While stopping short of specific legislative recommendations, the paper offers a set of principles for lawmakers that's largely focused on avoiding being tied too closely to past practices or to the interests of powerful companies or consumer groups.
"Revisions to copyright law should be made without regard to the vested interests of particular business and consumer groups," the congressional economists wrote. "Instead, they should be assessed with regard to their consequences for efficiency in markets for creative works and other products."
The paper could provide a strong working text for legislators, as they face growing calls from both copyright holders and consumer groups to reshape laws that have been severely tested by the growth of the Net and digital copying technologies.
This year, lawmakers are debating a controversial bill that could shut down commercially run peer-to-peer software companies by holding them liable for copyright infringement that takes place on their networks.
The paper outlines the likely economic effects of several ideas that have been proposed in Congress or by copyright experts, without advocating support for any of them.
Doing nothing--and letting technologies such as digital rights management take their course--could make the market more efficient by letting copyright owners charge varying prices, the paper said. But it also could impose new consumer costs, as well as social costs for enforcement. Continuing piracy--if digital rights management doesn't work--could be harmful for copyright holders and reduce the output of creative works, it said.
A compulsory license plan, which would force copyright holders to allow distribution in return for a government-set royalty, could substantially reduce enforcement and transaction costs. But it might also reduce supply or demand, depending on where the fee was set, the paper said.
Changing laws to favor either consumers or copyright holders could reduce efficiencies of the market but boost the market--if they helped reduce piracy or opened up new digital markets, according to the paper, which was released independently by the Congressional Budget Office, without being requested by a member of Congress.
