Overall, I think this is fair and workable. It's similar to a proposal that Lessig (I think) made where once a work is created, the copyright holder has 10 years to register it. Failure to register means that the work falls into the public domain. Registration is only $1. Every 10 years, the copyright has to be renewed.
So works that are no longer commercially viable quickly fall into the Public Domain.
Originally Posted by nekokami
Commercial Distribution: Commercial distribution is defined as the ready availability of a work for all fair use by any purchaser.
Which means that almost all DVDs will not be "commercially distributed" because region encoding violates Fair Use.
IHMO, removal of region encoding is a good thing. But the MPAA won't like this at all.
I'd like to see a similar version of this for Patent reform: use it or license it in a reasonable amount of time, or you lose the patent. It would greatly reduce the effectiveness of Patent Trolls.