Subject: Model for FOSS financing by consortium
From: "Forrest J. Cavalier III" <>
Date: Mon, 5 Apr 2004 16:56:12 -0400 (EDT)

This has a few paragraphs of introduction that FSBers
do not need.  But what do you think of the idea?

Of course this is not a cure-all, but do you think it will
be useful?  

If the contract price is high enough to cover development,
consortiums or cooperating individuals can join together
to share the cost.  They only get one copy (there is only
one contract, after all), but they can redistribute.

Cooperating individuals must organize themselves, so that
only one entity enters the contract.  The distributor does
not try to organize them.  Do you think the FSF and other
non-profits or governments would find these arrangements

Commercial customers who make purchases may decide they do
not want to redistribute.  They may have reasons which
include avoiding risk/liability or even "don't help the
competitors."  Will this allow certain developers in
certain markets to set the contract price much lower than
the development cost, in order to increase demand?

Has anyone tried or written about this kind of model before?

What kinds of changes should be made to this?



Copyright law and proprietary software licensing enable
software development to be effectively financed by splitting
the cost among many customers. Each customer pays only a little,
but hundreds, thousands, or millions each paying a little can
fund costly projects.

Open source software licensing is greatly challenged to provide
similar magnitudes of financing. By definition, it is not
possible to require each licensee to pay anything.

Others have conceived of "closed source until freed" models for
funding open-source software.  This isn't exactly open-source
software development.  Another characteristic discouraging the
success of this method is that it can be rational to wait, letting
competitors spend money for something you get at no cost just a
little bit delayed.

The idea....

I propose the following arrangements. The first recipient
receive an open-source copy. Cost-sharing is rational.

 1. Distributor agrees to provide a copy of the software only
    under contract.  For example, the distributor provides no
    public FTP or WWW repository.

 2. The contract covers the acts necessary to transfer a copy of
    the software and assent to the terms of the license(s) and
    disclaimer(s) of warranty. 

 3. The contract does not alter any rights and obligations provided
    by the applicable software licenses.  For example, the contract
    does not restrict owners of legitimate copies from redistributing
    the software, nor influence fees for that.

 4. If the distributor knowingly offers or transfers substantially
    the same item or superset thereof to a third party within 12 
    months, the distributor owes the customer a refund equal
    to the difference between the payment tendered and the
    third-party's net cost if it is "substantially lower."
    "Substantially lower" means discounted in excess of the greater
    of 4% a month or $15 a month.