Intractable online IP policy controversies

Hat tip: Matt Asay (@mjasay)

Like anyone who follows the tech industry, I’ve been seeing apocalyptic stories, emails and seminar announcements about how SOPA (the Stop Online Piracy Act) will destroy the Internet, Internet companies and technological innovation as we know it.

With my new job, I haven’t been paying as much attention as I’d like to, but from what I’ve read, it’s another law in the general direction of the (much loathed) Clinton-era Digital Millennium Copyright Act. Certainly the motivation and opposition sound nearly identical to DMCA.

What also sounds similar is the oddfellow coalition: I mean, how often do Republicans try to make Hollywood studio execs richer? And how often do Democrats have to choose between the supporting the entertainers (and entertainment execs) who help them raise millions against the grass roots consumers and the EFF/civil liberties types?

I spent a fair amount of time studying DMCA. After briefly working as a consultant to one of the earliest Internet music streaming sites (Live365), I wrote two teaching cases about the challenges facing the entertainment industry in the Napster generation, and the trade-offs of Federal imposition of terms for content producer-consumer negotiations (particularly the Online Royalty Tribunal).

My favorite part of that era was when I asked my MBA students to do a five forces analysis of the record industry ca. 1995, when there were 6 major labels instead of the soon-to-be 3. After walking through the buyer power, supplier power, substitutes, rivals and entry barriers, I led them to the inescapable conclusion: this is as close to a cartel as you’re ever going to see. (Hint to students: professors love examples of industries with very high or very low forces.)

There are no white hats here. The DMCA was a sledgehammer to kill a mosquito, but that didn’t make the mosquito any less deadly. My sense is the SOPA is roughly the same.

So I was thrilled to read a blog entry (tweeted by Matt Asay) by John Lilly:

What’s bothering me about the SOPA “discussion”

There are 3 things that have really been bothering me about how the SOPA/PIPA discussion has been going so far.

1. it’s not a discussion at all — it’s people calling each other names.
2. it’s highly likely to have a result that is unhelpful at best, and insanely destructive at worst
3. we’re building a completely worthless/bad roadmap for how to deal with technology policy going forward, and it’s going to get worse

Let me be very clear: SOPA is a terrible law that should not be enacted under any circumstances. It’s broken technically and misguided from a policy point of view. It not only won’t accomplish what advocates want it to accomplish, but it also will create backbreaking burdens and barriers to entry for some of our most promising technology companies and cultural movements of the coming decade.

But also: content creators & owners have a legitimate beef with how their content can be appropriated and distributed so easily by rogue actors.

I don’t share John’s interpretation of the law. Part of this is because I’ve not read the law, nor heard more than a smidgen of the articles regarding it. But part of it is also because entertainment companies are getting killer, the other side (consumers, Silicon Valley, cyberlibertarians) are at best indifferent to their situation and it’s only with the threat of bad legislation will they make even the most modest concessions.

John was particularly funny as he caricatured the name-calling on both sides:

[Here] I use the term “conversation” here very loosely, since it has characteristics more like a bunch of schoolyard name calling. The conversation that’s happening is going more like this:

- content: “you people are stealing our stuff. you’re thieves”

- techies: “we’re not stealing it. we’re just building great apps for users.”

- content: “you’re ignoring the problem and helping the thieves. you’re effectively pirates, so we’re going to shut everyone down.”

- techies: “you’re acting like jackbooted fascists, embracing censorship and your’e going to end everything that’s good about culture today.”

- content: “we’re trying to protect our content — you guys are pretending like there’s no problem, then getting rich off platforms that pillage our content.”

- techies: “you don’t understand how the Internet works — how do you even live life in the 21st century? dinosaurs.”

So that’s awesome. Then you throw Congress into the mix and hilarity ensues. Because if you’re looking for folks who really do not act like they want to understand the Internet, Capitol Hill is a pretty good place to start.

John advises that “we need to be thinking about copyright law — in an age where copies are the natural order of things, as opposed to previously, when it was harder to make copies.“

What I find particularly depressing here is that fixing entertainment copyright law is trivial compared to fixing patent law. Here we have a pretty simple mix of stakeholders: content producers, content consumers, interested bystanders and pirates.

When you’re trying to fix patent law, you a particularly rich mix of people in an industry. For example, for the patent term on a therapeutic compound you’d have big pharma, startup biotech, insurance companies, the Feds (Medicare/Medicaid/VA), consumes, and senior citizen lobbies. But when the same patent system also impacts IT — with components, systems, software, open source, patent trolls — and dozens of other industries, then the prospect of finding a patent reform compromise that a majority will endorse becomes virtually impossible.