I'm just returning from participating in the OECD's Future of the Digital Economy conference in Rome. The conference attracted about 350 attendees with all expected companies, lobby groups, NGOs, and governments in attendance.  I may write more about the conference next week, but it is worth highlighting my major take-away, namely the clear divisions for what are likely to be the two big battles in this area in 2006 (and possibly beyond).

The first big battle again involves digital rights management (DRM) technologies.  While one might be forgiven for thinking that we're back in 1996 rather than 2006, but DRM came up at virtually every panel.  From my perspective, the news is that there is at least some acknowledgement of the problems involving DRM.  The privacy, security, innovation, etc. issues are still largely ignored, however, there is a tacit (and sometimes explicit) recognition that DRM has created consumer concerns.

The battle lines revolve around the source of these concerns.  For the content companies, the problem lies not with their DRM but rather with the interoperability problems engendered by DRM.  They argue that the problem therefore rests with the electronics companies, who insist on releasing devices that won't recognize all DRM, thus leaving consumers stuck with products that frequently can't be shifted from device to device.  This discussion reminded me of the recent headline during the Canadian election which ran along the lines of "Martin attacks Layton for not attacking Harper."  In this context, the not-particularly catchy headline would be "Content companies attack electronic makers for hurting their attack on consumers with their own attack on consumers."

Incredibly, this is described as a "neutrality" issue.  The content companies would like a device neutral world (except when they don't, such as with the broadcast flag) in which DRM will work on all devices. Indeed, there was some discussion about the need for government mandated interoperability.

Another recurring theme at the conference pointed to the other side in this debate.  It was remarkable to see the amount of discussion around the growing importance of user-generated content.  Although unfortunately tagged as the rise of the "amateur" (or marginally better "creative activation"), there were noteworthy presentations on Creative Commons, the BBC Creative Archive, Flickr, Google Book Search, and blogs (Technorati founder Jason Sifry reported that 75,000 new blogs are being created every day with Japanese emerging as the leading language for blog postings in January – less than 1/3 of blog postings were in English). 

Among this group not only is DRM not needed (which drew a response from Intel's representative who seemed genuinely puzzled at its absence), but it is harmful with negative effects for free expression, user acceptance, as well as privacy and security.  This again brought up the growing call for DRM consumer protection that would better protect against DRM misuse.

Given the "buy your senator an ipod" campaign in the U.S., I expect that this is where the battle will be fought.  Once everyone in the Senate has an iPod and experiences the limitations of DRM, the response from the content companies will be to blame the consumer electronics industry and to try to force changes to devices, not the DRM'd content itself.

The other big battle will be well known to readers of this blog – network neutrality.  The issue surfaced repeatedly in questions and comments as a serious threat to the digital economy.  That said, Verizon was on hand to present its IPTV, which looked a lot like a private Internet.  It isn't described as such of course, but we were told that the residents of Keeler, Texas are thrilled with the new high speed lines that permit transmission of high-definition television and other content.  Content companies also like it – so much so that Disney was delighted to strike a deal with Verizon to deliver its content in this way.  And it turns out that Disney gets more than just fast delivery of content in the bargain as Verizon has agreed to assist them with their IP enforcement efforts.

Ultimately, if the OECD's conference was unable to arrive at a consensus on the future of the digital economy, it succeeded in highlighting where the future battles will be fought.