TECHNOLOGY : FIGURING OUT HOW TO PRICE INFORMATION.

Byline: James Boyle 

WE'VE got the information age all wrong.

Someone who reads today's newspapers would conclude that the four most important aspects of the information age are cyberporn, Windows 95, Newt Gingrich and cyberporn.

This is like saying that the most important signposts during the rise of industrial capitalism in America were mass-produced pornographic magazines, Warren Gamaliel Harding and the Veg-O-Matic.

To understand the age we have entered, we need more than a modem, the Bill of Rights and a subscription to Penthouse on line.

We need to figure out how the world changes when information becomes one of the most important forms of wealth and power: When everything from the pattern of purchases revealed by credit card receipts to the pattern of your DNA can become a byte of information, to be bought and sold in the marketplace.

The first effect of this transformation is that intellectual property rights become very important. Around the world, corporations are lobbying their governments, demanding more expansive copyright, patent, trademark and data-base rights.

Governments are complying, granting monopolies over information and information products that make the monopolies of the 19th-century robber barons look like penny-ante operations.

Even human genetic information has been privatized. The gene that indicates a predisposition to breast cancer, for example - called BRCA1 - has been patented by Myriad Genetics.

But beyond such examples lies a more general trend. We are in the middle of an information land grab and no one seems to have noticed.

There is a reason for this apparent blindness. The information economy is unfamiliar territory. When private parties are allowed to exploit federal land, we can all work out the politics of the situation. We know the arguments - and the interest groups - for and against.

But who wins and who loses when the property at stake is intellectual, and the struggle is over the extension of a copyright term or a software patent? As yet, we have no politics of the information age.

We don't see the linkages between issues or perceive a common interest in apparently disparate situations.

Who is affected by the politics of intellectual property? Many groups are, though they might not see it that way.

Some of the most innovative software engineers have objected to the extension of patent law to cover their products. They fear it will help create an oligopolistic software market and diminish inventiveness.

There are complaints about an intellectual property system that has expanded out of control. Yet they don't see those complaints, or their interests, as linked. Part of the problem is that we have not adapted our public debate to the realities of the information age.

Censorship we understand. But the subtler forms of control imposed by ownership of information? These are harder to discuss.

Congress is now considering the Clinton administration's proposal for intellectual property on the Internet, aimed at ``saving'' this thriving medium.

Using a far-fetched theory of what constitutes ``copying,'' the proposal would turn browsing an Internet document into a copyright violation.

It would effectively privatize much of the public domain by transforming the current law of fair use. It would make on-line service providers strictly liable for their customers' copyright violations, thus giving providers an incentive to monitor what you do in cyberspace.

These proposals are extraordinarily far-reaching. They have been criticized by educators, librarians, writers, civil libertarians and entrepreneurs, who fear that the Net will become a pay-as-you-go information toll road.

And yet there is scarcely any coverage of these issues in the press.

The information land grab isn't confined to the Internet. In fields ranging from software to biography, biotechnology to court reporting, the general tendency of intellectual property rights has been to grasp outward, ever outward.

Information products are expensive to create, after all, and cheap to copy - that's why we need intellectual property rights, right?

But the issue isn't so simple. Imagine that you were the intellectual property czar, charged only with creating the most efficient, productive system of property rights. You don't care about free speech, artistic integrity or equal access. All you care about is economic efficiency. What would you do?

At first it might seem that you would just hand out copyrights and patents galore, and even expand the scope of such rights to give innovators a higher return on their investment. The greater their incentive, the more drugs, programs, data bases and gene maps they will develop, right? Not necessarily.

Although courts, economists and U.S. trade representatives often talk this way, the effect of intellectual property restrictions on innovation is not so clear-cut.

Entrepreneurs have to be assured that time spent developing new software won't be wasted, that a profit lies at the end of the tunnel. But they also require an adequate amount of raw material. There has to be an adequate flow of information for the market to function.

Every intellectual property claim is a chunk taken out of the public domain. If classroom copying is sharply curtailed, if we give someone a software patent over basic functions, at some point the public domain will be so diminished that future creators will be prevented from creating because they won't be able to afford the raw materials they need.

An intellectual property system has to ensure that the fertile public domain is not converted into a fallow landscape of walled private plots. We are in danger of forgetting this.

Right now, the ground rules of the information society are being laid down by lawyers (strike one) employed by the biggest players in the field (strike two), all with little public debate or press scrutiny.

This is bad politics in the thrall of worse economics. We need a politics and a press of the information age.

Access to dirty pictures will be little consolation, and speech anything but free, if we let this moment escape our grasp.

MEMO: James Boyle is the author of ``Law and the Internet Age.''