SOPA and PIPA – Bogus Assumptions And Lousy Law

My Congressman is a sponsor of the Stop Online Piracy Act.  This is a great disappointment to me, and I absolutely did let him (and both Senators) know that.  This was in one of his responses:

As you may know, countless foreign rogue websites steal and sell American intellectual property by counterfeiting trademarked goods and pirating copyrighted materials. Unsuspecting consumers are tricked by these foreign rogue websites into buying counterfeit products like fake prescription drugs and car parts, or illicit copies of software, music, movies and books. The result is more than $135 billion in revenue lost annually by legitimate American businesses  through foreign websites that keep profits for themselves , do not pay taxes ,  do not adhere to manufacturing or public health standard s that harm American consumers,  and steal American jobs and hinder innovation during trying economic times. Further, these foreign rogue websites also put American customers at risk for identity theft, credit card fraud and malware.

Can you count the number of bad justifications in this?  There’s a lot.  Even more, there’s some “creative accounting” in here, along with merging of various problems which the bill is not designed to “combat.”   You may see this from your representatives.

What are the “merges”?  First off counterfeiting is not idential to piracy.  This bill does nothing to address that.  Here’s the difference.  If I buy or download a DVD of a movie,  “rip” it (make an electronic copy),  burn them to DVD’s which I then sell, that’s counterfeiting.  If I make a “knockoff” or “lookalike” and sell it as the real thing, that’s counterfeiting.   That’s always been illegal, and yes, the government has been fighting that for decades.  There are criminal and civil penalties for doing so, and one can calculate a loss from those.   I might also note that this bill does nothing to address the identity theft or credit card issues.

Piracy, on the other hand, at least in this sense is different.  Someone makes an electronic copy and “shares” it with people.  It’s a copyright violation.    What we’ve learned from the implementation of the Digital Millenium Copyright Act (DMCA) is that you can turn everyone into “pirates” quite easily.  A look through the list of RIAA “enforcement actions” quickly shows that they’re notorious for filing charges, even if the person they’re filing against doesn’t have a computer or access to the Internet.  No, I’m not kidding.

But you notice the “figure” my congressman quoted, in “economic loss?”  Well, that’s something else again.  Where did that figure come from?  Ars Technica did a look at it two years ago, in detail.  It turns out that it’s … bogus.  The author of that study in a recent follow-up, had this to say:

The bogus numbers Carr cites—which I’ll get to in a moment—actually represent a substantial retreat from even more ludicrous statistics the copyright industries long peddled. In my previous life as the Washington editor for the technology news site Ars Technica, I became curious about two implausible sounding claims I kept seeing made over and over—and repeated by prominent U.S. Senators!—in support of more aggressive antipiracy efforts.  Intellectual property infringement was supposedly costing the U.S. economy $200–250 billion per year, and had killed 750,000 American jobs. That certainly sounded dire, but those numbers looked suspiciously high, and I was having trouble figuring out exactly where they had originated. I did finally run them down, and wrote up the results of my investigation in a long piece for Ars. Read the whole thing for the full, farcical story, but here’s the upshot: The $200–250 billion number had originated in a 1991 sidebar in Forbes, but it was not a measurement of the cost of “piracy” to the U.S. economy. It was an unsourced estimate of the total size of the global market in counterfeit goods.

and…

So in a fantasy world where U.S. movie pirates don’t just circumvent blockage with a browser plugin, and SOPA actually stops all online movie piracy by American users, we get a $446 million economic benefit to the United States in the form of movie revenues, and presumably comparable benefits in music and software revenues? Well, no. Remember our old friend the Broken Window Fallacy. It’s true that some illicit U.S. downloads displace sales of legal products. But what happens to the money the pirates would have otherwise spent on those legal copies? They don’t eat it! As that same GAO report helpfully points out:

(1) in the case that the counterfeit good has similar quality to the original, consumers have extra disposable income from purchasing a less expensive good, and (2) the extra disposable income goes back to the U.S. economy, as consumers can spend it on other goods and services.

As one expert consulted by GAO put it, “effects of piracy within the United States are mainly redistributions within the economy for other purposes and that they should not be considered as a loss to the overall economy.” In many cases—I’ve seen research suggesting it’s about 80 percent for music—a U.S. consumer would not have otherwise purchased an illicitly downloaded song or movie if piracy were not an option. (bolding mine)

What this means is that Congress is using an unverifiable – and demonstrably false in many instances – set of figures to justify the measures in these laws.    What caused all the furor against the bill was not that people didn’t think that piracy – or counterfeiting – wasn’t a problem.  It was the measures that were being proposed to “combat” it.

Implementing such a solution breaks the distributed tree of authority concept used by the DNS by “injecting” U.S. nationalized pieces of DNS policy into the system. ISPs around the United States would become responsible for implementing, maintaining and monitoring these SOPA feeds into their DNS infrastructures, creating an additional layer of operational complexity for their DNS operations. Additionally, since not all DNS systems permit the inclusion of external data feeds to support local policy, many operators would be required to upgrade the recursive DNS infrastructures in significant ways.

There’s a number of conditions that could occur where a SOPA-fed recursive DNS server could hand back incorrect DNS data or be circumvented all together. If an ISP were to have issues pulling the SOPA feed or clearing domains from the SOPA list, a single domain could be blacklisted in the United States when it is perfectly legal to be used. If the source of a SOPA feed were to ever be compromised, an attacker could take critical Internet infrastructure domains offline by adding them to the feed (i.e. root-servers.net).

and even the definition of “foreign” is open to question, as Reddit points out:

The concept of ‘domestic’ versus ‘foreign’ on the internet is complex. For example, reddit’s primary servers are located in Virginia, however we have domain names through foreign registrars (redd.it, reddit.co.uk). The site is hosted via a third-party content-delivery network (Akamai). This means that if you connect to reddit from a foreign country, you are likely connecting to an Akamai server not located in the U.S. This legislation naively ignores this complexity, and simply labels a site ‘foreign’ or ‘domestic’ based solely on the domain name.

The legislators sponsoring these bills have indicated that they are only targeted at truly foreign sites. However, the language is so loose and ignorant of what is truly a foreign site that there is a huge amount of room to argue what is actually “foreign”.

What it comes down to is that these bills were fatally flawed from the outset.  Even removing the DNS blocking provisions don’t save them.

But we think SOPA and PIPA are beyond saving. It was negotiated in a smoke-filled room with minimal input from the Internet community, and its core provisions are flatly inconsistent with the values of the Internet. Congress should stop considering SOPA and PIPA for this session. They may wish to consider the more reasonable (but still far from perfect) OPEN Act as an alternative. Or if that doesn’t satisfy Hollywood, they should spend the next few months brokering a serious conversation between Hollywood and the Internet community. Then maybe all the parties can come back in 2013 with a new proposal that doesn’t endanger online freedom.

Yes the principal players in here are well known to the technology people.  They’ve been writing legislation at the behest of the media companies for a very long time, and each time it starts yet another battle.   One might well ask why Congress went this path, if the technology companies and experts had so many problems with it.  The answer, sadly enough, is that they didn’t want to hear from them.

Groups that weren’t invited to speak at the hearing vented afterwards. “This lack of speaking and listening has been a continued frustration and led to such a flawed bill,” said CCIA chairman Ed Black. “I’d liken it to killing mosquitoes with an uzi, but at least the uzi hits its target. This bill will fail to actually stop traffic to infringing sites and will Balkanize Internet traffic, sending the real pirates to foreign DNS servers that can’t easily be monitored.”

The Consumer Electronics Association, which was apparently denied a chance to participate in the hearing, also pulled no punches. “The bill attempts a radical restructuring of the laws governing the Internet,” said CEO Gary Shapiro. “It would undo the legal safe harbors that have allowed a world-leading Internet industry to flourish over the last decade. It would expose legitimate American businesses and innovators to broad and open-ended liability. The result will be more lawsuits, decreased venture capital investment, and fewer new jobs.

In other words,  Congress went down the path of “our minds are made up, don’t confuse us with facts,” or they were honest politicians – they stayed bought.  It was not until the massive protest brought to bear by the Internet communities, across the political spectrum, that the support for the bill started crumbling.   These bills are “not dead yet,” though.   Even now, there are attempts to “tweak” the bills to try to make them “more acceptable.”   They can’t be made that way, they’re fatally flawed from the outset, and based on bad assumptions.   They need to be totally stopped, dead, buried.

No one says that piracy isn’t a problem.  But until we have reliable and verifiable figures as to just how big a problem it is, and no, not figures from media companies, along with a set of solutions that actually is implementable and does not infringe on free speech, any law Congress brings up should be looked at with a seriously jaundiced eye.  There are some suggestions being made for the process, and we should be pushing our congressional representatives to use them.   Because right now, the process is broken, and if we don’t keep an eye on our representatives, they could break the Internet.

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4 Comments

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4 responses to “SOPA and PIPA – Bogus Assumptions And Lousy Law

  1. Thanks for the link to the ars technica article on post SOPA. I’ve sent that link to both of my Senators and my Congressman – strongly urging them to review the article.

    • According to Fight For the Future both bills have “postponed” action. Whether that means “killed” or not is subject to interpretation. Personally, I like to keep the pressure on until there is no need for interpretation. 😉

      • Agreed. My reading on The Hill and Politico (as well as MSM coverage) lead me to believe they aren’t dead yet – just on hold while – as Boehner stated – build more consensus.

        • Smith has pulled SOPA in the House, and Harry Reid has “postponed” Tuesdays vote on PIPA.

          While it probably means they’re dead, there’s still a chance that PIPA, at the least, could be “rescheduled.”