Mathew Ingram is bringing up important considerations with regard to Jim Griffin's plan to Tax ISPs for music data on their networks. I have talked with Jim about this at SxSW, and he hates the term tax, he calls it (I'll paraphrase) "an agreed upon and negotiated fee (without government intervention) with an ISP, which will eliminate the threat of being sued by the RIAA et al." In this sense Mike Arrington is correct in calling it "Protection Money". However, as the courts have determined ISPs are NOT liable for the data transmitting through their lines. So unless the government legislates away this protection, what exactly is the incentive for an ISP?

It is either a tax:
If government does legislate away the ISPs' protection ordered by the courts to support this initiative, then I would say it MUST be a tax.
If so Mathew rightly points out that this a slipper slope for all cultural industries:

"What about the movie companies, and other media companies? What about photographers who claim their work is being stolen?"

And I would add what about other digital content, including software?
Not only do we need to ask, how much is a poem I read on the Net. But how much does Yahoo get for me using Flickr?

Or it's collusion, and quite possibly extortion:
With all major record companies teaming together there is obviously a serious anti-trust issue here.

The fact that Jim has mentioned that he would go after the Universities first, and then the ISPs gets my back up a bit. Why not the ISPs? Well they have no incentive as per above. But Universities are not ISPs, and this at least on the surface has the danger of sounding extortionist (please excuse the inflammatory language, I'm trying to make a point not accuse or imply that anyone is a crook.) Universities are probably the most concerned about students and the institution being sued (successful or not). As such going after the most 'fearful' wether they are in the right or not, certainly would sound like 'protection money' would it not?

An ISP Music Tax, taxes the WRONG people

I have brought this up before, and I said it to Jim directly. The biggest issue I have with this scheme is that it taxes the wrong people. Jim is trying to recover money from the declining sale of CDs, but he is not targeting the people who buy CDs, he's targeting everyone. When he talks he talks about music being purchased now or in the 1990s he always talks about "the average" (or mean) and consumers only being charged about 3-5 dollars per month. However, looking at the average is a red-herring. The fact is MOST people (Mode not Mean) spend 0 (ZERO aka NOTHING) on music in any given month or YEAR. In fact the Median spent on music is also ZERO. The vast majority of the North American population does not spend money directly on music. Jim's plan in effect forces the majority of the population to subsidize a small group of people like me who do buy music. Forcing anyone to subsidize my hobby and entertainment preferences is misguided. Should I subsidize people to play golf? I know a few people who would like that. ;) (Joey!)

Now although I do not agree with Jim's approach to this issue, I have never met a man so open in discussing his plan - especially one so controversial. He will talk to anyone about it - in detail. You won't sway Jim's opinion, but he will listen to you and give respectful responses. You will either be swayed to Jim's way of thinking, which I admit is seductive, or you will reach an impasse where Jim understands your view, and will offer a respectful "we disagree", which is exactly correct. We disagree.