The NBA establishment quickly took notice. [Dean] Oliver, who published the seminal Basketball on Paper in 2003, seven months after Moneyball hit stores, was hired full time by the Seattle Supersonics in 2004. Another frequenter of the board, John Hollinger, was hired the following year by ESPN - and recently became a vice president of basketball operations for the Memphis Grizzlies. Hollinger's ESPN gig was filled by Pelton, who, after making his name at Basketball Prospectus, did a consulting stint with the Indiana Pacers' front office. Roland Beech, who created the popular website 82 games, was hired by the Dallas Mavericks in 2009 as director of basketball analytics. (His boss, Mark Cuban, is regularly one of the biggest names at the Sloan conference.)

As soon as each statistician joined an NBA squad, sharing in public became off-limits-and so, gradually, the think tank closed shop. What were the teams paying for, after all, if their new stat gurus were just posting their ideas online for the other 29 franchises to read? This has had a paradoxical result: Because NBA teams embraced advanced stats so quickly, progress on basketball analytics has actually slowed down. The top minds are now all working in silos, not only unable to collaborate but actually competing against each other.

Major League Baseball teams were hidebound enough to ignore Bill James and sabermetrics for a full quarter century-as a result, he and others hashed out ideas out in open, public forums. By the time MLB executives finally embraced advanced baseball statistics, the movement was fully formed.

Many, including Oliver, believe the killer app is hiding in there somewhere. The challenge is that there's so much information, it's easy to get lost. "It's like saying you're going to Wal-Mart or Ikea to get something," offers Tommy Sheppard, the Washington Wizards vice president of basketball administration. "You better know what you want, or you're going to walk out with a ton of s***." That each franchise is working alone - and against each other - compounds the problem. Goldsberry describes it as 30 "micro-CIAs," all racing against each other to "procure actionable intelligence out of these haystacks of vast data."

Despite that manifest logic, transport companies have been slow to release that data in a form that developers can use. And even when they do, it often comes hedged around with conditions that make it useless. Here's an example from the UK, where Alex Hewson has been trying to get hold of live train data to create applications using it.

As his fascinating blog post explains, something called the Association of Train Operating Companies (ATOC) collates the primary data:

Through its subsidiary TISL ("Train Information Services Limited", more commonly known as NRE / National Rail Enquiries) ATOC owns a datasource called Darwin. If you want an API for querying live train running information complete with all the delays and cancellations at any given moment they're the only shop in town.

As a series of blog posts by Hewson reveals, the relationship between ATOC and developers has not been of the best, especially once a formal license to use the data was required in 2009.

During a "Developer Engagement Day" in January this year, and responding, perhaps, to criticism over the way it makes this publicly-funded data available, NRE expressed a desire to work with the development community more constructively. Hewson was naturally keen to see the details of the license that was being offered in the wake of this new openness, and noted a couple of unusual elements:

There are clauses saying you'll lose access to the data if you bring TISL into "disrepute" and that the signatory may not publicly discuss the subject without written consent from TISL.

15.2. Either party shall be entitled to terminate the Agreement on notice without liability at any time if:

...

15.3.1. the Customer brings TISL, the TOCs or the passenger rail industry into disrepute

Disrepute is a fabulously broad word -- it covers anything that blackens their name even if what you said was true. In other words you aren't allowed to criticise them.

By a happy coincidence, the body that oversees the national railways in the UK, the "Office of Rail Regulation", has been conducting a review into "how NRE deals with applications for access to its RTTI database ('Darwin')." I'm sure many of the developers who have had dealings with ATOC's subsidiary over the last few years will have submitted their views on this topic. I can't wait to read them.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Hi, I'm Sean! I'm one of the two guys who made Anodyne. It's neat that Anodyne's ehre and I'm glad that means more people can play it, though of course we'd love it if you bought the game! We're tryin' to get Greenlit on Steam so we'd really appreciate it if you and your friends gave us an upvote over at http://steamcommunity.com/sharedfiles/filedetails/?id=92921739.

Most importantly let us know what you think of the game and if you like it or if it fills you with burning rage! - we're on Twitter at @seagaia2 and @jonathankittaka.

"Yeah, piracy is inevitable so it's better to embrace it – plus, it gives lots of people who couldn't normally afford the game the opportunity to play it – and I think when you're a small group of developers (only my friend Jon and I made Anodyne), it's better to have lots of people able to experience your game," he wrote.

Cost partly motivated the decision, according to Jeff Shelstad, the company’s co-founder and chief executive officer. “We’ve got to be smart with the limited capital that we have” if the company is to survive 10 years from now, he said.

There’s also “an element of fairness” behind the move, Mr. Shelstad said. Some institutional partners have been paying as much as $20 to $25 per student for access to Flat World content, while other partners pay far less. The goal is to even things out while remaining affordable, according to Mr. Shelstad. “We have anchored ourselves around affordability, and we are still there with this move,” he said.

Are you reading this feeling a bit jaded? Something must be coming -- some advertising, spam, a charge after a trial period, lock-in to a product, something. Breathe. Relax. It's just not coming.

Our business model eliminates the catch. We're giving away great textbooks and making them open because it solves real problems for students and instructors. In so doing, we are creating a large market for our product. We then turn around and sell things of value to that large market -- more convenient ways to consume our free book (print, audio, PDF) and efficient ways to study (study aids). Sure, we'll make less money per student than the big guys. But that's okay. We'll be selling to a lot more of them, and we'll be doing it for a lot less money (thanks to technology like web-hosted services, XML, print-on-demand, and more). Like we said... just a smarter way to do business. For all of us.

But the same logic could be applied to the commercialization of publicly-funded research. Why should people be asked to pay often elevated market prices demanded by companies for these products -- which naturally try to maximize profitability -- when it was the public that funded the initial work that made those products possible in the first place?

As with open access, the challenge here is to come up with an alternative approach that allows new medical treatments to be made available as widely as possible. A recent paper by John Frangioni in Nature Biotechnology, pointed out by @MaliciaRogue, offers a novel solution based on open-source development managed by a non-profit foundation:

In this open-source model, sublicensing to for-profit entities is encouraged but is nonexclusive. For-profit companies licensing the technology are encouraged to innovate on the platform, which will provide protectable IP for them, help lower the barriers to market entry and provide patients with even better versions of the technology. Open-source information exchange and evolution of the technology is encouraged rather than discouraged, with the premise that knowledge will empower for-profit companies that want to carve out IP-protected niches while empowering academic scientists with a firm grasp of the state of the art.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Lastly, I hate that Twitter’s metamorphosis seems to reinforce the idea that being an open network — one that allows the easy distribution of content across different platforms, the way that blogging and email networks do –isn’t possible, or at least can’t become a worthwhile business.

I do not think open conflicts with making money and further I think there are ways to make more money by being open rather than closed, but it takes imagination and a well designed relationship between your product/service and the rest of the Internet.

I also think it is better to open up slowly, cautiously, and carefully rather than start out wide open and then close up every time an existential threat appears on the horizon.

Create more value than you capture

Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable. A useful metaphor for production in an economy comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we would eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. Human history teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes generally produce fewer unpleasant side effects and generate more economic value per unit of raw material.

Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered. The difficulty is the same one we have with compounding. Possibilities do not add up. They multiply.

• Answer questions. As many as you can. Questions are not your enemy. We're all here because we all love video games.
• Don't be afraid to tease games that are coming in the far future. We love teases. And we won't even mind if those games get cancelled, as long as you don't lie or pretend they're not.
• Just talk to us. Explain the logic behind your decisions. Help us understand you. Help us relate. Help us empathize.

In order for innovation to happen, a bunch of things that aren’t happening on closed platforms need to occur. Valve wouldn’t exist today without the PC, or Epic, or Zynga, or Google. They all wouldn’t have existed without the openness of the platform. There’s a strong tempation to close the platform, because they look at what they can accomplish when they limit the competitors’ access to the platform, and they say ‘That’s really exciting.’

We are looking at the platform and saying, ‘We’ve been a free rider, and we’ve been able to benefit from everything that went into PCs and the Internet, and we have to continue to figure out how there will be open platforms.’

The big problem that is holding back Linux is games. People don’t realize how critical games are in driving consumer purchasing behavior.

We want to make it as easy as possible for the 2,500 games on Steam to run on Linux as well. It’s a hedging strategy. I think Windows 8 is a catastrophe for everyone in the PC space. I think we’ll lose some of the top-tier PC/OEMs, who will exit the market. I think margins will be destroyed for a bunch of people. If that’s true, then it will be good to have alternatives to hedge against that eventuality.

I hope we can keep a lot of open and free platforms around. If Microsoft decides to lock down Windows 8, it would be very very bad for Indie games and competition in general.

If we can keep open platforms around, there's going to be a lot of very interesting games in ten years, mixed in with the huge AAA games that we all love.

Yesterday, Vint Cerf distributed an open letter regarding concerns about the Measuring Broadband America measurement infrastructure. We share the objectives of the letter writers that “Open data and an independent, transparent measurement framework must be the cornerstones of any scientifically credible broadband Internet access measurement program.” Unfortunately, the letter claims: “Specifically, that the Federal Communications Commission (FCC) is considering a proposal to replace the Measurement Lab server infrastructure with closed infrastructure, run by the participating Internet service providers (ISPs) whose own speeds are being measured.” This is false.

The FCC is not considering replacing the Measurement Labs infrastructure. As part of a consensus-based discussion in the Measurement Collaborative, a group of public interest, research and ISP representatives, we have discussed how to enhance the existing measurement infrastructure to ensure the validity of the measurement data. Any such enhancements would be implemented solely to provide additional resiliency for the measurement infrastructure, not to replace existing infrastructure. Any data gathered would be subject to the same standards of data access and openness.

Recently, the FCC measurement program has backed sharply away from their commitment to transparency, apparently at the bidding of the telcos in the program. The program is now proposing to replace the M-Lab platform with only ISP-managed servers. This effectively replaces transparency with a closed platform in which the ISPs -- whose performance this program purports to measure -- are in control of the measurements. This closed platform would provide the official US statistics on broadband performance. I view this as scientifically unacceptable.

For the health of the Internet, and for the future of credible data-based policy, the research community must push back against this move.

Vint breathlessly suggests that the FCC is now backing away from this openness "at the bidding of the telcos" and claims the program is proposing to replace the M-Lab platform with only ISP-managed servers. THIS IS FALSE. ISPs have made no such request of the FCC nor has the FCC proposed to eliminate use of M-Lab’s servers.

What has been proposed is that, in addition to continuing to use the data collected via the M-Lab servers, the FCC and SamKnows may also rely on the ISP provided servers that have been in use since the beginning of the project. These ISP-provided servers meet the specifications required by SamKnows as do the M-Labs servers. In fact, it was only because of the presence of these non-M-Lab, ISP-donated servers, that SamKnows was able to identify problems with an M-Lab server that was affecting the results of the tests being conducted. M-Labs did not identify this server problem on their own. It was only fixed when SamKnows brought the issue to their attention. By the way, this problem forced the FCC to abandon a month's worth of test data, extend the formal test period and delay production of their report. Later, another M-Lab server location had transit problems that again affected results. This was the second M-Labs-related server problem in two months and once again, it was SamKnows, using the ISP-provided servers as a reference who identified the problem and brought it to M-Labs attention.

I continue to be overwhelmed by the positive feedback and enthusiasm from the support I have gotten from Kickstarter. The groundswell of people cheering us on and the evangelism - people spreading the word - is unlike anything I have experienced. In fact, I would say the last week was the high water mark of my career.

On the next day I get a short tweet from an individual that confesses he pirated Wasteland as a kid and was donating to help make up for it. I of course forgave not knowing he had donated $10,000 dollars. An incredible gesture... now if we could get every pirate of Wasteland 1 to donate we could really beat the Kickstarter all time record.

And just today I got an email along with a donation from a kid who lived down the street from me when he was a teenager. His note was as follows:

"This message is intended for Brian Fargo. Brian, I was your next door neighbor when you used to live in Laguna. I was a pesky 15 or 16 year old kid that would come around and ask you about games. You would sit down and take time to talk to me about games, and the industry, and I just wanted you to know how cool it was that you didn't blow me off. It meant a lot to me. Recently, I found out about your Kickstarter movement for Wasteland 2, and I contributed to it because I believe in you and your ability to resurrect the glory of the franchise. I wish you the best of luck in your endeavors, and thank you again for creating some memorable memories for me during my teenage years. Take care!"

It shows that being nice creates goodwill 20 years later.

It's nice to see more developers acknowledging this. At the Game Developers Conference, Rami Ismail and Jan Willem Nijam of Vlambeer said they are getting tired of the same old debates about copying, and want to move the discussion forward. Their suggestion is to worry less about patents and ownership rights, and more about the actual impact of copying—and then address it by being more open, not less:

The pair acknowledged that protecting game designs with patents might actually damage innovation, but argued that this sort of legal protection is separate from the issue of whether game cloning is helpful or harmful to the industry. And make no mistake, clones are hurting the industry, Nijam said, both by diverting skilled developers towards work on soulless copies and demotivating skilled developers who put a lot of effort into truly original games.

What's worse, a preponderance of low-quality clones is training consumers to expect a lack of originality in the industry, Nijam said, a loss of "gaming literacy" that drags the whole industry down. "Players will get all those bad games and stop recognizing actual good games," he said. "If you only eat bad hamburgers, you're not going to recognize a good hamburger."

The natural reaction to this kind of rampant cloning among many developers might be to hold their cards close to the vest, keeping a new idea totally secret until dropping it on an unsuspecting public. But Ismail said the solution to the cloning problem is actually the opposite—educating gamers by developing games out in the open and showing them the real work that goes into an original design. Detailed development blogs, documentaries like Indie Game: The Movie, and websites that dig deep into game design process all help improve gaming literacy among the public and build a foundation for an audience that values original games.

I can only hope other developers at the conference heed his call. The simple fact in any creative industry is that if someone can beat you by copying your work wholesale, then either they are doing something you're not, or you are failing to connect with your audience. Perhaps, as Ismail argues, this can even become a broader cultural problem that needs to be addressed by the industry as a whole—and that's a good challenge to take on. After all, what's more productive? A bunch of developers suing each other without always distinguishing between genuine bad-actors and actual innovative copying? Or a bunch of developers working together to enhance the industry as a whole, better connecting with fans and letting originality emerge organically? The answer, I hope, is easy.

The Free Internet Act: To promote prosperity, creativity, entrepreneurship and innovation by preventing the restriction of liberty and preventing the means of censorship. FIA will allow internet users to browse freely without any means of censorship, users have the right to free speech and to free knowledge; we govern the content of the internet, governments don't. However enforcements/laws must also be put into place to protect copyrighted content.

"The idea is to aim high," the thread reads. "This is the same strategy employed by SOPA/ACTA pushers. We are aiming absurdly high, so that we can back down and reach a compromise."

If people like you and like your work, they'll buy your games. If they like your work but don't like you, they'll pirate them.

Although MIT is known as a pioneer of sharing its courses freely online through its OpenCourseWare project, arguably Rice University went even further with its highly-modular Connexions program, which offers what it calls "frictionless remixing". The use of small learning modules, together with a permissive cc-by license for everything, allows educators and publishers to create their own courses by drawing on Connexions' material.

Given that the founder of Connexions, Richard Baraniuk, is also the Director of OpenStax College, it's hardly a surprise that the same cc-by licensing applies to the latter's textbooks. Still, that's a step beyond Flat World Knowledge, which allows textbooks to be modified, but under the more restrictive cc by-nc-sa license. Even though OpenStax College is a non-profit, and Flat World Knowledge a company, both adopt the same business model: the e-textbooks are given away, while printed copies and supplementary materials require payment -- a classic example of using abundance to make money from associated scarcities.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

The USTR needs to be more transparent and inclusive in the Trans-Pacific Partnership treaty. The public should be informed by regular drafts of language released and open for comment. Members of Technological and on line civil rights groups should be invited to the negotiations.

• Entertainment spending as a function of income went up by 15% from 2000 to 2008
• Employment in the entertainment sector grew by 20% -- with indie artists seeing 43% growth.
• The overall entertainment industry grew 66% from 1998 to 2010.
• The amount of content being produced in music, movies, books and video games is growing at an incredible pace.

• For consumers, today is an age of absolute abundance in entertainment. More content is available in more ways than ever before. If we simply go by the terms of the US Constitution’s clause from which copyright came, it seems clear that the "progress of science and the useful arts" is being promoted -- even as copyright is often being ignored or foregone. There is just a tremendous amount of content, a tremendous variety of content, it's more accessible to more people than ever before.
• For content creators, it is an age of amazing new opportunity. Traditionally, to take part in the entertainment industry, you had no choice but to go through a gatekeeper, which served to keep the vast majority of people who wished to be content creators from ever making any money at all from content creation. Today, that is no longer true. More people are making more money from creating content than ever before -- with much of that coming via new tools that have allowed artists to use the internet to create, promote, distribute and monetize their works.
• For the traditional middlemen, the internet represents both a challenge and an opportunity. There is no doubt that the internet has eaten away at some traditional means by which these businesses made money. But, as the data shows, there is more money going into the overall market, more content being created, and many new ways to make money. That shows that there is a business model challenge -- and a marketing challenge -- but much more opportunity in the long run. The key challenge for business is in figuring out how to capture more of the greater revenue being generated by the wider entertainment industry. Legacy players certainly face a lot more competition (and fewer reasons that artists have to do deals with them) -- which can explain some of the public complaints about the "death" of various industries -- but overall, it's clear that by embracing new opportunities, there are plenty of ways to succeed.

The U.S. International Trade Commission (ITC) recently reported that it will delay ruling on an important patent infringement claim brought by well-known camera company Kodak against smartphone makers Apple and Research In Motion (RIM).  The case, originally filed in January 2010, now anticipates a ruling in September 2012. The delay now means that the ITC will have taken 33 months to decide on a high-stakes and time-sensitive issue.  So this is the “expedited” process SOPA opponents are embracing as an alternative in the proposed OPEN bill?

Why in the world would we shift enforcement against these sites from the Department of Justice and others who are well-versed in these issues to the ITC, which focuses on patents and clearly does not operate on the short time frame necessary to be effective? In addition, the remedy traditionally offered by the ITC – an exclusion order to prevent foreign criminals from accessing the US market – is precluded under the OPEN Act.

Today, no startup would consider doing it any other way, which means that the initial competitive advantage of taking the open source route has largely vanished. So the question for entrepreneurs looking to ride the next wave becomes: what's next for commoditization? This fascinating post by Ed Freyfogle on the blog of the property search engine Nestoria suggests it might be swapping out proprietary mapping services for those based on the collaborative open data project OpenStreetMap (OSM):

this week we went live with a significant change to our service - in most countries we've moved away from Google maps and are now relying exclusively on OpenStreetMap maps served by MapQuest.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Before I get further into substance, two process notes:

First, SOPA was the product of rent-seekers who were talking only amongst themselves and legislators tethered to their campaign contributions. The drafting process was disturbingly closed-door and exclusionary, exactly the kind we wish didn't take place in our representative democracy. In contrast, the OPEN sponsors want to have a dialogue about their ideas. In support of that, they have posted the draft to a website that allows comments and discussion. This is the way our democracy SHOULD work. Why is such an open process the exception instead of the rule?

Second, OPEN is a comparatively svelte 18 pages focused mostly on one core concept, compared to SOPA's 78 page monstrosity that advanced about a dozen different substantive proposals. I can't tell you the number of times I've seen very smart people stymied to keep all of SOPA's moving parts separate, and the failure to do so meant that they were conflating different parts of the statute in ways that prevented productive discussion. (Just two examples: the Colbert Report, where Zittrain mostly focused on SOPA's felony streaming provision while his counterpart was mostly talking about the cutoff provisions; and Business Insider's infographic where the felony streaming sanction was presented as a remedy to the cutoff provisions.) By reducing the number of topics at issue, OPEN substantially reduces the chance that policy discussants will simply talk past each other.

An Overview

The law contemplates that rightsowners can file a petition against rogue websites at the ITC, an independent federal agency best known for its adjudication of certain patent disputes. In response to the rightsowner's petition, the ITC will conduct an administrative adjudication. If the ITC determines that the website is a rogue website, then (1) the website is required to cease its conduct (not sure how enforceable that is), (2) the site also will be subject to any other unspecified consequences following from its determination as a rogue actor, and (3) most importantly, the rightsowner can take the ITC determination to payment service providers (PSPs) and ad networks and have them cut off the flow of money to the rogue website. The PSPs and ad networks would be protected by several immunities for trying to comply with the orders or their other efforts to protect the public.

This makes OPEN similar to SOPA in that it seeks to cut off funds flowing to rogue actors. However, among other key differences, PSPs and ad networks have no legal obligations until the ITC makes a ruling. In contrast, SOPA imposed cutoff obligations on PSPs and ad networks based merely on rightsowners' unsubstantiated assertions.

What's Good

Substantively, some of the things I liked about OPEN:

* it situates the discussion about "rogue websites" in foreign trade policy. This fixes SOPA's overinclusive application to both domestic and foreign actors. However, if we really think rogue websites are a transborder enforcement problem, there are many other trade policy solutions that might be better options to consider—the most obvious being transborder enforcement coordination like the FTC does with its foreign counterparts.

* OPEN doesn't touch the domain name system or search engines. SOPA had the potential to destroy the DNS and to jeopardize search engine functioning. OPEN sidesteps both pitfalls.

* OPEN builds in some due process before any formal legal obligations attach. As we've recently seen, due process is actually quite important, and we suffer from its absence. I say "some" due process because I'm not sure how much due process will attach in practice. For example, I have some concerns about the notice provision--not every targeted website will receive notice of the ITC investigation. However, I did like that any website the ITC labels as rogue can correct any identified problems, reapproach the ITC and ask it to remove the "rogue" determination.

* the definition of rogue website is tightened up substantially. It requires three elements:
a) a "non-domestic domain name," which requires that the registry, registrar and registrant all have to be located outside the US (I'm not sure what "located" means in this context). Venkat asked me what happens to a .com registered with a foreign registrar; I believe OPEN does not apply to this domain name.
b) conducting business in the US; and
c) "has only limited purpose or use other than engaging in infringing activity and whose owner or operator primarily uses the site to willfully engage in infringing activity."

The last element, in particular, is quite restrictive by requiring willful infringement. The meaning of the word "willful" is notoriously murky (see, e.g., the multitudinous Supreme Court cases over the word), so the statute would be improved by using a more detailed synonym. No matter what, though, willful is a high scienter level that should easily exclude most legitimate players. The statute further expressly excludes any sites that:

- follow good notice-and-takedown procedures
- qualify for 17 USC 512 (the DMCA online safe harbors) [this means that the statute sits next to 512 instead of rendering 512 moot like SOPA threatened to do], or
- distribute "copies that were made without infringing a copyright or trademark." I'm not 100% sure what this means. It apparently excludes websites reselling goods covered by the First Sale doctrine. I presume that the exclusion includes sites that sell legitimate knock-off goods, such as replicas of goods that aren't protected by copyrights or trademarks.

* if a PSP or ad network fails to comply with an ITC order, the only consequence is that the DOJ can seek injunctive relief. Rightsowners do not have a private cause of action in those cases. As discussed below, this doesn't eliminate all PSP/ad network exposure to rightsowners, but rightsowners can't introduce evidence of ITC orders in any civil suits they bring against PSPs or ad networks.

* on the trademark side, it expressly limits its applicability to counterfeiting (although there is an erroneous cross-reference in the draft). Presumably, dilution or garden-variety trademark infringement disputes don't qualify under the statute.

What's Not Good

Substantively, some of the things I don't like about OPEN:

* OPEN still contemplates reestablishing a Fortress USA. Fortress USA marginally makes sense regarding the shipment of physical goods across geographic borders. It makes zero sense for digital bits zinging around the borderless network.

* in particular, because OPEN would burden only US-governed PSPs and ad networks, it may drive websites—including legitimate websites who want to reduce their risk of being mistargeted—to shift their business to foreign-based PSPs and ad networks. If lots of businesses make a switch based on these concerns, OPEN could counterproductively result in net financial losses for the US economy.

* similarly, foreign websites can opt-out entirely of the ITC process by consenting to US judicial jurisdiction. I like the idea of an opt-out, but imagine if other countries offered the same quid-pro-quo of allowing US websites to opt-out of some nasty foreign process so long as the websites consent to jurisdiction in their countries. I think we'd be outraged and insulted; which is how I would expect foreign countries to view this quid-pro-quo. Cf. Venkat's recent post on Facebook v. Faceporn. Then again, other countries might think it's a pretty good idea, leading to a proliferation of transborder quid-pro-quo jurisdictional offers.

* designating the ITC to conduct the investigations is a little odd. First, the ITC is an administrative agency, not a federal court. I don't fully understand all of the implications of administrative vs. judicial review, but I believe there are substantial procedural differences that could lead to important substantive differences. Second, the ITC has been gamed in the patent world (see, e.g., my colleague Colleen Chien's research on the ITC explaining how the ITC hears many US company vs. US company disputes), so I fear similar gaming will emerge. For example, a rightsowner chasing a rogue website could simultaneously pursue a domestic court action, a foreign court action and an ITC proceeding. How would these types of parallel proceedings play out in practice? We're still trying to resolve the parallel proceeding problems in patents.

* like SOPA, the bill covers copyright infringement, trademark infringement *and* 1201 circumvention. I don't understand why the circumvention issue is getting equal billing or how often transborder circumventions are a real problem. Seeing how 1201 circumvention lawsuits have devolved into anti-competitive enforcements, picking up the circumvention piece could increase the risk of competitive misuse of the statute.

* like SOPA, the definitions are vague. Consider, for example, the definition of Internet advertising service:

The term Internet advertising service means a service that serves an online advertisement in viewable form for any period of time on an Internet site.

Hmm...what does that mean? Notice that the definition doesn't directly distinguish between third-party ad networks and sites that sell their own ads. I think in practice sites that sell their own ads drop out of the statute, so one possible implication is that more sites will ramp up their own ad sales. (This is doubtful, but just throwing the possibility out there.) I think the focus on "viewable" is interesting; are audio-only ads excluded? And what does it mean to "serve" content? This contemplates a specific technological interaction that I don't fully understand today and will almost certainly evolve over time.

Why I'm Not Enthusiastic About OPEN

Even though OPEN is worth discussing intelligently, unlike SOPA, I believe it's based on two underlying assumptions that aren't fixable.

First, like SOPA, OPEN assumes there is a problem with foreign rogue websites that needs to be solved. I'm not saying there isn't, but the policy discussions have been startlingly devoid of reliable and credible facts demonstrating the nature and scope of the problem.

Instead, the evidence in support of a rogue website "problem" typically consists of two main threads: (a) people are dying from counterfeit drugs, and (b) bad guys are "stealing" our stuff. With respect to the former, I've never seen anything more than ad hoc assertion; but if there's a real problem, counterfeit drugs can be fixed with a highly targeted solution. With respect to the latter, it's hard to give those arguments much credit. After all, all rightsowners' arguments are inherently self-interested: it's in their financial interest to say that they would like to make more money than they are making. It's also in their interest to bemoan broad sectoral changes in the economy as evidence that someone is capturing money they think they are entitled to (and to use rent-seeking to thwart those broad sectoral changes). More importantly, there is lots of evidence that a lot of rightsowners are making a lot of money today, both via the Internet and more generally. So it's hard to break out the quantity of actual economic losses that rightsowners are truly suffering when those claims are intermingled with rightsowners' general rent-seeking efforts.

Therefore, until the rightsowners offer us more than the trumped-up BS already-discredited statistics, I'm still not clear on the problem, how bad it is, how any legislative solution would remediate that problem, and if the collateral consequences of the effort to remediate the problem are greater or less than the problem itself. OPEN does nothing to fill the void of supporting foundational evidence of the problem, so it's hard for me to be enthusiastic about its solution.

Second, and more importantly, attacking the money supply to supposed bad actors remains too blunt an instrument. I may be truly on my own on this point, as many people I respect--including, notably, Rep. Lofgren--are prepared to embrace the policy solution of cutting off money flows. However, by embracing an attack on the movement of money, OPEN replicates one of SOPA's sins. If a player is engaged in legitimate and illegitimate activity and its money supply is cut off, both activities go down the tubes. In contrast, one of the positive aspects of 17 USC 512(c) and (d) is that they require the copyright owner to identify infringing items and target only those items. Giving rightsowners a remedy that would affect an entire site for only some items on the site goes too far.

The OPEN bill tries hard to minimize overbreadth by narrowly defining the targeted websites. Perhaps this definition is narrow enough that there won't be much collateral damage. However, in practice, regulating money flows nevertheless could have pernicious effects in the field. A PSP or ad network drawn into an ITC proceeding frequently will "voluntarily" choose to toss the targeted website before the ITC proceeding reaches its conclusion—even if the ITC proceeding would have rejected the challenge. Furthermore, rightsowners still will send cutoff notices to PSPs/ad networks without filing any ITC petition, and the PSPs/ad networks will often honor them as a way of preempting an ITC proceeding.

What this teaches me (in combination with the Elsevier v. Chitika case) is that PSPs and ad networks need robust statutory immunities which are not based on a notice-and-takedown scheme. On the trademark side, the need for an immunity became clear after the sloppy language in Gucci v. Frontline. On the copyright side, 512 doesn't cover PSPs and ad networks, probably because in a million years the safe harbor drafters never thought PSPs and ad networks would be liable for third party infringing activity in the first place. Now that we've seen copyright law and trademark law creep much further than we could have imagined in 1998, we should plug this liability hole completely. If OPEN proceeds, it should have a broad-based immunity for PSPs and ad networks with the idea that rightsowners are getting a specific remedy against them in the new law.

While OPEN can't really be fixed to resolve my two structural concerns, my hope is that the discussion about OPEN will force rightsowners to provide *credible* evidence of harms that they or consumers are suffering (no more self-serving hype, please), and that such evidence will force us to think carefully about how "rifle shot" solutions (as opposed to shotgun solutions) can ameliorate those harms. If we have a discourse that even slightly resembles this ideal, then OPEN will be successful no matter what final outcome we reach.