Congress Bows To Hollywood, Introduces Bill To Fundamentally Alter Internet Infrastructure

All In The Name Of Copyright Protection

Two years ago, the Obama Administration, despite the behest of moneyed interests in Hollywood, was unable to insert language into an international treaty that would have required ISPs to remove content that allegedly infringed on copyright: no evidence or trial required.

On Wednesday, U.S. Rep. Lamar Smith (R-TX) introduced legislation (H.R. 3261) advanced by Hollywood that would do just that. Smith and five of his co-sponsors have collected $3.8 million from the TV/Music/Movies industry for their election campaigns, according to OpenSecrets.org.

The Stop Online Piracy Act (SOPA, H.R. 3261, pdf) is a companion to The Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property (PROTECT IP) Act (S. 968) which Senate Judiciary Committee Chairman Patrick Leahy (D-VT) introduced in May. Leahy has collected almost $1 million from the TV/Music/Movies industry, according to OpenSecrets.org. The last Senate action on the bill was in July.

In the news release announcing the bill, Rep. Smith asserted:

The Stop Online Piracy Act helps stop the flow of revenue to rogue websites and ensures that the profits from American innovations go to American innovators. The bill prevents online thieves from selling counterfeit goods in the U.S., expands international protections for intellectual property, and protects American consumers from dangerous counterfeit products.

The release also touted job preservation as one of its benefits.

Four years ago, the Institute for Policy Innovation argued that global piracy cost the music industry $13 billion. However, also in 2007, independent research published in the Journal of Political Economy found that “downloads have an effect on sales that is statistically indistinguishable from zero.” In 2010, an article in the Journal of Marketing reported (pdf):

Based on two large empirical studies and a validation exercise with a large sample of more 2000 college students, the model results indicate that the music industry can benefit from removing DRM because such a strategy has the potential to convert some pirates into paying consumers. In addition, a DRM-free environment enhances both consumer and producer welfare by increasing the demand for legitimate products as well as consumers’ willingness to pay for these products. The authors find that producers could benefit by lowering prices from currently observed levels.

Nevertheless, Congressional leaders have bowed to the demands of their campaign contributors.

From ArsTechnica’s Nate Anderson:

Imagine a world in which any intellectual property holder can, without ever appearing before a judge or setting foot in a courtroom, shut down any website’s online advertising programs and block access to credit card payments. The credit card processors and the advertising networks would be required to take quick action against the named website; only the filing of a “counter notification” by the website could get service restored.

Corynne McSherry, Electronic Frontier Foundation, told cNet’s Declan McCullagh.

“One thing is clear: Big Media is doing its best to accomplish in Washington what it couldn’t in court,” McSherry told CNET. Supporters of the measure want to eliminate, she said, legal “safe harbors that have made possible an explosion of economic growth, innovation, and creativity. And, it is not a little ironic that a bill that proposing massive interference with the Internet ecosystem is being introduced just as human rights advocates from around the world are meeting in Silicon Valley to talk about the problem of internet censorship.”

And from TechDirt [added]:

The bill effectively takes what the entertainment industry wanted the Supreme Court to say in Grokster (which it did not say) and puts it into US law. In other words, any foreign site declared by the Attorney General to be “inducing” infringement, with a very broad definition of inducing, can now be censored by the US. With no adversarial hearing. Hello, Great Firewall of America.

Criticism Of The 2011 Senate Bill

Because the House bill was introduced late on Wednesday, differs measurably from the Senate bill, and affects many other existing laws, a full analysis is not yet available. However, that’s not the case with the Senate bill.

Last week U.S. Sen. Ron Wyden (D-OR) described the stalled Senate version of the bill as “the arbitrary seizure of domains” which would “chill freedom and chill innovation.” Wyden put a hold on Senate versions introduced in both 2010 – S3084 and 2011 – S968.

In September, more than 100 tech entrepreneurs and executives joined the Center for Democracy and Technology, EFF and 90 “ideologically diverse” law professors in opposing the Senate bill because of “its effects on the Internet ecosystem.” Other oppositional voices include the NY Times and the LA Times.

Concerns about both Senate bills center on vague definitions and broad powers for copyright holders (“private right of action”) to take down content without due process. The entrepreneurial group wrote:

Historically, overzealous rights holders have tried to stop many legitimate technologies that disrupted their existing business models and facilitated some unauthorized activity. The following technologies were condemned at one point or another — the gramophone (record player), the player piano, radio, television, the photocopier, cable TV, the VCR, the DVR, the mp3 player and video hosting platforms. Even though these technologies obviously survived, many individual businesses like DVR-maker ReplayTV and video platform Veoh were not so fortunate — those companies went bankrupt due to litigation costs, and sold their remaining assets to foreign companies.

In July, the group of law professors warned that the Senate bill was unconstitutional:

The Supreme Court has held that it’s unconstitutional to suppress speech without an “adversary proceeding.” That is, a speaker must, at a minimum, be given the opportunity to tell his side of the story to a judge before his speech can be suppressed.

Yet under PIPA, a judge decides whether to block a domain after hearing only from the government… This, the professors say, “falls far short of what the Constitution requires before speech can be eliminated from public circulation.”

The law professors also point out that blocking entire domains could “suppress vast amounts of protected speech containing no infringing content whatsoever” if an entire domain is blocked based on finding infringing material on a single subdomain. The Supreme Court has compared such over-broad censorship to “burning the house to roast the pig.”

In May, Google executive Eric Schmidt told The Guardian that S. 968 “could set a ‘disastrous precedent’ for freedom of speech.”

“If there is a law that requires DNSs [domain name systems, the protocol that allows users to connect to websites] to do X and it’s passed by both houses of congress and signed by the president of the United States and we disagree with it then we would still fight it,” he added. “If it’s a request the answer is we wouldn’t do it, if it’s a discussion we wouldn’t do it.”

Schmidt, who became Google’s executive chairman last month after a decade as its chief executive, described website blocking as akin to China’s restrictive internet regime.

“I would be very, very careful if I were a government about arbitrarily [implementing] simple solutions to complex problems,” he said. “So, ‘let’s whack off the DNS’. Okay, that seems like an appealing solution but it sets a very bad precedent because now another country will say ‘I don’t like free speech so I’ll whack off all those DNSs’ – that country would be China.

Bill supporters include U.S. Chamber of Commerce and the Copyright Alliance as well as the AFL-CIO and Comcast/NBC Universal, the Motion Picture Association of America and major Hollywood talent guilds such as the American Federation of Musicians (AFM), American Federation of Television and Radio Artists (AFTRA), Directors Guild of America (DGA), International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts of the United States, Its Territories and Canada (IATSE), International Brotherhood of Teamsters (IBT) and Screen Actors Guild (SAG).

Other opponents include the American Library Association, Human Rights Watch, the Consumer Electronics Association and NetCoalition.

Updated: Reaction

Co-Sponsors of H.R. 3261

  • Rep. Lamar Smith, (R-TX), Chair, House Judiciary committee : OpenSecrets, Rep Smith; TV/Music/Movies is his number five industry, 1989-2010
  • Rep. John Conyers (D-MI), Ranking Member : OpenSecrets, Rep Conyers; Lawyers/Law Firms is his number one industry, TV/Music/Movies is number two, 1989-2010
  • Rep. Bob Goodlatte (R-VA), Chair, IP Subcommittee : OpenSecrets, Rep Goodlatte; TV/Music/Movies is his number five industry, 1992-2010
  • Rep. Howard Berman (D-CA) : OpenSecrets, Rep Berman; TV/Music/Movies is his number one industry and his top three donors are Time-Warner, Disney and News Corp, 1989-2010
  • Rep. Marsha Blackburn (R-TN) : OpenSecrets, Rep Blackburn; TV/Music/Movies is her number two industry, 1992-2010
  • Rep. Mary Bono-Mack (R-CA) : OpenSecrets, Rep Bono-Mack; TV/Movies/Music is her number two industry, Leadership PACs is number five, 1992-2010
  • Rep. Steve Chabot (R-OH) : OpenSecrets, Rep Chabot; Leadership PACs is his number one industry, Lawyers/Law Firms is number four, 1994-2010
  • Rep. Ted Deutch (D-FL) : OpenSecrets, Rep Deutch; Lawyers/Law Firms is his number one industry, 2010-2010
  • Rep. Elton Gallegly (R-CA) : OpenSecrets, Rep Gallegly; Lawyers/Law Firms is his number four industry, 1989-2010
  • Rep. Tim Griffin (R-AR) : OpenSecrets, Rep Griffin; Leadership PACs is his number four industry, 2010-2010
  • Rep. Dennis Ross (R-FL) : OpenSecrets, Rep Ross; Lawyers/Law Firms is his number two industry, 1992-2010
  • Rep. Lee Terry (R-NE) : OpenSecrets, Rep Terry; Leadership PACs is his number three industry, 1998-2010

Legislative Timeline

  • September 20, 2010 : S. 3804, Combating Online Infringement and Counterfeits Act (COICA). Introduced by Sen. Patrick Leahy (D-VT) and 19 co-sponsors.
  • May 12, 2011 : S. 968, The Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property (PROTECT IP) Act. Introduced by Senate Judiciary Committee Chairman Patrick Leahy (D-VT) and 34 co-sponsors.
  • October 26, 2011 : H.R. 3261, Stop Online Piracy Act. Introduced by House Judiciary Committee Chairman Lamar Smith (R-TX) and 11 co-sponsors