CBO Says PROTECT IP Will Cost Taxpayers Over $10 Million Per Year To Censor The Internet

from the why-are-we-doing-this-again? dept

Thu, Aug 18th 2011 1:30pm — Mike Masnick

The Congressional Budget Office (CBO), who tries to estimate the cost to taxpayers of all new laws proposed by Congress has put out its report on the PROTECT IP Act, noting that it will cost taxpayers $47 million (pdf) from 2012 to 2016. Specifically, the CBO notes that the Justice Department would have to go out and hire 48 new people (22 special agents and 26 support staff) to act as Hollywood's censor police -- and that the annual cost will run about $10 million. Separately, the CBO notes that outside of the cost for taxpayers, the law would certainly impose costs on a variety of tech companies, by placing liability and requirements on them in regards to sites picked by Hollywood and the Justice Department to censor (you know, sites like that bastion of "piracy," the Internet Archive, which Hollywood has already put on its evil pirates list). However, it does not estimate that additional cost on those companies, since it will depend heavily on "future judicial proceedings."

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Filed Under: censorship, copyright, costs, protect ip, taxpayers

64 Comments

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PlagueSD (profile), 18 Aug 2011 @ 1:44pm

I though we were supposed to be CUTTING spending to balance the budget...This doesn't look like that to me...
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Anonymous Coward, 18 Aug 2011 @ 1:50pm

That's it? Doesn't sound like they're spending enough.

And they'll make it all back and more in tax revenues. Recorded music sales have gone up ever since Limewire was shut down almost a year ago.
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Lord Binky, 18 Aug 2011 @ 1:50pm

Good Ideas Gone Bad.
This will totally help the economy. It isn't like putting those damn pirates in jail reduces the number of paying customers.
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MRK, 18 Aug 2011 @ 1:55pm

Not to mention the lost tax revenue from companies abandoning the US market and moving overseas.
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Anonymous Coward, 18 Aug 2011 @ 1:58pm

Good point Mike. All the more reason to extend private right of action to search engine delisting as well.

@MRK- Protect IP is exclusively targeted at non-US companies. If you are going to comment, it'd be helpful if you knew what you were talking about.
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E. Zachary Knight (profile), 18 Aug 2011 @ 2:00pm

Re:
Correlation does not equal causation.
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Jay (profile), 18 Aug 2011 @ 2:02pm

Re:
If you understood why people would move their servers and business away from Verisign and GoDaddy, you might understand why the US will be losing tax revenue.
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Josh in CharlotteNC (profile), 18 Aug 2011 @ 2:09pm

Re:
And they'll make it all back and more in tax revenues. Recorded music sales have gone up ever since Limewire was shut down almost a year ago.

Are the taxes from recorded music somehow higher than the taxes people spend to buy physical goods? Does the average consumer somehow get more in their paycheck when this law goes into effect? If neither of those are true (and they're not), then you're living in fantasy land.
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Anonymous Coward, 18 Aug 2011 @ 2:14pm

Re: Re:
Oh no, it is definitely the case. When will you people learn that all pirates burn the cash they save through said piracy? That's the real reason for the economic crisis. We are running out of money. Businesses aren't hiring. Jobs are being lost, all because pirates keep burning up the money supply. Ever since Limewire got shutdown the federal reserve has finally been able to print at an equal rate of pirate burning. We have to pass this law so that even more piracy will stop and then the cash printing will exceed the cash burning. It's the only way to get us out of the economic recession.
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Anonymous Coward, 18 Aug 2011 @ 2:17pm

$10 million a year, and for what? More DRM. More unwanted sequels and remakes. More erosion of personal freedom. More autotune. More years of obsolete business models. More lowest common denominator.

Why should my tax dollars serve Hollywood? They're not my government, they're behind the times, and they're pretty much useless. They can't even do movies right anymore.
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Anonymous Coward, 18 Aug 2011 @ 2:18pm

Re: Re: Re:
Exactly! The Pirates destroy the rules of economics where the money they remove from the system causes inflation! Meanwhile the underhanded accounting of the recording industry helps the economy by avoiding taxes.
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MRK, 18 Aug 2011 @ 2:18pm

Re:
"Non-US companies" is a farce. Corporations are multinational. A company can have a site registered with a foreign registrar, and still do business in the USA.

Businesses may choose to abandon the US market if the potential litigation is too much of a liability.

So yes, it would be helpful if you knew what you are talking about.

http://leahy.senate.gov/imo/media/doc/BillText-PROTECTIPAct.pdf
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Donnicton, 18 Aug 2011 @ 2:19pm

Re: Re: Re:
I thought burning money was a felony.

Maybe the RIAA is going about it the wrong way. Perhaps they should be getting criminal charges placed on these pirates for burning their cash, rather than small time civil bullying...
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PRMan, 18 Aug 2011 @ 2:48pm

Re:
"Recorded music sales have gone up ever since Limewire was shut down almost a year ago."

And how does that translate into taxes?

1. Almost nobody pays tax on internet purchases.
2. Even if they do, there's no Federal Sales Tax.
3. Large corporations like the music industry don't pay taxes, they contribute to tax-free campaign funds.
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Anonymous Coward, 18 Aug 2011 @ 2:51pm

Re: Re:
you retard
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Paul (profile), 18 Aug 2011 @ 2:55pm

Re:
Recording music sales have gone up? I looked around for a source on that and can't find it.
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Jeffrey Nonken (profile), 18 Aug 2011 @ 2:56pm

So...
It will cost us an additional $10m+/year to help prop up a dying industry so it can give us more unmitigated dreck and treat its customers like criminals while continuing to withhold content and options that we actually want?

Sign me up, I'm stupid and masochistic. I certainly don't want to see that money go towards education or social services.
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Any Mouse (profile), 18 Aug 2011 @ 2:59pm

Only slightly maybe sorta off-topic
http://chainsawsuit.com/2009/04/21/strip-200/
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Anonymous Coward, 18 Aug 2011 @ 2:59pm

Re:
recorded music sales were also going up while Limewire was running.
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Mike Masnick (profile), 18 Aug 2011 @ 3:04pm

Re:
@MRK- Protect IP is exclusively targeted at non-US companies. If you are going to comment, it'd be helpful if you knew what you were talking about

That's incredibly inaccurate. It may be targeted at non-US companies in terms of takedowns, but it will place tremendous liability on US companies in terms of compliance. That's going to harm US tax revenue also.

The idea that this will somehow make more people buy is a total myth as well, so there won't be any increase in tax revenue from the entertainment industry.
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Anonymous Coward, 18 Aug 2011 @ 3:13pm

Re: Re: Re: Re:
No stupid it causes deflation. When you remove money from circulation prices are forced down because nobody has the money to spend on crap.
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ervserver (profile), 18 Aug 2011 @ 3:16pm

Many groups plan to flood the stream with fake files to make it look like piracy occurred to the censors, while in reality it's a fake file. Won't stand up in court because piracy didn't occur
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Anonymous Coward, 18 Aug 2011 @ 3:16pm

Re:
Cutting ? What world do you live in, the Government doesn't cut. If you're really lucky they're just not grow as fast.
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Anonymous Coward, 18 Aug 2011 @ 3:20pm

Re: Re: Re:
When will you people learn basic economics?

When something is overpriced and the market find a way around it those prices are going down and so it is all the infra-structure that supported that way of doing business jobs will be lost of course in that scenario, OTOH when the market is subvalued jobs are added because more people are trading those things and helping create new markets while maintaining others.

Just look at places like Nigeria(Nollywood), India(Bollywood), China, South Korea and Japan and compare that to markets that are sunking like US and Europe.

Piracy is the way the market will adjust itself to the economic reality of the market, you can like it or not it won't chance the outcome.
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Anonymous Coward, 18 Aug 2011 @ 3:48pm

Re: Re:
Jay, answer this. Does the Protect IP Act (the subject of the article) target foreign or domestic websites?
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Anonymous Coward, 18 Aug 2011 @ 3:48pm

Re: Re:
Jay, answer this. Does the Protect IP Act (the subject of the article) target foreign or domestic websites?
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Anonymous Coward, 18 Aug 2011 @ 4:12pm

Re: Re:
That's incredibly inaccurate. It may be targeted at non-US companies in terms of takedowns, but it will place tremendous liability on US companies in terms of compliance. That's going to harm US tax revenue also.

The idea that this will somehow make more people buy is a total myth as well, so there won't be any increase in tax revenue from the entertainment industry.

Really? Which US companies do you think will dissolve and become foreign companies? American Express? Visa? Paypal? Diner's Club? Mastercard? Or perhaps the ad networks like Google's Adsense? I'm pretty sure a non-US company cannot provide broadband service so that eliminates them. I can't see any company that has skin in the game fleeing the US to avoid the corporate responsibility associated with stopping criminal infringement. I don't recall any banks leaving the US when onerous anti-money laundering laws were imposed on them. How is this situation different?
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Anonymous Coward, 18 Aug 2011 @ 4:23pm

Re: Only slightly maybe sorta off-topic
This is incredibly lame. Is he related to Nina?
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That Anonymous Coward (profile), 18 Aug 2011 @ 4:46pm

Cost to the people - $10,000,000.00
Taxes paid by companies this protects - $0.03

This seems like an amazingly fair deal for us.

We get to carry a dinosaur on our backs, have them try to break the internet (I mean they have already broken your TV by disabling features), and make sure they face no competition that often produces superior product with fewer restrictions.
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E. Zachary Knight (profile), 18 Aug 2011 @ 4:50pm

Re: Re: Re:
wow. You have completely dismantled my argument. I am ashamed and will go hide under my rock.
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Anonymous Coward, 18 Aug 2011 @ 5:00pm

I'm wondering when the Dissolve IP Act will come.
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Anonymous Coward, 18 Aug 2011 @ 5:06pm

Re: Re: Re:
On the blah blah blah it is only supposed to be a tool for foreign websites on practice it can be used against anyone.

Google selling music in China, bad Google we will smack you down, Zynga doing something we don't like, bad Zynga you get a smackdown, Facebook not being able to stop somebody from doing something we don't like bad Facebook take it like a man now.

This means that anything inside the US is now a liability, so people just need to pull out of the US market and close their own markets to Americans because sure as hell if they start claiming jurisdiction for things that happen legally in other countries just because American law doesn't allow it, others countries will slap the USA silly.

Want to see how that will work?

Where is the USA claiming justice against baidu.com? or PPTV.com?

They are not, wanna know why? because the chinese would fuck them up that is why.
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Anonymous Coward, 18 Aug 2011 @ 5:17pm

Re: Re: Re:
Which American companies?

Universal is from Japan, EMI is from France, biotech research is moving away from the US

"Building a Better Goat

Brazil's investment in transgenic animals shows how opposition to such technologies in the United States is opening opportunities elsewhere."
http://www.technologyreview.com/biomedicine/26582/

HP is abandoning hardware manufacturing.

Chinese companies are partying buying American companies.

Do you think all that investiment is sure if anybody can seize assets from those people?

Are you mentally challenged?
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Anonymous Coward, 18 Aug 2011 @ 5:32pm

Re:
When sanity riegns once more
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Anonymous Coward, 18 Aug 2011 @ 5:33pm

Re: Re: Re:
You think anybody will put a penny inside the US economy if they can have their assets seized by some stupid reason like doing something legal in their own countries and being charged with a crime inside the US?

Think again, if you thought the house bubble was bad wait until foreign investment starts dropping.

Study: Buy Chinese and you support Americans
http://www.digitaljournal.com/article/310433

The China Price
Why Chinese investors are overpaying for struggling American companies.
http://www.slate.com/id/2121095/

IBM sold their PC business surprise to foreigners, HP is going to sell theirs too.

http://smarthouse.com.au/Home_Office/Industry/C8G2J6P4

Apple and a tone of other designers depend on foreigners to manufacture something how that affects them?

Not to mention startups that probably will find better places to start a business.

http://developers.slashdot.org/story/11/07/16/1152252/UK-Developers-Quit-US-App-Store-O ver-Patent-Fears
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Mike Masnick (profile), 18 Aug 2011 @ 5:33pm

Re: Re: Re:
Jay, answer this. Does the Protect IP Act (the subject of the article) target foreign or domestic websites?

Again, as I stated, it targets foreign websites for blocking, but to do so, puts liability and threats of legal fights on domestic companies. Why do you ignore this?
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Anonymous Coward, 18 Aug 2011 @ 5:42pm

Re:
I'm wondering when the Dissolve IP Act will come.

It'll be a combination punch.

� The San Andreas fault rips and tears �the big one�.

� The Santa Ana winds drive the flames from the hills all the way down to the ocean.
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Anonymous Coward, 18 Aug 2011 @ 5:47pm

Re: Re: Re: Re:
@Masnick

I guess you missed this comment above:

"hat's incredibly inaccurate. It may be targeted at non-US companies in terms of takedowns, but it will place tremendous liability on US companies in terms of compliance. That's going to harm US tax revenue also.

The idea that this will somehow make more people buy is a total myth as well, so there won't be any increase in tax revenue from the entertainment industry.

Really? Which US companies do you think will dissolve and become foreign companies? American Express? Visa? Paypal? Diner's Club? Mastercard? Or perhaps the ad networks like Google's Adsense? I'm pretty sure a non-US company cannot provide broadband service so that eliminates them. I can't see any company that has skin in the game fleeing the US to avoid the corporate responsibility associated with stopping criminal infringement. I don't recall any banks leaving the US when onerous anti-money laundering laws were imposed on them. How is this situation different?"
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Jamie (profile), 18 Aug 2011 @ 5:51pm

Re: Re: Re:
Where does Mike talk about companies dissolving and moving overseas? He doesn't.

Mike addressed who was affected by PROTECT IP:

* Non-US companies may be affected, because their domains will effectively become invisible to US citizens.

* US companies may be affected, notably those that run DNS servers. Implementing PROTECT IP will require updates to DNS software/hardware, and there will be other ongoing costs of compliance.

Never mind that all of these measures can be worked around by simply using a different DNS server. (PROTECT IP works in the same way as unlisting a number from the phone book. If you can't turn a name into a number, you can't make the call. The workaround is like using a 3rd party phone book, one which still has the number listed.) So in other words, PROTECT IP will cost a lot, but won't do anything to protect intellectual property.
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Anonymous Coward, 18 Aug 2011 @ 5:52pm

Re:
I'm sure you find facts inconvenient, but fwiw Disney's most recent federal tax bill (FY 2010) was 1.5 billion. Not that should matter to you and your argument.
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Anonymous Coward, 18 Aug 2011 @ 6:36pm

Re: Re: Re: Re:
Some times it does and sometimes it doesn't. Your statement makes it sound as if it never does.

I apologize for my previous comment, I was out of line.
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blaktron (profile), 18 Aug 2011 @ 7:05pm

Re:
Canada is more than happy to headquarter them :D Also, its not that far a drive from silicon valley to either Vancouver OR Calgary...
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That Anonymous Coward (profile), 18 Aug 2011 @ 7:13pm

Re: Re:
And was under 4% of their revenue.
My tax bill was computed at 15%.

And I should contribute almost 3 times the corporations contribution to the 10 million a year, so they can ignore a changing market.

Go on this make perfect sense....
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Jay (profile), 18 Aug 2011 @ 7:17pm

Re: Re: Re:
They target both, increasing liability for domestic websites. If you don't answer the summons, you lose your domain through an ICE takedown.

If you're a foreign website you lose your domain, period. So it's more difficult to put up anything and provide a service locally to an area, and it's failed enforcement all around. What exactly is your point? And why did you ignore the point I put up above to ask me this question?
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Jay (profile), 18 Aug 2011 @ 7:18pm

Re: Re:
When politicians stop lying and can tell the truth.
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blaktron (profile), 18 Aug 2011 @ 7:27pm

Re: Re:
Forgive me if I'm wrong, but doesn't every major corporation have 'companies' in every country they do business in? So wouldn't that restriction be a paper shield at best?
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That Anonymous Coward (profile), 18 Aug 2011 @ 7:29pm

Re: Re:
except the need real internet speed and bandwidth, so Canadas off the table :)
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blaktron (profile), 18 Aug 2011 @ 7:31pm

Re: Re: Re: Re:
Do you know how little money it would cost to just run your companies DNS in Canada or mexico?
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Jay (profile), 18 Aug 2011 @ 7:33pm

Re: Re: Re: Re: Re:
Final question:

Why are you moving the goal posts when the statement discusses no increase in tax revenue, not about American companies dissolving?

Perhaps, since the Big ISPs are profiting from torrents, we should shut them down too.
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blaktron (profile), 18 Aug 2011 @ 7:34pm

Re: Re: Re:
That's almost a suggestion to tax revenue instead of profit... which would fail companies faster than any internet bill.

Comparing corporate and personal taxes is irrelevant unless you start counting every penny your employer spends on your benefits, office space, work equipment etc to your gross. You would probably be paying around 5% too when real expenses are included.
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Any Mouse (profile), 18 Aug 2011 @ 10:56pm

Re: Re: Only slightly maybe sorta off-topic
Wow. Miss the point totally, did we?
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The eejit (profile), 18 Aug 2011 @ 11:36pm

Re: Re: Re: Re: Re:
Dude, if you moved the goalposts any further, we'd be playing rugby, rather than football.
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Ed C., 19 Aug 2011 @ 12:50am

Easy solution
If they really want the feds to handle all of the cost of Imaginary Property enforcement, then all the feds need to do is create an Imaginary Property tax! Seriously, if they want to have it counted as real property, with the same legal protections, then its value should be added to their taxes too--including all of the back taxes owed for those retroactive extensions as well. Then next year, after they fail to pay up, they should be arrested for tax evasion and have their "property" confiscated.
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That Anonymous Coward (profile), 19 Aug 2011 @ 3:01am

Re: Re: Re: Re:
Maybe we should tax content producers on revenue instead of "profit".

*digs out and dusts off the Harry Potter - Order of the Phoenix balance sheet*

$612 Million Gross Profit...and it "LOST" $167 Million at the end of the day.
One of the top ten worldwide grosses of all time, and this stinker lost $167 Million.
How the hell could they have afforded to make another one?

Mind you the revenue listed for WB is dated 2007 for 11.7 billion.

I don't have the figures for WB's tax bill for that year, but I am guessing its not huge.

Why would things other than benefits be included in my gross?
They are not my things.
I don't get to take the space set aside for my office if I leave.
I don't get the computer if I leave.
Those are tools required to do the job, owned by the corporation.
They get to depreciate them not me.

What I do know is if I used the accounting practices the studios used, the IRS would audit me in a heartbeat.

And no at the end of the day they still have me in the 15% bracket, but its ok... I make about $1500 more than the poverty line I can afford it.
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That Anonymous Coward (profile), 19 Aug 2011 @ 5:10am

Re: Re: Re: Re: Re:
You mean like once upon a time when some grand standing Attorney General wanted to sue all of the ISPs over Usenet, so they just moved the servers outside of the US?
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That Anonymous Coward (profile), 19 Aug 2011 @ 5:12am

Re: Easy solution
The Feds already collected, they were called "contributions" and "donations" and "political action committees".
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CriTikiLL, 19 Aug 2011 @ 8:40am

What a waste. People will always find away around it. Why don't these people get it. Just because you DL something doesn't mean you'd buy it of you couldn't. I'd like to he very clear about this so can understand. Piracy or whatever you want to call it cannot be stopped, EVER! It's impossible!
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John Doe, 19 Aug 2011 @ 8:53am

It costs $863 million to censor (jail) rapists
We are spending too much money on limiting the freedom of rapists.

If you look at the cost of law enforcement, it always costs money. Duh

Only an idiot like Mike would bitch about the cost without looking that the reduced crime.

But I agree that suing pirates is a better deal for taxpayers.
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Mike Masnick (profile), 19 Aug 2011 @ 9:38am

Re: Re: Re: Re: Re:
Really? Which US companies do you think will dissolve and become foreign companies?

Did I say it would dissolve companies? No. I said it would put serious burdens on US companies. Which is the entire point of the bill. Because the entertainment industry is filled with people who don't want to adapt, the PROTECT IP Act is yet another attempt to get the tech industry to try to turn back the clock for them.

So sad.
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Anonymous Coward, 19 Aug 2011 @ 3:23pm

Re: Re: Re: Re: Re: Re:
It's an attempt to turn the clock forward. The tech industry is getting rich off of content it didn't create or bankroll.

Did you really think such an unfair (and illegal) scam would continue forever?

Silly you.
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Anonymous Coward, 19 Aug 2011 @ 3:31pm

Re: Re:
The idea that this will somehow make more people buy is a total myth as well, so there won't be any increase in tax revenue from the entertainment industry.

No, you ridiculous buffoon, it will indeed result in more sales. Besides simple logic telling you so, there is also the empirical evidence that is recorded music sales going up and staying up since Limewire was shut down.

And the same thing will happen when the rogue sites are blocked; people will cease to spend 10 dollars a month on mediafire, and will buy through itunes.

They're not going to stop consuming music simply because they can't get it for free any more. Seriously, you need to get a grip on reality.
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Jay (profile), 19 Aug 2011 @ 5:13pm

Re: Re: Re: Re: Re: Re: Re:
[citation needed]
Businesses get rich providing services that people want. Your statement is misleading at best.
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Anonymous Coward, 19 Aug 2011 @ 8:32pm

Re: Re: Re: Re: Re: Re: Re:
So, genius, explain this...

Where exactly would the content industry be without the tech industry to provide them with all the cameras, projectors, sound systems, recording equipment, TVs, VCRs, DVD players, computers, software etc., that the content industry uses to both create their content and get it to the masses of people out there that want it?

Sure seems to me like the content industry, who is completely technologically inept, has been making billions off the backs of the tech industry. In fact the only reason they are even capable of creating their content is because of the brilliant minds in the tech industry.

Perhaps its time the tech industry as a whole started their own collection societies and started charging every time one of their inventions was used. Movie studios would have to pay X amount every time they used a camera, theaters would have to pay every time they used a projector plus factor in how many people they're showing to, or by capacity, and pay X amount for that. Sound familiar? Can you see where this would go?

Content is NOT king. The technology that creates it is.

Silly you.
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techflaws.org (profile), 20 Aug 2011 @ 2:12am

Re: Re: Re:
Dream on, skintube. Will be fun to see you whine here again, when you're done with your reality check.
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