(my title, not hers)
At the VI Computer Law World Conference, Yueyue Wang presented a paper titled “Will Fair Use Survive? – Regulating File-Sharing in Research and Education.” Yueyue's central argument rests upon the proposition that fair use is losing out, particularly in peer-to-peer networks. Hence the choice is between not having fair use at all, or finding an alternative, such as 'fared use' – where copyright owners are remunerated for fair uses.
Yueyue justifies this proposition by showing that Fair use != Free Use – citing Coase, she notes that because transaction costs always exist, fair use is never monetarily free.
In my opinion, there is a major flaw in this conception. Fair use may not be 'free', but it is /non remunerated/ – the copyright owner is not rewarded. Transaction costs are waste. The moment you make fair uses remunerated uses, you are effectively saying that anyone who can afford to pay the transaction costs, but not the fair use levy, will be denied access to the information. This is classic deadweight loss in the economic sense.
There is an argument that fair use exists because transaction costs for users to find the copyright owner and ask for permission would be too high for the kind of uses envisaged. Potentially, a compulsory licence would alleviate a significant portion of these, allowing copyright owners to be remunerated for uses on which they could not otherwise not collect.
I don't accept this construction. I believe that fair use is an exception to the copyright monopoly because it is a set of uses which we understand are so important that we can't deny it to anyone. Costs of access (i.e., getting to the library, cost of photocopying, etc) are a different problem – undoubtedly one we should also try to alleviate. I think it's a logical fallacy to go from the preposition that because fair uses are never zero-cost, to the conclusion that copyright owners should be remunerated for fair uses of their works.
I'm not convinced that the only way we can deal with the apparent problem of file-sharing is to charge for fair uses. It would be far too early to say that fair use will not survive if we don't start charging for it, and the dangers of charging for fair uses are simply not justified on the available evidence.