Senators Leahy And Tillis -- Both Strongly Supported By Hollywood -- Ask Merrick Garland To Target Streaming Sites

from the because-of-course dept

As you'll likely recall, at the very end of last year, Senator Thom Tillis, the head of the intellectual property subcommittee in the Senate, slipped a felony streaming bill into the grand funding omnibus. As we noted at the time, this bill -- which was a pure gift to Hollywood -- was never actually introduced, debated, or voted on separately. It was just introduced and immediately slipped into the omnibus. This came almost a decade after Senators had tried to pass a similar bill, connected to the SOPA/PIPA. You may even recall when Senator Amy Klobuchar introduced such a bill in 2011, Justin Bieber actually suggested that maybe Senator Klobuchar should be locked up for trying to turn streaming into a felony.

Of course, this whole thing was a gift to the entertainment industry, who has been a big supporter of Senator Tillis. With the flipping of the Senate, now Senator Leahy has become the chair of the IP subcommittee. As you'll also likely recall, he was the driving force behind the PIPA half of SOPA/PIPA, and has also been a close ally of Hollywood. So close, in fact, that they give him a cameo in every Batman film. Oh, and his daughter is literally one of Hollywood's top lobbyists in DC.

So I guess it's no surprise that Tillis and Leahy have now teamed up to ask new Attorney General Merrick Garland to start locking up those streamers. In a letter sent to Garland, they claim the following:

Unlawful streaming services cost the U.S. economy an estimated $29 billion per year. This illegal activity impacts growth in the creative industries in particular, which combined employ 2.6 million Americans and contribute $229 billion to the economy per year. In short, unlawful streaming is a threat to our creative industries and the economic security and well-being of millions of Americans.

If you've been following these stories long enough, you know where this number comes from. It's from a report put out by the US Chamber of Commerce's "The Global IP Center" and written by NERA Consulting. The US Chamber of Commerce has always been a huge backer of stronger copyright -- mainly because the MPA pays them to be -- and NERA Consulting releases reports for Hollywood all the time. This report is not nearly as bad as some of their earlier reports, but it still makes a ton of assumptions about consumption that seem unlikely to be anywhere close to reality.

Either way, Tillis and Leahy want Garland to get down to doing exactly what Hollywood wants:

Now that have you been confirmed, will you commit to making prosecutions under the PLSA a priority? If so, what steps will you take during your first one hundred days to demonstrate your commitment to combating copyright piracy?

How quickly do you intend to update the U.S. Attorneys manual to indicate prosecutors should pursue actions under the PLSA?

Hurry up and throw streamers in jail!

As if recognizing just how bad this looks, they did include one final point as a sort of nod towards the fact that the DOJ probably shouldn't be going after ordinary everyday streamers.

When updating the U.S. Attorneys manual, what type of guidance do you intend to provide to make clear that prosecutions should only be pursued against commercial piracy services? Such guidance should make clear that the law does not allow the Department to target the ordinary activities of individual streamers, companies pursuing licensing deals in good faith, or internet service providers (ISPs) and should be reflective of congressional intent as reflected in our official record.

Just the fact that they need to include this certainly suggests that they know how dangerous the law they passed was, and how it could easily be misinterpreted and/or abused to go after such individuals or companies.

Hopefully, AG Garland realizes that he's got more important things to do than being Hollywood's latest cop on the beat.

Filed Under: copyright, felony, felony streaming, justin bieber, merrick garland, pat leahy, priorities, streaming, thom tillis

Potentially Big News: Top CEOs Realizing That 'Maximizing Shareholder Value' Isn't A Great Idea

from the well-look-at-that dept

For the better part of two years, I've been noodling on a post (I've half written it a bunch of times) talking about how perhaps the biggest problem with so much of what we see today can be tied up in two related concepts: "fiduciary duty to shareholders" and the idea of "maximizing shareholder value." I talked a little about this a few weeks back in highlighting how almost all of the problems that people talk about when they complain about big tech can really be traced back to Wall Street and this idea of maximizing shareholder value.

Conceptually, maximizing shareholder value makes some sense, but only if you don't think about it for more than a few minutes. Because the whole thing falls apart as soon as you ask "over what time frame?" I first wrote about this back in 2006, in what I called the "time function of profits," in trying to understand why so many people were claiming that Craigslist's approach to grow slowly (but massively) by leaving most of their site free and not doing all sorts of icky stuff, was seen by some as "leaving money on the table" or even being anti-capitalist. As I pointed out then, that only made sense if you thought in the very short-term. Taking a longer term view suggests that "maximizing" profits in the short run is likely to create significant problems in the long run, whether it be competition or customers annoyed at you and the like. In a follow up post I did in 2008, I pointed out that maximizing profits shouldn't mean screwing your customers. The real issue is the time frame. If you want to maximize profits for just this quarter, then, yes, screwing over your customers is a viable strategy.

However, if it's more long term, then the incentives should change quite a bit. It's just like the Prisoner's Dilemma. If you are playing that game once, the incentives are heavily weighted towards cheating. However, if you're playing it many, many times, the incentive structure changes, and it should move to a more cooperative model. For some reason, however, this hasn't happened that much in real life. Many businesses (and many folks on Wall Street) assume that having a "fiduciary duty" to "maximize shareholder value" or "shareholder profits" means squeezing out every penny of profits right away, with no concern for the future.

Perhaps stating this backwards thought process most clearly was former big record label exec Dick Morris who once famously told Wired magazine that if someone is asking you to give up some money now to make more later, it means that "someone, somewhere, is taking advantage of you." And, of course, one of the foremost proponents of this theory was Milton Friedman, who argued that the only responsibility of a company is to its shareholders, and that companies need to maximize the return to those shareholders. Friedman trashed the idea of social responsibility for corporations, but he, himself, didn't seem to recognize how the long term played against the short term here. Ignoring any sense of social responsibility, in favor of short term maximization, would lead not just to long term social harms, but also to limits on the long term value for shareholders.

In recent years, we've started to see some pushback on these ideas. A few months ago, there was the announcement of a new Long Term Stock Exchange, designed to respond to these challenges, by giving companies more time to accomplish stuff than the usual quarterly heartbeat. But perhaps much bigger news is that the Business Roundtable, a gathering of top CEOs, has now put out a letter saying that shareholder value cannot and should not be the only focus of a corporation.

I'd argue that the letter is not that well-written, and given the signatories, I'm sure it went through millions of dollars worth of lawyering before anyone agreed to sign onto it. However, it does set up a much more thorough framework for thinking about all of the stakeholders that a company should consider in doing business: customers, employees, suppliers, communities, and shareholders. It's signed by a bunch of big company CEOs (the letter itself is one page, then there are 11 more with signatures).

Of course, it pays to be cynical about such things. It's one thing to say all of this, another thing altogether to actually walk the walk. And, certainly, some of the signatures come from CEOs who run companies who don't exactly have a strong history of paying attention to most of the stakeholders listed above. Indeed, if you want to find some of the worst behaving companies -- especially towards customers, employees, and communities -- this is a ready-made list (I mean, AT&T's and Comcast's CEOs, Randall Stephenson and Brian Roberts, both signed on to this). So, no one should take this as a real commitment to change.

That's only going to come if the companies are seen to be putting this into action, and that's where the public (and the media) need to come into play. When companies -- especially those who signed onto this document -- are seen behaving badly, it should be called out, and this letter should be referenced. Yes, it's quite probable that many signed onto this thinking that it's a good PR effort to pretend to be good corporate citizens for a day or two. But if we want to enact real change, and have companies get past the short term view of screwing over everyone to "maximize shareholder value," it's only going to happen if these execs are held to the very standards they claim to support.

Filed Under: business roundtable, maximizing shareholder value, priorities, profits, shareholder value, shareholders, stakeholders

French Government Takes 172 Million Euros From Citizens To Pay Publisher For Access To Research Public Already Paid For Once

from the and-slashes-public-education-funding-on-top-of-it dept

It's all about priorities. Those providing the valuable research will have to learn to do without because the publishers must be paid.

France may not have any money left for its universities but it does have money for academic publishers. While university presidents learn that their funding is to be reduced by EUR 400 million, the Ministry of Research has decided, under great secrecy, to pay EUR 172 million to the world leader in scientific publishing Elsevier.

If the name Elsevier rings a bell, it's because the academic publishing giant has dragged its own dubious reputation through the mud with alarming frequency over the past several years. It has charged for access to open-access documents, despite being repeatedly informed of this "oversight" in its purchasing system. At one point it had a division dedicated to cranking out fake medical journals for use by pharmaceutical companies to buttress iffy claims about medicinal effectiveness. It was also engaged in ghostwriting copy for these same companies in order to downplay disagreeable research findings. It has also routinely targeted researchers who have posted copies of their own work on personal sites or to freely-accessible university online libraries.

As the Open Knowledge Foundation points out, France is paying multiple times for the same documents -- documents created for "free" by university researchers who don't see a cent of Elsevier's profits.

The scientific publishing market is an unusual sector, those who create value are never remunerated. Instead, they often pay to see their work published. Authors do not receive any direct financial gain from their articles, and the peer review is conducted voluntarily. This enormous amount of work is indirectly funded by public money. Writing articles and participating in peer review are part of the expected activities of researchers, expected activities that lead to further research funding from the taxpayer.

So, in response to demands from Elsevier, France is cutting the financing that generates the research locked up by academic publishers and increasing its contributions to a company that enjoys a 30-40% profit margin on documents it is often paid (by researchers) to resell.

This published research was mainly financed by public funds. Therefore in the end, we will have paid to Elsevier twice: once to publish, a second time to read.

When the Open Access Foundation says "we," it means French citizens. And despite being double-dipped by their government, a large majority of French citizens will still have no access to the research locked up by Elsevier. Publicly-funded research resides behind the publisher's paywall, limited to certain people within the 476 institutions included in the agreement. While Elsevier did offer the French government a "discount" of nearly 16 million EUR, this price cut is due to the withdrawal of over 150 institutions from Elsevier's licensing scheme.

That's a lot of money being spent to benefit only a small percentage of French citizens. And, as the article points out, it's only one of several similar agreements with other academic publishers. These closed markets provide for constantly increasing prices, even as digital storage and distribution continue to decrease costs. And let's not forget the fact that those creating these works are also paying to have them included in academic publishers' libraries, often giving up control of their copyright for an extended period of time.

Sooner or later, the system will collapse under its own weight. Slashing funding to universities negatively affects the creation of the very documents Elsevier needs to sustain its position in the marketplace. You can't continue to rob one to pay for the other, at least not forever. Publisher reaction to declining participation has generally been to increase rates -- another unsustainable pattern. But until it all falls apart, publishers will continue to do all they can to separate the public from research it already paid for once… and erect a paywall to ensure they still can't access it even after paying for it again.

Filed Under: france, open access, priorities, research

Despite Promises To Fight Mortgage Fraud, DOJ Basically Ignored It, Then Claimed Success With Faulty Stats

from the terrorism-is-hot dept

A few months ago, we noted that the FBI had quietly admitted that its primary function was no longer law enforcement (as it was supposed to be), but rather "national security." Because fighting terrorism is hot. Putting bankers destroying the economy in jail? Not hot. As we noted at the time, the numbers showed that the FBI was putting a huge part of its budget towards "counterterrorism" (potentially doing much more to destroy your civil liberties than the NSA) and its efforts to take down white collar crime was dropping significantly.

A new report from the Justice Department's Inspector General confirms this finding. It also notes that, despite President Obama and Attorney General Eric Holder promising (yeah, I know...) that cracking down on "mortgage fraud" was a top priority, the FBI has actually put it near the bottom of the list of actual priorities. Say one thing, do another. That sounds mighty familiar.

“In cities across the country, mortgage fraud crimes have reached crisis proportions,” Attorney General Eric H. Holder Jr. said at a mortgage fraud summit in Phoenix in 2010. “But we are fighting back.”

The inspector general’s report, however, shows that the F.B.I. considered mortgage fraud to be its lowest-ranked national criminal priority. In several large cities, including New York and Los Angeles, F.B.I. agents either ranked mortgage fraud as a low priority or did not rank it at all.

Oh, and even better, because of all the hype and talk about mortgage fraud, Congress allocated more budget specifically for that purpose, though it appears to have gone elsewhere.

And that's not all. The DOJ then pretended that it had been fighting mortgage fraud and put on a whole presentation about its success -- based on totally faulty numbers. Numbers that it was pretty sure were faulty -- and then took nearly a year to admit that their claims of success were based on bogus stats:

We further found that, despite receiving significant additional funding from Congress to pursue mortgage fraud cases, the FBI in adding new staff did not always use these new positions to exclusively investigate mortgage fraud. Moreover, when we attempted to assess the effectiveness of the Department’s efforts in pursuing mortgage fraud cases, we found that DOJ could not provide readily verifiable data related to its criminal and civil enforcement efforts. The DOJ’s release of significantly flawed information at a highly publicized press conference in October 2012 regarding the purported success of the FFETF’s and the DOJ’s recent mortgage fraud initiative reflects the lack of accurate data maintained by the Department regarding its mortgage fraud efforts, as well as the Department’s serious failure to adequately vet information that it was presenting to the public. Only days after the press conference the Department had serious concerns over the accuracy of the reported statistics, yet it was not until August 2013 when the Department informed the public that the October 2012 reported statistics were indeed flawed. Moreover, during those 10 months, the Department continued to issue press releases publicizing statistics it knew were seriously flawed. We believe the Department should have been more forthright at a much earlier date about this flawed information.

Somehow, none of this is making me feel any safer.

Filed Under: doj, eric holder, fbi, mortgage fraud, national security, priorities

Reveal Illegal Surveillance? Run For Your Life; Conduct Illegal Surveillance & Lie About It? No Biggie

from the our-priorities-are-really-screwed-up dept

It really says a lot when you compare how Ed Snowden and James Clapper are being treated these days. Snowden, who revealed the NSA's illegal and unconstitutional surveillance efforts is finding that US pressure and various "technicalities" mean that his asylum requests are getting quickly rejected, leaving him with dwindling options. Meanwhile, James Clapper, who ran the actual program and then flat out lied to Congress about is, can apparently get away with a ridiculous, staged "apology" to Congress for "clearly erroneous" statements.

In a sane world, the person who exposed an illegal surveillance program would be celebrated and congratulated, while the guy who ran the program and lied to Congress about it would be the one worried about his future. Instead, Snowden is being hunted, while no one seems even remotely concerned that Clapper has admitted to not just perjuring himself, but also running a highly questionable surveillance program that to this day is continuing to collect data on millions of Americans and their communications. Something is really screwed up with our priorities.

Filed Under: ed snowden, james clapper, lying to congress, priorities

Press Goes Nuts Over Bieber Baby, But Ignores Bieber's Concerns With Regulating The Internet

from the priorities,-people dept

As pointed out by Harold Feld, it seems pretty messed up that our news media is going absolutely nuts over the story of the potential "Bieber baby," but has all but ignored the story of how the lack of clarity in the proposed SOPA law might mean Justin Bieber would go to jail for his performances of other people's works on YouTube -- something Bieber himself has spoken out against. Let's take a look. A basic Google News search on "bieber baby" turns up... 3,770 news stories: And then let's do a search on "bieber sopa." For that... we get... a grand total of 15 news stories (including one from Techdirt): Which story is actually more important? The one in which the government makes massive regulatory changes to the internet that will create felons out of ordinary people? Or the story about a baby that a pop star may or may not have fathered?

Filed Under: e-parasite, journalism, justin bieber, priorities, protect ip, sopa

Why Is The MPAA's Top Priority 'Fighting Piracy' Rather Than Helping The Film Industry Thrive?

from the misplaced-priorities dept

We've already written about the news that ex-Senator Chris Dodd has gone back on his promises and his principles to take the top lobbying job at the MPAA, but this recent article in Hillicon Valley, talking with interim MPAA boss Bob Pisano, is bizarre in that it shows how incredibly misguided the MPAA's entire strategy is. We've seen that the MPAA has an entire "content protection" staff, but doesn't appear to have a staff of folks dedicated to actually helping filmmakers to adapt and to succeed in the modern era. But it strikes me as ridiculously short-sighted that the MPAA admits that its number one priority is getting the government to "fight piracy."

Interim CEO and president Bob Pisano told Hillicon Valley earlier this month that the media's fixation on who would succeed former chairman Dan Flickman hadn't changed his organization's unwavering focus on its top priority, which is increasing the federal government's efforts to stop online film piracy.

And, yes, the amusing misspelling of Dan Glickman's name is in the original. But, more to the point, why is getting the government to fight piracy the MPAA's "top priority," when study after study has shown that piracy, alone, is not damaging the industry. It's the failure to compete and to come up with smarter business models that is causing trouble for filmmakers. Even if you got rid of piracy, it's not like it would suddenly drive people to start buying again. Perhaps the real problem is that Pisano (a lawyer, of course) is so clueless when it comes to business, he doesn't realize what business the movie industry is even in:

"I don't care how much you talk about it you can't compete with free," Pisano said.

And, that, right there, is why the MPAA should fire him and hire someone who actually understands business (which is not Chris Dodd). Of course, you can compete with free. Lots of businesses do it all the time and plenty of movie makers have successfully done it for years. Why would Pisano flat-out lie?

It's almost not worth mentioning that Pisano also talks up the importance of COICA and how happy he is that Homeland Security has been seizing domains in violation of the First Amendment and basic due process, even taking down tens of thousands of perfectly innocent sites. These are the people who run Hollywood now? Censorship-loving folks who can't understand basic business principles? No wonder they're so worried about failing. They have no clue what they're doing.

Filed Under: bob pisano, chris dodd, movies, piracy, priorities
Companies: mpaa

FBI Prioritizes Copyright Issues; Not So Concerned About Missing Persons

from the say-what-now? dept

While we've seen that copyright infringement -- which really should be a civil issue dealt with between private parties -- has suddenly become a major priority for the FBI, it appears that the FBI has stopped caring about things that seem a lot more important. Earlier this year, we noted that the FBI had stopped considering identity fraud as a priority. Now, a new report notes that another thing the FBI appears to not care much about are missing persons cases. Specifically, the FBI has consciously decided to give such cases lower priority in the FBI's laboratory, which is used to look at DNA evidence. This has created a massive backlog in missing persons cases. A new report from the Justice Department's Inspector General notes that this has serious consequences:

"Backlogs can also prevent the timely capture of criminals, prolong the incarceration of innocent people who could be exonerated by DNA evidence, and adversely affect families of missing persons waiting for positive identification of remains."

Perhaps I'm missing something, but doesn't it seem like missing persons cases and identity fraud are the sorts of things the FBI should be working on, as they're cases where individuals can be seriously harmed? Copyright cases are really just business model issues, where the only "harm" is caused by copyright holders refusal to adapt to a changing market. Isn't it time the FBI got its priorities straight?

Filed Under: copyright, fbi, identity fraud, missing persons, priorities
Companies: fbi

Is The Federal Government The Most Interesting Tech Startup For 2009?

from the perhaps... dept

A few weeks back I got to see the federal government's CTO, Aneesh Chopra, speak twice during his first trip to Silicon Valley. I've seen him speak before (before he was appointed, when he was CTO for Virginia), but I have to admit I was pretty skeptical going in. For plenty of reasons that you can guess, I'm pretty jaded by people in government, and it's rare to come across people who seem to be doing things for anything other than "political" purposes. But I have to admit that the amazing thing that came through in both Chopra's talks was that they were both entirely about actually getting stuff done, with a focus on openness and data sharing. Chopra talked, repeatedly, about figuring out what could be done both short- and long-term, and never once struck me as someone looking to hoard power or focus on a partisan or political reason for doing things. It was never about positioning things to figure out how to increase his budget. In fact, many of the ideas he was discussing was looking at ways to just get stuff done now without any need for extra budget. Needless to say, this is not the sort of thing you hear regularly from folks involved in the government.

But, of course, talk is cheap (especially in politics). And, while Chopra (and Vivek Kundra, the government's CIO) both actually have a nice track record of accomplishing these sorts of goals in their past jobs, the proof is in what's actually getting done. We'd already mentioned at least one success story with the IT dashboard at USASpending.gov, but can it continue? I have to admit, a second thing that impressed me about Chopra was that, even with such a success, he didn't focus on it. The fact that he got together such a site in such a short period of time is impressive enough, and while he mentioned it in his talks, most of them were much more focused not on what he'd already done, but on what he was going to do -- and the plans all seemed quite achievable.

So I have to agree with Anil Dash, that one of the most interesting tech "startups" to watch this year is the federal government of the US. The tech projects that they're already coming out with are compelling and well done. As Anil notes:

What's remarkable about these sites is not merely that they exist; There had been some efforts to provide this kind of information in the past. Rather, what stands out is that they exhibit a lot of the traits of some of the best tech startups in Silicon Valley or New York City. Each site has remarkably consistent branding elements, leading to a predictable and trustworthy sense of place when you visit the sites. There is clear attention to design, both from the cosmetic elements of these pages, and from the thoughtfulness of the information architecture on each site. (The clear, focused promotional areas on each homepage feel just like the "Sign up now!" links on the site of most Web 2.0 companies.) And increasingly, these services are being accompanied by new APIs and data sources that can be used by others to build interesting applications.

That last point is perhaps most significant. We've seen the remarkable innovation that sprung up years ago around the API for services like Flickr, and that continues full-force today around apps like Twitter. But who could have predicted just a year or two ago that we might have something like Apps for America, the effort being led by the Sunlight Foundation, Google, O'Reilly Media and TechWeb to reward applications built around datasets provided by Data.gov. The tools that have already been built are fascinating. And, frankly, they're a lot more compelling than most of the sample apps that a typical startup can wring out of its community with a developer contest.

There's plenty going on in the administration that I disagree with and am troubled by -- but efforts on the tech side are something worth applauding, while also watching to see what the folks there can do in the next few years.

Filed Under: aneesh chopra, cto, federal government, innovation, plans, priorities, technology, vivek kundra

National CTO's Plans Sound Pretty Good... Let's Hope They Don't Get Bogged Down In Politics

from the good-signs dept

Aneesh Chopra, who recently became the federal government's CTO has a very impressive track record in encouraging more governmental openness and also adopting new technologies. I think he was an excellent choice as CTO, though I'm always cautious until we get to see what actually is being done. Saul Hansell from the NY Times interviewed Chopra recently, where he laid out his basic priorities, and they definitely sound like steps in the right direction:

• Economic growth through innovation
• Addressing presidential priorities through innovation platforms
• Building the next-generation digital infrastructure
• Fostering a culture of open and innovative government

While those bullet points may sound a little vague, they certainly are the key things he should be focused on, and the rest of the article details some of the details of where he may be heading on all of those points, and it suggests that he's certainly going beyond the soundbite style thoughts found all too commonly in political circles these days. For example, when most politicians talk about economic growth through innovation, they usually mean just dumping more money into research programs or increasing the number of patents. But, as we've all seen, those don't necessarily serve as an accurate proxy for real innovation. Instead, Chopra wants to focus on looking at actual data about how products are getting to market:

Rather than purely thinking about basic research, he said, the government should focus on investing in technologies that can be developed. A first step is to find ways to actually measure how much research is being commercialized.

"There is an implicit assumption that R.&D. investment will lead to job growth and economic success," he said. "The measurement question will lead us to think about, how do we begin to assess the outcomes."

It's great to see that he's skeptical of the common wisdom that R&D automatically leads to economic growth, but wants to dig deeper into the data to see what the numbers really mean. He's also hoping to learn from how different universities lead to commercialization:

Mr. Chopra noted that among universities, there is a wide range in how effective they are in commercializing the work of their laboratories. He wants to take the practices used by the most commercial of universities and spread them to other research facilities.

Again, this is good news. Many people falsely assume that things like the Bayh-Dole Act, which pushed universities to patent their research to drive commercialization was a good thing. But there's a growing amount of research suggesting that Bayh-Dole has actually harmed research and the ability to commercialize products. Hopefully, the data that Chopra is looking at takes that into account. Bayh-Dole caused many universities to set up "tech transfer" offices, but the vast majority of them are losing money -- in part because they've focused on the patents rather than the actual steps to innovation. The universities that have focused on enabling innovation rather than just collecting and licensing the most patents, have had the most success.

Hopefully, there is where Chopra will lead the government... but, as always, until we see it in action, it's worth being skeptical and watching closely. At this point, though, it's nice to see that he actually seems to be looking in the right direction.

Filed Under: aneesh chopra, cto, innovation, plans, priorities