The Definitive Post On Why SOPA And Protect IP Are Bad, Bad Ideas

from the let's-walk-through-the-reasons dept

There's been plenty of talk (and a ton of posts here on Techdirt) discussing both SOPA (originally E-PARASITE) and PROTECT IP (aka PIPA), but it seemed like it would be useful to create a single, "definitive" post to highlight why both of these bills are extremely problematic and won't do much (if anything) to deal with the issues they're supposed to deal with, but will have massive unintended consequences. I also think it's important to highlight how PIPA is almost as bad as SOPA. Tragically, because SOPA was so bad, some in the entertainment industry have seen it as an opportunity to present PIPA as a "compromise." It is not. Both bills have tremendous problems, and they start with the fact that neither bill will help deal with the actual issues being raised.

That main issue, we're told over and over again, is "piracy" and specifically "rogue" websites. And, let's be clear: infringement is a problem. But the question is what kind of problem is it? Much of the evidence suggests that it's not an enforcement problem and it's not a legal problem. Decades of evidence from around the globe all show the same thing: making copyright law or enforcement stricter does not work. It does not decrease infringement at all -- and, quite frequently, leads to more infringement. That's because the reason that there's infringement in the first place is that consumers are being under-served. Historically, infringement has never been about "free," but about indicating where the business models have not kept up with the technology.

Thus, the real issue is that this is a business model problem. As we've seen over and over and over again, those who embrace what the internet enables, have found themselves to be much better off than they were before. They're able to build up larger fanbases, and to rely on various new platforms and services to make more money.

And, as we've seen with near perfect consistency, the best way, by far, to decrease infringement is to offer awesome new services that are convenient and useful. This doesn't mean just offering any old service -- and it certainly doesn't mean trying to limit what users can do with those services. And, most importantly, it doesn't mean treating consumers like they were criminals and "pirates." It means constantly improving the consumer experience. When that consumer experience is great, then people switch in droves. You can, absolutely, compete with free, and many do so. If more were able to without restriction, infringement would decrease. If you look at the two largest contributors to holding back "piracy" lately, it's been Netflix and Spotify. Those two services alone have been orders of magnitude more successful in decreasing infringement than any new copyright law. Because they compete by being more convenient and a better experience than infringement.

Finally, even if you disagree with all of that, and believe that the problem is enforcement, SOPA and PIPA, won't be effective in dealing with that. The internet always has a way of routing around "damage" no matter how hard people try to stop it, and the approach put forth by these bills is a joke. It's hard to find anyone with technology skills who thinks that they will be effective. Every "blockade" has an easy path around it, and the supposed "anti-circumvention" rule in SOPA will never deal with the more obvious paths around things like DNS blocking (use a different DNS or a perfectly legal foreign VPN system). The private right of action efforts are also mistargeted. They're based on the premise that infringement is done for monetary reasons. It's amusing that just a few years ago, these same industries insisted that music and movie fans never wanted to pay anything any more, but now they're claiming that these same people are paying for cyberlockers all the time? That's simply not credible. And if there's so much money to be made, the studios and labels would be opening their own cyberlockers. Either way, we've watched this game of Whac-a-mole for over a decade. It doesn't work. Every site that is shut down leads to half a dozen new ones that spring up. This is not how you tackle a problem: by making the same mistake made over and over again in the past.

So... SOPA & PIPA don't attack the real problem, do nothing to build up the services that do solve the problem, and won't work from a technological standpoint. And that's just if we look at the what these bills are supposed to do.

The real fear is the massive collateral damage these bills will have to jobs, the economy and innovation.
  • The broad definitions in the bill create tremendous uncertainty for nearly every site online. This sounds like hyperbole, but it is not. Defenders of the bill like to claim that it is "narrowly focused" on foreign rogue infringing sites. Nothing could be further from the truth. While PIPA targets only foreign sites, the mechanism by which it does so is to put tremendous compliance and liability on third party service providers in the US. SOPA goes even further in expanding the private right of action to domestic sites as well. We've already seen how such laws can be abused by looking at how frequently false takedown claims are made under the existing DMCA. Of course, under the DMCA, just the content is blocked. Under SOPA all money to a site can be cut off. Under PIPA sites will just end up in court. Or, with both laws, an Attorney General can take action leading US companies to have to effectively act as network nannies trying to keep infringement from being accessible. None of this is good for anyone building a startup company these days. The massive uncertainty around this, combined with the need for a huge legal department sitting in "the garage" as a startup begins, will certainly slow down the pace of innovation in the US, while likely driving it elsewhere.

    And the definitions are ridiculously broad. Under SOPA, you can be found "dedicated to the theft of US property" if the core functionality of your site "enables or facilitates" infringement. The core functionality of nearly every internet website that involves user generated content enables and facilitates infringement. The entire internet itself enables or facilitates infringement. Email enables or facilitates infringement. They have significant non-infringing uses as well, but the definition leaves that out entirely. Under SOPA, there's also a risk if you take "deliberate actions to avoid confirming a high probability" of infringement on a site. Of course, it's not at all clear how one takes deliberate actions to avoid taking action. The only way to read this clause from a tech company perspective is that it requires proactive monitoring, which is effectively impossible for a user generated content site. PROTECT IP's definitions are equally broad, again using the "enabling" or "facilitating" language.

  • The risk of these broad definitions on perfectly legitimate companies is not theoretical: Defenders of both bills continue to insist that they're only meant to deal with the worst of the worst. If that were really true, the definitions would be a lot tighter and a lot more specific. Even if this is the intention of the authors of both bills, the simple fact is that the very broad definitions in the bill, mean that any entrepreneur today will need to take significant compliance costs just to avoid the possible appearance of fitting the criteria.

    Defenders also like to brush off the idea that a bill like this would target something like YouTube. But we know that's not accurate since Viacom is still engaged in a huge lawsuit against YouTube, in which Viacom's claims certainly appear to cover the definitions found in these bills. While it seems unlikely that anyone would try to shut down YouTube completely, given the public outcry it would create, the real fear is what happens to the next YouTube, or just the fear that a rights holder could strike into any company by threatening them under the private rights of action in each bill. It becomes a form of legalized extortion. Threaten to bring action under these bills, and watch tech companies crumble.

    And, already there are indications that companies are interested in bringing broad actions for infringement against organizations that most people would consider perfectly legal. Advertising giant GroupM recently asked its entertainment industry customers to compile a list of "sites dedicated to infringement," not unlike what's found under PROTECT IP. Universal Music, Warner Bros. and Paramount were three key providers to that list, which ended up covering a large number of perfectly legitimate sites including the famed Internet Archive (widely recognized as the library for the internet). It also included numerous innovative startups that are frequently used by content creators to get their works out, such as SoundCloud and Vimeo. Even more worrisome, it included a variety of publications and blogs, including Vibe Magazine, the quintessential hip hop and R&B magazine founded by Quincy Jones, as well as Complex, a popular lifestyle magazine recently recognized as one of the most valuable startups in New York.

    Even worse, it appears that Universal Music also included the personal website of one of its own top artists, 50Cent. The hiphop star has a personal website as well as a website owned by Universal Music. The personal website is much more popular... and it appeared on the infringement list. Suddenly, you can see how letting companies declare what sites are dedicated to infringement can lead to them looking to stifle speech and competition.

    Similarly, Monster Cable, who has stated its support for PROTECT IP, has put together its own list of "rogue sites" and it, rather stunningly, includes sites like eBay, Craigslist, Costco and Sears. It even includes consumer rights groups like Which? in the UK, and various popular shopping search engines like PriceGrabber.

    These companies clearly take an expansive view of what constitutes "dedicated to infringement," and have no problem suggesting they would like to stop these sites. Internet companies and site owners have every right to be extremely afraid of what laws like PIPA and SOPA would do when they give much more power to these private companies to take actions that could shut down these sites, tie them up in court or merely cut off their funding and advertising.

  • That uncertainty has very real and quantifiable effects on jobs in this country. President Obama has noted that the internet adds approximately $2 trillion to the annual GDP (pdf). The amount of jobs created by the tech industry are massive, and represent a large percentage of all new job creation today. IDC has predicted 7.1 million new jobs and 100,000 new businesses created in the next four years from the tech sector. An astounding 3.1 million people are employed thanks to internet advertising -- jobs that simply did not exist a decade ago.

    And these jobs go way beyond just the jobs at tech companies themselves. The important thing in tech platforms is not in how many jobs are at those companies, but how many jobs they enable elsewhere. eBay has been said to have empowered 750,000 people to build their own small businesses. Facebook's app platform has, by itself, created somewhere around 200,000 new jobs (pdf). It's likely that Apple's iOS app platform has created significantly more than that, given how popular it is. Google's tools have been shown to create $64 billion (with a b) in additional economic activity.

    Do we really want to stifle all of that growth and activity with regulations that will stifle innovation and jobs, even (as noted above) as the evidence shows that merely adapting and providing a better service makes everyone better off?

  • That uncertainty has extreme and quantifiable effects on investment in new startups. A very detailed look at the uncertainty in the cloud computing space, prior to and after the decision in the Comedy Central v. Cablevision case, which effectively set the framework for the legality of cloud computing, showed much greater investment when the law was clarified to be in favor of letting these new services thrive. Take that away, and investment in this engine of growth likely would be much lower. Considering that politicians claim to be so concerned about the economy and jobs these days, the idea that they would push forth a bill that quantifiably would reduce investment in one of the only sectors creating new jobs is really stunning.

  • Broadly expanding secondary liability is a dream for trial lawyers, but will be a disaster for business. There's been a move, associated with these bills to somehow demonize important concepts of safe harbors from secondary liability. The suggestion is that secondary liability somehow "allows" bad activity. Nothing is further from the truth. Illegal activity is still illegal. The point of safe harbors from secondary liability is blaming the party actually doing the action that breaks the law. We don't allow people to sue AT&T because the telephone was used in commission of a crime and we don't sue Ford because someone crashed their pickup truck into another car. Liability should be properly applied to the parties doing the action that breaks the law. The safe harbors have just made that clear -- and allowed innovation to flourish. Empirical studies have pointed out that "the rich informational ecosystem we know today... is a function of the 'breathing space' Internet intermediaries currently have under the law."

    Other studies have shown that pulling back on such secondary liability safe harbors would mean that investors would need an astounding 13x to 20x return on investment to make the risk worthwhile. That triples or quadruples the standard risk level that most angel investors deal with.

    The key way that both PIPA and SOPA function are to drastically scale back that breathing space, by attaching secondary liability and compliance costs to US companies, in an attempt to keep users from infringing via other sites. That would represent a massive shift in the legal framework that has allowed the internet to flourish, and yet no research or studies have been done to look at the possible impact of all of this.

  • The technical measures described in both bills is tremendously problematic. Looking to use DNS blocking is just a bad move. It's why a group of core internet infrastructure experts spoke out very early on (about COICA, in the pre-PIPA days) to explain how DNS blocking would set back a decade or more's worth of work on online security standards, would make people less safe online, and has the risk of fragmenting the internet. It's why the founder of the world's largest independent DNS provider, OpenDNS, in charge of protecting one-third of all schools in the US, has noted that under these laws, he likely wouldn't have started the company, or might have started it in another country.

  • Having a judge determine the best network architecture is a bad idea. SOPA's attempt to address the "DNS blocking doesn't work" argument by adding a vague standard in which courts can order sites to take "reasonable measures" to block even more is also not encouraging. Does anyone really think that we want some judges determining what are "reasonable measures" for managing how the internet works? Wouldn't it be better to trust the long line of experts, drop any thought of DNS blocking, and move on?

  • Going down the slippery slope of censorship is fraught with peril, both domestically and abroad. Supporters of the law get angry any time people bring up censorship, but as law professor Derek Bambauer has made clear, any effort to block content is a form of censorship. What we can argue is whether or not this form of censorship makes sense or is a policy that people think makes sense. But no one should deny that bills that lead to blocking access to websites is a form of censorship.

    There is reasonable debate as to whether or not this level of censorship goes violates the First Amendment. Constitutional scholar Laurence Tribe has argued that it does violate the First Amendment. Well over 100 of the country's top legal scholars have made the same argument. Arguing on the other side is well respected First Amendment lawyer Floyd Abrams... but even he admits that under SOPA and PIPA protected speech would get censored. He just deems that as acceptable collateral damage, as being merely "incidental." We can argue over whether or not it really is incidental, as we've already seen actions against sites under current law that seek to stifle large amounts of protected speech outside of any infringement.

  • The functional setup of such site blocking -- via DNS blocking -- is effectively identical to how the Great Firewall of China works. While the intended purpose is obviously different, the actual mechanism for blocking is nearly identical. This creates significant cover for repressive regimes to resist any diplomatic efforts by the US to push back against attempts by the US to promote internet freedom. Furthermore, we have seen how countries, such as Russia, have used copyright law to censor political opposition, using the law to go against activists challenging the government. Even if the intended purpose of SOPA and PIPA are to protect against infringement, opening up the door to censorship for one purpose makes it nearly impossible to avoid it being used for other purposes. It also basically gives the perfect blueprint for repressive regimes. They merely need to claim that their Great Firewalls are designed to stomp out infringement, and then can use it to intimidate and block political opponents. Adding to that is the massive expansion of the diplomatic corp. pushing for greater enforcement, and it's almost as if we're begging countries to set up their own Great Firewalls that will certainly be abused.

  • Countries abroad are watching us, and already noting the seeming hypocrisy concerning our statements. Media in other countries, who already are known for suppressing speech and censoring the internet, are already mocking the US for even considering such legislation at the same time as the US State Department claims to be promoting internet freedom. Talking about the importance of internet freedom on the one hand, while pushing countries to put in place the very tools that will be used to undermine internet freedom is not a particularly consistent message. This can be seen in VP Joe Biden's recent speech on internet freedom that presents all the arguments for why SOPA and PIPA should not be supported (in an unintended manner).

  • Changing what counts as a felony for copyright, without understanding the implications or common usage of technology puts many at risk. This does not apply directly to PIPA, but its companion legislation in the Senate, S.978. Similar provisions are found in SOPA as well, making certain forms of "streaming" a felony. Supporters of these actions insist that they're merely harmonizing criminal and civil copyright laws, since the felony parts of the criminal copyright statute cover reproduction and distribution, but not performance. What they fail to recognize (or admit) is that there's a reason why performance rights were left out, and it's because it's pretty ridiculous to think of a felony performance in normal contexts. But it becomes even more troublesome in the online context, because "performance" is so vaguely defined in an era when streaming works via a simple one-line embed. To embed a video is no different -- from a technical standpoint -- from linking to a video. And most people would have significant problems with the idea that you could face five years in jail for merely linking to content you have no control over. Yet, the streaming portions of SOPA and of S.978 make that entirely possible. Merely putting a single line of code on a site, pointing to content on another server that you have no control over, potentially makes you a felon. This will have massive unintended consequences and puts at risk millions of Americans who embed videos all the time.
To be honest, there are many, many more problems hidden down within the specifics of the bill, but this post was already getting long enough. However, what we have is a bill that doesn't tackle the real problems at all, that won't solve the problem it thinks it's facing, and has massive unintended consequences. Why? Well, because the entertainment industry insists that it's in trouble. This is the same entertainment industry who has been claiming the same thing about every technological innovation ever. If they'd had their way in the past, there would be no radio, no cable TV, no VCR, no TiVo and no iPods. Do we really trust them now to create a "narrowly focused" law that will only target the really bad behaviors? We'll close it out with a few quotes from the entertainment industry over the last century discussing various technological innovations, and question why we're letting them drive PIPA and SOPA forward:
The Player Piano

“I foresee a marked deterioration in American Music…and a host of other injuries to music in its artistic manifestations by virtue – or rather by vice – of the multiplication of the various music reproducing machines” -- John Philips Sousa, 1906

The Video Cassette Recorder

"But now we are faced with a new and troubling assault on our fiscal security, on our very economic life, and we are facing it from a thing called the Video Cassette Recorder" -- MPAA President Jack Valenti in 1982

Cassette Tapes

"When the manufacturers hand the public a license to record at home...not only will the songwriter tie a noose around his neck, not only will there be no more records to tape, but the innocent public will be made accessory to the destruction of four industries" -- ASCAP, 1982

Digital Audio Tape

The Mp3 Player

“Diamond's product Rio was destined to undermine the creation of a legitimate digital distribution marketplace..." -- RIAA President Hillary Rosen in 1998

The Digital Video Recorder

"It's theft...Any time you skip a commercial or watch the button you're actually stealing the programming." Turner Broadcasting CEO Jaime Kellner in 2002

Filed Under: bad ideas, censorship, copyright, economy, investment, jobs, pipa, protect ip, secondary liability, sopa

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  1. identicon
    Anonymous Coward, 18 Jan 2012 @ 1:20pm

    go to hell sopa

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