Much of the debate over compulsory licensing has been with regard to how fees are to be raised and distributed (including how the distribution of copyrighted works is to be tracked), which are enormously thorny problems. I don't believe these problems have been adequately solved by any of the schemes with which I am familiar.
However, compulsory licensing raises many more questions than that, and before we can seriously consider such schemes these questions must be answered. In an occasional series, I'll ask some of those questions that haven't gotten nearly the same attention as questions regarding fees and distribution of fees. My questions won't be all inclusive and I encourage readers to add their own questions and answers as well.
What, exactly, is noncommercial use?
Virtually all compulsory license schemes restrict themselves to noncommercial use. They are put forward as a solution to the P2P issue, of file sharing between consumers. No serious compulsory licensing scheme that I am aware of advocates that commercial vendors should be allowed free rein under the compulsory license. Unfortunately, I think that the distinction between commercial and noncommercial use in the P2P realm is not so easy to make. After all, previous compulsory licenses were essentially in the commercial realm. The commercial realm is, in many ways, much easier to regulate than the public or P2P realms (isn't that why people advocate compulsory licensing schemes in the first place?).
Some have argued that one couldn't solicit donations for engaging in noncommercial use. But how far would this restriction go? If I run a blog with a tip jar, am I prevented from having my music webcast link to my blog page? Am I prevented from running public service announcements on the webcast? If I run a neighborhood webcast that includes announcements of local events, would that be considered commercial? If the neighborhood got together and pooled money for such a webcast, would that be commercial? Who would police noncommercial use and how would those who violated this restriction be punished? There are serious questions regarding how this new regime would replace current copyright law on these issues.
Generally, most compulsory schemes would also have at least some limited privileges for noncommercial remixes, adaptations and other derivate works (often including a requirement noting the original author and the fact that modification was without consent). But what is a noncommercial remix? If I am a video artist, is it noncommercial for me to create music videos using popular music and spread them around the internet as a calling card or resume? Is it noncommercial if I identify that it was I who created the music video (and here's my homepage URL) in order to drive traffic to my site? What if my site then has a tip jar? What if my site is hosted on a service that includes third party ads in return for free hosting?
What about advertisements for third parties? Presumably it would clearly be illegal for McDonald's to make a commercial or jingle using someone else's copyrighted works without permission. But what if some fan turns a popular song into a jingle for McDonald's because they love Big Macs, or creates what is essentially a commercial for their favorite sports team using highlights and popular music? I can imagine fans of all sorts of endeavors creating their own commercials - check the web, you'll find them already. The individual creating the mixup gets no commercial benefit, so that would seem to be noncommercial use. Or would it be considered commercial, and how would we make that determination? Would third party advertisements for nonprofits be noncommercial? What about political advertisements? I recall that songwriters have objected to politicians using their songs at rallys ("I'm a Dole Man" as opposed to Isaac Hayes and Dave Porter's orginal "I'm a Soul Man").
A related question regards those who distribute such a work. What happens to P2P users who distribute a commercial work? Their distribution of the work is noncommercial, but the work itself is commercial. In traditional copyright law, if a business creates an advertisement with unlicensed content, damages can be sought and an injunction ordered to prevent distribution of the infringing work. However, once such a work gets out to the P2P public, would the public be liable for continued distribution? Could a copyright holder sue somebody who distributed an unlicensed commercial, even if the distributor didn't create it and gets no benefit from distributing it? Would the company that initially created the work have essentially unlimited liability if the infringing work became popular with the public?
Compulsory licensing has gotten a great deal of interest recently. However, I believe that we need to think a little more deeply about the issues such a system would raise.