The DAT Tax

In 1992 congress passed legislation ( The Audio Home Recording Act of 1992 ) that amends the Copyright Act of 1976 to do the following:

Would you like to know which congresscritters voted for and against the bill? So would I, but I guess we won't find out. It was passed by voice vote, so there is no record. Why do we let them do this?

Why the federal government should act as an agent for Michael Jackson and Madonna is beyond my comprehension. Aren't they able to look out for themselves? Copyright law already addressed the issue in a much more reasonable manner.

If any people are getting screwed by music piracy, they are the obscure independent artists who won't benefit at all from this legislation. In fact, the new law actually screws them worse, because now they have to pay substantially more money to buy "professional" DAT recorders in order to make digital copies of their own music. And they have to pay a 3% tax on the blank tape they use to record themselves!

The law does have one benefit to the consumer. It explicitly makes it legal (or more precisely, non-actionable) for you to copy audio works for your own use ( section 1008). That's right, it is now perfectly legitimate for you to borrow the latest Madonna album from a friend and make yourself a copy, despite the copyright. Pretty neat, huh?

But now that you have a legal right to copy music, the same law requires that equipment have SCMS, to make it difficult for you to exercise that right (section 1002(a)). What kind of sense does that make? And of course the law prohibits the manufacture or sale of devices whose primary purpose is to circumvent SCMS (section 1002(c)).

It is claimed that the purpose of SCMS is to eliminate large-scale piracy, but there is no evidence to suggest that it does so. In reality it only serves to frustrate the consumer.

Presumption of Guilt

When Sony introduced the first consumer video cassette recorders, the motion picture industry was terrified that everyone would pirate tapes and noone would buy them or go to the theatre. They lobbied congress for the imposition of a tax on blank video cassettes. Congress was smarter back then and realized what a fiasco that would be. A tax on blank media is essentially a presumption of guilt. They are in effect saying "We know that everyone who buys blank media is breaking the law, so we're going to fine you for it up front."

SCMS is designed from the ground up to support this presumption of guilt. Let's suppose for a minute that I have my own band, and we use a DAT recorder to cut a demo tape. If we hook up a microphone to the analog input of the DAT recorder, it can't be certain of the status of the source, so it will flag the tape to prevent multiple generation digital dubbing. Not only does Congress presume me guilty, they have mandated that an inanimate object should presume me guilty. Not to mention that I have to pay a 3% royalty tax on the blank tape I used to record my band. It's entirely possible that Michael Jackson and Madonna will make more money from my band than I will.

As has become evident in recent years, the advent of video cassette recorders has if anything increased the revenue of the motion picture industry. This parallels the introduction in 1964 of the Phillips Compact Cassette. The recording industry opposed that, but now derives almost half of their revenue from sales of cassettes. With so much historical precedent indicating that new recordable media formats increase industry revenues, how did they convince congress to impose this ridiculous tax?

The Future?

Now that congress has given us the DAT tax, how long can it be before the motion picture industry tries again? And what about floppy disks? I'm sure the Software Publishers Association would love to get a similar tax on blank floppy disks. After all, they claim the industry loses billions of dollars a year to piracy, although they've never shown any solid evidence of it.

I'm a software author, and my work is sometimes pirated, but the government isn't acting as an agent for me, nor would I want them to. Realistically I know that most pirated software is pirated by and used by people who wouldn't have bought it anyhow. This doesn't make it right, but I can't count it as lost revenue. If the government decided to tax floppy drives and blank floppy disks I'd be extremely pissed off. Then every time I made a copy of my own programs I'd be making Microsoft and Lotus richer.

By just the slightest amount of extrapolation, it is evident that we can expect to see taxes on blank paper and photocopiers. Once all of these new media and recorder taxes are in place, the continued greed of industry and the success of the "lost revenue" justification will inspire them to try to ban libraries. After all, lending out books deprives publishers and authors of revenue. And for that matter, lending my lawn mower to my neighbor deprives the lawn mower company of revenue. Eventually we will be required by law to go to the theatre once a week whether we want to or not, to avoid depriving the movie industry of revenue.

What you should do

I've written to my congresscreatures asking them to introduce new legislation to repeal this mess, but it seems unlikely that it will actually happen. Once someone gets their hands directly into your wallet, how likely are they going to be to let go?

In the mean time I'm only buying 60 meter DDS tape, which isn't subject to the tax because it doesn't fit the definition in section 1001 (4)(A) since it isn't marketed for use by consumers to make digital audio recordings. It also is specifically exempted by section 1001 (4)(B)(ii), because it is primarily marketed and most commonly used for computer programs or data bases.

60 meter DDS media is of higher quality than audio DAT media, has fewer dropouts, and causes less head wear, while being completely compatible with audio decks and providing 120 minutes of recording time. You might expect that it would cost more than audio DAT media, but if you shop carefully it is actually less expensive. It is also possible to find once-used DDS media for substantially less.

Even though it is tempting to use 90 meter DDS tapes for 180 minutes of recording time, I recommend against it, as it is thinner tape which audio recorders are not designed to handle properly. While they may seem to work, they are considerably more likely to break. The audio recorders (as well as some first generation DDS drives) only control the tape tension appropriately for the thicker tape.

120 meter DDS-2 tape should not be used in audio recorders at all, because it is even thinner than the 90 meter tape, and it uses a different formulation.

Note: the references to Michael Jackson and Madonna should be taken only as examples of performers who are so successful that I doubt they need the money from the DAT tax. In fact, I have no idea whether they (or their agents) have filed any claims for it, but if the government offers to give you money, do you turn it down? Anyhow, I have nothing personal against them and I don't mind supporting them when I buy their CDs, but I draw the line at blank tape and recorders.

Similarly I wasn't trying to pick on Microsoft and Lotus.

Disclaimer: I am not a lawyer, and therefore not competent to offer legal advice. Consult your own lawyer before taking any action as a consequence of my statements.
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Last updated April 21, 2001

Copyright 1995, 1996, 1999, 2001 Eric Smith

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