Hollywood Writers & Copyright Scholars Point Out That Piracy Fears Over Open Set Top Boxes Are Complete FUD

from the you-tell-'em dept

We've been covering for a while the ridiculous ongoing fight about the FCC's plan to open up the set top box market to actual competition. Historically, we've always seen that when closed technologies are opened up, it generally leads to much more innovation that benefits everyone. But the big cable companies are freaking out, because locked set top boxes are a huge moneymaker for them: they get customers to "rent" those cable boxes for an average of $230 per year. The industry, as a whole, takes in approximately $20 billion from set top box rentals alone. And they can only do that because the market is locked down. And the cable companies don't want to give that up.

They've been trying various strategies to kill off the FCC's plans, including the ridiculous, but frequently used, argument that opening up set top boxes will harm diversity (the opposite is actually true, but... details). But a key vector of attack on this plan has been to convince their buddies at the MPAA that open set top boxes are just another name for piracy. They've convinced some truly confused Hollywood types to freak out about more innovation in set top boxes meaning more piracy, leading to a series of similar op-ed pieces showing up basically everywhere. And those op-eds have influenced some of our clueless lawmakers too, who are now asking if open set top boxes will lead to a Popcorn Time revolution.

As we've explained over and over and over again, these concerns are complete bunk. The proposal has always made clear that cable providers will still be able to "determine the content protection systems it deems sufficient to prevent theft and misuse, and will not impede the introduction of new content protection systems." In other words, these other boxes will still be encumbered with DRM (as bad an idea as that is...).

Thankfully, now a new flurry of "response" comments have come in and people are pointing out just how wrong the "OMG piracy!" comments are concerning set top boxes. First up, some actual copyright law professors -- including Pam Samuelson, Peter Jaszi, Annemarie Bridy, Betsy Rosenblatt and Rebecca Tushnet, along with Mitch Stoltz from EFF -- have filed a response pointing out that the concerns about piracy from open set top boxes is not particularly accurate. First, they point out that it's not the FCC's job to protect a particular business model of legacy industries, and that the intent of copyright law is, once again, to benefit the public. And it seems like an odd way to do that by locking up set top boxes. They also take issue with the idea that because someone might potentially view infringing works via a set top box, it makes that an issue that (1) the FCC should even care about or (2) that is really about set top boxes at all:

Copyright does not confer a general right of commercial exploitation or “use” of a work. Thus, products and services that touch copyrighted works do not infringe copyright, and do not require a license, except to the extent that they implicate one or more of the exclusive rights. A television set is worthless without video programming to view, and a home audio system has little purpose without music. One could argue that the commercial value of these devices derives from the copyrighted works they touch. Following that reasoning, the sale of TVs and home audio equipment could be deemed a commercial exploitation of copyrighted works. But because these devices don’t ordinarily reproduce, distribute, or publicly perform works (let alone meet the rigorous standards for establishing secondary liability under copyright law), the law does not give copyright holders any right to prohibit their use and sale, dictate their design, or demand royalties.

They further point out that the set top boxes themselves are clearly not infringing anyone's copyright, no matter how much the MPAA and its friends have been repeating this myth. In some sense, the comment suggests that the MPAA is trying to roll back the famed Betamax decision that legalized the VCR (and, I should add, provided a massive new revenue stream for Hollywood).

Commenters in this rulemaking have characterized the proposed use of third-party devices or services to access pay-TV programming with terms such as “exploit[ing],”7 “repackag[ing],” “convey[ing]” copyrighted works to a third party, and creating “new uses on new platforms.” They imply that these activities constitute copyright infringement, or that the Commission should prevent these things regardless of whether they constitute infringement. These terms confuse rather than clarify the issue, because most of the activities they describe are not copyright infringement.

For example, a set-top box or other consumer device that receives TV programming in the home and displays it to the user does not inherently perform or display that programming publicly, nor does it distribute copies of the programming. While such a device is likely to make transitory, internal reproductions of programming in the process of displaying it to the user, such reproductions are not copies for purposes of the Copyright Act.

A set-top box or service might also make long-term personal copies of programming for the customer to watch later, much as a videocassette recorder does. This is firmly established as a fair use, including in systems where the recording is stored at a central facility.

They also use the infamous lawsuits against the Dish Hopper system to remind the FCC that the MPAA and its friends have, shall we say, a rather long and sad history of exaggerating claims to say that basically any new consumer friendly innovation is automatically copyright infringement if it happens to impede their chosen business model:

Such devices and service arise with some regularity, and their status is resolved either through litigation or licensing. For example, several programming providers sued Dish Networks, accusing its Hopper DVR and PrimeTime Anytime service, which skipped commercials upon playback, of causing infringement. After a court ruling that the core features of the device and service did not infringe, Dish reached settlements with most of the rightsholders in which the company agreed to limit the functionality of the service.

Meanwhile, in what might seem like a surprising source, another group calling bullshit on the MPAA is the local Hollywood writer's guild, the Writers Guild of America, West. Their full filing is totally worth reading. They basically make the exact point we've made for years: every time the MPAA fears some new innovation, it's not just wrong, but it often misses how that new innovation actually helps Hollywood in addition to the public:

It is often the case that when new technology emerges incumbent providers make alarmist predictions about guaranteed harms resulting from these innovations. While some concerns may be reasonable, the overwhelming majority of outlined harms are never realized. As CBS Chairman and CEO Les Moonves said in 2015, “All these technology initiatives that supposedly were going to hurt us have actually helped us. SVOD has helped us. DVR has helped us. The ability to go online with our own content, CBS.com, and the trailing episodes – all have helped us.” With the entertainment industry currently dominated by a handful of companies that have never been more profitable, it is clear that new technology and forms of content distribution have helped, not hurt the industry.

While new technology can create some business uncertainty, there is strong evidence that pro-consumer developments that make legal content more accessible to viewers benefits both consumers and content creators.

And then they point out that open set top boxes, combined with an open internet, are almost certainly a good thing:

Like all other entertainment industry participants, WGAW has strong incentives to protect the health of the business. WGAW members are the creators of intellectual property and their livelihoods depend on the ability of studios to license programming for initial exhibition and generate revenue in secondary markets. As such, WGAW and its members do not take concerns regarding piracy lightly. WGAW has consistently advocated for reasoned measures to protect copyright and address infringement. But WGAW members are also strong proponents of market competition, because it leads to more and better choices for consumers and more and better opportunities for writers. WGAW’s position seeks to strike a balance between these objectives, and led to our support for strong Net Neutrality rules and, ultimately, the need to reclassify broadband Internet access services under Title II of the Communications Act. In our advocacy, we were clear that Net Neutrality rules could protect Internet openness without jeopardizing content, as the rules applied only to lawful content, and outlined ways to address piracy that would not harm a free and open Internet. We believe the developments resulting from the open Internet, primarily the growth of a robust online video market, demonstrate the success of a balanced approach. The online video market generates significant revenues for media companies and residuals for writers through the licensing of television series and feature films and is projected to see upwards of 100 professional scripted series released for initial distribution on subscription online video distribution (“OVD”) services in 2016. We believe a similar balance can be achieved in the Commission’s proposed rules. Reasonable concerns can be addressed. Content can be protected while competition is promoted.

They also point out that they're totally against piracy -- in fact, they argue that limiting piracy is important to their careers -- but they don't see how these open set top boxes will actually increase piracy, especially when it will likely create tons of other benefits.

WGAW strongly agrees with the need to protect content and to limit piracy. No less than our members’ livelihoods depend on it. However, WGAW believes that a competitive navigation device market can and will protect content and, consistent with our position in Net Neutrality, we approach the proposed rules by assessing the likely benefits of competition and the risk of piracy. We find that the risks of this proposal are no greater than those presented by an open Internet, where there is strong evidence of a flourishing legal market that is very attractive to consumers.

There's a lot more good stuff in the full filing. Once again, the Writers Guild of America is one of the few voices that rises out of the Hollywood ecosystem that actually looks at the larger picture and how an open internet benefits everyone. In the past, the same organization came out against SOPA, in favor of better copyright law (as opposed to increased enforcement) and (as mentioned in the quoted portions above) in favor of net neutrality (while much of Hollywood opposed it). Kudos to the folks at the Writers Guild for taking a more accurate and holistic view of these issues, as compared to so many others.

Filed Under: competition, copyright, fcc, innovation, piracy, set top boxes
Companies: mpaa, writers guild of america west

Hollywood Screenwriters Worry About Aggressive Copyright Enforcement And Threats To An Open Internet

from the good-for-them dept

The Writers Guild of America West has been quite forward looking for a while. They were a surprise early voice against SOPA, despite representing thousands of Hollywood screenwriters, who you might think would fall in line with the likes of the MPAA. But, just as they were worried about SOPA, they continue to worry about drifts towards copyright maximalism. Like many individuals and organizations, the WGAW sent in comments on the recent "green paper" concerning copyright reform from the USPTO.

The letter opens up by talking about just how much their members rely on copyright to make a living, and how important copyright is -- but then highlights where copyright law has gone too far, and how it risks harming an open internet. Furthermore, the WGAW rightly worries about certain attempts to expand copyright law and enforcement that would further harm the open internet. While this may seem surprising, the reality is that the WGAW recognizes it needs to represent all of its members, and the majority of members have found much greater opportunities by being able to work outside the major Hollywood gatekeepers. They recognizes that tools like YouTube and BitTorrent are actually really useful, rather than dangerous.

Front and center, the letter takes on the ridiculousness of statutory damages -- and not just how it creates problems for the everyday user, but how it has harmed innovation:

While penalties for copyright infringement are an important tool for deterring piracy, the massive statutory damages currently allowed under copyright law have become unmoored from the actual damages caused by copyright infringement. Plaintiff’s demands in some cases have reached hundreds of millions and even billions of dollars without any evidence of the real magnitude of harm. Viacom’s $1 billion suit against YouTube has dragged on for six years and has cost the streaming site over $100 million in legal fees. High statutory penalties are not only often unreasonable but unpayable. Recently, in its case against the torrent site isoHunt, the MPAA requested nearly $600 million in statutory damages despite admitting that $5 million at most would be enough to bankrupt the defendants. Whether a statutory penalty bankrupts infringers once or a hundred times over probably has little additional deterrent effect. In fact, empirical research by economists suggests that lawsuits do not increase legal sales because infringers’ willingness to pay is generally lower than the market price. Rather, the threat of such large damages and the cost of litigation may deter further investment in web sites that serve as venues for independent production and allow users to upload content without gatekeeper permission for fear of liability. Such venues are critical to the promotion of independent content and are only available online because television and film are controlled by a handful of media companies who decide what content consumers have access to. We suggest further study of the effectiveness of statutory damages in protecting copyright.

The letter also pushes back on the idea of making streaming a felony, as has been pushed for a few years now:

It is important to assess the role of statutory damages in limiting copyright infringement particularly because of the Green Paper’s proposal to make streaming unauthorized works a felony. The extension of a policy that may not actually limit piracy or result in recouped monies to content creators has troubling implications for artistic expression. A broad interpretation of such a law could chill innovation through the use of copyrighted works in remixes, cover versions of songs and fair use. For example, artists like Justin Bieber have used YouTube videos of themselves singing covers as a way to gain exposure. Allowing felony charges for such activities could have a chilling effect on artists who use such independent forums an

While the WGAW is open to changes in the notice and takedown procedure, they (unlike many gatekeepers and maximalists) recognize just how valuable the DMCA's safe harbors have been towards innovation, and worry about what will happen if they're weakened:

Rather, the notice and takedown system in conjunction with the safe harbor provisions of the DMCA strike a balance between the interests of copyright owners and ISPs and sites that allow users to upload content without permission. It has allowed sites like YouTube, where artists may distribute content without permission, to flourish while providing copyright owners a method for removing their own content from such sites. The WGAW believes that efforts should be made to improve this system, both for copyright owners and online sites and services, rather than more drastic measures that would fundamentally alter the nature of the Internet by requiring affirmative policing of content. We echo the comments made by the Future of Music Coalition regarding The Stop Online Piracy Act (SOPA). SOPA moved too far from the balance struck by the DMCA and would have had significant implications for free speech, due process and a competitive online market.

Furthermore, they rightly point out that if we're changing the notice and takedown system, it's more important to fix how it deals with "mistaken or abusive notices that target fair use." It's great to see the WGAW recognize that creators benefit tremendously from fair use as well -- rather than the way some in the creative community still seem to think that fair use is something that harms them. It's not. It's something that is a key part of creativity today.

Another interesting tidbit in the letter is the concern the WGAW expresses towards "voluntary agreements" like the infamous "six strikes" plan that a bunch of major ISPs agreed to with the MPAA and RIAA. As the WGAW notes, this can have serious consequences for the internet and its users -- taking away due process and putting the burden on the accused.

In recent years, the enforcement of copyright has expanded to include voluntary agreements such as the Copyright Alert System (CAS) between major media companies and Internet Service Providers. While these agreements have yet to prove their effectiveness in limiting copyright infringement, they have raised concerns regarding their lack of consumer protections. For example, the CAS appeals process places the burden of proof on alleged infringers and requires the payment of a fee to the arbitrator, although the fee is refundable if the challenge is upheld. Several other aspects of the process are problematic: appeals are not allowed until the mitigation stage, where Internet throttling or landing pages are implemented, and there is no further appeal after a review.

Similarly, the voluntary ad network agreement encourages networks to suspend a website until verifying that it is non-infringing; once again placing the burden of proof on accused infringers. Private agreements must not become a way of circumventing due process when an essential forum for free speech and commerce is at stake. If the government is going to endorse private agreements it should also promote transparency and comprehensive stakeholder participation in these initiatives.

Of course, nearly every argument the WGAW makes equally applies to pretty much any other content creator as well. These days, nearly all of them really do rely on an open and free internet, the innovations the internet has allowed, and the ability to more efficiently create, promote, connect, share, find fans and sell. And yet... many coming out of the old industry have this weird knee-jerk reaction against the internet, as if it's an "us vs. them" thing. We've been saying for quite some time that the right way to deal with copyright policy is to realize that content creators, innovators and the public actually have most of their interests aligned. It's not a zero sum game. It's great to see that the WGAW continues to get this, even if many other "Hollywood" organizations are still confused about it.

Filed Under: copyright, hollywood, open internet, screenwriters
Companies: writers guild of america west