Rep. Polis Asks Treasury To Ban Dollar Bills, Mocking Senator's Request To Ban Bitcoins

from the you-win dept

Last week, we wrote about the technologically clueless grandstanding Senator Joe Manchin's bizarre request to the Treasury Department and the Fed that it figure out a way to ban Bitcoin. Almost everything in Manchin's letter was ill-informed, right down to his ridiculous assertion that we need to copy Thailand and China (who haven't really banned Bitcoin) to get ahead of this "trend." Of course, as we noted, along with a whole bunch of factual inaccuracies, almost all of Manchin's complaints applied equally to cash.

So, in response to a totally technologically clueless elected official, up steps Rep. Jared Polis, perhaps the most technologically knowledgeable elected official out there, with a counterproposal. He basically rewrote Manchin's letter, but replaced Bitcoin with the dollar bill, highlighting the sheer absurdity of Manchin's request.

I write today to express my concerns about United States dollar bills. The exchange of dollar bills, including high denomination bills, is currently unregulated and has allowed users to participate in illicit activity, while also being highly subject to forgery, theft, and loss. For the reasons outlined below, I urge regulators to take immediate and appropriate action to limit the use of dollar bills.

By way of background, a physical dollar bill is a printed version of a dollar note issued by the Federal Reserve and backed by the ephemeral “full faith and credit” of the United States. Dollar bills have gained notoriety in relation to illegal transactions; suitcases full of dollars used for illegal transactions were recently featured in popular movies such as American Hustle and Dallas Buyers Club, as well as the gangster classic, Scarface, among others. Dollar bills are present in nearly all major drug busts in the United States and many abroad. According to the U.S. Department of Justice study, “Crime in the United States,” more than $1 billion in cash was stolen in 2012, of which less than 3% was recovered. The United States’ Dollar was present by the truck load in Saddam Hussein’s compound, by the carload when Noriega was arrested for drug trafficking, and by the suitcase full in the Watergate case. 

Unlike digital currencies, which are carbon neutral allowing us to breathe cleaner air, each dollar bill is manufactured from virgin materials like cotton and linen, which go through extensive treatment and processing. Last year, the Federal Reserve had to destroy $3 billion worth of $100 bills after a “printing error.” Certainly this cannot be the greenest currency.

Printed pieces of paper can fit in a person’s pocket and can be given to another person without any government oversight. Dollar bills are not only a store of value but also a method for transferring that value. This also means that dollar bills allow for anonymous and irreversible transactions.

The very features of dollar bills, such as anonymous transactions, have created ubiquitous uses from drug purchases, to hit men, to prostitutes, as dollar bills are attractive to criminals who are able to disguise their actions from law enforcement. Due to the dollar bills’ anonymity, the dollar bill market has been extremely susceptible to forgers, tax fraud, criminal cartels, and armed robbers stealing millions of dollars from their legitimate owners. Anonymity, combined with a dollar bills’ ability to finalize transactions quickly, makes it very difficult, if not impossible, to reverse fraudulent transactions.

Many of our foreign counterparts already understand the wide range of problems that physical currencies can have. Many physical currencies have enormous price fluctuations, and even experience deflation.  20 years ago Brazil had an inflation rate of 6281%.  In 4 years (2001 to 2005), the Turkish Lira went from 1,650,000: $1 to 1.29 to $1. In 2009, Zimbabwe discontinued it’s dollar. Before it was eliminated, the Zimbabwe dollar was the least valuable currency in the world and their central bank even issued a $100 trillion dollar banknote. A person would starve on a billion Zimbabwe dollars and it took an entire wheelbarrow full of $100 billion dollars in notes to purchase a loaf of bread.

The clear use of dollar bills for transacting in illegal goods, anonymous transactions, tax fraud, and services or speculative gambling make me wary of their use. Before the United States gets too far behind the curve on this important topic, I urge the regulators to work together, act quickly, and prohibit this dangerous currency from harming hard-working Americans.

Sincerely,

Jared Polis
Member of Congress ​

This is, to put it mildly, absolutely hilarious. I imagine that we'll see some traditionalists bitch about a Congressional rep using satire to mock a colleague, but that's just silly. This makes the point better than any boring letter or speech would ever do. And, considering that Rep. Polis has no problem wearing this on the House floor, I get the feeling he really doesn't care at all what "traditionalists" think of his actions around Congress.

Filed Under: bitcoin, currency, jared polis, joe manchin, parody, satire

Digital Exports Dwarf Other Industries, So Why Is The USTR Ignoring Them?

from the just-clueless dept

We've talked a few times about how the USTR seems to have an antiquated view of the American economy these days, which is driving it to make some really bad and dangerous assumptions about what sorts of things should be in the Trans Pacific Partnership (TPP) agreement -- things that benefit a few older legacy industries, which totally ignore the reality of where innovation is happening today. In fact, the current policies that the USTR is pushing in the TPP agreement seem designed to actually hold back the most innovative industries of today, pushing them to other countries instead, and massively harming the US economy. We've detailed, for example, how the main committee of industry folks who are the "advisers" on the "intellectual property" chapter come from legacy industries, rather than anything involving the internet. The "IP" Industry Trade Advisory Committee (ITAC 15) includes a bunch of lumbering giants, more focused on protecting their positions, than on innovating.

Senator Ron Wyden's office recently asked the Congressional Research Service (known for the high-quality, non-partisanship of their reports) to look at how much "digitally enabled services" were exported out of the US today, and to compare that with other "large" exporters, which the USTR generally thinks it's protecting. The results are somewhat astounding. Digital exports are massive compared to all of those other industries. And yet, the USTR seems focused on helping out all those other guys at the expense of the digital services that make up such an important part of our economy. Why? At this point, it seems that there's just a massive level of ignorance within the USTR about which part of our economy is actually driving so much growth -- and their plans to protect old line industries create real problems for the internet, and they just don't seem to care.

At least some in Congress are finding this situation quite troubling. Reps. Jared Polis and Thomas Massie have teamed up to ask USTR Michael Froman to finally commit to actual transparency, and that includes both releasing the text of the IP chapter and finally letting people who are actually knowledgeable about the internet and its impact on the economy into the discussions.

While we recognize the need to maintain a degree of confidentiality in negotiating our trade agreements, we remain disappointed that important stakeholders including civil society groups, businesses, and academics have not been able to meaningfully participate in the treaty process. The Industry Trade Advisory Committee on Intellectual Property (ITAC-15) has a limited membership, precluding a more diverse set of stakeholders from being able to review and provide input on the negotiating texts or regularly meet with United States Trade Representative (USTR) negotiators.

In particular, we are concerned that the TPP Intellectual Property Rights chapter leaked in November 2013 would place undue restrictions on our copyright laws, harming our innovation, our economy, and an open and free Internet. These standards are troubling given their ability to potentially restrict the legislative branch, particularly when Congress has indicated it is beginning to evaluate the merits of revising these laws. For example, as sponsors of H.R. 1892, the Unlocking Technology Act, we are particularly troubled by draft proposals concerning prohibitions on the circumvention of technical protection measures or Digital Rights Management. The leaked treaty draft includes language that would seemingly make any permanent fix to unlocking cellphones illegal. Intellectual property is a dynamic policy area in which preserving Congress’ ability to adapt to the changing nature of technology is absolutely critical for the United States and our trading partners.

To that end, we encourage the Administration to work with the negotiating parties to publicly release the current official text of the TPP intellectual property and related chapters—or at least summaries of these proposals—and invite public comments on such provisions before the agreement is concluded. A strong precedent already exists for such a process; for instance, the Anti-Counterfeiting Trade Agreement official text was made public an entire year before the agreement was finalized. Additionally, in the future we urge you to develop a more open model of trade agreement negotiation.

Personally, I think this language could and should be much, much stronger, given just how out of touch with reality the USTR seems to be. With the Congressional Research Service itself noting how much more important digital services exports are to the economy, why is the USTR still ignoring them, and looking at them as if the internet is a second- or third-class citizen in the US economy?

Meanwhile, over on the Senate side, Senators Ron Wyden and John Thune have introduced a bill directly seeking to promote an open internet when it comes to trade agreements:

The Digital Trade Act of 2013 would establish negotiating principles to address several key digital trade matters in future bilateral and multilateral agreements and in multistakeholder settings. Those principles include: preventing or eliminating restrictions on cross-border data flows, prohibiting localization requirements for data and computing infrastructure, ensuring that provisions affecting platform Internet sites are consistent with U.S. law, and recommitting the United States to the multistakeholder model of Internet governance. The bill requires the president to prioritize digital trade and ensure it benefits from robust and enforceable rules.

Again, it might be nice if this was even stronger, but recognizing that it's difficult to get anything through Congress these days, perhaps you need to start with things that seem simple and obvious, like having the USTR recognize that "digital" is actually a big business these days.

Filed Under: digital exports, innovcation, jared polis, john thune, ron wyden, thomas massie, tpp, ustr

Bill Introduced To Fix Anti-Circumvention Provision Of DMCA

from the well-needed dept

While there was a lot of talk after the White House agreed with an awful lot of people that mobile phone unlocking should be legal, there's been little real action. Part of the problem might be that the White House suggested that this could be fixed via telecom law, when the whole issue had nothing to do with telecom law, but the broken anticircumvention provisions of the DMCA, also known as 17 USC 1201. While Congress did put forth a bunch of bills, they were all lacking, and none seemed to really tackle the underlying problem: 17 USC 1201 is completely broken. It makes circumventing a technical protection measure a form of infringement, even if the circumvention has nothing to do with actual copyright infringement. Furthermore, it makes it illegal to "manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof," that is primarily designed for circumventing digital locks even if the end use is not infringing.

Thankfully, Rep. Zoe Lofgren has finally introduced a real reform bill that tries to tackle this issue, along with Rep. Thomas Massie, Rep. Anna Eshoo and Rep. Jared Polis. The bill, called the Unlocking Technology Act of 2013, changes the law to make it clear: if you circumvent some sort of digital lock for a reason that has nothing to do with infringement, it would no longer be illegal. Basically, it would add the following:

It shall not be a violation of this section to circumvent a technological measure in connection with a work protected under this title if the purpose of such circumvention is to engage in a use that is not an infringement of copyright under this title.

Similarly, circumvention tools that have primarily non-infringing uses would also be legalized. It would still be illegal to do that big list of things above if the intent is to infringe, but merely creating the tools for non-infringing purposes would be legalized. Thus, tools for unlocking mobile phone, and the act of unlocking mobile phones, would be legal.

The bill also has two other key pieces. First, it makes it clear that it is not copyright infringement to switch networks and then access or load a copy of software that is stored in RAM. This seems very specific, but some operators have argued that by putting in a clause in a user agreement that forbids switching networks, those who do so could infringe by then accessing software stored in memory.

Finally, and perhaps most importantly, the bill addresses the claims that fixing the DMCA would violate trade agreements (we've heard seven different trade agreements would be violated with this simple fix of the DMCA) by telling the President that Congress says he needs to fix those agreements. Nice and simple:

The President shall take the necessary steps to secure modifications to applicable bilateral and multilateral trade agreements to which the United States is a party in order to ensure that such agreements are consistent with the amendments made by this Act.

This is actually really important. Because (just watch) copyright maximalists love to scream about how changes like this would "violate our international obligations" (while leaving out the fact that they were the ones who wrote half of those agreements in the first place). But the fact is that Congress has authority over international trade, not the executive branch. So if Congress wants, as would be the case with this bill, it can order the executive branch to change or fix any international agreements that get in the way of good law.

Filed Under: 1201, anna eshoo, anti-circumvention, circumvention, digital locks, dmca, jared polis, mobile phone unlocking, thomas massie, trade agreements, zoe lofgren

CISPA Renders Online Privacy Agreements Meaningless, But Sponsor Sees No Reason To Fix That

from the all-talk dept

CISPA's sponsors insist the law is 100% voluntary—it doesn't compel companies to do anything. But as we've been warning for a year and warned again yesterday, the bill's blanket immunity provision doesn't merely clear a "legislative thicket" of laws restricting information-sharing about cyber threats. It also bars companies from making enforceable promises to their users about how they might share users' information with the government or other companies in the name of protecting cybersecurity. Yesterday the House Rules Committee refused to allow a bipartisan amendment, sponsored by Rep. Justin Amash to fix this problem, to be brought to the floor for a vote.

At that Committee meeting (1:01:45), the bill's chief sponsor Chairman Rogers emphatically repeated his earlier assertions that CISPA wouldn't breach private contracts in response to questions from Jared Polis:

Polis: Why wouldn't it work to leave it up, getting back to the contract part, and I think again there may be a series of amendments to do this, if a company feels, if it's voluntary for companies, why not allow them the discretion to enter into agreements with their customers that would allow them to share the information? ...

Rogers: I think those companies should make those choices on their own. They develop their own contracts. I think they should develop their own contracts. They should enforce their own contracts in the way they do now in civil law. I don't know why we want to get in that business.

And yet... CISPA will go to the House floor as written, providing an absolute immunity from "any provision of law," including private contracts and terms of service.

Only in Congress can you swear up and down that your bill doesn't do X, then refuse to amend it so that it really doesn't do X—and then lecture those who note the disconnect, like Polis, with patronizing comments like "once you understand the mechanics of the bill..." (1:02:50).

It brings to mind what Galileo said after he was forced to sign a confession recanting belief in Copernicus's heretical idea that the Earth revolves around the sun: "And yet, it moves."

And yet... for all Rogers' bluster, CISPA moots private contracts—and House Republican leadership won't fix the problem, even when five of their GOP colleagues offer a simple, elegant fix.

This is the same stubborn refusal to accept criticism and absorb new information that brought us SOPA, PIPA and a host of other ill-conceived attempts to regulate the Internet. It's the very opposite of what should be the cardinal virtue of Internet policy: humility. Tinkering with the always-changing Internet is hard work. But it's even harder when you stuff your fingers in your ears and chant "Lalalala, I can't hear you."

The good news is that, as with SOPA, this fight transcended partisan lines, uniting a Democrat like Jared Polis (an openly gay progressive from Boulder) with a strict constitutionalist like Justin Amash (the "Ron Paul Republican" from Grand Rapids Michigan)—and four more traditional Republicans. This is precisely the realignment predicted 15 years ago by Virginia Postrel in The Future and Its Enemies. On one side are those profoundly uncomfortable with change, desperate to control and plan the future, and so insecure about their own understanding of technology that they inevitably perceive criticism as a personal attack. On the other are those far more humble and more willing to let the future play out in all its messy unpredictability. The first camp is always pushing for the one, right piece of legislation that will avert a crisis. The second camp admits they don't know the one, best way to deal with a problem like encouraging sharing of cyberthreat information while protecting user privacy, so they reject static rules that can only be changed by Congress. They want simple rules for a complex world. At a minimum, they want what law Professor Richard Epstein argues in his book Simple Rules for a Complex World--the perfect slogan for this camp--"the most ubiquitous legal safety hatch adds three words to the formal statement of any rule: unless otherwise agreed."

It's not a battle between Left and Right, or conservatives and progressives. It's a battle between attitudes towards the future: the stasis mentality of Congressmen like Mike Rogers and Lamar Smith (of SOPA infamy) and the dynamism of Justin Amash and Jared Polis, and SOPA foes like Republicans Darrell Issa and Jason Chaffetz and Democrats Ron Wyden and Zoe Lofgren.

The dynamists may have lost this battle. But, like Galileo, we'll eventually win the war. The only questions are: How many more poorly crafted, one-size-fits-all laws will the stasists put on the books in the meantime? How long it will take to clear the real "legislative thicket"--all the complex laws that attempt to provide a single answer for a complex and unknowable future? And when will it finally become unacceptable for Congressmen like Mike Rogers to ram through legislation that doesn't even do what they claim?

Berin Szoka (@BerinSzoka) is President of TechFreedom (@TechFreedom), a dynamist tech policy think tank.

Filed Under: cispa, cybersecurity, dynamism, house rules committee, jared polis, justin amash, mike rogers, privacy

Jared Polis Tells FTC To Back Off Google Antitrust Investigation

from the waste-of-government-resources dept

Colorado's Jared Polis is likely a familiar Congressman to our readers. He was one of the key voices in Congress against SOPA. He's also been one of the few members of government willing to speak out against all of the problems in the domain seizures that have occurred. Now we learn that his pro-tech stance over government-meddling continues with a strongly worded letter to the Federal Trade Commission over its investigation of Google for antitrust violations.

At a time when the national economy continues to stagnate, it's not clear to me why the FTC should be focusing on a product that consumers seem very happy with, search engines. While Google is surely a big company and an important service in peoples' lives, my constituents also use a variety of competing services, including Amazon.com for shopping, iTunes for music and movies, Facebook for social networking and recommendations, and mobile apps like Yelp for finding local businesses. Competition is only a click away and there are no barriers to competition; if I create a better search algorithm I could set up a server in my garage and compete globally with Google. To even discuss applying anti-trust in this kind of hyper-competitive environment defies all logic and the very underpinnigns of anti-trust law itself.

His admission, that Google is indeed a massive entity, likely is designed to push back against the FTC for targeting Google specifically in the search space, despite the relatively high level of competitive search engines on the market. Antitrust violations are not designed to punish really successful companies, and they're not supposed to just go after companies for being "big." Rather, they're designed to prevent anti-competitive practices for the benefit of a healthy marketplace and, most importantly, for the benefit of consumers. While the country is still waiting for the official charges against Google by the FTC over any kind of anti-competitive behavior, there can be little doubt that there is indeed a swath of competition and that the public is pleased with Google's product. It's not like Bing and Yahoo (or Blekko or DuckDuckGo) don't exist, after all, it's just that more people trust Google for their search results. None of this seems worth pursuing an antitrust suit over. As Polis notes:

I have never heard one of my constituents say that they don't feel like they have enough choices online, or that they feel locked in to using any one of these services. Competition among these services is leading to lots of great services for consumers -- and consumers aren't asking Congress or the FTC to protect them.

Indeed, it only seems to be Google competitors who are asking for help here. And that's not the purpose of antitrust law.

Having said all that, Polis went further in his letter, issuing a warning to the FTC that if screws this up, it risks being downsized.

The FTC should tread carefully when reviewing Google, Facebook, Twitter or any other tech company, given the dynamism of our tech industry and the potential for making things worse through regulation. Today's giants can be tomorrow's failures without any government intervention; market forces drive obsolescence at a break neck pace which should only further abrogated the need for government intervention. I believe that application of anti-trust against Google would be a woefully misguided step that would threaten the integrity of our anti-trust system, and could ultimately lead to Congressional action resulting in a reduction in the ability of the FTC to enforce critical anti-trust protections in industries where markets are being distorted by monopolies and oligopolies.

Critics of Google will point to this as some kind of hinted blackmail by Polis, but that isn't at all what he's saying. All he's saying in this instance is that if the FTC brings a poor case against Google and loses face over it, the representatives of the people (whom government is supposed to serve) will take action. It's a warning that the FTC had better have its ducks in a row when considering such a move against a huge member of the national business community.

In the end, we'll have to see if any actual anti-competitive practices by Google are really brought forth. Barring that, Google simply being really successful is no reason to bring an antitrust suit against them.

Filed Under: antitrust, ftc, jared polis
Companies: google

Congressional Reps Question Feds Over Botched Domain Seizures

from the will-we-get-answers dept

The government's admission that it had (once again) mistakenly seized and censored a website for over a year when it dropped its case against Rojadirecta/Puerto80 has reminded everyone that Dajaz1 was not an isolate case. It was a part of a wider program where DHS (via ICE) and the DOJ systematically believed whatever the RIAA and MPAA were telling them, leading to the blatant censorship of a variety of websites, without proper due process. Thankfully, some in Congress are paying attention. Bipartisan Congressional Reps. Zoe Lofgren, Jason Chaffetz and Jared Polis have teamed up to send a letter raising a number of questions about Operation in Our Sites, to both Attorney General Holder and Homeland Security Secretary Napolitano.

The letter doesn't even mention the Rojadirecta case, but focuses on what happened with Dajaz1, pointing out their concern with the program, and how it appears to violate free speech rights, ignore due process and destroy legitimate businesses. The letter raises the fact that Dajaz1 is not an isolated case. As we've pointed out in the past, we're aware of at least a few other domains that were seized, and whose owners had challenged the seizures. And yet, well over a year later, there appeared to be no evidence of either a return of those domains or a forfeiture process started. Given how the feds treated Dajaz1, with secret extensions, preventing Dajaz1 from representing itself in court, we've wondered how many other domains the DOJ and ICE had incorrectly and illegally seized -- and which they were now keeping in that kind of holding pattern. It's good to see that this letter directly asks about that issue:

Other complaints have been raised by websites seized under "In Our Sites" that bear similarities to the Dajaz1 case. These complaints center around unnecessary delays in advancing and resolving cases, difficulty in obtaining documents from the government that are fundamental to the underlying cases (such as affidavits), and difficulty even maintaining contact with the U.S. Attorneys prosecuting the cases. The effect of these problems is to severely limit the ability of website owners to challenge the legality and merits of the domain name seizures.

The letter goes on to ask a series of important questions for both DHS and DOJ, especially regarding the utter failure of both departments in the Dajaz1 situation.

1. What is the process for determining which sites to target? Who is involved in that process? What specific steps do DOJ and ICE take to ensure that affidavits and other material are thoroughly reviewed for accuracy prior to seizing a domain?
2. To what extent are government agents required to evaluate whether the potentially infringing material to which target sites link -- or which they host themselves -- are non-infringing fair uses, impliedly licensed, and/or de minimis uses?
3. Do government agents consider whether a site complies with the DMCA safe harbors? If so, how does this affect the determination to target a site?
4. How many sites have attempted to retrieve their domains, via any process, judicial or informal, and what is the status of those cases?
5. Have you made any changes to your domain seizure policies or their implementation as a result of the issues arising from the Dajaz1 seizure or any other seizure? If so, what were those changes?
6. What specific steps has the DOJ and ICE taken to ensure that domain name seizure cases proceed without unnecessary delays, and that website owners seeking to restore their domain names have swift access to the officials and documents necessary to resolve their cases?
7. How many more seizures do you anticipate occurring in the next six months and year?

It seems to me that questions four and five are the key ones here, which means I fully expect DOJ and ICE to be especially non-responsive in whatever answers they provide.

Filed Under: dhs, doj, domain seizures, forfeiture, ice, jared polis, jason chaffetz, legality, stalling, zoe lofgren

Online Gamer... And Congressional Rep. Jared Polis Discusses Problems Of SOPA In Gaming Forum

from the net-native dept

There's been lots of talk about members of Congress being proud of how ignorant they are of technology and the online community -- and then seeking to regulate that which they do not understand. One exception has been Jared Polis, who was an internet entrepreneur before he was a Congressional Rep. And it turns out he's a video gamer as well. Via the Legal Lady, we discover that Rep. Polis jumped into the middle of an online forum discussion about SOPA/PIPA when he noticed it on a forum involving a game he plays, League of Legends. This wasn't even a case of him starting the discussion, but seeing an ongoing discussion about the bill already, and just jumping in (you have to scroll down to see it):

Hi, this is Congressman Jared Polis of Colorado. As a member of the League of Legends community (partial to Anivia and Maokai), and as someone who made his living as an Internet entrepreneur before being elected to Congress, I'm greatly concerned about the future of the Internet and gaming if Congress doesn't wake up. You may have heard that Congress is currently considering a bill called the Stop Online Piracy Act, or SOPA. While SOPA has a ton of problems, there are some significant issues that I thought fellow gamers might want to know about.

I'm particularly concerned that SOPA might stifle the kind of innovation that brings us games we love, such as LoL. The bill makes it far too easy for angry competitors to sue good law abiding companies out of existence. It threatens any company or website that depends on user-generated content, even companies like Riot. Instead of coming up with great ways to keep making games like LoL even better, companies will have to spend their money hiring lawyers. That's why companies like Riot, who want to protect the games they create, are opposed to SOPA.

I've been working on alternative legislation that would protect the games companies create while also fostering innovation. But we also need you to call your members of Congress and let them know of your opposition to SOPA. This bill has a very real chance of passing, and it is up to all of who want to protect the Internet to take action. More information is available at http://keepthewebopen.com/. Please make your voices heard in this debate! I will be happy to respond to your posts below, and will check back every few hours today and respond to as many as I can.

After hearing about so many elected officials who are totally ignorant about online communities... it's kinda refreshing to see one who is much more net native...

Filed Under: jared polis, league of legends, pipa, protect ip, sopa, video games

How SOPA 2.0 Sneaks In A Really Dangerous Private Ability To Kill Any Website

from the scary dept

I already wrote a big post about yesterday's SOPA markup day one. While we're moving forward on day two, I wanted to call out one key point that was really made clear by an amendment offered by Rep. Jared Polis late in the day yesterday, which hasn't received nearly enough attention. As you may recall, with the "manager's amendment" version of SOPA (i.e., SOPA 2.0), the "notice-and-shut off funding" section of the private right of action in Section 103 was removed. This was good, because we've seen how the notice-and-takedown provision of the DMCA has been widely abused.

However, what most people missed was that the bill effectively sneaks this back into the bill in a much worse form in Section 105, which supposedly grants "immunity" to service providers for taking voluntary action to stop infringement. The true impact of this section was only made clear by Rep. Polis' attempt to limit it, as he highlighted how this broad immunity would likely lead to abuse. That's because this section says that anyone who takes voluntary action "based on credible evidence": basically gets full immunity. Think about what that means in practice. If someone sends a service provider a notice claiming infringement on the site under this bill, the first thing every lawyer will tell them is "quick, take voluntary action to cut them off, so you get immunity." Even worse, since this is just about immunity, there are no counternotice rules or anything requiring any process for those cut off to be able to have any redress whatsoever.

This is scary.

Rep. Polis, quite reasonably sought to limit this section to avoid such a situation. As he noted, anyone can send in a notice under this section, and the service provider is likely to take action to keep immunity. That's super wide open for abuse.

The debate on this point was downright painful. Some of the others on the Committee insisted that Polis' interpretation of the section was wrong. But it's not. Rep. Ted Deutsch kept misreading the law, pretending that because it talks about the "actions" in earlier sections (that you can take to get immunity), it means that the conditions for those actions must be the same (i.e., there needs to be a court order). But the law doesn't say that at all. Others insisted that there needed to be a court order to get the immunity as well.

Let's put this simply: that's ridiculous. And wrong. Very wrong. And anyone who can think for two damn seconds would know it's wrong. You don't need immunity for obeying a court order. Because if you get a court order, you pretty much have to obey (or end up in court). But more to the point, this whole section is about "voluntary actions". Obeying a court order is not a voluntary action. If this section were just about cases where there's a court order, then it wouldn't make any sense at all. It clearly applies to voluntary actions outside of a court order.

The response from SOPA defenders was painful in its cluelessness. Rep. Watt more or less admitted that he thought Polis' interpretation was wrong, so he wouldn't support the amendment. That makes no sense. If Watt thinks the language already says that, what's the harm of clarifying that with the text of the Polis amendment? It makes no sense to refuse to do so. And if Watt and Deutsch really believe that the meaning of 105 is clear and doesn't need any amendments to clarify, they might want to talk to some actual legal experts, because they're analyzing the bill and reading it to say exactly as Polis interpreted it. And since this is a private right in the bill, if lawyers are already interpreting it that way, that means it'll get used that way. So why not clarify? It's mind-boggling.

Perhaps even more ridiculous was Rep. Howard Berman, who, in trying to agree with Watt and Deutsch, made the exact opposite argument and actually agreed with Polis, while claiming he didn't and using that agreement as a reason to vote against the amendment! I'm not joking. Berman pointed out that, contrary to Deutsch and Watt's claims, it made no sense to have an immunity section that only dealt with court orders for all the reasons we listed above. Basically, while Deutsch and Watt pretend that the section requires a court order, Berman proves that it doesn't... and then says that's why he's voting against the amendment. It really was a head smashing moment.

In the end, despite vigorous attempts by Polis and Rep. Lofgren to explain why this was so problematic, the Committee basically just ignored the whole thing and rejected the amendment. End result: SOPA 2.0 contains a crazy scary clause that's going to make it crazy easy to cut off websites with no recourse whatsoever. And this part isn't just limited to payment providers/ad networks -- but to service providers, search engines and domain registrars/registries as well. Yes. Search engines. So you can send a notice to a search engine, and if they want to keep their immunity, they have to take the actions in either Section 102(c)(2) or 103(c)(2), which are basically all of the "cut 'em off, block 'em" remedies. That's crazy. This basically encourages search engines to disappear sites upon a single notice. It encourages domain registries to kill domains based on notices. With no recourse at all, because the providers have broad immunity.

It's this kind of insanity that should terrify people about this bill moving forward.

Filed Under: copyright, immunity, jared polis, private right of action, sopa

SOPA Markup Day 1: We Don't Understand This Bill, It Might Do Terrible Things, But Dammit, We're Passing It Now

from the how-congress-works dept

So, if you weren't paying attention, yesterday was a marathon session of SOPA amendments... It ran for 11.5 hours, with just one tiny break, and it looks like they didn't even get through half of the amendments. I'll get into some more details in a bit, but honestly the single best description of the insanity of these hearings came from The Washington Post's Alexandra Petri, who called them "nightmarish."

If this were surgery, the patient would have run out screaming a long time ago. But this is like a group of well-intentioned amateurs getting together to perform heart surgery on a patient incapable of moving. “We hear from the motion picture industry that heart surgery is what’s required,” they say cheerily. “We’re not going to cut the good valves, just the bad — neurons, or whatever you call those durn thingies.”

This is terrifying to watch. It would be amusing — there’s nothing like people who did not grow up with the Internet attempting to ask questions about technology very slowly and stumbling over words like “server” and “service” when you want an easy laugh. Except that this time, the joke’s on us.

That really describes the situation perfectly. Over and over again the people in favor of this bill flat out admitted that they didn't understand the technology -- and when the various people opposed to it asked why don't they get some experts in to answer some questions, the supporters had no credible response. The DNS and security aspects were completely brushed aside. As Rep. Jason Chaffetz (who is fighting the good fight against this) pointed out repeatedly, there's simply no reason to rush this bill when there are such widespread concerns about it and no one has taken the time to get the answers to key questions.

But the supporters of the bill -- mainly Reps. Lamar Smith, Bob Goodlatte and Mel Watt -- simply wanted to push forward at all costs. They rejected every amendment raised, except two minor ones (we'll get to that in a minute). Amazingly they rejected all sorts of quite reasonable suggestions -- while complaining that those opposed to the bill never had any suggestions to fix it! And yet when those actual proposals were brought up, they were rejected out of hand. It really was pretty disgusting. Goodlatte's responses struck me as particularly inane. He kept rejecting amendments because he feared that the amendment could be abused. The fact that most of those amendments were to prevent the much wider scale abuses guaranteed under SOPA never seemed to occur to him.

In fact, supporters of the bill regularly used arguments that actually could have been turned around on them. They refused an amendment from Rep. Darrell Issa to limit the powers of the bill to those who actually were in the US, saying that it would set a bad precedent for countries like China... and this came just after they were totally outraged that anyone might think that the entire bill itself sets a bad precedent for countries like China. The disingenuous bullshit was really ridiculous.

Rep. Watt was particularly keen to display his own ignorance. He regularly admitted that he wasn't very knowledgeable on technology -- which should have been a reason to recuse himself or to at least ask for more info from experts. Instead, he just insisted that all of the technical experts were simply wrong. Based on what? Nothing. How does someone like Watt get elected when he appears to want to regulate the internet based on pure faith and against what every single expert has said? It's downright scary.

Later, Watt angrily rejected an amendment to clarify some language to make sure it was limited -- by saying that he believed the language already said what the amendment added. If that's true, why reject the amendment? All it would do is make the intent clear. Instead, he said no. That makes no sense at all.

What was clear, from the beginning, was that the SOPA supporters were not there in good faith. They had no intention of listening to reasonable suggestions to fix the bill, and stuck together as a bloc to reject pretty much all of them -- even while admitting their own ignorance. The really sad part was when Goodlatte tried to equate the views of a couple of policy analysts who get money from the entertainment industry, with the views of nearly 100 independent internet engineers who have pointed out how problematic SOPA really would be. Watt and others tried to pretend that because each side could turn up someone who would say something that those views were equal. It's the insane Congressional equivalent of "he-said/she-said" journalism, where you "hear" both sides, but never seek out the truth. That's nuts.

The simple fact is that nearly every single actual credible internet engineer has come out against these bills. There isn't an equivalence where each side can turn up a few people. The scales are completely weighted down against the bills... and many of those people have no associations whatsoever -- even as SOPA defenders insisted that only "Google" experts were against the bill. Stewart Baker isn't speaking for Google. Sandia National Labs isn't speaking for Google.

The real insanity is that supporters of the bill are rushing forward just because they want to pass "something," and they don't seem to care about the consequences.

As for the two amendments that did pass, one was to say that if you "knowingly misrepresented" a claim on a site, you had to pay attorneys' fees. Of course, "knowingly misrepresent" is a very, very high bar that will almost never be met. A similar amendment by Rep. Chaffetz that would also require fees if you failed to get an injunction in court was rejected, because SOPA supporters were worried this would scare people off. As Chaffetz pointed out: that's the whole point. It would scare off those who don't have strong, legitimate claims.

The other amendment that passed right at the end, was from Rep. Jared Polis, requiring the State Department to do a study on the eventual impacts of SOPA. That doesn't change the law really. It just will at least let people check back in on the damage it does a couple years from now.

A few other key points:

• Huge kudos to Reps. Issa, Lofgren, Chaffetz and Polis, who combined to repeatedly point out the problems of the bill and to argue forcefully and compellingly about why we needed to fix these problems. That much of the rest of the Committee ignored these concerns, played them down, or rejected them for silly or nonsense reasons, is really just a statement on the sad state of Congress today.
• I heard from sources that a big time content industry lobbyist was seen hanging out in the "members only" area during the session. If that doesn't tell you everything you need to know about what's going on, then you're not paying attention.
• There was a bizarre elementary school-like fight that went on at one point. Rep. Steve King tweeted early on:

  We are debating the Stop Online Piracy Act and Shiela Jackson has so bored me that I'm killing time by surfing the Internet.

  Rep. Jackson-Lee found out about this and announced that she was "offended," at which point it seemed like a bunch of these old clueless men started arguing about how inappropriate it was for her to say she was offended. The whole session had to pause while they talked to a "parliamentarian" about whether it was okay to use the term "offended," eventually leading Jackson-Lee to change her statement. Yeah. These are the people in charge of making our laws. Scary.
• With the session going on for 11.5 hours, there was a short break for lunch, but for dinner Rep. Lamar Smith offered "four kinds of pizza," but apparently only for other members. Staffers had to sit and starve. Nice of them, huh?

All in all, the process should leave you frightened for our country. This was not an attempt to fix a broken law. It was an attempt to please some Hollywood funders at the expense of innovation and jobs. It's insanity.

That said... if you want to watch more of it today, tune in either at the Judiciary website or the KeepTheWebOpen site and make sure you have a pillow nearby for when you want to bang your head on the desk or wall. Once again, I'll be live-tweeting some of the hearing (don't think I can make all of it) from my personal Twitter account.

Filed Under: bob goodlatte, copyright, darrell issa, dns, dnssec, jared polis, jason chaffetz, lamar smith, markup, mel watt, sopa, zoe lofgren

Tons Of Amendments Proposed For SOPA

from the sit-back-and-relax,-this-is-going-to-take-a-while dept

The "markup" process for SOPA is going to begin shortly (at 10am ET/7am PT), and it's going to be quite a circus. This is when various amendments can be proposed and debated. You can watch it stream live, if they can keep the stream up (they had trouble during the SOPA hearings). On top of that, I'm planning to live tweet as much as I can via my Twitter account -- assuming Twitter doesn't tell me I've "hit the limit of tweets for the day" (as it did during the hearings as well). I also have a few meetings here and there, so I'll have to disappear from time to time depending on how long the markup goes. But I still intend to cover as much as I can.

Normally, this process doesn't take a huge amount of time... but this time around there are a huge number of amendments, and reports are that it may take two days to get through everything. I've heard anywhere from 55 to 60 amendments are being proposed, each one of which needs to be discussed and voted on. We got our hands on an "amendments roster" (embedded below) that shows 55 amendments. It's possible that more have been added. However, there are plenty of interesting amendments already here -- and it suggests, at the very least, that some unexpected members of the Judiciary Committee retain serious concerns about SOPA, even after Lamar Smith's watered down version was released.

Here are just a few of the interesting amendments:

• Zoe Lofgren has an amendment that says a DNS operator should have no obligation to block a website if doing so would impair the security or integrity of the domain name system or the operator's system or network. I'm sure opponents will say this makes the blocking toothless, but what they're really saying is they don't care if censoring websites they don't like harms the security of the internet.
• Darrell Issa tries to completely dump the DNS blocking section, as well as the requirements for search engines to block links. This would be a huge step forward... which is why Smith will never let it happen.
• Lofgren wants to make sure the anti-circumvention rule isn't able to be used to block tools used to get around foreign censorship. Considering our own State Department is funding such tools... this seems important. But it does lead to a bizarre situation where it could be legal to create circumvention tools for foreigners, but not for your own country. The whole circumvention stuff is ridiculous.
• Lofgren also wants to make sure that those defined as "foreign infringing sites" actually violate copyright law, rather than "facilitate" infringement. Defenders of SOPA insist it's just about enforcement, not about broadening copyright law itself. But when you extend enforcement to things that don't directly break the law...
• Jared Polis wants an amendment saying that the US government won't spend any money "protecting the intellectual property rights of pornography." Interesting.
• Polis also wants to dump the anti-circumvention provisions entirely. Good for him. Anti-circumvention has been a disaster under the DMCA. Expanding it here would just be crazy.
• Jim Sensenbrenner wants to do away with the private right of action entirely. Also a good idea. At least someone recognizes that this is a lawyer's dream tool. The private right of action will be massively abused. It wasn't clear where Sensenbrenner stood on the overall bill, but nice to see that he's clearly concerned with the likely abuse of section 103. He has another amendment that "replaces" the private right of action with the ability serve an order on payment providers and ad networks -- but limits the authority to enforce this to the Attorney General. I'm not sure this is that much better, but it'll be interesting to hear the details.
• Lofgren tries to narrow the definition of what's "dedicated to theft of US property." This needs to be narrowed. While it's narrower than it was in the original, it's still way too broad.
• Jason Chaffetz has an amendment that says if a company files an action based on Section 103 (trying to get ads or payment processors cut off) and the court disagrees... the company who files has to pay all fees of all the parties. Similarly, Ben Quayle, has an amendment that says anyone who knowingly misrepresents that a site is "dedicated to theft of us property," they'll be required to pay attorneys fees and court costs, and another amendment that just says that the losing party pays. Good to see more members worried about how the private right of action can be abused.
• There are a bunch of amendments clarifying that ad networks, payment processors and search engines should only get immunity in very specific cases for voluntarily cutting off sites, rather than the broad immunity currently in the bill.
• Chaffetz and Polis both have amendments concerning the "study" on the impact. Chaffetz, quite rightly, says that key parts of section 102's DNS blocking should not go into effect until after a study is done assessing the impact on internet security. Polis also wants a report on the impact of DNS blocking, as well as the impact on "employment, economic growth and the availability of capital."
• Polis wants to add in DMCA-like safe harbors to the felony streaming provisions, and also make it so first time offenses remain a misdemeanor.
• Hank Johnson includes one of my favorite clauses, and one I think should be on almost every bill: the provisions of the bill expire after five years. Why more bills don't have such provisions, I don't understand.
• Polis takes on the issue of massively expanding the diplomatic corp. with diplomats whose sole job it is to push ever more draconian copyright law on foreign nations, by saying they should be required to "consider fair use, consumers and licensees as part of their duties." What? Consider consumers? When would Congress ever do that?
• And, of course, Issa seeks to substitute his own OPEN bill. That would definitely be a big step forward towards getting rid of the problems of SOPA, but there's no way that amendment passes.

There are a bunch more, but those were just some of the interesting ones... We'll try to have a wrap up after it's all over. Chances are most of these amendments won't pass, but perhaps a few of them will at least get a reasonable hearing.

Filed Under: amendments, ben quayle, darrell issa, hank johnson, jared polis, jason chaffetz, jim sensenbrenner, lamar smith, sopa, zoe lofgren