Techdirt. Stories filed under "policy"

The McCain Cable Bill Can Only Do So Much; Real Change Is Market-Driven

Leigh Beadon — Wed, 15 May 2013 11:43:00 PDT

There's a lot of buzz about Sen. John McCain's proposed Television Consumer Freedom Act (pdf and embedded below), a bill designed to encourage cable companies to unbundle the TV stations they offer, and force the networks to do the same. It also takes away the weak bargaining chip that some networks have attempted to play against Aereo, in which they threaten to pull their broadcasts from the open air, by making them sacrifice broadcast licenses in order to do so.

Everyone on the consumer side agrees that they'd like to have à la carte choices from cable companies, but beyond that there's no shortage of debate as to how effective the bill is likely to be and whether the end result would actually be any better for those consumers. The television market is badly distorted at all levels by monopoly interests and those whiffs of not-quite-collusion by groups of companies with a shared interest in maintaining the status quo, but is this bill capable of overcoming that? And is the practice of bundling really at the heart of the problem, or just a good public face for the deeper issues?

This is hardly the first attempt to stop the practice at either the network or cable provider level. Some courts have already found bundling by cable providers to be legal and not anticompetitive; meanwhile Cablevision is currently pursuing an antitrust suit against Viacom for the network's bundling of stations that it sells to providers. Most of the details of the latter are under seal, but one notable point is Viacom's claim that it already offers channels individually, they just cost way more. If that's true of all Viacom's content, then it wouldn't be affected by McCain's bill anyway, which still permits bundling as long as there is an à la carte option.

And even if it's not true, it just underlines the core problem of this approach: the bill doesn't give networks any reason to make individual channels affordable or desirable. They either already offer an expensive à la carte menu that nobody orders from, or they could easily do so. Moreover, it's not as though the justification for bundling offered by the networks is completely falsified: they can spend more money on niche channels and programs by subsidizing them with the revenue from more broadly popular fare. Of course, it's not as though that justification isn't exaggerated and twisted to suit their needs either, nor is it true that the same fundamental idea couldn't exist without bundling. Networks get more value from niche programs than just transmission fees: they care about audience reach, brand-building, competing with other forms of content, accumulating accolades for prestige shows and even, believe it or not, making good television. There's no reason their businesses could not be structured to continue subsidizing niche programming with popular programming in a slightly less direct manner.

So the final solution, as always, needs to be found in the market — and that's already happening. Basically every single noticeable trend in media consumption habits, not just in television but in music and publishing and every format, points towards a more à la carte world. It's not news that the networks and cable providers have dragged their heels on this in the hope of milking their incumbent position a bit longer, nor is it news that they are privately a lot more freaked out by the cord-cutting movement than their public statements admit. Ultimately, it will be consumers making choices that force these companies to either adapt or perish.

But for that to happen, innovators do need to be able to actually give the consumers those choices. If the market has become so badly distorted that innovators are being locked out, then legal action and new laws are needed. And that's why the aspect of the bill that is likely to be the most effective (not to mention the most interesting) is the way it all seems to come back to Aereo.

The fight that Aereo started sits at the core of almost everything in the bill. Network owners don't like Aereo because they don't want to lose their retransmission fees from cable providers. Cable providers don't like Aereo because they don't want to lose the appeal of the major networks which, despite the ascendence of cable channels, still sit at the core of their service bundles — and because, generally, they don't want cord-cutters to have more options. McCain's bill basically says: Aereo or no Aereo, consumers need choices, and they're going to get them, whether you like it or not.

Is it a worthwhile step? Yes — or, at least, it's hard to see how it could do any harm, even if it does prove ineffectual. Is it the best approach? No. It almost feels like a bet on Aereo's failure. If Aereo were permitted to innovate, rather than being forced to jump through endless technological hoops and still spend more time in court than in the workshop or the boardroom, then the market would already be giving consumers what they want and pushing the networks and cable providers to become more competitive. If there is to be legal reform, it shouldn't be another layer of conditions and caveats on broadcast licenses and the retransmission fee structure that attempts to force the hand of the networks and cable companies, it should be a clarification (and probably a relaxation) of the rules, removing the legal and regulatory uncertainty that holds disruptive startups back. Television doesn't need a Consumer Freedom Act — consumers already have lots of freedom, they just don't have many choices in how they exercise it. The heart of McCain's bill is in the right place, but a Television Innovator Freedom Act is what we really need.

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'Intellectual Bulwark' Of Austerity Economics Collapses Because Of Three Major Errors

Glyn Moody — Wed, 17 Apr 2013 15:59:00 PDT

Amongst economists and those who draw on their thinking, the names Reinhart and Rogoff are well known for work published under the title "Growth in a Time of Debt," which sought to establish the relationship between public debt and GDP growth. The key result, that median growth rates for countries with public debt over 90% of GDP are about one percent lower than otherwise, and that the mean growth rate is much lower still, has been cited many times, and invoked frequently to justify austerity economics -- the idea being that if the public debt is not reduced, growth is likely to suffer badly.

Given the economic, political and social importance of that finding, many have tried to reproduce it, but failed. A post by Mike Konczal on The Next New Deal blog explains how three researchers finally succeeded -- with surprising consequences:

In a new paper, "Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff," Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst successfully replicate the results. After trying to replicate the Reinhart-Rogoff results and failing, they reached out to Reinhart and Rogoff and they were willing to share their data spreadsheet. This allowed Herndon et al. to see how how Reinhart and Rogoff's data was constructed.

They find that three main issues stand out. First, Reinhart and Rogoff selectively exclude years of high debt and average growth. Second, they use a debatable method to weight the countries. Third, there also appears to be a coding error that excludes high-debt and average-growth countries. All three bias in favor of their result, and without them you don't get their controversial result.

In his post, Konczal goes on to give a good explanation of just what went wrong. Correcting those three major errors produces the following result: So what do Herndon-Ash-Pollin conclude? They find "the average real GDP growth rate for countries carrying a public debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not -0.1 percent as [Reinhart-Rogoff claim]." [UPDATE: To clarify, they find 2.2 percent if they include all the years, weigh by number of years, and avoid the Excel error.] Going further into the data, they are unable to find a breakpoint where growth falls quickly and significantly.
That is, not only is there no significant difference between countries whose public debt-to-GDP ratio is over 90%, and those with much lower values, there is apparently no critical number above which growth falls catastrophically. Put another way, from the corrected research, there does not seem to be any reason why the public debt-to-GDP ratio cannot keep on rising while preserving normal levels of growth. That clearly runs entirely contrary to the current dogma that public debt must be reduced at all costs in order to keep growth at a healthy level. As the authors of the new paper conclude (pdf): RR's [Reinhart and Rogoff's] findings have served as an intellectual bulwark in support of austerity politics. The fact that RR's findings are wrong should therefore lead us to reassess the austerity agenda itself in both Europe and the United States.
That debate about public debt reduction and the need for austerity measures certainly won't stop just because a key justification for the approach has been found to be completely wrong. But it's worth noting that alongside the major political ramifications of this new finding, there is another, rather less contentious, conclusion to be drawn.

The three errors in the original work by Reinhart and Rogoff finally came to light when they allowed other researchers to examine their model and the data they employed in it. It then became clear that the model was flawed, and that not all the relevant data had been included in the calculation. Neither was obvious from the result alone.

This reinforces a point we have made before. Alongside the results of their work, academics also need to release the datasets and any mathematical/computational models that they have used to derive them. Without those additional resources, it is not possible for other researchers to reproduce the results, which may -- as turns out to be the case for Reinhart and Rogoff's famous paper -- contain fundamental errors that completely undermine the conclusions drawn from them.

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DailyDirt: Basic Science Deserves Some Respect

Joyce Hung — Tue, 19 Mar 2013 17:00:00 PDT

The National Science Foundation, which funds a lot of basic research at American colleges and universities, is facing a budget cut of $283 million this year, eliminating (up to) ~1,000 research grants. It's a shame because over the years many NSF-funded projects have resulted in discoveries that have turned into commercial products with significant benefits to society. Unfortunately, for people outside the scientific community, it's easy to overlook these impacts when trying to decide where to cut spending. Here are a few examples of why basic science deserves some respect.

Sad fact: Funding for basic science research makes up less than 1% of the federal budget. Even sadder is that cutting the small amount the government spends on basic science will have little impact on short-term fiscal goals, but its negative effects on the economy will be felt for decades to come, potentially costing the U.S. billions of dollars in missed future opportunities. [url]
Lasers are an example of how a discovery in basic science can eventually lead to a revolutionary invention. The first laser was built in the 1950s, but practical applications for lasers didn't appear until decades later. Today, lasers are a multi-billion dollar industry and are key to many technologies used in manufacturing, communications, medicine, entertainment, and scientific research. [url]
Cutting funding for basic science research will impact young investigators the most. Actually, brand new tenure-track professors are somewhat insulated because there's always some money set aside for them. It's the just tenured professors that will feel it the most, as they try to compete for grants against the entire population, which includes Nobel laureates, National Academicians, and more well-established researchers. [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post via StumbleUpon.

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Why Copyright Shouldn't Be Considered Property... And Why A Return To 1790 Copyright May Be Desirable

Mike Masnick — Wed, 5 Dec 2012 09:33:51 PST

We recently mentioned that Jerry Brito of the Mercatus Center at George Mason University was publishing a book about the "free market case for copyright reform," called Copyright Unbalanced: From Incentive to Excess. It's now available at Amazon. They also have a free chapter available on the site. Brito was kind enough to send me an advance copy of the short book, and it's a worthwhile read.

Not surprisingly, it fits in quite well with our ongoing discussion of the recent RSC paper by Derek Khanna, and more specifically our recent discussions on why it makes little sense to assume that copyright is property in economic terms. As we've noted, it has some property-like attributes and many non-property-like attributes. Ignoring the non-property-like attributes, even though they have vast economic implications, is a huge mistake, and basically means ignoring fundamental economics.

Those posts have led to some interesting (and some less interesting) discussions in the comments. And, in a bit of perfect timing, Brito's latest edition of his "Surprisingly Free" podcast is with law professor Tom Bell and makes one of the absolute best arguments I've heard -- from the legal perspective -- for why it's an absolute mistake to claim that copyright is property, contrary to the claim of some of the amateur lawyers in our comments. Seriously, just listen to the podcast, but I'll highlight a few snippets.

Copyright is not quite like other types of property. It has some similarities, to be sure, but at its root it is fundamentally different than tangible property like fields and houses and cars and computers. And that's because it is non-rivalrous in consumption. Copyright is a special kind of economic good and special kinds of rules should therefore apply to it. Among those rules, you should have those that take into account that you can have too much copyright....

That, of course, is really no different than what we've said for a while. It has property-like attributes, but many non-property like attributes as well. Brito then makes the argument that copyright is a form of property, and then Bell highlights a few more differences about where copyright originates legally speaking, and also highlights some similarities.

I don't want to get into a semantic discussion, but I am not completely comfortable with calling copyright property. Simply saying property. I don't even like the phrase intellectual property. I prefer intellectual privilege. I think copyright is a privilege, because it's created by statute, it doesn't exist in a state of nature, it's not recognized by common law. It's purely the creature of statute and you can't say that about the sorts of property rights we enjoy in our persons and in our farms and our cars and computers. Those rights, the rights in those forms of tangible property... you can't deny they're protected at the common law. And many people, me among them, would say that they're protected in a state of nature....

Important ramifications follow from what you call copyright. Me? I like to say it's a privilege that has certain property-like aspects and indeed the best things about copyright -- and there's a lot to like about copyright -- are those features that most resemble property. It's alienable, you can transfer it to other people, you can go to the copyright office and check to see who owns the copyright. There is something like trespass afforded to people who suffer wrongful use of their property. Wonderful things. That's the best thing about copyright.

Brito points out, in response, that there are other "intangible" forms of property, naming taxi medallions and tradeable emissions permits. Bell points out that those often are not considered property.

I was just talking to someone who works out here in Southern California in the local regional air quality control board, and we got into this conversation, and he said "we don't call them property, we don't even call them privileges, we call them permits" I said "well you can buy and sell permits" and he said "there are some things that are like property, but we don't call them property, because we don't want the state thinking, for example, we can't change the rules without suffering a takings claim." And that's true of copyright as well. Look, if Congress decides tomorrow, that we're going to just stop copyright -- they won't, but they might say, per some of the suggestions, of our reformers in our book -- we're going to tinker around the edges, and maybe, just once, around the edges, trim back the restrictions. If they did that, would they face a takings claim? No, no! It's just not part of common law...

This is interesting, because I had actually believed that copyright likely would be covered by a "takings" claim (i.e., a prohibition under the 5th Amendment on "taking" away some property). But as Bell notes, since copyright is not subject to common law, it seems wrong -- and to him, preposterous -- that it would be subject to a takings claim. Of course, just watch: I bet if copyright is trimmed back, the entertainment industry will bring a case under this very theory.

Bell then goes on to point out why, if such a "takings" claim was allowed, there would be a pretty big Constitutional problem very quickly. And it stems from the "limited times" clause under copyright. You'd have a bit of a conflict there, wouldn't you?

Let's recognize, that if you take that approach to copyright, you pretty quickly run into a tough paradox. And it's that the Constitution, says that "only for limited times" shall lawmakers protect these works of authors. So if you're a fan of real property, intangible property, as I am, you don't want to hear about lawmakers saying "we're putting a fuse on your property rights in your house or your car or your computer. We're going to let you have property rights for, oh, maybe 20 years and then 'poof' it's gone, anybody can take it." No, we would take exception if the federal government said that policy with regard to our 401ks or our houses or cars, and for good reason. Yet that's the policy we have copyrights, and it's by design. It's in the Constitution. It's as if the Constitution had a clause that said 'oh also, property rights in your farms and factories and houses -- yeah, we're going to end all those after 34 years.' That's not how they treat tangible property. We're glad of that. And yet that is how we treat copyright and I think we should be glad of that.

From there, Bell goes on to talk about the recommendations he makes in the book for how copyright should be reformed -- and he definitely goes pretty far out there with them:

Reinstate the Founders’ Copyright Act,
Withdraw the U.S. from the Berne Convention,
Develop misuse doctrine into an escape from copyright,
Focus copyright policy on consumers’ costs, not producers’ profits, and
Reconceive “IP” as “Intellectual Privilege.”

The discussion on those is very interesting, both in the book and in the podcast. I won't spoil it all for you yet, but I will say that, yes, he's talking about going back to what copyright law was in 1790 -- meaning that it only lasts for two 14 year terms, and that it should cover only "maps, charts and books" since that's what the founders intended. Also, infringement only happened if you copied the entire thing. Copying a section was fine. Interestingly, Bell's next book (also published by Mercatus) will apparently be published under those exact terms. As for why other things shouldn't be covered, well, he notes that the founders didn't appear to think such expressive works like music, painting and sculpture required copyright, and it's not clear why that should have changed.

There's also the "misuse" doctrine aspect, which is fascinating, in that he thinks it could act as a form of "training wheels" for a world without so much reliance on copyright:

How can misuse doctrine open an escape from copyright? The doctrine bars claims of copyright infringement that arise under conditions of misuse. It does not, however, bar claims premised on violations of common-law rights, such as trade secrets or the contractual terms of a license. In effect, misuse doctrine corrects the overweening power that results from combining copyright privileges with common-law rights, by negating only the former. Suppose for instance that a copyright holder wrongly tried to squelch rights protected by the First Amendment and the fair use doctrine by including in its license a clause forbidding public criticism of the work. A court might remedy that misuse by denying the considerable enforcement powers afforded by the Copyright Act even while leaving the underlying contract in force. In practical terms, the dispute would become a matter of state contract law rather than federal legislation. Repeated applications of the same doctrine in other cases would eventually encourage the development of business models premised solely on contract law, tort law, trade secret law, and other common-law devices. Misuse thus opens an escape from a world where copyright comprehensively regulates access to expressive works to one where only common-law rules apply

I'm not sure I fully agree with that -- and I can actually see how contract law could create a worse scenario (in which things like fair use, first sale, etc. would not be allowed). But it is a thought-provoking discussion.

One other point that was quite interesting. Bell argues that when you claim that copyright is "property" you actually harm real property rights, because things like fair use, first sale and other such "exceptions" suggest that it's equally fine to create similar exceptions to real property, and that's a road that we shouldn't want to travel down.

If you'd actually like to see that discussion live and want to see some sparks fly, the Cato Institute is hosting a discussion of the book with Brito and Bell, and moderated by Jim Harper... but also with the RIAA's Mitch Glazier to (I am guessing) argue strongly against all of this. I imagine that ought to be entertaining, and it appears they'll be streaming the whole thing live online, Thursday at noon ET, 9am PT. Should be a fun time.

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Supplying The Missing Ingredient In Evidence-Based Policymaking: Evidence

Glyn Moody — Wed, 21 Nov 2012 03:47:52 PST

It seems extraordinary that in the area of copyright it is only recently that people have started to consider the evidence before formulating policy. Even now, there is still resistance to this idea in some quarters. Elsewhere, though, there is a growing recognition that policy-makers must have access to the data they need when considering how to achieve given goals.

That's very much the impulse behind a new document entitled "Statistical, Ecosystems and Competitiveness Analysis of the Media and Content Industries". It has been prepared on behalf of the European Commission by the Joint Research Centre, which describes its role as follows:

to provide EU policies with independent, evidence-based scientific and technical support throughout the whole policy cycle.

The bulk of the report is filled with detailed tables of figures and charts attempting to show what's been happening over the last few years in the media industries. Here's a summary of what the Joint Research Centre hopes producing these will achieve: This study aims first of all to gain a better understanding of the dynamics in the Media and Content Industries (MCI) and to produce an assessment of the current and future competitiveness of the European MCI sector. The study maps the economic value and growth potential of this sector, driven by increasing awareness of the economic value of the sector. The sector itself has grown considerably over the past decades, but it also contributes to the growth of the Information Society. It provides the content which, in digital form, requires high speed broadband networks and thus stimulates the roll-out of broadband networks. The MCI is also an important part of the creative industries, which stimulate a flourishing creative climate thereby attracting other highly skilled economic activities, leading to vibrant urban economies (Florida, 2002; UNCTAD, 2008; European Commission, 2010a).

Secondly, this study aims to gain insights into the fundamental changes in this sector, which have taken place over the past two decades as a result of the introduction of ICT in different parts of the production and distribution process. Some of these technological innovations were so fundamental that they caused changes in the production chain, in the roles and positions in the value chain, in business models and in market structures. In other words, they have led to a transformation of the whole ecosystem.

Significantly, much of the first half of the report is given over to exploring why it is so hard to draw up detailed figures on the media and content industries. Part of the problem is that such official statistics as are available -- and they are relatively limited -- follow older industry categories that don't really fit any more. Even relatively new ones are problematic:

The new OECD definition intends to give a better reflection of the current MCI sector structure. However, the underlying categorization of the Media and Content Industries can not account for one of the most apparent trends in the Media and Content Industries, i.e. its increasing interconnectedness and convergence with ICT (telecom, computer and software industries). Distribution is now separated from MCI and included in ICT category, but increasingly distribution companies are involved in acquisition of content and content rights, packaging and marketing of content, sometimes also adding added value by producing additional services (EPG, communication services etc.) The same is true for new entrants such as major ICT firms like Google, Apple, YouTube, which are also increasingly involved in not just dissemination of content but also in many content related activities.

It is this intermingling of media, content, computers and communications in the digital sphere that makes it so hard to establish what is really happening. For example, the decline bemoaned by many in the traditional copyright industries is in many ways simply a reflection of the fact that new forms of creation and distribution are starting to replace the established ones, but capturing that in official statistics is hard. One way around that is to turn to other sources: In order to complement the data from official statistics, the study includes 'unofficial' statistics on developments in MCI. With the help of this data, it provides insight into the transformations taking place in MCI that are not immediately apparent in the official statistics. The main topics for which statistical evidence has been collected are the transformations resulting from the impact of ICT, or more specifically the impact of the internet and digitalisation on the production and distribution of media and content. This concerns especially the shift from offline (physical) to online digital distribution of content, and the impact of piracy, P2P networks and user-generated content in particular sub-sectors.
However, in this context the report makes an important point: From investigating data found by screening major sources from industry associations, consultancies and research institutes specialised in media and content industries, an important conclusion is that it is impossible to directly compare or complement official statistics with unofficial statistics
One source of unofficial statistics is, of course, industry bodies. The report quotes some of their figures in a discussion of piracy: The industry regards piracy as a serious threat for their business. Table 22 shows estimates by the film industry in 2005 for the losses incurred due to piracy. For the music industry, IFPI (2010) states that the music industry experienced a decline in sales of 30% from 2004 to 2009, which it mainly attributes to file sharing.
It's good to see that those figures aren't accepted uncritically, simply reported. Even more importantly, rather than accept the naïve view that unauthorized file sharing is necessarily harmful to the copyright industries, the report quotes one of the few studies available that looks at what the evidence says: Although it is difficult to understand the true impact of illegal file sharing on the industry, it is clear that every file downloaded does not result automatically in one less CD or DVD sold. TNO conducted a statistical analysis and calculated the effect of illegal file sharing on the music industry for the Dutch market through a welfare-theoretical approach. They calculated the substitution ratio for the Dutch music industry, and estimated a substitution ratio of at most 5-7%. In other words: for every 15-20 downloads one track less is sold. However, the economic implications of file sharing for the level of welfare in the Netherlands were found to be strongly positive in the short and long terms, because downloaders buy the same amount of music as non-downloaders, and more games and DVDs than non-downloaders. Moreover, downloaders go to more concerts and buy more merchandise (TNO, 2009). It should however be noted that because of the fact that this study is focused on a single country, its conclusions can not be generalized to the EU as a whole without further investigation.
This is just one study, albeit a suggestive one, of what is happening in one country. Clearly many more are needing in order to establish the real impact of unauthorized sharing on the traditional copyright industries. Let's hope the Joint Research Centre can build on its current report and contribute to the gathering of more complete evidence on this crucial topic.

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Don't Let Retraction Distract From The Simple Fact: GOP Copyright Policy Brief Was Brilliant

Mike Masnick — Mon, 19 Nov 2012 08:46:45 PST

While there's been plenty of attention paid over the weekend to the fact that the Republican Study Committee (RSC), the conservative caucus of House Republicans, pulled its report on copyright reform after some entertainment industry lobbyists hit the phones/emails late Friday/early Saturday (and, no, it wasn't directly to RSC, for the most part, but to "friendly" members asking them to express their "displeasure" with the report to the RSC leadership). But we shouldn't let that distract from the simple fact that the report was brilliant -- perhaps the most insightful and thoughtful piece of scholarship on copyright to come out of a government body in decades. You can still read the whole thing as uploaded to Archive.org.

Some people have set up a petition at Change.org asking the RSC to republish and stand behind the policy brief. Others are saying you should contact your own Representatives directly and ask them to support the report. For example, Dave Weinberger wrote a wonderful letter to his own Representative, telling him that he should take a look at the report, and that he should use it as a starting point "for a conversation this country very much needs."

It seems unlikely that the RSC will bring it back, despite the quality of the report. But one hopes that the massive outpouring of support (seriously, just check Twitter) will lead politicians from both parties to recognize that sensible and smart copyright reform is a topic that gets people excited -- and one thing they're sick of is decades of both parties simply falling all over themselves to distort copyright to favor a few dominant Hollywood players.

Because the GOP has chickened out, we're going to try to do a series of posts analyzing the various aspects of the report, starting with the three myths about copyright it debunks, followed by four policy recommendations, to see if we can further the discussion. Look for those posts in the coming days and weeks.

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Cloud Computing To Save Europe, Or Just Iceland?

Ben Zevenbergen — Fri, 12 Oct 2012 00:08:03 PDT

Cloud computing has been presented as the new economic weapon for bringing economic prosperity to Europe, if you believe the new cloud computing strategy from the European Commission. An additional € 957 billion ($1,236 billion) is expected to be earned in the EU by 2020, along with an additional 3.8 million jobs created. These impressive economic forecasts are unfortunately just seen as a positive side effect of something much more important to the bureaucrats: a chance to update the regulation of the internet. Of course, all this might actually do is open up opportunities for other countries and regions to do a better job at it. And it appears that Iceland wants to be poised to step in where Europe is all too likely to fail.

Fixing the regulation of information and online services has been overdue for many, many years in Europe. Developers of both complex and simple cloud services are often being frustrated by current laws, which were enacted many years ago without much (or any) foresight into how information would be used today. For example, the consent of the user to allow a cloud service to handle his or her personal data often does not reflect the technical reality of how the data is handled by a service operating in a cloud. Even if the cloud system is technically secure and privacy measures are taken seriously, obligations or prohibitions in data protection laws inhibit efficient handling of personal data by modern services if the service provider wishes to fully adhere to the law.

Other policy areas that will likely be updated include consumer rights, security, competition and intellectual property. Officials also see this as a chance to address issues such as jurisdiction (applicable law, but also tax issues), liability of intermediaries, standards and interoperability. Techdirt has been reporting on the flaws of current legal systems and the frequently absurd consequences for many years now. Postponing the much needed regulatory update on these issues is like shooting yourself in the foot, over and over again.

The figures presented in the report above may be overstated, but significant investments can be expected as a result of increased legal security in cloud computing. The question is, then: Who will reap the benefit from this? There are many other countries and regions, which have been preparing themselves for the highly interconnected world and now see a chance to profit from new investments in cloud computing and related infrastructure.

For example, Iceland recently stepped forward and presented itself as a strong contender and ideal host for new server farms, which are needed for cloud computing. The Iceland Modern Media Institute (IMMI) presented a rather useful model to analyze a region's potential for becoming a modern information hub based on a few primary indicators. The report was requested by the European Greens party and models a region's suitability for information services based on energy (e.g. sources and natural cooling), connectivity (e.g. international network and security) and jurisdiction (e.g. local legal provisions and legal security).

Iceland was used as a case study to showcase the model, presenting the natural and societal advantages of the island over other countries in an impressive and convincing way. Iceland is ideally located between the US and the EU, has abundant natural cooling sources and, above all, has developed an impressive and progressive portfolio of policies related to the free and open internet.

Not all is lost for Europe, though. The Financial Times has spotted the necessary political frame for the cloud computing strategy to become a serious topic among European officials:

For Ms. Kroes and her colleagues, the cloud is the embodiment of the European Economic Community, eliminating obstacles, stimulating competition and opening up the market to new possibilities.

This 'European Dream' argument for cloud computing could entice some non-tech savvy politicians to take the issue seriously by enabling them to score media attention with their involvement in the new futuristic project which helps rebuild the economy. At least this enables a public, broad and open discussion on all types of internet regulation, where there is plenty of room for expertise and evidence-gathering about the internet to enter the debate.

Recent announcements pave the way for an increased "connectivity" score for the EU in the IMMI model. However, unless the European legislators seize this opportunity in policy making to update its "jurisdiction" score in the model and learn from Iceland's recent policy innovations for the free and open internet, investors may be enticed to build their infrastructure on the island nation, or elsewhere, instead of mainland Europe. The message is simple: Fail to make use of this chance to update the regulation of the internet intelligently, and countries like Iceland will profit most from Europe's cloud computing strategy.

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European Parliament Committee Calls For Creation Without Copyright To Become EU Policy

Glyn Moody — Wed, 3 Oct 2012 03:15:22 PDT

The European Union's governmental machine is a complicated beast, with its intertwining of supra-national, national and party-political levels (if you're interested in understanding how it works, the digital rights organization EDRI has put together a useful introduction (pdf).) That makes it quite hard to tell what is going on behind the scenes with this new Opinion of the International Trade Committee on a Digital Freedom Strategy in EU Foreign Policy (pdf.)

It begins with the usual boring statements about how

the internet has become a part of the public space where new forms of cross-border trade are achieved, along with innovative market development and social and cultural interaction

and then in line with the reference in its title to a "Digital Freedom Strategy", it calls on the Council and the Commission, in the context of free trade agreements, to consider the possibility of implementing objective and transparent safeguards aimed at preserving unrestricted access to the open internet and ensuring the free flow of information and related services in accordance with existing legislation
before plucking the following surprising statement out of nowhere: Is aware that there is concern that some people increasingly hear the word copyright and hate what lies behind it;
But that's nothing to what comes afterwards: Calls on the Member States and the Commission to develop IPR policy in order to continue to allow those who wish to create their own content and share it without acquiring IPR to do so;
Yes, you read that correctly: an official document from the important trade committee of the European Parliament is calling for the option to create without copyright being attached. Had this come from some obscure and informal grouping, buried deep in the bowels of Brussels, and infested with pirates, such a call might be dismissed as simply a wacky and totally irrelevant view. But this has been published by one of the main committees, which had just one pirate politician present, but many representatives from other parties that traditionally have regarded the sanctity of copyright as somewhere north of the sanctity of life.

Of course, the proposal stands no chance of being implemented because EU countries are signatories to the Berne Convention, which requires copyright to be automatic as soon as a work is "fixed," which means that creation without copyright is not permitted. But equally, this is an official request to another European Parliament committee, that for Foreign Affairs. It will be fascinating to see how the latter responds to this extraordinary production of the EU machine.

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The Internet Savvy Appear To Agree On A Lot Of Policy Ideas

Mike Masnick — Wed, 26 Sep 2012 10:03:00 PDT

We were just talking about how the "internet bloc" of voters may be an important new constituent for politicians to be aware of -- and I've been wondering if there's evidence that the bloc does not, in fact, fall into typical partisan classifications. Alex Howard conveniently points us to the news that Popvox, one of a number of excellent sites for discussing proposed Congressional legislation, has put out a blog post and infographic about the top 50 bills, by interest on Popvox, for the 112th Congress.

I imagine that it will surprise approximately none of you that SOPA was the most popular bill on the site (PIPA came in fifth). And while there may be something interesting to talk about in terms of which bills were most popular, something else struck me that seems a lot more remarkable: look at how many of the top bills had overwhelming support for or against the bill. Nearly all of the bills had a viewpoint that was very strongly in favor of the bill or opposed to the bills. Looking down the list, you have to get to the 7th bill, before you even have one where the majority viewpoint wasn't over 90% (and even on that bill, it's 88%). You don't get any real "split" opinion until bill number 9, HR 3, or the "No Taxpayer Funding for Abortion" bill that hits on a high profile issue that is usually split down partisan lines -- and you can see the for/against are much closer: 56% for, 44% opposed. But that's a rare case. If we set the cutoff on "in strong agreement" and "contested" at bills where you had over 70% on one side or the other, of the top 50 bills, only 11 fall into the contested category. Meanwhile, 20 of the top 50 bills had over 90% agreement, including each of the top 6 bills. This makes me wonder if sites like these are helping to expose what "the internet bloc" really feels about certain issues. Of course, there are some caveats that should be made clear. It's entirely possible that these votes are skewed, and not a representative sample. For example, if someone who was strongly in favor of, or strongly opposed to, one of these bills points a lot of others to the Popvox bill page, you could see how it would likely lead to getting a lot of votes in one direction. But you would then think that communities on the flip side would also send people to the same bill page to vote the other side.

Either way, it does seem clear that these folks -- who are quite likely more internet savvy and engaged on political issues -- have pretty strong feelings on these topics, and the views aren't in dispute, but strongly agreed upon by a large segment of those internet savvy folks. It seems like an opportunity for a politician to recognize this and really start focusing on supporting what the "internet bloc" has to say...

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New Internet Infrastructure Coalition Reminds Us That Internet Infrastructure Goes Beyond Just Telcos

Mike Masnick — Tue, 18 Sep 2012 00:07:58 PDT

One of the more frustrating things in watching policy debates concerning the internet is the assumption that "internet infrastructure" means the telcos (and, to some extent, the cablecos). There are a lot of other players who really build the nuts and bolts of the internet, and their views do not always match with AT&T's and Verizon's. So it's great to see the launch of a new trade group, called the Internet Infrastructure Coalition, made up a bunch of those "other guys." That includes web hosting firms, domain registrars, and tool providers for those infrastructure providers (like cpanel). The coalition came together out of a group of companies like this who helped fight against SOPA and PIPA, knowing that such laws were bad for infrastructure providers (AT&T and Verizon, in the meantime, remained mostly quiet on SOPA and PIPA). At the very least, having these players stand up and speak out about how the internet infrastructure is made up of a bunch of players beyond the big telcos would be good. Too often those guys drive the discussion, often at the expense of other important players...

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US Chamber Of Commerce Launches Ad Campaign For Son Of SOPA

Mike Masnick — Wed, 29 Aug 2012 08:17:00 PDT

Next to the MPAA, the main lobbying organization that pushed SOPA was the US Chamber of Commerce. The organization and its laughably inept "Global Intellectual Property Center" are infamous for the fact that they have absolutely no shame in using completely bogus numbers to argue for bad laws that their highest spending backers support. Not surprisingly, the USCoC did not take the loss over SOPA lightly, and it appears that they're gearing up for the next version of SOPA in 2013. As pointed out by Gautham Nagesh, the USCoC has kicked off a new ad campaign priming the pump for new legislation to "protect intellectual property."

In other words: get ready for "son of SOPA."

The powerful business lobby, perhaps the biggest supporter of controversial legislation intended to stem online piracy, is at it again. The group is up with a billboard advertisement in Manhattan's Times Square and an online video series urging Congress to "protect America's IP rights."

The Chamber is claiming that "this is an awareness campaign.... not political," but no one believes that. They've also set up a "website" at DangerousFakes.com, which includes a silly video and more debunked stats.

World-wide cross border trade in physical counterfeits alone costs the global economy $250 billion a year.

This number is so bogus that it's been debunked through and through over and over again through the years. As we have explained, the real number may be closer to about $5 billion (still decently large, but nowhere near $250 billion) and that $250 billion is based on a single unsourced claim in an article in Forbes from 20 years ago. In other words: bogus.

96% of all online pharmacies are operating illegally, many out of compliance with international IP laws that protect the public health and safety.

Of course, this depends on how you define "illegally." Many are merely gray market re-importers, helping people get more affordable, and perfectly legitimate drugs. But the big pharma companies (USCoC members, of course) don't like the competition and efforts to drive down their insane margins.

In the United States, the domestic value of counterfeit pharmaceutical seizures in FY 2011 rose by more than $11 million, an increase of almost 200%.

And, again, how much of that was gray market, legitimate drugs that were just being re-imported? And how much of it were true "fakes"? Also, if the problem is really $250 billion, doesn't it seem to highlight how small a problem fake drugs are if the US seized just ~~$11 million~~ approximately $17 million worth? (Update: Correcting the number based on $11 million being the "increase" of "almost 200%" to approximate the total). Oh, and note that they said "domestic value," not the actual price. That's because they're taking the fake drugs and then inflating them way up to the price that would have been charged. Meaning the real amount seized was much, much less.

Counterfeits also have the potential to put our military at risk and jeopardize our national security missions, according to two recent reports by the Department of Commerce and the Government Accountability Office.

More fear mongering. And of course, if the military is buying counterfeit parts, shouldn't the focus be on the military's procurement process? Why is the military buying from shady equipment dealers in the first place?

The thing is, there is a risk from fake drugs and military equipment, but it's a really, really, really small problem. Barely noticeable. That's why the Chamber likes to lump those in with other things, like copyright infringement, because then they can pretend that the "risk" is really big. But it's not. I'm all for focusing in on stopping those who actually sell truly fake drugs and fake military parts, but there really aren't that many of those out there, and they can be targeted specifically, rather than passing broad legislation with massive consequences for the rest of the internet.

But that's not how the Chamber works.

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NZ Judge In Dotcom Extradition Case Speaks Out Against TPP & US Copyright Extremism

Mike Masnick — Tue, 17 Jul 2012 07:14:47 PDT

A bunch of news reports are highlighting a story in which New Zealand District Court Judge David Harvey supposedly called the US "the enemy," and are pointing out that he's the judge overseeing the extradition case for Kim Dotcom. Upon seeing the headline, I was pretty amazed as well, figuring that might cause problems with the case, but the details show that his comments were not about the US in general, or about the Dotcom case. Rather, they were in response to the TPP negotiations that we've been following closely -- and how the TPP will take away certain rights from New Zealanders, like the ability to get around region-specific DVD players:

It is legal in New Zealand to use methods to get around these regional codes and make the DVDs watchable but Judge Harvey said the TPP would change this.

"Under TPP and the American Digital Millennium copyright provisions you will not be able to do that, that will be prohibited... if you do you will be a criminal - that's what will happen. Even before the 2008 amendments it wasn't criminalised. There are all sorts of ways this whole thing is being ramped up and if I could use Russell [Brown's] tweet from earlier on: we have met the enemy and he is [the] U.S."

His point is that the US is trying to expand copyright protectionism and curtail current rights of New Zealanders, blocking them from doing something that is currently legal and seems perfectly reasonable (getting around regional restrictions to watch legally purchased DVDs from other regions). It's a good thing that more people are seeing the problems of American extremism on copyright law, but I wonder if this will be used (as it appears to be in the press) to hit back on him for his role in the Dotcom case.

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The White House Wants To Hear From You Concerning Its Strategy For Intellectual Property Enforcement

Mike Masnick — Tue, 26 Jun 2012 07:06:00 PDT

Victoria Espinel, the White House's Intellectual Property Enforcement Coordinator, has announced the opening of a public comment period for people to give their thoughts to the administration on what it should be doing about "intellectual property enforcement." As always happens with "public comment" periods, expect large filings from big special interests. Also, I wouldn't expect any major change to come from this. However, I would still recommend submitting carefully argued, well-thought-out filings on your thoughts concerning the White House's approach to "enforcing" intellectual property. While I do not always agree with Espinel or the administration in how it handles these things, I have found them to be very open to actually listening to concerns from people -- much more so than other parts of the government that have taken a specific view on these issues and have no interest in budging. Espinel, at the very least, is actually interested in opposing viewpoints and the more detailed, thoughtful arguments she hears, the better. The key part of her request is as follows:

I believe that essential to the development of an effective enforcement strategy, is ensuring that any approaches that are considered to be particularly effective as well as any concerns with the present approach to intellectual property enforcement are understood by policymakers.

I will be submitting my own thoughts, which I will also publish here, but for those thinking about what to say, I would focus on this sentence above. Historically, many of the government's approaches have not been at all effective, and have created a number of significant problems -- most of which have been ignored by the government (either willfully or through ignorance). This really is a chance to provide examples of why the current policy is not effective (and will never be effective if it keeps on the current path) as well as the "concerns" with the current approach, such as the criminalization of expressive behavior and the outright censorship of media publications.

As always, if you are filing comments with the government, make sure to proofread them carefully, and make your arguments clear and persuasive. The details of how to submit can be found here. Submissions are due by July 25th at 5pm ET.

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DailyDirt: National Robotics Week -- Save The Bots!

Michael Ho — Mon, 9 Apr 2012 17:00:00 PDT

The third annual National Robotics Week is currently underway, if you didn't get the memo. The second week of April was officially designated for robotics in 2010 by House Resolution 1055. If you haven't hugged your robot today, it's about time you did, perhaps.

A full calendar of events is available at nationalroboticsweek.org. There's something going on in every state, and you can keep up with some of the activity via Facebook. [url]
The iRobot Corp, famous for its line of robot vacuum cleaners, is sponsoring some public awareness projects for students to get kids interested in robots and science/technology subjects. FYI, iRobot products are also serving in the military to help clear out explosives from the battlefield, so its robots don't just clean up dirt. [url]
If you're in Florida, the University of Miami School of Law will be discussing legal and policy issues relating to robotics at its inaugural 'We Robot' conference, April 21-22. The future of lawsuits against robots covers some things you might not expect. [url]
To discover more interesting robotics-related content, check out what's currently floating around the StumbleUpon universe. [url]

By the way, StumbleUpon can recommend some good Techdirt articles, too.

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UK Parliament Asks For Public Comment On Six IP Policy Questions

Mike Masnick — Fri, 16 Mar 2012 17:31:00 PDT

It appears that the UK Parliament is asking for thoughts from the public on six key policy questions around intellectual property. You can be assured that the large lobbying organizations will make their voices heard, but it would be great if others in the UK, who have a more modern and nuanced view of what's happening around intellectual property issues, would make their voices heard as well:

1) What should the objective of IP policy be?

2) How well co-ordinated is the development of IP policy across government? Is IP policy functioning effectively on a cross-departmental basis? What changes to the machinery of government do you believe would deliver better IP policy outcomes?

3) There have been numerous attempts to update the IP framework in the light of changes brought about by the digital environment. How successful have these been and what lessons can be learnt from these for policy developments?

4) How effective is the Intellectual Property Office and what should its priorities be?

5) UK IP policy sits within European and supranational agreements. How should the UK government co-ordinate its policy at an international level and what should it do to promote IP abroad to encourage economic growth? Do you have examples of good and poor practice in this area?

6) Protecting, and enforcement of, the IP framework often sits in very different departments to those that develop IP policy and those that have responsibility for the industries most affected. What impact does this have and how can it be improved?

If you do decide to respond, obviously take time to carefully detail your position and back it up with facts and analysis, rather than any sort of emotional response. The details of how to respond to the request can be found in the official announcement (pdf) of this inquiry. It's worth noting that the group organizing this does appear to come at these questions from an already biased position -- in that the person collecting these responses works for "the Alliance Against IP Theft." So, you're already dealing with someone who falsely defines infringement as theft. That's all the more reason to be careful, thorough and detailed in any response.

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Head of Mozilla Says ACTA Is 'A Bad Way To Develop Internet Policy'

Glyn Moody — Wed, 15 Feb 2012 16:02:26 PST

One telling sign of the widespread concern about SOPA/PIPA was that the non-profit Mozilla Foundation, which oversees the open source Firefox and Thunderbird projects, abandoned its non-interventionist policy, and came out strongly against the bills. It first signed a joint letter sent to the key sponsors of both bills, and then modified its home page, pointing to further information about SOPA. That, in its turn, linked to a post entitled "PIPA/SOPA and Why You Should Care," written by Mitchell Baker, the Chair of the Mozilla Foundation.

Baker has now written another, entitled "ACTA is a Bad Way To Develop Internet Policy", which explicitly links ACTA and SOPA/PIPA:

One aspect of the controversy about ACTA is the closed process where only a tiny subset of people affected by the law were allowed to participate. Another great controversy is about the actual content of ACTA. We know that the goal of stopping unauthorized access to digital content can lead to very dangerous results. The proposed SOPA and PIPA legislation in the U.S made this abundantly clear. This is an area where even good intentions can lead to imbalanced and dangerous results.

The post is fairly restrained, and basically recommends that people should find out more about ACTA and "make their voice heard." But it's a further indication that people from all sectors are waking up to the problems with ACTA, just as they did with SOPA/PIPA.

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The Internet Begins Discussing What To Do With Its New Found Powers

Mike Masnick — Tue, 24 Jan 2012 08:20:39 PST

Even before last week's "uprising" by the internet, lots of people had been talking about how the larger internet generation needed to be more engaged in policy issues. This was part of the very reason that I helped start the new organization Engine Advocacy over the past couple months -- because of the belief of a group of folks that there needed to be a conduit of education both between the wider "internet" and policy makers... and in reverse. Along those lines, you can't imagine how thrilling it's been over the past few days to see hundreds of people suddenly coming to similar realizations. There has been a deluge of posts from people (many of them, it appears, coming out entirely independent of one another) in the wake of the delay of SOPA and PIPA, discussing the same key things:

This was an astounding demonstration of what the internet can do in the policy space, and we should not let it die, but leverage what came together for more.
This shouldn't just be reactive to things like SOPA/PIPA, but it should be a positive, proactive, long-term force for good going forward.
We should start discussing what kinds of positive goals we can reach for immediately.

Here are just a few examples of this kind of discussion (and there are many, many more):

Joel Spolsky, with some policy ideas and a suggestion for getting around Congressional corruption by having internet companies give free online ad space to politicians who run "respectable" campaigns.
Fred Wilson, suggesting we need an entirely new framework for thinking about copyright issues.
Smari McCarthy, worrying that the response to SOPA/PIPA was too strong (I disagree), but also noting the need to be much more proactive going forward.
Rick Falkvinge, also talking about going on the offensive for freedom of speech online.
Mark McKenna, also pointing out that it's time to revisit existing copyright law and raise questions about whether it needs to be ratcheted back, rather than forward.
Reddit user ColtonProvias tries to create organization out of chaos.
Reddit user birdomics looks at creating a new political party for the internet -- called the Internet Party (which others suggest already exists in the form of the Pirate Party).

I've also been involved in three separate phone calls since Friday, from different folks who were deeply involved in bringing together the disparate forces that resulted in last week's (and really, the past four months') efforts against SOPA/PIPA -- to discuss the same exact issues, and how to take what happened and use it proactively as a force for further good.

I've also seen a number of discussions about people trying to set up an "internet super PAC" or something similar. For what it's worth on that, apparently one already exists, and I know of at least two other attempts currently underway to create similar super PACs. I'm also pretty sure that the folks over at Demand Progress already have a super PAC.

Tons of people don't want to let this feeling go, and very much want to push forward. That's really exciting. I'm especially thrilled about the unbridled optimism seen at community sites like Reddit -- even if it's sometimes misguided (and a little too frequently, misinformed) -- because it's going to take a kind of unbridled optimism to overcome the forces that are working against such things. I know lots of people have mocked the Reddit community for jumping into things headfirst without getting its facts straight, but it's that same sort of optimistic spirit that lets the community jump into projects that otherwise objective people would claim are "impossible." Hell, getting GoDaddy to change its position, and even the big internet blackout (which really started on Reddit), were two ideas that most folks would have insisted would have never worked just two months ago. And yet they did.

On top of that, I'm thrilled to see most of this all bubbling up publicly and online -- rather than being sorted out secretly in backrooms. This should be a public discussion. And while -- as with any public discussion -- it leads to a few cringeworthy moments where people who don't know what they're talking about run wild with ideas that don't make sense, that's part of where good ideas come from. The fact that lots of people are chiming in and sharing their thoughts may seem chaotic to an outside world, but out of it, I expect to see some amazing things come together. That, by itself, really is part of the power of the internet -- the fact that this doesn't need to be top-down and organized, but can build itself organically. It may be messy, but I expect we'll see some impressive things come out of it.

I will have lots more to say about all of this going forward, but for those who are jumping into these discussions here and elsewhere, I have three suggested points that I think should drive these discussions, though I have no idea if others will agree:

Any regulation that impacts the internet needs to be data driven rather than faith-based. I've been banging this drum for ages. The evidence used to support copyright expansionism for centuries has been suspect. Yet, when one industry makes claims, politicians seem to take them at face value. That needs to stop. A key guiding point for those driving any kind of "internet agenda" going forward should be a reliance on actual, credible data. James Boyle and William Patry have both written books that highlight this, and if you haven't read them, you should.

Thankfully, the UK is actually leading the way (somewhat) here, thanks to the mostly good Hargreaves report (which Boyle worked on), which the UK government has said it intends to follow. Unfortunately, while it says that, so far the actual actions when it comes to laws have remained faith-based.

Some will claim that you can come up with data to support just about anything -- and to some extent that's true. But I think that it's possible for rational people to look closely at research and data and come to reasonable conclusions -- while figuring out when to dismiss conclusions that are clearly bunk or created through pure extrapolation or bad assumptions. Either way, the fact that plenty of legislation gets proposed and passed without any real evidence of a need is a huge problem.

We need to recognize that the internet, free speech and copyright are all connected. One of the tricks for trying to pass SOPA/PIPA (and successfully passing previous bills like the ProIP Act) was to pretend that these were just laws about "arcane" legal issues like copyright -- something that "no one cares about." But in an age where (thanks to bad copyright law changes) everything you create is pretty much subject to copyright, combined with computers and networks whose main job is copying works -- we've reached a point where it's ridiculous to think that you can regulate copyright or the internet without impacting free speech.

There has been a growing recognition of this, including an excellent book by Neil Netanel, and another by David Lange & Jefferson Powell, in which the conflict between copyright and free speech is discussed at length. Unfortunately, the courts have yet to really recognize this issue. The Supreme Court's ruling in Eldred nearly a decade ago is a pretty big problem here, not recognizing how the expansion of copyright law, combined with the internet, really has made copyright law and the First Amendment much more entwined. The Supreme Court completely ignores that based on some very silly reasoning -- and that ruling has lived on to haunt us until today -- such as with the Golan ruling, which came out the exact same day as the internet SOPA/PIPA protests.

People who live online recognize the inherent conflict between today's copyright laws and free speech -- and recognize the risks of harming free speech through copyright expansionism. But because the two laws barely conflicted for quite some time, those who don't understand the internet pretend that there's no conflict at all. That's a problem. Part of the reason why the SOPA/PIPA efforts worked was because people inherently recognized an attack on their free speech rights. Keeping the focus on such rights is the only way efforts to be proactive and move forward will work.

Don't be confined by what's been done or how others do things. While I'm not against the idea of these sorts of "internet super PACs," something about them feels very... old school. Similarly, I've heard talk of efforts to "hire a lobbyist" for "the internet." Perhaps these things need to be done, but I worry if those become the sole focus of the strategy, because it seems to be playing into the thinking of "the way things are done" in DC today. It's way too easy to be co-opted into the system if you play by their rules.

The reason that the protests worked (so far) was because we didn't "play by the rules." We came together incredibly organically (and chaotically at times -- and sometimes didn't come together at all, as different people and groups just did different things). If this effort is going to turn into something more powerful going forward, it needs to keep some of that same spirit and thinking. It can't just squeeze itself into the way things are done in DC today, or it will become "just another super PAC" or "just another lobbyist." That's not useful or productive.

I'd really like to see a lot more out-of-the-box thinking, about how we can actually use the tools of the internet to make a difference, rather than looking at how we can use the tools of DC to join the crowd.

Also, while I have no desire to add a bit of a buzzkill to all of this: this was a single (very limited and possibly very temporary) victory in a very long-term war, in which people who get this stuff have lost pretty much every battle so far. It's great to feel empowered by what happened. And, it's fantastic to recognize that the momentum we've seen building for years finally bubbled over into something productive, but this is a tough slog, and will be a lot of work going forward. We absolutely should channel that feeling and energy into these proactive efforts -- but we have to also recognize that we remain at a disadvantage in much of this, and will almost certainly lose some (if not many) of these fights in the future. That's part of the learning process. This victory was important -- but it will also be followed by some losses (and hopefully more victories). For folks backing this fight, you need to recognize that it won't always be successful. Hell, even with everything that happened, most people still don't recognize just how close a battle this was, and just how likely it was that PIPA was going to pass this week until the very last second.

Either way, it really was just only a few weeks ago that I talked about the amazing power of people speaking up and actually making a difference. I didn't realize we'd see it show up in such a large scale and with such effectiveness so quickly, however. The trick now is to keep it going.

There's obviously much more that can and should be done (and can and should be talked about), and I'll certainly be talking about much more. But with so many different ideas flowing around, I thought it would be best to start with a few key principles, and then move on from there.

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Paul Vixie Explains, In Great Detail, Why You Don't Want 'Policy Analysts' Determining DNS Rules

Mike Masnick — Thu, 12 Jan 2012 15:50:42 PST

There's been plenty of talk, obviously, about the problems with SOPA and PIPA and how they treat DNS as a tool for blocking, despite the massive problems it causes for security efforts like DNSSEC. Every single working engineer who's spoken out on this issue (that we've seen, at least), has made this same point. We've even heard from techies within the government saying the same thing. And, of course, even Comcast itself (despite supposedly being in favor of the bill) proudly admits that DNS blocking is incompatible with DNSSEC. Even as the House and Senate are trying to punt on DNS issue, they still fully expect to put it in place at a later date, so it's important to discuss why it's a bad, bad idea.

So far, the "pro-SOPA/PIPA" folks haven't been able to find a legitimate working technologist who says that these plans make sense. Instead, they've brought out some "policy analysts" who have some basic technology background, but not a deep understanding of DNS. But, because they can toss around some tech terms, SOPA/PIPA supporters think they sound credible. However, in his latest post on the subject, Vixie walks through a step-by-step explanation for why each suggested method of DNS blocking won't work and/or breaks DNSSEC. Basically, these "policy analysts" keep suggesting different ways that they think DNS blocking could work, and Vixie explains why they're wrong each time, and points out the importance of actually having DNS engineers do DNS engineering -- not policy analysts.

For example an early draft of this legislative package called for DNS redirection of malicious domain names in conflict with the end-to-end DNS Security system (DNSSEC). Any such redirection would be trivially detected as a man in the middle attack by secure clients and would thus be indistinguishable from the kind of malevolent attacks that DNSSEC is designed to prevent. After the impossibility of redirection was shown supporters of PIPA and SOPA admitted that a redirection (for example, showing an "FBI Warning" page when an American consumer tried to access a web site dedicated to piracy or infringement) was not actually necessary. Their next idea was no better: to return a false No Such Domain (NXDOMAIN) signal. When the DNS technical community pointed out that NXDOMAIN had the same end-to-end security as a normal DNS answer and that false NXDOMAIN would be detected and rejected by secure clients the supporters SOPA and PIPA changed their proposal once again.

The second to latest idea for some technologically noninvasive way to respond to a DNS lookup request for a pirate or infringing domain name was "just don't answer". That is, simulate network loss and let the question "time out". When the DNS technical community explained that this would lead to long and mysterious delays in web browser behavior as well as an increased traffic load on ISP name servers due to the built in "retry logic" of all DNS clients in all consumer facing devices, we were ignored. However when we also observed that a DNSSEC client would treat this kind of "time out" as evidence of damage by the local hotel or coffee shop wireless gateway and could reasonably respond by trying alternative servers or proxies or even VPN paths in order to get a secure answer, the supporters of SOPA and PIPA agreed with this and moved right along.

The latest idea is to use the Administrative Denial (REFUSED) response code, which as originally defined seemed perfect for this situation. To me this latest proposal as well as the road we've travelled getting to this point seems like an excellent example of why network protocols should be designed by engineers....

And yet... it's not being designed by DNS engineers at all. It's being designed by policy people, with a smattering of help from some former technologists who don't really understand DNS. That seems like a pretty big problem.

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Has Hollywood Hubris Awakened Silicon Valley To The Importance Of Telling DC To Knock It Off On Bad Laws?

Mike Masnick — Fri, 6 Jan 2012 17:28:00 PST

We've talked a lot in the past about how the tech industry frequently ignores what's happening in Washington DC, and takes the attitude that it doesn't want to be involved in policy debates, because folks are busy focusing on actually building companies. However, as we repeatedly learn, just because we want to ignore DC, it doesn't mean that DC ignores us. And that's a problem. It allows others to use the government as a weapon against innovations they don't like. For years, Hollywood has been able to do this successfully -- but, when they push too far, it seems they may awaken a political beast they'd rather not deal with: the geeks. You don't want to make the geeks angry. Yet, that's exactly what Hollywood has done with SOPA/PIPA... and this time, most of the public is on the side of the geeks, because we're all geeks now. We all use these technologies and services. It's why there's widespread public outcry against SOPA, but absolutely no grassroots support for the bill.

Larry Downes, over at News.com, has written up a great article highlighting how SOPA/PIPAhave awakened Silicon Valley to the importance of engaging in policy -- and comparing it to previous battles, like the infamous Clipper Chip fight, which brought us EFF, among other things. It seems that, when clueless bureaucrats push techies too far, they respond in a big way. The real question is whether or not this becomes a sustained thing. Disclaimer: I make a brief appearance in the article, in part because of my involvement with Engine Advocacy, a group which is helping to educate both sides -- entrepreneurs and politicians -- on these issues (and not just about SOPA, but a wide variety of such issues).

Downes asks the right question in wondering if we can keep this up, so it's not just in emergency situations. I sure hope so, and that's definitely part of the thinking behind Engine:

Establishing a permanent counterbalance to old economy interests won't be easy. Engine Advocacy's McGeary acknowledges that incumbent industries who want to reign in technological change are better organized and know every corridor and office on Capitol Hill by heart. So using social media and other technical advantages will be critical to even the odds. "We can't line up soldiers on an open field," McGeary said. "We need to be rangers and use the tools we have to fight a guerrilla war. The facts are on our side; not that that always wins."

Facts win in the long run... but we're hoping to make that long run a lot shorter, and we're hoping we can do it by using the very tools that Congress seems intent on hindering. But, in the end, for any of this to work, it's still going to take a lot of motivated people. Hopefully, the fight against SOPA/PIPA has shown what can be done when enough people do get involved and speak out.

Even more important, however, for the long run, is getting ahead of these issues. We shouldn't just be responding to ridiculous attempts by legacy industries to hold back innovation. We should be proactive in explaining to Congress why innovation is important for the economy and jobs, and why passing bad laws to protect legacy industries at the expense of job creating innovation is a dangerous idea for the economy. It can be done, but, again, it's going to take a lot of people being willing to take part.

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DailyDirt: Science Policies For The US

Michael Ho — Wed, 9 Nov 2011 17:00:00 PST

We're generally interested in government policies that affect the discovery of information or the creation of new works. Usually this means we focus on copyright issues, but science policies are also important to us -- so here are just a few gov't policies that have been released.

US research in synthetic biology isn't subject to a lot of new government regulations (yet), but there will be an exhaustive evaluation of current government funding for synthetic biology projects. That exhaustive report should be available to the public in a few more months... [url]
The National Science Foundation (NSF) is trying to make it a bit easier to be a scientist by allowing for some flexibility for budding scientists -- such as cutting back on the demands to travel to NSF headquarters for renewals/applications. The new rules will also allow grant recipients to defer their projects for up to a year to raise children. [url]
The US government's policy for isolating scientific research from politics was released last year. The guidelines set "minimum standards" for federal agencies to meet, and didn't really spell out many specifics. [url]
To discover more interesting science-related stuff, check out what's currently floating around the StumbleUpon universe. [url]

By the way, StumbleUpon can recommend some good Techdirt articles, too.

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New Study: Piracy Increases The Quality Of Content

Mike Masnick — Mon, 25 Jul 2011 11:01:06 PDT

Eric Goldman points us to a very, very interesting new research paper by Atanu Lahiri and Debabrata Day, showing all sorts of real examples about how "piracy" appears to increase the quality of the related goods that are being infringed upon. Of course, this counters the "common sense" argument that such infringement inevitably lowers the quality of content, since the creators and distributors of said content can no longer invest as much in the content.

The key explanatory factor here: the best way to compete with piracy is to offer a better product yourself. And one way to do that is to increase the quality. For example:

A case in point is the European unit of the cable TV channel HBO, which is fighting against unauthorized distribution of its content by illegal torrent websites by raising the quality of its offerings. The piracy rate faced by HBO is estimated to be between 30% to 50%. HBO has responded to this high piracy rate by churning out new high quality contents in different European languages (Briel 2010). New contents are available through both HBO’s cable TV channels as well as its new IPTV channels. HBO’s innovative offerings have reduced piracy and brought in new subscribers. Valve, a video game manufacturer, has also adopted a similar strategy. Since releasing its game Team Fortress 2 in 2007, it has made frequent quality enhancements, including addition of new weapons and avatars. This strategy has encouraged enthusiastic gamers, who have a strong preference for the latest version, to switch to legal downloads.

The study doesn't just look at such anecdotal cases. It digs in on some evidence as well, showing how investments in R&D from software companies continues to increase, almost directly in line with claims that "piracy" rates for those companies has increased. The conclusion: less enforcement of copyright laws will likely lead to greater quality in output in many cases, and conversely that greater enforcement likely leads to less social benefit as the quality decreases, in markets facing the same conditions. In fact, they find that content creators (or distributors) are likely to increase profits by focusing on product quality, rather than enforcement.

Most of the paper focuses on creating and testing an economic model that explains this behavior, and highlights when such factors apply and when they don't, for the purpose of trying to optimize policy as well as an individual copyright holder's response to piracy. That is, they do find some conditions under which the traditional "common sense" view holds, but it seems relatively rare. In fact, one part of the study models whether or not there are "ethical" consumers who don't infringe for ethical reasons -- and finds that in such a world, there tends to be even fewer reasons for increasing enforcement.

Of course, when you think about much of this, it makes sense. We've argued from the beginning that there are tons of ways to "compete" with unauthorized access, and providing quality is definitely one such way. It's nice to see this bit of research adding deeply to this debate, both with real world examples of this happening today and a detailed economic model that explains the behavior.

And yet... our policy makers continue to think that the best answer is simply to keep on ratcheting up enforcement.

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UK Rightsholders Want Web Censorship; Don't Want The Public To Be A Part Of The Conversation

Mike Masnick — Wed, 22 Jun 2011 12:47:12 PDT

A whole bunch of you have been pointing to James Firth's detailed post concerning some leaked information about a "private" meeting of rightsholders, ISPs and the government in the UK to discuss a "voluntary" web censorship system designed to block what copyright holders deem to be infringing.

"Confidential" documents sent to this blog show the Premier League has joined a coalition of rights holders including the Publishers Association, BPI, Motion Picture Association and others lobbying hard for a great copyright firewall of Britain.

The group is attempting to influence public policy with a desperate-sounding and confused in places confidential submission to minister for the internets Ed Vaizey, who discussed the proposal at a meeting of stakeholders (including ISPs) last Wednesday.

As Firth's source notes, no matter where you stand on issues of copyright, the idea that policy decisions should be made behind closed doors without the public involved seems incredibly questionable, even if it's quite common. We've seen the same thing in the US, where politicians seem to think that the public isn't a stakeholder, and that the beneficiaries of a law are the only stakeholders. In this case, making matters even worse is that representatives from the Open Rights Group asked to attend the meeting and were denied. The government did allow a single "consumer rights" representative to attend, from a group called Consumer Focus. We've seen this before also. When the USTR was working on ACTA, it very briefly showed a couple of consumer rights groups a copy of a draft (which they weren't allowed to copy, take notes on or do anything with) and then claimed that they were being fair in allowing all stakeholders access. Of course, they ignored that the copyright maximalists were helping in the actual drafting and had full copies of the documents. But... details.

As for the actual proposal under discussion: it would be a scheme under which ISPs would "swiftly" block access to certain sites rightsholders claimed were infringing, as reviewed by an "expert board." However, the speed with which the censorship would take place suggests little actual review of the websites in question, because it even notes the desire to censor sites that may be streaming live events. Due process? That's for peons, apparently. And while people will again insist that this sort of thing would only be used for obviously infringing sites, remember, it was just in the past few days that we noted that copyright holders were claiming that obviously non-infringing sites like Archive.org, Vimeo and SoundCloud were pirate sites.

About the only good news to come out of this meeting is that the UK government apparently wasn't too interested in being a part of this scheme, which is supposed to be "voluntary."

If another contact of mine inside government is to be believed, Ed Vaizey is said to have commented, "if it's a voluntary scheme, go and do it." Heavily implying that the government need not be involved.

What's really scary here, however, is how much is being done behind closed doors to create policies -- whether "voluntary" or via the government -- that massively impact everyone and their rights to free speech. No matter what your opinion on copyright enforcement, is it really so crazy to think that these discussions and proposals should be done out in the open to get all views heard?

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One Congressional Loss That Hurts: Rick Boucher

Mike Masnick — Wed, 3 Nov 2010 05:07:49 PDT

I mentioned on Twitter yesterday that it was really sad how difficult it was to find any candidates I actually wanted to win in the election yesterday. In most cases, the more familiar I was with any candidate, the more I felt they didn't deserve to be elected (and that included both the leading candidates in many elections). There was one exception, however: I hoped that Rick Boucher would win re-election. There is a very, very small number of Congressional Representatives who actually seem to really get technology, telecom and copyright issues, and Boucher is was one of them. Despite easily winning re-election in many past elections (he didn't even have any real competitor last time around), it looks like Boucher has been swept out as part of the anti-incumbent sentiment. Trust me, I understand the desire to get rid of incumbent politicians, but Boucher was one of the rare politicians who actually seemed to get the issues that many of us find important.

This is bad news for copyright and for consumers. Not that he was all that successful in passing the laws that mattered on that subject, but he was one of the few who would ask the key questions, and actually try to fix those broken laws -- such as his repeated attempts to fix the DMCA and support fair use, as well as more recent attempts to stop the massive boondoggle that is the Universal Service Fund. Boucher was so respected on these issues, that even Public Knowledge's Gigi Sohn and ITIF's Richard Bennett agreed that this was bad news. I've known both Richard and Gigi for a while, and I can't recall them ever agreeing on anything. Gigi wrote up a blog post about what a loss this is for consumers and innovation. Hopefully we'll find out that one of the newly elected representatives actually understands some of these issues -- or perhaps some of the "survivors" will step up and recognize the issues. But Boucher's loss is bad news.

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Reuters Social Media Policy Gets It Half Right, Half Wrong

Mike Masnick — Fri, 12 Mar 2010 15:10:00 PST

Just a couple of months ago, I wrote about something that I thought was really impressive by Thomson Reuters. A Reuters blogger wrote a blog post on his official Reuters blog questioning Reuters itself after rumors started spreading that the company had spiked an article after pressure from the article's subject. Now, the two stories might cancel each other out in some way. Spiking a story based on pressure from the subject is bad, but allowing an employee to publicly question the action on a company blog shows an openness that I thought was impressive.

However, with the release of Reuters' new social media policies, it looks like the blogger, Chris Clair, would have broken one of the new rules:

The advent of social media does not change your relationship with the company that employs you -- do not use social media to embarrass or disparage Thomson Reuters.

Then there's this:

We're in a competitive business and while the spirit of social media is collaborative we need to take care not to undermine the commercial basis of our company.

The thing is, since you are in a competitive business, it's worth noting that all of your competitors are trying to "undermine the basis" of your company -- and thus it tends to be better to undermine yourself before someone else undermines you. So, while I understand why Reuters would say the following about Twitter usage:

As with blogging within Reuters News, you should make sure that if you have hard news content that it is broken first via the wire. Don't scoop the wire.

It doesn't really make much sense. It also goes against what some at Reuters have successfully done. You can still "scoop the wire" and then publish a full report on the wire. In fact, if you use Twitter correctly, you can build a lot more interest in the upcoming full story.

While there are plenty of reasonable and useful suggestions in the Reuters social media policies, some of it seems to go against what Reuters own Editor in Chief, David Schlesinger, said just last year:

The old means of control don't work.
The old categories don't work.
The old ways of thinking won't work.
We all need to come to terms with that.

Fundamentally, the old media won't control news dissemination in the future. And organisations can't control access using old forms of accreditation any more.

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Is Piracy Really More Important Than The Financial Crisis And Climate Change?

Mike Masnick — Tue, 10 Feb 2009 03:17:39 PST

Reader Virginia notes that in an announcement concerning European Commission President Jose Manuel Barroso and Chinese Prime Minister Wen Jiabao meeting to talk about various issues, it seems odd that "piracy" was apparently a priority over both the financial crisis and climate change. You would think that the other issues would be much more important, but the old legacy content industry still has been able to convince politicians that piracy is some huge political problem, rather than a business model issue they could take on, if only they bothered to try.

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