The copyright standoff: Technology pits bad rules vs. no rules

On the morning of Jan. 18, Alexis Ohanian sat down, bleary-eyed, in front of his computer and, as he often did, opened Wikipedia. But this time something was wrong. The site refused to load. "Oh, right," he said to himself. "Today's the blackout day."

Ohanian was instrumental in organizing that blackout day, when a bunch of major websites — including Reddit, which he co-founded — went dark to protest the proposed Stop Online Piracy Act (SOPA) then being debated in the House of Representatives.

SOPA was a terrible bill. Nobody liked it, save its copyright-industry backers and congressional sponsors. Even people who favor some kind of legislation to combat unauthorized media downloading thought it was terrible.

The bill's terribleness (as well as that of the slightly-less-terrible Senate version, the Protect IP Act, or PIPA) should have been enough to do it in. Aimed at blocking access to foreign websites that might be purveying unauthorized copies of music, movies, videogames, and even knockoff products, SOPA was badly conceived, badly written, and posed a technical danger to the operation of the Internet. But if not for the groundswell of online protest, stirred up in part by the tech industry, it might have become law anyway. The House, at any rate, seemed poised to pass it until the blackout day, when representatives started withdrawing their support. Not all of them did so, however, and the danger remains that a clueless Congress will pass a similar measure, perhaps next year.

After SOPA was shelved, the media lobby backed off slightly — but only slightly — from its apocalyptic rhetoric. During a congressional hearing in June, though, Cary Sherman, head of the Recording Industry Association of America, warned what would happen if Congress failed to act against piracy: "Massive layoffs, of course. But also less money to invest in artists. That means fewer artists on our rosters, fewer people who can make a living from music, fewer songs permeating through our culture that help form a piece of our national identity."

Got that? If you download a Beyoncé track, you destroy a piece of our national identity.

Such proclamations point to one of the most serious challenges involved with crafting reasonable copyright law and policy: These issues are too often debated as a zero-sum game, where the only choices are total corporate control over how media gets distributed and what can be legally done with it, or else total anarchy, where all media products are free. Each side accused the other of extremism, thus making a reasonable compromise harder to achieve. That sounds a lot like our national politics right now.

That morning, Ohanian did some other stuff online, then, out of habit, went to Reddit, the web's most popular social-news website. In just a couple of minutes, he says, "I had forgotten about the blackout again." He was exhausted from the months of work he had put in fighting SOPA, along with his many other projects. Among the more exhausting tasks was dealing with all the politics and the politicians. "I generally try not to dig too deeply into the inner workings of Washington," he says. "But here I was for three or four months, watching the sausage being made. "

It was, he says, "both exhilarating and depressing." Depressing because it's so different from the online world where he lives and works. "The Internet is a place where the best ideas always win. Washington's not like that."

Of course, the best ideas don't always win on the Internet. One look at YouTube or SFGate.com's comments section will tell you that. It is, however, a place where really bad ideas — like SOPA or, say, the Komen Foundation's decision to defund Planned Parenthood's breast-cancer screenings — are killed because social media enables an inescapable critical mass of public outrage.

The Internet is also a place where people hash out ideas. SOPA is shelved, and it might be dead, but the debate over piracy and copyright goes on, mainly online.

In June, Emily White, an intern at NPR, created a stir when she wrote a blog post about how she'd only bought about 15 CDs in her whole life, though she owned about 11,000 songs. Most were unauthorized copies she got from friends and from CDs she had ripped at her college radio station, not illicit downloads (a distinction she seemed to think was important). She breezily revealed her sense of entitlement, writing, "I honestly don't think my peers and I will ever pay for albums. I do think we will pay for convenience.... What I want is one massive, Spotify-like catalog of music that will sync to my phone and various home entertainment devices. With this new universal database, everyone would have convenient access to everything that has ever been recorded."

Before services like Spotify, White didn't have the "convenience" she believed was her right, so she just ripped CDs and got free music from friends. Musician David Lowery of Cracker and Camper Van Beethoven fame wrote a response that went viral: "Fairly compensating musicians is not a problem that is up to governments and large corporations to solve," he told White. "It is not up to them to make it 'convenient' so you don't behave unethically."

White is no monster. Music was already being distributed online by the time she started to listen to it, and she doesn't know from "albums," but she does believe that artists be fairly compensated, though she seems clueless as to how that could or should be done. She went too far in demanding that such compensation must conform to her need for "convenience." But Lowery downplayed the responsibility of the music business for its own destruction, and seemed to indicate that he wants to protect the music industry not only from piracy, but from inexorable technological change. Just as White has no "right" to convenience or low prices, the media business has no "right" to control the markets in which it operates. If technological change means that the industry loses its iron grip on distribution, and market prices for music sink (piracy aside), well, them's the breaks.

The music business has fought legitimate digital distribution and streaming almost as hard as it's fought piracy. It is reluctantly giving in only because it has no choice — indeed, it has made concessions largely in response to piracy. Consumers don't much care about the industry, of course, unless you remind them — as Lowery did — that it includes musicians, engineers, producers, and other actual humans, who don't get paid when people download music for free.

A recent cartoon by Matthew Inman, creator of The Oatmeal, has served as a Rorschach test on the copyright question. The cartoon depicted the thought process behind the average person's decision to illegally download copyrighted material. The subject couldn't find a place to buy or rent recent episodes of Game of Thrones online — unless he signed up for cable service, which he didn't want to do. So, after exhausting every legal avenue, he gave up and went to a pirate site, and later felt bad about it. People who think media companies are greedy and clueless saw the cartoon as supporting their point of view. People who think all downloaders of unauthorized material are amoral freeloaders saw it as a defense of the indefensible. But really, it was just an accurate depiction of the current technological reality, where the interests of media consumers and media distributors are impossible to reconcile and questions of ethics and morality are almost beside the point.

Tech journalist Tim Carmody, who now writes for The Verge, is one of those who saw the cartoon as an apologia for piracy. In a debate on Twitter, he complained that people were trying to turn the cartoon into a "normative principle." Some of them were. But he complained that those people "don't even know how the television industry works."

The point, however, isn't whether viewers have insider knowledge — it's that they know there's a show they want to watch, but can't without ponying up for an expensive cable package. That's one way the television industry works — forcing customers hungry for its products to buy a bunch of crap they don't want to get the programs they do.

Carmody doesn't disagree — he just thinks that it makes business sense to make new episodes of some shows, such as Game of Thrones, available only on cable.

"I think the basic value proposition of cable, especially bundling lots of cable channels together in a single subscription, is still pretty good," he said in an interview. "Piracy can't be stopped, infringement can't really be enforced. But that doesn't necessarily mean it makes good business sense to do everything you can to take away all the 'if only' arguments that people make" — such as, if only Game of Thrones were more easily available, it wouldn't be pirated so much. In May, the media measurement firm Big Champagne estimated that Game of Thrones was "the most pirated show of the year," with its second season having been downloaded at least 25 million times.

In an article for Wired in March titled "In Defense of Cable," Carmody wrote that "what the pro-piracy arguments come down to is: 'this is legally available, but not at a price I am willing to pay,' and/or 'this is legally available, but not for a time that I am willing to wait.'"

He's right, though his use of "pro-piracy" sort of misses the point of the Oatmeal cartoon. But he's also right that this shouldn't be seen as a practical question rather than a moral one. Fighting piracy through law enforcement and the courts will never solve the problem, nor will guilting people into refraining from downloading unauthorized material. To minimize the harm of piracy, the media industry must divert its resources away from draconian enforcement efforts and toward realigning its business strategies to comport with modern realities.

In the end, the media industry has to accept that unless people's desires for cheap and easy access to content are met, piracy will never go away. Call it the realpolitick of media distribution.

The media industry has few disinterested allies. Indeed, there's hardly anyone outside the business, its paid water carriers, and its congressional pals who stands up for its interests.

One outlier is Robert Levine, the author of Free Ride: How Digital Parasites Are Destroying the Culture Business. The problem, he says, is that both sides tend to frame the copyright debate as a moral issue, when it's really a classic "clash of interests."

"I've never in my life wanted to pay for a record," Levine says. "That's my interest as a consumer, but it's not in the public interest." The public interest lies in making sure that creative material gets produced, not in giving everyone free access to it, he says. And that in fact is the reason copyright originally came about in English Common Law, on which American copyright laws were originally based — not to protect the interests of creators, but to protect the public interest by ensuring that knowledge could be disseminated.

Levine is the former executive editor of Billboard, and before that, he worked for Wired; he's got cred on both sides of the tech/media divide. He opposed SOPA (because of its fundamental terribleness as a piece of legislation), but thought that its most strident opponents were just as bad as the copyright industries at framing their side of the issue. Anti-SOPA zealots stirred up public opinion based on misinformation, he says. For instance, an oft-cited claim was that SOPA would "break the Internet." Levine equates such rhetoric with the Republicans' warning about "death panels" during the healthcare debate. On the other hand, in the healthcare debate there was no equivalent of Vint Cerf talking about death panels. Cerf, often called a "father of the Internet," was one of many networking experts who thought SOPA might interfere with the Net's basic operation. The only people talking about "death panels" were crackpots.

Levine points out that piracy is a problem that needs to be addressed reasonably. "We can argue about how much piracy hurts [creators of content], but to say it's not hurting them at all is insane," he says. "To people who say the music business isn't losing money to piracy, I say: 'What are you, fucking nuts?'"

Ohanian describes the bill's failure as an example of "people winning against lobbying dollars." He's partly right. It was actually more like people and lobbying dollars winning against other lobbying dollars. Google and other tech companies worked hard in Washington to get the bill shelved. But the movement against it had been bubbling up online for many months, and it reached its pinnacle with the blackouts.

Still, Ohanian insists that opposition to SOPA was "all bottom-up." The blackout at Reddit, the first site to announce such a plan, "wasn't a top-level decision — it was a top-level response" to the denizens of Reddit, who came up with the idea after months of discussing strategy among themselves.

Just as Ohanian credits people power, supporters of SOPA tend to cite tech-industry lobbying as the cause of the bill's defeat, and backroom politics surely played some role. Silicon Valley is finally coming into its own as a power player in Washington, and the tech industry's lobbyists played their part — just not as big a part as is often claimed. SOPA supporters made much of the news that Google had spent $5 million on lobbying in the first quarter of 2012. That's what really killed SOPA, some of them said.

To buy into that theory, though, is to succumb to the idea that the issue is nothing more than two opposed industries each fighting for their own interests. That's only part of the story. The tech industry in the specific case of SOPA not only happens to be in the right, but it also happens to still be massively outgunned when it comes to lobbying.

Most of Google's lobbying took place before the company's spending upsurge. (Google spent only $1.48 million on lobbying in the same quarter of the previous year.) While some of that money surely went toward defeating the piracy bills, it most likely represented a tiny proportion of the total, since the quarter started just a couple of weeks before the bills were shelved. SOPA/PIPA supporters counter that Google had ramped up its spending throughout 2011, to $3.72 million in the fourth quarter. That's true, but again, it's impossible to know how much of that went to defeating the bills, and Google has other political interests. If it's fair to see Google's total lobbying expenditures as evidence that the company bought Congress away from the piracy bills, then it's also fair to note how much the U.S. Chamber of Commerce spent during the same period on all its various interests. Along with the RIAA and the Motion Picture Association of America, the Chamber was the leading pro-SOPA lobbyist, spending $14.2 million on all lobbying in the fourth quarter. The RIAA spent $1.1 million, and the MPAA $850,000.

So, no, Google didn't buy off the House.

Like all those organizations, Google has its interests in Washington — mainly, in keeping potential trustbusters out of its face, but also in fighting other matters, like possible privacy regulation. Meanwhile, however much political muscle the tech industry might have built up in recent years, it's nothing compared to the might of the copyright industry, which has been working Congress since before the silent film era. No representatives are as "captured" (to use a term of art) by Big Tech as Lamar Smith is by Big Media. Smith, a Texas Republican and the lead sponsor of SOPA in the House, got $133,050 from SOPA supporters in the two years before July 2011, according to Maplight, an organization that tracks campaign finance. Co-sponsor Howard Berman, a Democrat from the district that encompasses Hollywood, got $328,400 from many of the same sources during that period. (One of the striking things about the piracy debate is how nonpartisan it is. There are Democrats and Republicans on both sides.)

Lobbying surely played a role, but the bills were shelved when massive numbers of people on the Internet decided they were a bad idea. Following the blackouts, public opposition reached a peak, with congressional representatives deluged with citizen complaints, Internet users flocking to comments sections to register their disgust, open letters signed by tech execs and public-interest advocates published in major newspapers, and a statement from President Obama opposing SOPA.

"When Reddit, and especially Wikipedia, went black, that was a huge statement," Ohanian says. After that media could no longer ignore the bills.

The underlying reason for the outrage was that SOPA, in particular, represented everything that's wrong with the copyright industry's approach to combating piracy. It was aggressively clueless about how the Internet works. It would have transferred responsibility for illegal downloading to people and companies, like Google, that have nothing to do with pirated materials. Under one interpretation, it could have made a private citizen who simply linked to a site that offered unauthorized material liable, even if the link itself wasn't to anything illicit. Sites like Etsy, YouTube, and Flickr would have been made legally responsible for everything posted by their users, which could have rendered the operation of such sites impossible.

Further, SOPA would have allowed judges to issue orders, absent any due process, to block a site from linking to another site where unauthorized material might be housed. And networking experts said that provisions for blocking access to domains could have wreaked technical havoc.

There were many more problems with the bill — nearly all of them stemming from how terribly it was written. It was so vague that nobody on either side had a clear idea of who would be held liable for what actions.

Each side had business interests at stake, but the copyright industry, as usual, was far more wrong than its opponents. After all, this is an industry that spent years believing that suing its own customers was the best way to combat piracy. That strategy sent more than a few people into poverty for downloading a few songs, and the music business (or at least, the record-label business) imploded anyway. This attitude is endemic to the media industry. Jack Valenti, president of the MPAA, told a congressional panel in 1982 that "the VCR is to the American film producer and the American public as the Boston Strangler is to the woman home alone." Nothing has changed. During the SOPA debate, Chamber of Commerce Vice President Mark Elliot made the insane claim — during a congressional hearing, no less — that foreign pirate sites "threaten more than 19 million American jobs," a figure that is basically made up. The media business has always been paranoid about new technologies, and it probably always will be.

But if the aim is to reach a reasonable compromise, the copyright industry's opponents aren't helping much. How much piracy has hurt, say, the music business is open to question — one that is complicated by the industry's own woeful mismanagement. But although the media industry has done a breathtakingly bad job of making its case, that doesn't mean it has no case to make. Piracy is not an existential threat to the movie and television businesses, and the evidence suggests that the industry has suffered far less than it claims it has — but probably more than its critics assert.

So, what to do about piracy? One alternative to SOPA and PIPA is the Online Protection and Enforcement of Digital Trade Act, or OPEN. Introduced by Sen. Ron Wyden (D-Ore.) and Rep. Darrell Issa (R-Calif.) just before the web blackouts, OPEN would put enforcement of foreign-based piracy in the hands of the International Trade Commission. It is, after all, a matter of foreign trade, and the ITC already enforces foreign patent violations. Rather than censor content, impose dangerous technological enforcement methods, or target American businesses linking to sites that offer pirated material, OPEN would target the actual sites by giving the ITC the power to cut off electronic payments to them.

Many critics say it would be toothless. The pro-SOPA forces hate it for that reason. Levine calls it "the not-SOPA Act" and says it was drafted merely to prevent SOPA from passing, which might be true. But it seems like a reasonable approach to attack at the margins of what is, for the most part, a marginal problem.

Another option is to refrain from passing any new legislation at all. There are laws and enforcement mechanisms in place to fight piracy, as shown by the Justice Department's shutdown of the Hong Kong-based Megaupload earlier this year, when several of its executives were arrested in New Zealand at the FBI's request. Such actions would go over better without some of the more extreme tactics that were employed — such as the government's refusal to return legitimate data to customers who had stored it on Megaupload's servers. But the raid showed that the worst players can, at least sometimes, be taken out of the game.

But no matter what approach the government takes, the copyright industry will have to accept some level of piracy as just another cost of business.

Congress won't take up the matter until after the election, and what might happen remains unclear. There might be an attempt to resurrect SOPA, perhaps with some modifications to appease critics. Or there could be an attempt to reconcile SOPA with OPEN or something like it.

Ohanian tends to think not about what should be done to fight piracy but what shouldn't. If Congress comes up with another SOPA, he and his allies are likely to oppose just as stridently. Whatever his response is, though, he promises it won't be him or any other "leader" calling the shots. "There is no leader," says the man Forbes magazine recently dubbed "The Mayor of the Internet." Decisions about how to react against Big Media's overreach "come from the bottom up," he says. "Ultimately, the power lies with the people — I have to believe that."

Dan Mitchell has written for Fortune, the New York Times, Slate, Wired, National Public Radio, the Chicago Tribune, and many others. He writes a weekly tech column on SF Weekly's Snitch blog called Digital Tremors.
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Dan Mitchell
Contact: Dan Mitchell