically speaking, they would face enormous pressures to do so, especially if publishers of books, journals, software, and other electronic ‘content’ were to adopt Microsoft’s standard to deliver their materials online. The publishers could dictate that colleges had to use Palladium or else be denied access to the material. That worries many in academe, who believe that publishers would use Palladium to bar some uses of digital materials to which scholars argue that they are entitled under copyright law. That loss may outweigh the advantages of tighter security over student records, the critics say.

“‘If Palladium is adopted, and if other technology vendors exploit it fully to restrict access to copyrighted works, education and research will suffer,’ says Edward W. Felten, an associate professor of computer science at Princeton University, who was the U.S. Justice Department’s chief computer-science expert in its antitrust case against Microsoft.”

Example of the Palladium approach used to crush fair use? The Chronicle warns: “Most of the early controversy surrounding Palladium in academe has concerned its impact on ‘fair use,’ a gray area in copyright law that gives professors and researchers limited but free use of copyrighted materials. In the past, faculty members could decide on their own that ‘fair use’ permitted them to distribute a journal article to, say, 10 students. But publishers could use Palladium’s controls to unilaterally limit use of their materials, such as by restricting professors to a read-only view of the article, from which they could not ‘cut and paste’ the text.”

By contrast, a library-friendly TeleRead approach, would leave it to users to determine whether they were within fair use. Publishers would still have legal recourse if they felt that copyright were being violated. What’s more, with a large enough national digital library fund, this often would be a moot question anyway–with zillions of items on line for free reading by the public and fair compensation for content providers.

Additional thought: Needless to say, with the new controls in place, Microsoft and other big tech companies might wittingly or unwittingly end up harming competitors.

Update: Fittingly, Dan Gillmor just posted an interesting item on Digital Restrictions Management. This isn’t about the Microsoft plan directly, but we’re in the same territory–the rights of readers vs. copyright holders. Among other things, Gillmor writes that “Lon Sobel, a lawyer and editor, says ISPs would pay royalties to copyright holders–he uses the word ‘owners,’ demonstrating his position on this matter–at rates set by copyright holders themselves. Everything would have watermarks. Says he’s been ‘assured’ by DRM companies they can put watermarks/fingerprints on everything out there.”

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