Response To The White House's Request For Feedback On IP Enforcement

from the promote-that-progress dept

Last month, we noted that the White House's "Intellectual Property Enforcement Coordinator," Victoria Espinel, better known as the IP Czar -- a position just created by 2008's ProIP bill -- had reached out to us and a bunch of other websites that discuss issues surrounding intellectual property and alerted us to the request for public input on the White House's IP enforcement strategy. Below is the email that I am sending in response. If you would like to send your own email, please note that they're due today, Wednesday, March 24th by 5pm (ET, I assume). If you notice, there are some similarities between this letter and the one I filed with the USTR on the Special 301 report. There seemed like no reason to reinvent the wheel, when I was happy with how parts of that first letter turned out:
Re: Comments on the Joint Strategic Plan

Victoria Espinel
Intellectual Property Enforcement Coordinator
Office of Management and Budget
Executive Office of the President
Filed via email

Dear Ms. Espinel:

I write to you today as a long-time content creator, who makes a living off of my ability to continue to create content and receive remuneration for that activity. And yet, I am concerned about the state of US copyright law, and the fact that it does not serve my interests or the interests of the vast majority of content creators today. Despite being a professional content creator, I have purposely chosen not to make use of copyright law, because the way it is structured today actually hinders my own ability to profit from my content creation.

Based on this, I would like to address three key points in response to your request for comment on the strategic plan for IP enforcement:
  • Any efforts at enforcement should be judged on the actual evidence, rather than faith-based claims of "harm" where no harm may exist.
  • The actual evidence suggests that less enforcement may actually increase economic and cultural progress -- and thus, any government run enforcement plan should tread carefully.
  • There is an important difference between harm to certain companies that don't want to adapt to a changing market, and harm to an overall industry -- and we too often confuse the two.
Promoting Progress

The central tenet of copyright law has been, "To promote the Progress of Science and useful Arts," and the mechanism for this is both copyright and patents, or more specifically, "securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." Unfortunately, over the years, all too often we've lost sight of the beginning of that sentence, in the assumption that any increase in those "exclusive rights" must surely "promote the progress." And, yet, as we have expanded and stretched copyright law time and time again -- and almost never contracted it -- no one ever seems to ask for any actual evidence that stronger and lengthier copyright law leads to promoting more progress.

This is not a new concern. Thomas Macaulay famously argued in 1841 that we ought to be careful to only extend and expand copyright upon evidence that such an extension or expansion would, in fact, lead to greater incentives to create. Yet, to this day, our public policy has been to take it on faith that stricter copyright laws lead to greater incentives to create -- despite the lack of evidence to support this position. In fact, the evidence has suggested that as technology has decreased the ability of copyright holders to enforce copyright, the incentives to create have only increased. And this is not just the ability to create as an amateur, but the ability to create and earn money as a professional.

A Look at the Evidence

A recent paper by economists Felix Oberholzer-Gee and Koleman Strumpf demonstrated this in rather great detail, highlighting that even as new technologies have undermined classical copyright law, there remains little evidence that this change has undermined the incentives to create. In fact, the research collected in that paper and other papers (such as the research by economist Will Page of PRS for Music in the UK) suggests that more people are creating new works of music today than ever before in history. The same is true of movies, an industry that has seen the number of annual releases double in the last five years alone and box office results continue to increase to record numbers.

Given this, it is unfortunate that your request for comment on enforcement strategies focuses solely on one half of the equation: "the harm." Looking at the actual evidence on the economics of intellectual property, it suggests that there are also benefits to reduced intellectual property enforcement -- and, in fact, those benefits may outweigh the costs. A bigger concern should be that overly aggressive expansion of intellectual property enforcement will actually cut off important forms of expression along with cultural and economic progress. The Oberholzer-Gee and Strumpf paper is quite detailed in reviewing the facts, concluding that "weaker copyright protection, it seems, has benefited society." They do this analysis both economically and from the viewpoint of output. More content than ever before is being produced and distributed, and the vast majority is being done outside the boundaries of traditional copyright law. At the same time, the amount of money being made by the various industries involved in these endeavors has continued to rise.

Even the music industry -- often seen as being the most hard hit -- is actually doing better than it has done in the past. This is because the breakdown of traditional scarcities in the market has fueled important and valuable new business models. The greater efficiencies of the system mean that consumers are actually getting more value, and are actually paying more than in the past. In economic terms, the shift in the market, sometimes associated with intellectual property infringement, has actually driven much greater complementary revenue streams. This argument may seem counterintuitive at first, but it is not as surprising when you recognize that modern technology, often by enabling further infringement, has also made the creation, distribution, promotion and consumption of such content significantly more efficient. Trying to block the infringement through greater enforcement via the law does not come without costs. It can serve to significantly burden those other areas as well, leading to decreased output and decreased economic activity.

The real issue is not harm to society or to the economy as a whole. Oberholzer-Gee and Strumpf's report shows that the overall music market has grown, such that in 2007 it was actually 66% larger than in 1997 in terms of revenue. This is not an industry in trouble. The problem is that one segment of the entertainment industry has seen harm: those firms that have relied heavily on copyright protections for their business models. However, as we have seen, the wider industry has already successfully been putting in place alternative business models.

Given that, it would be a dangerous mistake to increase enforcement policies, or to put in place new rules that may stifle these new opportunities and new models, as they are growing. I recognize the concerns of those in companies that have not been able to successfully adapt, but we should not be setting policy to rescue or support specific companies -- especially as the overall industry is thriving and consumers are benefiting greatly.

For detailed methodology on how the music industry has been thriving, you can read the Oberholzer-Gee and Strumpf report at the following URL http://www.hbs.edu/research/pdf/09-132.pdf. Further support for similar results in more focused areas comes from Will Page, the chief economist for PRS for Music, looking at the UK market for music, which is also growing: http://bit.ly/ukX9Y.

Policy Implications

These studies, along with numerous others, point to important facts about how industries can adapt, even in the face of technologically-weakened copyright, without the need for greater enforcement. But they also raise an important point: before our policy on copyright is made without actual evidence, it is important to allow the market to function to see if it can adapt appropriately. This often creates disruption, but we should not assume that a disruption within some companies within an industry means that the entire industry is imperiled.

Given all of this, it would be unfortunate to rush into any form of greater enforcement without evidence that it is actually needed.

From a specific policy perspective, then, the Joint Strategic Plan should set out a process for actually judging the real economic impact of stronger enforcement, rather than starting from the assumption that greater enforcement is necessarily good. It should not only look at the claimed "harm," but the flip side as well, the vast "benefits." It should step back from the question of "how do we increase enforcement" to ask whether stronger enforcement actually does serve to "promote the progress." For 300 years, since the Statute of Anne in the UK, copyright has been mostly a faith-based initiative. There is an opportunity now to bring actual evidence into the decision making process. I look forward to seeing how IPEC proceeds in making sure that any efforts in enforcement are based on actual evidence and tied back to that key requirement: "to promote the progress of science and the useful arts."

Sincerely,

Michael Masnick


Reader Comments (rss)

(Flattened / Threaded)

  •  
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    Ima Fish (profile), Mar 24th, 2010 @ 9:16am

    Since you're defending the evil pirates of the world, you should have written your letter in their language. Here's an example of your first paragraph for future reference.
    i Writ3 t0 you today @s @ long-tIme c0Ntent cr3ator, Wh0 m@k3$ @ LIVing 0fF 0f mY @8ili7y to c0n7Inue t0 Cre@7e CoN7ent @Nd r3ceIv3 reMuNeRa7ion For 7ha7 activi7y. and yet, i aM coNc3rned @b0U7 7he s7@te of us c0pyriGHt law, anD 7he f@Ct 7Hat I7 do3$ not $eRV3 mY iNteR3st$ or 7he iNt3Re5t$ 0f 7h3 Vas7 m@j0ri7y of coN73Nt cre@toRs tod@y. D3spi73 b3ing @ profe$5i0Nal c0nten7 cr3@7or, i h@Ve purpo5eLy chos3n n07 70 Mak3 us3 of copyRigh7 l@w, 83cause 7h3 W@y It i$ stRUctured 7oD@y ac7u@lly hInd3rs my own abiLity t0 pr0fIt from MY c0N7ent cre@7i0n.

     

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    Joel (profile), Mar 24th, 2010 @ 9:23am

    Awesome!

    Beautifully written!

    Exactly the kind of thing that they need to hear; and if it doesn't give them something to think about it is because they are sending it straight to the round file.

     

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    Anonymous Coward, Mar 24th, 2010 @ 9:32am

    I well structured letter that presents points clearly, even though it goes in a direction counter to the request for comments as published in the Federal Register.

     

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    Anonymous Coward, Mar 24th, 2010 @ 9:44am

    Damn Nazi Communists. If I can't make a profit gaming the system with illegible legalese, then Ill just sue you to shut up.

     

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    Planespotter (profile), Mar 24th, 2010 @ 9:48am

    Nicely done Mike, but sounds like she's already on the payroll of some entertainment industry by her only looking at the "harm" that is being done.

     

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    anymouse (profile), Mar 24th, 2010 @ 9:49am

    Excellent Letter...

     

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    Sean T Henry, Mar 24th, 2010 @ 9:52am

    Mike have you sent this yet?

    If not I would make a change.

    You wrote "...receive remuneration for that activity. AND yet, I am concerned about the state of US copyright law..."

    Do not start a sentence with "AND", 99.9% of the time if the and is removed it sounds better and is more correct. I actually mark out "And" in many books (unless used in speech) and if there are to many of them I think the author is ignorant for using improper English and stop reading.

    Thanks for listening Mike this has been something that has bothered me for some time reading Techdirt.

     

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      A Dan (profile), Mar 24th, 2010 @ 10:03am

      Re: Mike have you sent this yet?

      There's nothing fundamentally wrong with starting a sentence with "And". The reason many English teachers tell this to their students is to prevent fragments when students use periods instead of commas. It's not improper English. You should reserve your lectures for actual errors.

       

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        Sean T Henry, Mar 24th, 2010 @ 10:34am

        Re: Re: Mike have you sent this yet?

        Okay, I will give you that but when reading remove all starting ands then tell me if it sounds better.

         

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        R. Miles (profile), Mar 24th, 2010 @ 11:25am

        Re: Re: Mike have you sent this yet?

        "There's nothing fundamentally wrong with starting a sentence with 'And'."
        This certainly explains why so many have poor writing skills. The use of "and" as a sentence starter is tolerated, sadly, but should be discouraged.

        If one can't emphasize the preceding sentence without using "and" as a starter for the next sentence, one should re-write both.

        The other annoyance (which I'm guilty of doing myself): using one word as sentences such as "Fail".

        Idiocy. ;)

         

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    paperbag (profile), Mar 24th, 2010 @ 10:03am

    /dev/null

    in /dev/null no one can hear you scream

     

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    Danny, Mar 24th, 2010 @ 10:04am

    This really hits home

    I recognize the concerns of those in companies that have not been able to successfully adapt, but we should not be setting policy to rescue or support specific companies -- especially as the overall industry is thriving and consumers are benefiting greatly.

    I think this is a point that really needs to be pressed. Rather than just creating new laws everytime some part of an industry suddenly "needs help" when others around them are thriving there needs to be real examiniation of WHY that entity "needs help".

    If this is true:
    Oberholzer-Gee and Strumpf's report shows that the overall music market has grown, such that in 2007 it was actually 66% larger than in 1997 in terms of revenue.
    then my first question would be how is it that the recording companies need help to stay afloat when other parts of the music industry are growing.

    In many cases I think a close examination would prove the points that Mike is giving in his letter in that stricter enforcement is not the way to go.

    The entire picture needs to be looked at here. Not the parts that certain people don't like.

     

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    Anonymous Coward, Mar 24th, 2010 @ 10:13am

    well written but it starts from a poor position, the idea the no harm is done. not all harm is directly measurable. a song shared on the internet is shared again and again. how do you measure all of that? denial of harm is a poor place to start.

     

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      Anonymous Coward, Mar 24th, 2010 @ 10:22am

      Re:

      I know, right? Just like the measuring of lawsuits brought against fans of music. How do you measure the harm there?

       

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      Almost Anonymous (profile), Mar 24th, 2010 @ 10:31am

      Re:

      """
      denial of harm is a poor place to start.
      """

      I would submit that the assumption of harm is a worse place to start, especially given so much evidence to the contrary.

       

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      Anonymous Coward, Mar 24th, 2010 @ 10:34am

      Re:

      Oh no, evidence is too hard to find, we should just guess!

       

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      Michael, Mar 24th, 2010 @ 10:57am

      Re:

      Where is he indicating no harm is done? It is pretty clear to me that he is indicating that strengthening IP enforcement and laws may, in fact, stifle some harm done to some companies that rely heavily on IP for their business model. However, the overall market seems to be benefiting from an inability to enforce these IP laws to an equal or greater extent.

      This suggests that while the current inability to enforce these laws is clearly harming some large companies, enabling enforcement at the expense of the overall industry is not in-line with the original intent of the laws themselves. At the very least, we need to proceed with great caution and examine actual evidence of harm or benefit to the industries and society as a whole to determine if the benefits of greater enforcement outweigh the costs.

       

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      Valkor, Mar 24th, 2010 @ 1:40pm

      Re:

      -sigh-
      Comments like this make me miss The Anti Mike. At least what he wrote was worth arguing against.

       

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        Mike Masnick (profile), Mar 24th, 2010 @ 1:51pm

        Re: Re:

        Comments like this make me miss The Anti Mike. At least what he wrote was worth arguing against.


        Believe it or not, I believe the comment you're replying to comes from TAM. He recently started posting again, anonymously, but for some reason his comments are even more ridiculous than usual. It's as if he's become a caricature of himself -- which sorta confirms the fact that he was trolling all along. I can't say for certain that it's the same guy, but I'd say that it's 95% likely the same person. I guess there's a possibility that two people on the same IP subnet are equally confused about this stuff, but it seems unlikely.

         

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    Hephaestus (profile), Mar 24th, 2010 @ 10:20am

    MIKE one quick question ....

    "If you would like to send your own email, please note that they're due today, Wednesday, March 24th by 5pm (ET, I assume)."

    Whats the e-mail address or the URL to submit remarks?

     

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    NAMELESS.ONE, Mar 24th, 2010 @ 10:32am

    howto ENFORCE IP TOTALLY

    put cameras everywhere, the bathrooms the living room by law near and all computers , have them built into laptops so that law enfrocement can see you doing stuff
    and i'll add we'll require you to wear one on your head maybe we'll embed it like a reporter in iraq....

    YUP that will work

     

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    Ryan (profile), Mar 24th, 2010 @ 10:43am

    In case it hasn't been sent yet

    Just to help the readability of the letter I have one suggestion:

    The line:
    In fact, the research collected in that paper and other papers (such as the research by economist Will Page of PRS for Music in the UK) suggests that more people are creating new works of music today than ever before in history.

    Is a bit funny, might read better if changed to:
    In fact, the research collected in that paper and other papers (such as the research by economist Will Page of PRS for Music in the UK) suggests that more people are creating more new works of music today than ever before in history.

    Otherwise love the letter.

     

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    Anonymous Coward, Mar 24th, 2010 @ 10:56am

    I'm not sure if it was deliberate, but way to rhetorically tie current copyright law to the "faith-based" initiatives of the last administration. You use the phrase a couple of times in relation to the "harm" caused by instances of infringement, and while I don't know that it will be consciously noticed by Ms. Espinel, I think it has a chance of resonating.

    Kudos on that.

     

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    AC, Mar 24th, 2010 @ 11:03am

    Petition

    Create a petition. Collect signatures. Put together the evidence for your position, in a centralized location (on a website) under clearly identifiable sections. Have creative professionals explain their positions in video clips. Have economists explain their understandings in video clips.

    You do a good job championing the cause, but lets be honest- a lot of smart people make a living off of the business models you suggest we eliminate; they're not just going to give up. You need to prove that more people are on your side. You need to make your side the only side.

    If you want to kill the record industry (of old) you're going to have to do more than write a letter that sites two sources.

     

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      Chronno S. Trigger (profile), Mar 24th, 2010 @ 11:30am

      Re: Petition

      Myself and probably hundreds of thousands of others make a living off sorting out the massive confusion and complexity of medical insurance. Should we avoid fixing the problems with insurance just to avoid costing several hundred thousand jobs?

       

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    Ben in TX (profile), Mar 24th, 2010 @ 12:23pm

    Well done, Mike

    Very well-written and concise - I hope she pays attention.

    I'm going to send in my own email, but it's going to say:

    "What Michael Masnik said."

    Cheers

     

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    StarNoStar, Mar 24th, 2010 @ 12:55pm

    It doesn't really matter...

    The matter of the fact is that the majority of politicians are only in the business for personal gain/personal interests (In america). If the record company's lobby for turning customers into criminals, and then the politicians get paid for this, who are they going to side with?

    Remember Hillary Clinton? She used to be all for health care reform...until the lobbyists made her and offer she couldn't refuse, drastically increasing her income in exchange for her opinion.

    The record company executives are driving Porches home, I can barely afford my bills...the rich get richer and the poor get poorer. Its great that lil' wayne is such a big millionaire (or so he says), he is already set for life unless he blows his cash on some gold teeth and an escalade, I have a college degree, cant find a job due to the poor economy, and eat ramen every day...who is really getting robbed here?

    This is not implying that all artists are overnight millionaires, but I would be a heck of a lot more comfortable buying my music if the artists profited more than the record company...I don't pirate music, I don't want to risk my good name, but I don't buy it either... congratulations record industry, you have lost a customer... probably forever.

    This country is run and operated by greed, and it makes me sick.

     

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    AC, Mar 24th, 2010 @ 1:34pm

    Re: Re: Petition

    "Myself and probably hundreds of thousands of others make a living off sorting out the massive confusion and complexity of medical insurance. Should we avoid fixing the problems with insurance just to avoid costing several hundred thousand jobs?"

    Definitely not, and that's not what I'm suggesting. I'm suggesting that because of such entrenched interests, fixing the problems are easier said then done.

    My point was really that if this is a cause worth taking up... someone needs to do more to spearhead the effort. Unless and until that happens, its silly to think the the RIAA won't win these battles.

     

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    EEJ (profile), Mar 24th, 2010 @ 3:56pm

    Bravo

    Just....BRAVO!

     

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    TDR, Mar 24th, 2010 @ 6:30pm

    Time for a million person march on Washington, yes? Picketing the White House and Capitol building till support for ACTA is withdrawn and copyright is drastically reformed to its original constitutional limits or close to them.

     

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    Anonymous Coward, Mar 24th, 2010 @ 10:27pm

    "The central tenet of copyright law has been, "To promote the Progress of Science and useful Arts,""

    These parts of the constitution are irrelevant, only the parts that help huge corporations are relevant. The rest simply gets ignored.

     

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    The Creative Environmentalist, Mar 25th, 2010 @ 4:58am

    A perspective seldom considered in the file-sharing debate is our environment. We should realize that we now have a once-in-an-evolution opportunity to create a strong economic growth with minimal impact on the environment. A single computer server can over time generate millions of dollars in revenue by distributing paid digital products such as music, movies and software. Compare this to the old system where all products had to be made of physical material which inevitably consumes the earths's valuable natural resources and produces enormous amounts of waste.

    Many argue that musicians can make money from other things than digital works, such as making concerts and selling t-shirts and other physical merchandise. The video game industry tries to counter-act piracy by selling games that include hardware such as microphones, electric guitars etc. This development is natural and will persist as long as piracy exists in large extents. We are basically forcing creators to produce physical goods that in turn has devastating effects on our environment. Instead, we should embrace the new green economy that we can create with computers and the internet.

    The best strategy to create this new economy is NOT to chase illegal file-sharers with absurd fines. Rather we should try to enlighten people regarding the positive aspects of paying for digital works.

    I can see a wonderful future where musicians, filmmakers, writers and software developers create amazing creative works and sell them digitally over the internet with minimal impact on the environment. This might be the best route away from our problems with the economy, a growing population and the limited natural resources of our planet. We just have to realize that works in digital form actually have value.

     

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    lavi d (profile), Mar 25th, 2010 @ 11:40am

    My Letter

    Dear Ms. Espinel:

    I don't believe that increased enforcement of intellectual property (IP) law is in the best interest of the American people.

    Incumbent media industries have a history of attempting to extend IP law to avoid having to compete with new technology. Player pianos, radio, television, tape recorders, video recorders were all at one time seen as threats to the existing media industries of the day.

    Technology has rendered the cost of duplication and distribution of digital goods to near zero. No amount of stronger enforcement will change this fundamental fact.

    According to the incumbent IP industries, billions of dollars of losses are accorded to the assumption that each unauthorized copy represents a lost sale. Nowhere is it proven that this is the case. In fact, the movie industry had a record-breaking year in 2009. More movies are being made now as a result of cheaper means of production and distribution. The music industry is growing steadily as well (it's the recording industry that's suffering due to a failure to capitalize on lower costs). More and different forms of entertainment are being made and enjoyed now than at any other time in human history.

    The incumbent IP industries also fail to recognize the benefits to society and the economy as a result of lower copy and distribution costs. There are numerous independent studies that have found that whole new industries (where they haven't been litigated out of existence by the incumbents) have sprang up as a result of improvements in media technology.

    As an ironic example, the costs to Walt Disney might have prevented him from succeeding if today's IP laws had been around when he was appropriating older content as basis for his creations. Now the Disney corporation is one of the major proponents of IP law, getting copyright extended time and again in order to keep Mickey Mouse out of the public domain. A public domain where today's Walt Disney would be prevented from using Mickey as a basis for his new creations.

    To put it bluntly, if a company cannot make money off of copies of its product in today's market, then that company should be looking for new opportunities other than selling copies.

    It is not the government's job to ensure the success of any company's business model. Doing so can only result in restricting civil liberties and dangerously hampering America's true innovators at a time when global competition is fierce.


    Sincerely,

     

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