News Corp. Wonders If There Could Possibly Be Any Arguments Against Anti-Piracy Efforts

from the apparently-paying-attention-isn't-a-core-competence-at-murdoch-and-co. dept

The International Institute of Communications is hosting a particularly one-sided "roundtable seminar" in Hong Kong this week about "content piracy." Just from that phrase, you should know the deck has been stacked against a reasoned analysis of the nature of internet communications. So, it shouldn't be a surprise that the RSVP email is actually from News Corp., or that the "agenda" of the session is entirely one-sided, and suggests a pretty impressive tone-deafness to the worldwide protests against SOPA/PIPA and ACTA. For example, the final question is particularly amusing:

Are there arguments against actions aimed to reduce the impact of these overseas rogue websites?

Apparently, all the concerns about collateral damage, free speech, due process, internet security and the like fell on deaf ears at News Corp. Instead, they seem to be wondering how anyone could possibly have an argument against the next SOPA. An intellectually honest discussion would at least admit that there are arguments being made both for and against these kinds of actions, and actually explore the reality. As we've noted plenty of times in the past, it's no secret that online infringement represents a challenge for established players, but that doesn't mean the immediate reaction should be to go on the attack in a way that creates many more problems, and is unlikely to solve the problem they think they're attacking. So, the argument "against" going after such websites is that it won't work, it's a waste of time and money, it will have tons of collateral damage... and you can better deal with the "problem" by providing more quality legitimate services without restrictions and at better prices. See? Not that hard.

Filed Under: acta, pipa, piracy, rogue sites, sopa
Companies: news corp

Senator Coons Admits That SOPA 'Really Did Pose Some Risk To The Internet'

from the a-little-late-for-that dept

See update at the bottom.

A few folks have been sending over a recent article from Hillicon Valley, in which Senator Chris Coons, a co-sponsor of PIPA admits that SOPA "really did pose some risk to the internet."

Coons said it was "truly memorable" when one of his sons shook him awake and asked "why I wanted to break the Internet and why Justin Bieber thought I should go to jail."

The pop star had suggested that supporters of the Protect IP Act should be arrested after a campaign against the bill had claimed it could result in Bieber going to jail for singing songs that belonged to other artists.

"That was my first warning that we were not communicating effectively," Coons said. He added that he believes some elements of SOPA "overreached" and "really did pose some risk to the Internet."

Of course, I think that some folks are a little confused by this. The issue with Bieber wasn't actually about PIPA at all. Instead, Coons had directly sponsored (along with Senator Amy Klobuchar) a different bill, S.978, which would have made a felony out of certain forms of online streaming. This was at the center of the FreeBieber campaign, which was actually separate from PIPA (which was S.968). While the House version of SOPA pulled in similar language, PIPA was always separate from S.978. Coons, though, was a co-sponsor of PIPA as well. It's a little unclear from the context if Coons was really talking about S.968 or S.978 in what was quoted above.

Either way, it seems worth pointing out that, if it takes your kid to clue you in to the fact that you were pushing for legislation that "really did pose some risk to the internet," perhaps you shouldn't be putting forth that legislation in the first place. It certainly makes it clear that he didn't understand what he was supporting.

One hopes that Coons (and, really, all our elected officials) will use this as an opportunity to realize that jumping into regulating the internet without realizing what the hell they're doing is a mistake that should not be repeated. In the meantime, it looks like Coons may be trying to make amends to the tech community, and is now co-sponsoring the new Startup Act, which would provide a significant boost to entrepreneurs and startups by easing immigration laws for both entrepreneurs and highly skilled engineering students, allowing them to stay in the US where they can build companies that create jobs, rather than going back to their home countries to compete against Americans.

Update: Posted a slight clarification, as some insist that he was only speaking about SOPA -- the House bill, rather than PIPA, the Senate bill he co-sponsored. While the two bills were distinct, there were significant similarities -- especially on the key points that would have "posed some risk to the internet." If Senator Coons is making a material distinction between the two bills, that suggests he still doesn't understand the two bills he supported in the Senate and how they, too, had significant problems.

Filed Under: amy klobuchar, chris coons, justin bieber, pipa, sopa, streaming

Senator Leahy Wants To Give At Least $5 Million To State Department To 'Combat Piracy'

from the spread-the-money-around dept

Last week, we wrote about a proposal in Congress to give ICE (part of Homeland Security) at least another $10 million for the next year to continue its program of censoring websites in the name of "stopping piracy." Of course, when Congress and Hollywood get together, they never put all their eggs in just one basket. So, it should come as no surprise that in another appropriations bill, this time for the State Department, and put forth by Senator Patrick Leahy -- who also introduced PIPA -- there's another chunk of "anti-piracy" cash. The bill sets forth $899,600,000 for "civil judicial and security programs." But, amazingly, the only program that is specifically called out with a specific amount is to "combat piracy."

CIVILIAN JUDICIAL AND SECURITY PROGRAMS.—$899,600,000 for assistance for rule of law, justice, corrections, anti-crime, cyber crime, civilian police, and security sector reform programs, of which not less than $5,000,000 shall be made available to combat piracy of United States copyright materials, consistent with the requirements of section 688 (a) and (b) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2008

If you're curious about sections 688 (a) and (b) as mentioned in this bill, you can see them here. They just authorize the State Department to "provide training" to foreign judges and prosecutors on intellectual property law. That is, it's part of the US's official IP propaganda program to convince foreign judges and prosecutors that strict interpretations of IP laws are the only way to go.

A couple years ago, we wrote in more detail about how the State Department spends these funds, and it's not pretty. Basically, we send copyright maximalist lawyers to other countries -- countries that have their own copyright laws -- and tell judges and federal prosecutors there that they need to enforce US-style copyright maximalist laws.

I'm really not sure how that's an appropriate use of taxpayer money.

Filed Under: homeland security, ice, patrick leahy, pipa, propaganda, state department

Bogus Stats Again: BSA Puts Out Its Yearly Propaganda About Software Piracy

from the aren't-we-done-with-this-yet? dept

For the 9th year in a row, the Business Software Alliance (BSA), an organization that mainly represents Microsoft's interest, has put out its ridiculous "Global Software Piracy Study", which argues that tons and tons of software is being pirated, and if only people paid for it, there would be $63.4 billion more going to software companies. We've been criticizing the ridiculously laughable methodology of the report since it began, and even have seen the company that does the research, IDC, admit that the BSA exaggerates what the report actually says. We've done multiple detailed analyses of how the BSA's stats are misleading (or just flat out bogus). And yet, because there are magical numbers involved, the press just loves to parrot the claims without any skepticism.

This year's report is no different. It's more of the same ridiculousness, with a clueless press reporting (totally inaccurately) that the study says that software piracy "costs" the economy $63.4 billion. That's simply not true. What the report did find was not actually surprising or even very interesting. It's that people in developing countries tend to infringe more often. You probably knew that already, but if you wanted evidence for that, you shouldn't look to the BSA and its bogus stats, but a thorough, comprehensive and independent review of the market, such as the one done by Joe Karaganis and SSRC last year. That report found the reason that there was increased piracy in developing markets was because clueless companies don't realize that people aren't going to pay a month's salary for a single digital good.

Of course, rather than recognize it's their own business model failings at issue, the BSA is once again using this report to call for "tougher penalties" for infringement. This despite the fact that no study has ever shown that such penalties actually drive more people to buy.

Thankfully, at least some people are calling the BSA out on its bogus report, such as by noting that it's political propaganda designed to get legislation like SOPA and PIPA passed. The reality, of course, is that it shows how out of touch the BSA is with the innovation economy today, instead working to lock up and protect the interests of its major funders: Microsoft, Symantec and Intuit. Those companies are threatened by upstarts with better business models, and the best they can do is to support legislation that will lock down the internet, causing more harm than good for true innovation.

The "Bogus Stats Again" report from the BSA isn't about dealing with piracy. It's a way of white washing an agenda of protectionism for some large software companies who don't want to compete or to adapt.

Filed Under: bogus stats, bsa, pipa, software piracy, sopa
Companies: idc, intuit, microsoft, symantec

Can Congress Work Like A Tech Startup?

from the as-long-as-they-don't-drop-vowels dept

We've discussed a few times in the past Rep. Darryl Issa's Madison platform for crowdsourcing ideas around legislation. Over the last few months he's used it to create a productive discussion around the OPEN Act, the more reasonable alternative to SOPA/PIPA, and also used it to post the text of ACTA for discussion. While the platform may need some tweaking and advancement, it's still quite a feat to see someone in Congress actually innovating, and that should be encouraged. Joshua Lamel -- who admits that he's politically at the other end of the spectrum from Rep. Issa -- has a really nice profile of how Issa is trying to treat his job in the House like a "lean startup," with projects like Madison. It is a bit of a slog going up against the entrenched ways that Congress acts today, however:

"I try to bring a lean startup mentality to my work making government more efficient, open and participatory," he said.

"This technology-centered approach, however, is disruptive to the government bureaucracy and many in Congress because it demands experimentation, data-driven analysis and actually listening to our users -- the American people -- about how to make government work better for them. That's why social media and innovation are so central to my work: we in Congress do not have all the answers, but we can have a relentless drive to adapt technology to let taxpayers re-engage with government on their own terms. I firmly believe that just as new technologies are revolutionizing nearly every aspect of life in America, nascent tools like Madison show the transformative impact technology will have on government, and ultimately overcome the inertia of the bureaucracy."

While not a traditional industry, it sure seems like Congress could use some significant disruption -- and having people in there treating it like a startup might just be a good way to start.

Filed Under: acta, congress, crowdsourcing, darryl issa, madison platform, open act, pipa, sopa, startups

Senator Leahy Still Insisting That SOPA/PIPA Are 'Needed'

from the out-of-touch dept

It appears that Senator Patrick Leahy has learned absolutely nothing from the public outcry over his ridiculously overreaching PROTECT IP Act (PIPA). At a Senate Judiciary Committee hearing, in which the White House IP Czar, Victoria Espinel, suggested that perhaps the "problem" was solving itself via voluntary action, Senator Leahy continued to insist that legislation like PIPA was needed:

“Voluntary efforts are wonderful and I am hoping the voluntary efforts will give us some confidence for the legislation we need, because ultimately we still need legislation.” Leahy said.

This is really ridiculous. He isn't just saying that PIPA is needed, but he's arguing that the market working these things out on its own is evidence to support the need for legislation. How does that make any sense at all? What's clear is that Leahy still doesn't understand why PIPA was defeated or why there was so much concern (and so little legitimate rationale) for the legislation in the first place.

Filed Under: patrick leahy, pipa, senate judiciary committee, sopa, victoria espinel

If You Think The Cost Of 'Piracy' Is High, What About The Cost Of Enforcement?

from the why-is-that-always-missing-from-the-equation? dept

We've all seen the crazy high claims by the legacy entertainment industry about the "costs" of infringement. Most of these reports have absolutely no basis in reality and have been widely debunked -- even by the US government itself. But, even if we grant that there are some "costs" to infringement, why is it that we rarely -- if ever -- hear about the costs of enforcement? Julian Sanchez has a great post riffing off of the news that Hulu is thinking of requiring proof of pay TV subscriptions to get any free content, and does a neat little thought exercise on how distorting the "cost of piracy" discussions are if you don't also look at the cost of enforcement. He puts forth a hypothetical:

To illustrate, let’s imagine television show that initially streams online for free with advertising, garnering a million viewers per episode and earning $1 per viewer in ad revenues, for a total of $1 million. A small number who really dislike ads, or have connections too slow for streaming, let’s say 5,000, download pirate copies anyway—but the vast majority watch legally. After building an audience and generating some good word of mouth, the accountants suggest that it might be more profitable to stop the free streaming and instead sell ad-free episodes for $4, in hopes that enough dedicated fans will pony up to compensate for the predictable drop in viewership once the program is no longer free to watch. The paying audience does indeed drop to 255,000, which still leaves the company slightly better off for the switch, but 100,000 viewers decide to keep up with the show (at least initially) by downloading pirated copies. A subsequent price hike to $10, however, turns out to be a money loser. Now the show has only 80,000 paying viewers, while 150,000 are engaged in piracy.

Undoubtedly that piracy is costing the show’s producers something: If piracy were impossible, some unknown fraction of those who download illegally would be willing to pay the asking price. But just crudely using the actual market price at each stage—even if modified by some constant “displacement rate” to acknowledge that not every illicit download represents a lost sale at that price—yields some perverse results. As the pricing strategy for the show changes, the “cost” of piracy rises from $5,000 to $400,000 (even as revenue rises) to $1.5 million (while revenues drop by $20,000). Obviously, something is wrong here.

It’s no great mystery what: The problem is that the rate of piracy, the price of a digital good, and the “displacement rate” (the percentage of the pirates who’d buy at that price in a world of perfect copyright enforcement) are not independent variables. And, of course, the interdependency runs both ways: Pricing decisions are influenced by the knowledge that we don’t live in a world of perfect enforcement, and you can tell plausible stories according to which this might keep prices higher or lower than they’d be under perfect enforcement, depending on your assumptions about the conditions under which a particular audience will substitute the pirate for the legal good.

But it goes further than that, which is that when you factor in the cost of enforcement, the equation changes somewhat:

Returning to our imaginary program, suppose that under perfect enforcement—a zero piracy world—there would be 110,000 paying viewers at $10 per episode, netting the creators an additional $80,000 over what they’d make with their revenue maximizing strategy ($4 per episode) in the world of imperfect enforcement. That’s great for them, if not for consumers, but we haven’t factored in the costs of enforcement. Some of these are likely to be borne by the creators themselves—hiring lawyers to hunt down pirate copies circulating online and the like—but in practice they’re often shifted to taxpayers, in the form of direct enforcement expenditures, or to other parts of the economy, in the form of DMCA compliance costs or innovative services that are deterred entirely. It’s possible that, in this hypothetical scenario, the revenue maximizing strategy for the producers is to charge $10 while externalizing the costs of perfect enforcement, but the socially efficient outcome is to accept imperfect enforcement and let the producers revenue maximize against that background at a $4 price point.

As Sanchez admits, many of these numbers are theoretical, just for the sake of the thought exercise. But what we know in reality is that the cost of enforcement -- whether direct or through externalities -- almost never enters into the discussion in any meaningful way, even though it's absolutely there.

What's amazing is that even when the costs are explicit, they barely enter the conversation. Take, for example, the predecessor to SOPA/PIPA: the ProIP Act, which passed in 2008. A report by the Congressional Budget Office showed that the cost of this bill, which is almost entirely focused on increased enforcement was $435 million. Yes, you read that right. Taxpayers have been on the hook for nearly half a billion dollars for the increased enforcement initiatives -- like the spectacular flop known as Operation In Our Sites. Is this really a wise use of taxpayer resources?

Add to that, of course, the negative externalities created by such enforcement -- such as the chilling effects of increased censorship, expensive court cases and other such efforts, and it's kind of amazing that these costs never seem to even enter the public debate, even though many of them are a lot more real than the "costs" presented by the industry for "piracy."

Filed Under: pay tv, pipa, piracy, proip, sopa
Companies: hulu

After SOPA And ACTA, Now TPP Starts To Fall Apart

from the good-and-getting-better dept

What an extraordinary year this has been for Net activism. After the great SOPA blackout led to SOPA and PIPA being withdrawn, and the anti-ACTA street demonstrations triggered a complete rethink by the European Parliament that may well result in a rejection of the treaty, now it seems that the Trans Pacific Partnership is falling to pieces.

Foreign Policy magazine, for example, has a feature entitled Is the Trans-Pacific Partnership Foundering?, where its author explains that a number of the smaller countries participating in the negotiations are starting to ask themselves whether there are any advantages in joining at all:

Of even more concern, however , is the sudden questioning by the Chileans of the value of the deal as presently being constituted. Chile had been considered a slam dunk supporter. So its raising of questions is a red flag danger signal. Beyond that it seems that the Malaysians are also questioning whether any benefits they may be getting are worth the trouble of further liberalization of their domestic economy. And just to put the icing on the cake, it is becoming ever clearer that the Vietnamese, whose economy resembles that of China with large segments controlled by state owned companies, are going to have great difficulty in actually meeting the high standards being proposed.

As Techdirt has reported, TPP has been negotiated in the utmost secrecy, but now that word is finally leaking out about its provisions, there is resistance building in the US:

Although the deal, known as the Trans-Pacific Partnership, has received relatively little media attention in the United States, it has sparked international friction among consumer groups and environmental activists who worry that terms demanded by the Obama administration will eliminate important public protections. Domestically, however, the deal's primary source of political tension is from a portion that could ban "Buy American" provisions -- a restriction that opponents emphasize would crimp U.S. jobs.

That seems like a pretty significant issue. After all, one of the supposed aims of the trade agreement is to remove such internal barriers to trade for all signatories. But in an election year, President Obama will hardly want to be painted as someone who is sacrificing American jobs.

Even assuming this major contradiction is resolved somehow, and the other Pacific Rim countries don't decide to abandon the treaty altogether, TPP is still fundamentally flawed for the same reason that ACTA is flawed: China is not a signatory. And the idea that once TPP (or ACTA) is in place, China will suddenly rush to sign up is extremely unlikely, for reasons that Arvind Subramanian, an expert in Chinese economic policy, explains:

"China would never agree to just fall in line with rules in the negotiations of which it has not participated," he writes in a policy brief.

If China did agree to participate in the talks, it would have huge bargaining leverage. Better to have multilateral talks where China’s power is diluted by the addition of Brazil, Europe, India and others to the talks.

A third possibility is that China comes to view the TPP as a hostile effort to "encircle" China economically. "TPP could thus provoke China into playing the regionalism game in a way that could fundamentally fragment the trading system," he writes.

However you look at it, TPP seems to be in serious trouble. Coupled with the withdrawal of SOPA, and the possible rejection of ACTA, this represents a string of setbacks for copyright and patent maximalism that a year ago would have seemed impossible.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Filed Under: activism, chile, china, pipa, sopa, tpp

A Challenge To Facebook: Withdraw CISPA Support Until The Bill Is Fixed Or Replaced

from the get-off-the-fence dept

One of the more concerning aspects of CISPA that sets it apart from SOPA/PIPA is the number of technology companies that support it. Of chief concern is Facebook, which handles a lot of sensitive private data, but is standing behind the bill. Joel Kaplan, Facebook's VP of U.S. Public Policy, has now released a statement explaining their support, which basically amounts to "we promise not to abuse the gray areas in the bill".

A number of bills being considered by Congress, including the Cyber Intelligence Sharing and Protection Act (HR 3523), would make it easier for Facebook and other companies to receive critical threat data from the U.S. government. Importantly, HR 3523 would impose no new obligations on us to share data with anyone –- and ensure that if we do share data about specific cyber threats, we are able to continue to safeguard our users’ private information, just as we do today.

That said, we recognize that a number of privacy and civil liberties groups have raised concerns about the bill – in particular about provisions that enable private companies to voluntarily share cyber threat data with the government. The concern is that companies will share sensitive personal information with the government in the name of protecting cybersecurity. Facebook has no intention of doing this and it is unrelated to the things we liked about HR 3523 in the first place -- the additional information it would provide us about specific cyber threats to our systems and users.

Kaplan then goes on to say that Facebook is engaging lawmakers to see about amending the bill to address people's concerns. But that creates a pretty big question: why are they still supporting the bill if they recognize its problems? Based on this statement, Facebook wants to use cybersecurity laws the right way—to give and receive anonymized and minimized data about specific threats, to be used solely in relation to those and similar threats. But CISPA does not require any of that. It's nice that Facebook is "able to" protect private information, but why aren't they and all other companies forced to? If the authors of the bill want to tout its "strong privacy protections", then a requirement to eliminate personal user information from shared data seems like a necessity.

Moreover, while Facebook may only be worried about specific cyber-threats, they can't control what the government does with the information. As currently written, CISPA basically allows the feds to keep whatever data Facebook shares on file, and search it whenever they want, for anything they want, as long as there is a "cybersecurity" or "national security" purpose. And "cybersecurity" is very broadly described, and includes things like intellectual property. If this bill is supposed to be about protecting networks from disruptive attacks, why aren't the terms and limitations narrowly defined to ensure that's the only thing it can be used for?

If Facebook's cybersecurity motivations are good—and I'm willing to grant them the benefit of the doubt and assume that they are—then they should withdraw their support of CISPA until it is fixed to exclude the broad provisions that go well beyond what Facebook wants to use it for. If the company is so proud of its commitment to user privacy, then surely it has to acknowledge that there are other companies which are not so responsible, and which will abuse the same powers and immunities that Facebook promises to handle responsibly. Unless they can show us that they are making meaningful demands of Congress, this attempt to soften their support of CISPA is just hot air.

Filed Under: abuse, cispa, cybersecurity, pipa, privacy, sopa
Companies: facebook

Paramount's Post-SOPA 'Outreach' To Law Students About 'Content Theft' Still Shows An Out Of Touch Operation

from the talking-at-cross-purposes dept

You may remember, in the wake of the SOPA/PIPA fight that Paramount Pictures (a Viacom company) reached out to a bunch of top law schools, asking if it could send its "Worldwide VP of Content Protection and Outreach" (seriously), Albert Perry, to teach the students about the evils of "content theft." It appears that Brooklyn Law School took them up on the offer, and Brooklyn Law school prof Derek Bambauer wrote up some great notes on the session. The law school also had professor Jason Mazzone (author of Copyfraud and this month's Techdirt book club author) provide a "response" to Perry.

Honestly, the talking points won't surprise anyone who pays attention to this stuff. Perry argues that Hollywood is suffering massively from "content theft" and that something must be done. Mazzone, thankfully, points out that Perry is being disingenuous in using the word "theft," when it's not theft under the law or in reality. Using the word "theft" unfairly biases the discussion and ignores both the realities of copyright, and the fact that copyright is not absolute. Perry, however, can't let go of the term, apparently. You could sum of Perry's talk by basically saying "well, the big Hollywood studios are suffering, and it's everyone's fault but our own."

He literally admits that there may be more indie films and such, but that those aren't the films that anyone cares about. Instead, you see, culture will be worse off if Hollywood can't produce the next Transformers movie:

While he said he didn’t want to get into copyright math, Perry noted that the number of films released by the six major motion picture studios has dropped from 204 in 2006 to 134 in 2011.... He suggested that online infringement affects ancillary (post-box office) revenues, which isn’t captured in rosy reports of ticket sales. Perry said he doesn’t believe that infringement will wipe out content – rather, it will shift it. We’ll see more small-budget or amateur films, and fewer major studio films. These movies, he suggested, are the iconic ones that people remember and reference, so piracy may have an important cultural impact.

Of course, there are a few problems in these claims. While the big six studios may have made fewer movies, many more movies were made overall in the global economy. Just looking at the US, while the major studios released 204 movies in 2006, indies released 390. His number is off in 2011. It was actually 141 movies released by the major studios... but indies increased their release numbers to 469. So, total movies released actually grew from 2006 until 2011. That certainly suggests that everyone else in the market is figuring out how to adapt. Why should we be concerned about six companies that are unwilling to adapt? And, is that ever condescending and insulting to suggest that indie movies can't possibly have the "cultural impact" of a movie like Jack and Jill.

Perry also praised totally one-sided and misleading "education campaigns" that copyright maximalist organizations like the Copyright Alliance have been able to get into schools, ignoring things like fair use (it was also noted that Perry ignored fair use in his initial statements). It's really silly that schools are accepting industry propaganda like that to teach kids. Thankfully, more accurate alternatives are being created.

The other bit of good news in all of this is that it sounds like the students were mostly skeptical of Perry's claims, and recognize that he's exaggerating -- though it sounded like he couldn't even comprehend where they were coming from:

The discussion was impressively thoughtful and civil. The students evinced skepticism about the movie industry’s good faith and bona fides, particularly given the drafting of SOPA / PROTECT IP, and also given the recording industry’s history of suing its users. Perry pointed out that Paramount is trying hard to make content available widely, cheaply, and easily, and that the only other way of altering the reward calculus to users is to engage in enforcement against end consumers, which no one likes. He was repeatedly puzzled by the attitude of law students that infringement isn’t a big deal (since it’s unlawful), particularly when this attitude is justified by reference to movie industry profits.

In the end, while it was civil, it sounds like the same old story of Hollywood just not understanding. The profits of six organizations is of little concern to the wider social benefit, and Hollywood cannot show that there's any wider harm (because there is no such proof). Thankfully, it appears that the students (and professors) at Brooklyn Law get this important point.

Filed Under: book club, derek bambauer, jason mazzone, law school, pipa, sopa
Companies: paramount, viacom