BPI Unhappy With Techdirt, Seeks To Correct The Record... But Still Gets It Wrong

from the sorry,-that's-just-not-accurate dept

So, we recently wrote about how Geoff Taylor, head of BPI (the UK's equivalent of the RIAA) seemed to be going after British Telecom (BT) with a variety of highly questionable claims about how BT had some sort of obligation to stop file sharing on its network, and that BT was using unauthorized file sharing to prop up its own business model. Both claims are flat out ridiculous, but BPI apparently was quite upset with us pointing that out. Of course, rather than actually respond in the comments where we might have a conversation about it, they've been sending us a series of emails, taking issue with our statements and laying out their claims in more detail. In the interest of an open debate, I'll post BPI's comments here, with my responses mixed in (but of course):

It's unfortunate that in a piece which wrongly charges BPI with making things up, you have misrepresented what our Chief Executive said. He did not say that "BT broke the law in not stopping file sharing", as you assert.

Hmm. Let's look at what he did say: "If you operate a commercial service and know it is being used to break the law, taking steps to ensure it is used legally is a cost of doing business." Perhaps there's a way to interpret that, which doesn't imply that BT is breaking the law in not stopping illegal activity, but it seems like that is the rather clear implication of his statement. But, BPI goes on to say they actually just meant BT has a "social responsibility" to stop the illegal activity. Ah.

BT fosters a reputation as a socially responsible company. BPI has questioned whether it's appropriate for such a company to do nothing about 100,000 instances "a small sample" of the illegal behaviour that BT knows is occurring on its network. BT knows about this activity because BPI provides detailed weekly notifications enabling BT to verify each and every infringement. BPI's notifications are based upon robust copyright infringement detection techniques which have been accepted by the UK High Court in over 150 cases.

I see. Would that be the same "robust copyright infringement detection system" that a recent study in the UK found was accusing elderly couples of downloading gay porn, along with a significant number of other "false positives"? Furthermore, there's quite a difference between knowing that there is illegal activity on the network and being able to stop it. As we noted in one of our original posts, in a land with due process (the UK has that, right?), people aren't guilty upon accusation. It appears that BPI has leapfrogged beyond even the draconian "three strikes" proposals and is looking for something of a "one strike."

But this is a serious question for BPI: really, what would you have BT do? You are informing them of activity you claim is infringing, but BT has no way of verifying that is a fact. Secondly, by the time you've informed BT, the activity is over. So what is BT to do at that point? Finally, how is BT to determine what ongoing actions are actually legitimate? Plenty of smart content creators choose to give away their works on purpose. Plenty of the record labels represented by BPI, even, have long histories of sending out mp3s themselves for promotional purposes. BT has no way of knowing which content is legit and which is not. Pretending that BT can wave its magic wand and suddenly be all-knowing is just silly.

Oh yeah, as for the claim that BT "fosters a reputation as a socially responsible company," I would think that such would include not violating the civil liberties of its customers by spying on what they do online in an effort to prop up someone's obsolete business model. Wouldn't you?

We understand that BT employs very sophisticated traffic and network analysis technologies that allows it to see the proportion of network traffic that is P2P. We have never said that all P2P traffic is illegal, because not all of it is. But the weekly notifications we send to BT relate solely to music files which we know are being shared illegally.

Again, BPI assumes that BT can magically tell which content is infringing and which is not. Just recently, we pointed out that EMI -- in the UK -- was happily distributing infringing mixtapes from Lily Allen off of an EMI owned website. If someone is downloading such content, should BT stop them? How could it possibly know which content in real time is authorized and which is not? And, more importantly, why should that be BT's responsibility? Just because the folks at the labels that make up BPI haven't been able to adapt? If BPI believes that individuals are breaking the law, why is it not going after those individuals? Obviously, because it knows that it would be a public relations nightmare. But just because BPI has a PR issue, it doesn't mean that BT should have to spend a ton of money trying to fix BPI members' broken business models.

Since 2003, annual UK broadband revenues have increased from £0.6 billion to £2.7 billion (2008). Recorded music revenues have fallen every year in the same period, principally due to illegal filesharing. It is therefore not difficult to see that the growth of BT's consumer broadband business has been assisted by the increase in illegal filesharing.

Wow. I mean... wow. Talk about a logical somersault. Seriously? First off, just because one industry's revenue falls and another's grows, it does not mean the two are causal. I mean, this is really, really basic stuff. Correlation, causation, blah blah blah. But, even then, the link is so tenuous as to be laughable. First, the claim that recorded music revenue is falling. Well... be careful. As we've been pointing out, PRS in the UK has admitted that the music industry is actually growing, not shrinking. Apparently, the folks at BPI don't read the PRS economic reports. If they did, they'd know that the study found that the overall industry is growing, with a big shift in money going from recorded music to live music.

BPI, you're blaming the wrong culprit! It ain't the ISPs, it's the live venues! And those bands playing live shows! Why aren't you demanding that they cut it out! After all, wouldn't it be the "socially responsible" thing for them to stop gigging so that people would go back to buying CDs?

And, of course, the whole claim that the decline in recorded music sales is "principally due to illegal filesharing" is also flat out, ridiculously, laughably wrong. Study after study has shown that file sharers tend to buy more. Isn't it a lot more likely that the decline in recorded music revenues is due to a shift in the marketplace due to technology? That technology has taken away the monopoly on distribution that BPI members used to have. Whenever you lose a monopoly on distribution, it's to be expected that you lose monopoly rents and your revenue goes down. That's Econ 101 (or maybe 201, if we're talking monopoly rents... depends on your econ prof).

Besides, we spend a lot of time here working with and talking to and about musicians who have embraced file sharing, and put in place smart business models to take advantage of it. And, you know what? They're doing better than they did in the past. The problem isn't "illegal filesharing." It's bad and obsolete business models. Those who are embracing file sharing in combination with a good business model are doing better than in the past. That rules out "file sharing" as the problem, and suggests the real problem is BPI's resistance to smarter business models.

Other ISPs are recognising that it is not sustainable in the long-term for a high percentage of ISPs revenues to be based on the transmission of illegal data, and that in future they need to share in revenues from providing high quality entertainment services for their customers

This is again ridiculous. ISP revenues are not "based on the transmission of illegal data." ISP revenues are based on the fact that pretty much everyone needs an internet connection these days just to function. It's how people communicate, you know? Claiming that BT is making any more revenue because people file share is laughable. People are using the internet because it's useful for all sorts of things. Hell, we keep hearing ISPs saying that they need to break net neutrality because all this file sharing is filling up their network and costing them too much in network upgrades. How can they be making so much money off of file sharing if it's costing them so much?

Once again, this is typical entertainment industry drivel. They totally overestimate how much their own stuff is "worth" to the wider ecosystem, and then demand that everyone just pay up. Except... that's not the way the world works. The world works by having smart people with smart business models figuring out ways to make people want to give you money, not by sitting back and demanding others just hand over money.

So, thanks for the emails, BPI, but at least work on making your statements a little more believable next time. And, as always, our comments are wide open for you to reply to and interact directly with people here.

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BPI Continues To Make Things Up When It Comes To ISPs And File Sharing

from the why-does-anyone-take-them-seriously? dept

Last week, in responding to claims that it would cost ISPs more to police the internet than the music industry claimed it was losing from "piracy," BPI boss Geoff Taylor made a few funny statements, including the ridiculous claim that ISPs used piracy as a part of their "obsolete business model" without any support at all. It appears that Geoff can't stop making stuff up. As he continues to hit back at BT for the cost claims last week, he's now suggesting that BT broke the law in not stopping file sharing:

"It's shameful for a company like BT to know that a high percentage of the traffic it carries is illegal material but do nothing," Taylor told The Mirror. "If you operate a commercial service and know it is being used to break the law, taking steps to ensure it is used legally is a cost of doing business."

Of course, it's not quite accurate to say that BT knows a high percentage of its traffic is illegal material. BT doesn't know that, because it has no real way of knowing exactly what much of the traffic is, or what's authorized and what's not. Furthermore, Taylor is flat out wrong in saying that if you operate a service that is used to break the law, you must stop it. BT also runs a phone service, but no one's saying that it has a responsibility to stop phones from being used in the commission of a crime. BT accurately suggests that if BPI finds evidence of a copyright violation, it should prosecute, but that none of that is BT's issue. I'm reminded of how Australian ISP iiNet responded to similar charges last year:

They send us a list of IP addresses and say 'this IP address was involved in a breach on this date'. We look at that say 'well what do you want us to do with this? We can't release the person's details to you on the basis of an allegation and we can't go and kick the customer off on the basis of an allegation from someone else'. So we say 'you are alleging the person has broken the law; we're passing it to the police. Let them deal with it'.

Once again, it appears the entertainment industry thinks everyone else has to bend over to make sure their old business model still works. But that's not the way the world works.

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BT Throttling Online Video For Competitive, Not Congestion, Reasons

from the not-nice dept

While the broadband providers often talk up the need to break network neutrality in order to avoid "congestion" problems, most people have recognized that's just a smokescreen. The congestion issues are not an issue at all. Broadband costs have been going down, consistently, and most network engineers admit that with basic upgrades (nothing out of the ordinary), there's no bandwidth crunch to worry about. The real reason why broadband providers are interested in breaking network neutrality is because many of them want to get into the content business -- and they don't want to compete on even ground.

Case in point? BT. The British telco is starting to heavily throttle all video -- especially the BBC's online video player. This is the same BT, by the way, that just two years ago was saying there was no need to traffic shape or break net neutrality, and that it could handle all traffic issues with basic upgrades. So what happened? Well, it appears BT didn't like the competition from online video providers, so it decided to pretend it needed to do this for congestion purposes.

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BT Blocking Pirate Bay; Claims It's Part Of A Voluntary Self-Regulation Code

from the say-what-now? dept

Slashdot points us to the news that BT is blocking its mobile broadband subscribers from accessing The Pirate Bay, claiming that it's a self-regulation effort in order to remain in "compliance with a new UK voluntary code." It appears to have something to do with the already controversial self-censorship program being managed by the Internet Watch Foundation, which has already blocked access to parts of Wikipedia and the Internet Archive's Wayback Machine. At what point do people realize that any such demand to "block" certain types of content will overblock and harm perfectly legitimate sites and technologies?

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BT Turns Its Business Customers' Networks Into Public Hotspots

from the changeroo dept

British ISP BT is apparently "updating" some of its business customers' WiFi hubs and turning them into part of its OpenZone hotspot network. Sounds great, until you realize they're simply pushing the software update onto some 200,000 or so customers' hubs, and leaving them to opt out if they don't want them to be used as public hotspots. What's even greater is the commercial arrangement, if business owners should decide they want to utilize the "service": they buy prepaid vouchers from BT, then can either give them away or sell them. That's right: they pay BT for their bandwidth, then have to buy vouchers to resell or give away, in essence paying for the bandwidth a second time. There's no mention of how the customers could offer a free hotspot, beyond the double-billing scheme. But hey, that's a crazy idea for a business owner, anyway, so BT's doing its customers a further favor by precluding it as an option.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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BT Bans Talking About Phorm, Erases Earlier Discussions

from the we-were-always-at-war-with-Eurasia dept

You may recall that BT was one of the bigger supporters of Phorm, the controversial clickstream tracking system that would allow ISPs like BT to insert their own behaviorally targeted ads into your web surfing. The company held extensive trials with the system, without letting users know that their clickstream data was being sold to advertisers in order to do more targeted advertising. Now that UK officials have decided that Phorm is legal, if clearly explained to consumers, BT has chosen a funny way to make sure there's clarity around the system. Slashdot points out that BT has apparently banned discussion of Phorm on its forums and erased earlier forum discussions about the technology. How's that for openness?

Is it really so hard to allow open discussion on such a topic? If BT believes that it's reasonable to use the technology, then why not explain why clearly, responding to the critics? The only reason to erase these discussions is if BT knows that what's it's doing is highly questionable, and BT would rather not have to explain itself.

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UK ISPs Move Down The Slippery Slope Of Becoming Copyright Cops

from the slippery-slopes dept

Some UK politicians have been pushing to get ISPs to play the role of copyright cops for an unclear reason. It appears they've bought into the misleading and incorrect claim by the music industry that somehow ISPs are responsible for the record labels own failure to adapt its business model. So despite claims from some ISPs that wouldn't sign up for such a plan, and wouldn't kick users off the internet, a bunch of those UK ISPs are now promising to play the role of copyright cops anyway -- and this even includes the ISPs who insisted they wouldn't go down this road.

It's unclear why exactly they are agreeing to voluntarily waste their time acting on behalf of an obsolete industry's business model, but the misguided threats from UK politicians probably helped move things along. Either way, this starts things down the incredibly slippery slope of making ISPs responsible for policing the actions of users. For years, most governments have realized what a bad idea this is, but suddenly in many countries that concept is falling away, and the end results will not be positive for the internet -- as plenty of perfectly legitimate activities are about to get blocked in an overzealous effort to prop up a few obsolete business models.

Already there are rumors spreading that there is behind-the-scenes maneuvering for the next big step to occur: making all internet users pay an annual "music tax" fee. The original article on this agreement has someone from BPI denying that such a tax is under discussion, but some UK politicians seem ready to introduce it anyway -- and folks like Billy Bragg's manager, Peter Jenner, are claiming victory. And even a music person industry admits that this is a slippery slope (though, he thinks it's in the right direction), saying that this is: "a first step, and a very big step, in what we all acknowledge is going to be quite a long process."

The BPI representative backs this up by noting that his goal isn't to take steps towards ending file sharing, but to end it altogether: "There is not an acceptable level of file-sharing. Musicians need to be paid like everyone else." As for the artists who benefit from unauthorized file sharing? That doesn't seem to occur to the BPI. And, if musicians really need to "be paid like everyone else," how come the rest of us don't get paid for the work we did 50 years ago? How come if everyone else picks a business model that the market rejects, we don't get all the other companies in the value chain and the government to artificially prop up that business model for us? You know, we work pretty hard here at Techdirt to make a living, but apparently "everyone else" just complains that their business model isn't working and has ISPs take care of it for them. Can we now get UK ISPs to send "warning" letters to everyone who reads Techdirt to start telling them they should send us money? That would be a much easier business model.

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Phorm Did Track IP Addresses, Replaced Charity Ads With Behavioral Ads

from the how-nice-of-them dept

Phorm, the extremely controversial former adware company that reinvented itself as a behavioral advertising firm that would work with ISPs to look at your clickstream data and serve you special ads instead of the ones you were supposed to see, has been working overtime to defend its program as being perfectly legitimate and no risk to anyone's privacy. Of course, that's not satisfying many, as it later came out that, despite claims of openness, BT and Phorm had secretly tested the service without letting anyone know their clickstream data was being used this way. Even worse, after this news came out, BT and Phorm downplayed the test, only to later have it come out that it was quite extensive.

And, now, it gets even worse. More information has been leaked out about that test. As for it being super duper secret without your IP address ever being compromised? Well, not so much. It turns out that an internal BT analysis found that IP addresses were likely used as the identifier, which is the exact opposite from what Phorm has insisted. And, as for how well the system works? Well, it was successful in covering up ads for various charities and replacing them with "targeted" behavioral ads instead. Wouldn't want those darn charities to have anyone see their ads.

Update: A representative of Phorm has gotten in touch to note that there were some incorrect statements in the original report on this. Specifically, it appears that Phorm purchased the original charity ads that were replaced -- so it's not as though the charity lost anything here. It's easy to understand why the original interpretation of the BT report would make one think this was not the case, as it stated: "The advertisements were used to replaced [sic] a 'default' charity advertisement (one of Oxfam, Make Trade Fair or SOS Children's Villages) when a suitable contextual or behavioural match could be made by the PageSense system." It does not appear to say that the ads were purchased by Phorm -- at least not in that same section. At this time, there is still no indication whether or not the charities knew their ads were going to be "covered up" in this manner. None of this, of course, answers the questions about whether or not this test was legal.

Update 2: And now BT has also gotten in touch with us to complain -- though they falsely accuse us of making false statements, saying that the headline still says they "hijacked" charity ads. It does not and has not. It has always said "replaced" which, I'll remind BT, is the exact word used in their own report. Unless BT was falsifying its own report, the word "replace" is correct. The mistake was in suggesting that Phorm had not purchased that ad space -- and that has already been corrected quite clearly. BT also is upset that we accused them of "misleading ICO." The only problem: we made no such statement. Finally, BT complains that no personal information was used in the trials -- which is a point that is still disputed. The original researcher who researched the report claims that IP addresses were passed to Phorm's proxy server and that personal info was requested on a web form. BT notes that the IP addresses were not stored -- but that doesn't mean they weren't used, which was what was in question. Also, to both Phorm and BT, the comments on this post are open, and you are free to make your case here where anyone else can see it. Contacting me personally, with vague, slightly threatening and sometimes incorrect statements is certainly less effective that making your case to the public. Part of the reason you're in this PR situation is because of your secrecy. Being a bit more open might help.

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Turns Out BT's Phorm Tracking Tests Were More Extensive Than Previously Reported

from the transparency? dept

Last month, we noted that BT had secretly tested Phorm's tracking system without telling customers in the summer of 2007. This gave users no way to opt-out as they had no idea their surfing was being tracked. However, now it's being reported that BT's tests were even more extensive than originally reported, and the two companies secretly tracked the internet usage of 18,000 customers back in 2006, before Phorm was even called Phorm. That's back when Phorm was known as 121 Media and considered by many to be in the sneaky adware business. In fact, the BT internal report on the test noted that: "121Media [Phorm] will take action (both technical and public relations) to avoid any perception that their system is a virus, malware or spyware and to show that in effect it is a positive web development." Perhaps that explains Phorm's recent charm offensive. It's part of it's deal with BT.

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Questions Raised Over Phorm's Legality As BT Admits It Tested The Service Secretly

from the transparency,-transparency,-tranparency dept

While Phorm has gone on a charm offensive to try to convince people that its efforts are not as bad as some are making them out to be (including, by the way, using my post as a de facto forum), it appears that the effort still isn't convincing skeptics. Tim Berners-Lee made some news last week for suggesting he would switch ISPs if his started using a service like Phorm, but the bigger backlash may be coming from the legal arena. First, there was the news that BT (who had originally denied this) tested Phorm's technology, without letting users know, last summer. That has resulted in some people threatening a lawsuit. And, speaking of lawsuits, a bunch of scholars and think tankers are pointing out that Phorm may actually be illegal based on current UK laws, if it's used without first getting users to "opt-in."

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UK ISPs To Start Tracking Your Surfing To Serve You Ads

from the pirvacy-please dept

For years now, ISPs have been searching for alternative revenue streams to avoid just being "dumb pipes." A few years ago, they picked up on the fact that they have a tremendous amount of data about what you (yes, you!) do online. A bunch of ISPs then started selling your clickstream data to companies that could do something useful with it (though, those ISPs probably neglected to tell you they were doing this). Late last year, we heard about a company that was trying to work with ISPs to make use of that data themselves to insert their own ads based on your surfing history -- and now we've got the first report of some big ISPs moving into this realm. Over in the UK three big ISPs, BT, Carphone Warehouse and Virgin Media have announced plans to use your clickstream data to insert relevant ads as you surf through a new startup called Phorm.

While Phorm claims that it keeps your data private "by tracking individual users with an assigned number only," that's hardly assuring. After all, remember that both AOL and Netflix have released similar anonymized data where identifying info was replaced with an assigned number... and it didn't take long for both sets of data to be de-anonymized. While it's no surprise that ISPs would want to get into the advertising business, and to think that they could better target ads thanks to their knowledge of your entire surfing history, it's going to freak some people out (and potentially cause some serious privacy problems). All the more reason to figure out how encrypt your traffic and hide your activities from your ISP.

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Traffic Shaping In The UK: Who's Honest And Who's Not...

from the sound-familiar? dept

While we've mostly been focused on the debates over traffic shaping and false advertising in the US with the likes of Comcast and Verizon in the US, there's an interesting parallel over in the UK. Just like Verizon, it appears that Virgin Media's broadband offering is advertised as unlimited, even as the reality suggests quite differently. It's "unlimited within a fair-usage limit." That sounds like "limited" to me. In fact, the article notes, a Virgin Media user paying for unlimited service could find his bandwidth suddenly capped after just 20 minutes of straight downloading. That seems like quite a limit.

Much more interesting, however, is the story of Plusnet, an ISP that was recently bought by BT. It does traffic shaping, but unlike just about every other ISP, is incredibly honest and upfront about what it's doing. This is exactly what many people have been telling Comcast it should do. There are supporters of Comcast's efforts who insist that if Comcast did such a crazy thing as to actually tell its customers what it's doing, it would ruin the whole plan. However, the details from Plusnet show that's not the case at all. Plusnet makes it very clear what it's doing, explains to users what to expect, and even helps them understand when it makes more sense to use high bandwidth applications. According to the few supporters of Comcast out there, this would never work -- and yet, it clearly does work for Plusnet. Not only that, the article notes that Plusnet's customer satisfaction rating has been growing steadily. So, once again, we'll ask what could possibly be wrong with Comcast telling the truth about the fact that it's using traffic shaping to prevent certain actions?

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