, and aspirations. New techniques, new ways of doing the same things, and doing new things - all invoke harmful and beneficial effects to which society has not been accustomed. Property rights develop to internalize externalities when the gains of internalization become larger than the cost of internalization. Increased internalization, in the main, results from changes in economic values, changes which stem from development of new technology and the opening of new markets, changes to which old property rights are poorly attuned". (2)Given this statement, it would seem that based on the current progress of technology, new property rights will eventually emerge. No matter what the courts may rule today, given time, the way in which information and technology is being used today (i.e. Napster providing free music), the record companies will either have to internalize the externality (consumers desires and wants - which will be satisfied by peer to peer technology in light of what the courts may rule) and eventually see gains from doing so or give over the demand to other ways of satisfying consumer desires. Napster has shown a new way of doing things, a new technique. Record companies that follow a strategy based on controlling content are doomed for failure. The record industry needs to begin creating services providing the content the way consumers want it and by utilizing the formats and models consumers desire.Considering the pace at which technology is evolving, a solution from the courts in order to put the copyright issue to rest (at least temporarily), would be to put the onus of proving copyrights on to the record companies through current digital technologies that supply digital envelopes, " Copyrighted music or movie or video files can be sealed at the bequest of the copyright holders. These digital envelopes travel with the underlying digital file, refusing access to the goodies within until the consumer antes up a fee...
