The editorial states that, "before the ruling, the RIAA simply had to request a subpoena from any U.S. district court clerk's office. Now, it must prove to a judge that it has sufficient evidence before naming any individual in a lawsuit and obtaining a subpoena."
On this point, the editorial just plain gets it wrong. The 512(h) subpoenas at issue in the Verizon case provide better protection to consumer privacy than civil subpoenas.
Don't just take my word for it. And certainly don't take the word of the warring parties and amici that used the case as a proxy for other battles. The objective voice on this issue is that of the courts. And while the D.C. Circuit stuck to statutory interpretation issues, the District Court did address the privacy issue. It found that "in several important ways [civil subpoenas] are less protective of the rights of....Internet users than is the section 512(h) process."
The Federal Rules of Civil Procedure allow anyone who has filed a John Doe complaint to obtain a civil subpoena directing an ISP to identify a subscriber. Under Rule 45, the copyright owner can obtain such a subpoena directly from the clerk of the court with no review by a judge.
To obtain 512(h) subpoenas, the District Court noted that a copyright holder must not only obey the rules that govern Rule 45 civil subpoenas, but must also fulfill several additional requirements. The District Court noted that these "requirements....are precisely the type of procedural requirements that other courts have imposed for subpoenas on service providers to identify anonymous posters of messages on the Internet." It further noted that, "these requirements....provide greater threshold protection against issuance of an unsupported subpoena than is available in the context of a John Doe action."
Based on the District Court's opinion to the contrary, how could the editorial conclude that the D.C. Circuit decision is a victory for consumer privacy rights? The answer, I suspect, comes in the very next sentence of the editorial, which notes that, while it won't halt it, the D.C. Circuit decision will slow the RIAA's "legal onslaught against piracy."
In other words, the editorial equates slowing the filing of copyright infringement cases against P2P users with a victory for consumer privacy rights. Put another way, the editorial equates copyright infringement suits with a violation of consumer privacy rights.
I understand, though I don't agree with, the editors' position - namely, opposition to copyright infringement liability for P2P users. But once again, the editors make a misleading claim to support their policy vision. Suing P2P users for infringement doesn't violate their privacy rights. Put aside the fact that a P2P infringer, by engaging in infringement with millions of total strangers on a public network, has absolutely no reasonable expectation of privacy. Instead, just consider the fact that, if lawbreakers had a right to remain anonymous, no one could be punished for any crime, and we would have to throw out our whole civil and criminal justice system.
Besides which, the editors applaud the fact that the D.C. Circuit decision forces copyright owners to file John Doe lawsuits to identify P2P infringers rather than allowing them to issue 512(h) subpoenas. Before the D.C. Circuit decision, copyright owners usually used the information from a 512(h) subpoena to achieve a private, out-of-court resolution with an infringer, and only filed suit as a matter of last resort. Now, copyright owners will have to file lawsuits against P2P infringers as a matter of first resort. Furthermore, the alleged P2P infringer's personal information will be made part of the public record, and copyright owners will demand larger settlements in order to defray the increased costs associated with filing a John Doe suit. In other words, the D.C. Circuit decision is likely to result in the filing of more copyright infringement cases, not less, and to pose a greater burden to consumers and consumers privacy.
The editorial also cajoles Congress to "stop digging its head into the silicon and confront an issue it hasn't for years." It suggests that Congress "herd the unruliest industry folks around a table and compel them to develop ways to take advantage of - rather than just try to halt - technology."
This latter statement reflects perhaps the most persistent and pernicious red herring in the public discourse about copyright issues. Basically, it is the premise that copyright holders have not embraced new, technological ways for distributing their works. Based on this premise, the editors and others propose that Congress force copyright holders to make their works available through particular technologies.
Both the premise and the proposition are deeply flawed.
Today, there are more creative works available in a greater variety of formats and on more platforms than at any time in history. Further, there are more options than ever before in the choice, price, and use of those works.
Literally tens of thousands of business, productivity, application, and entertainment software titles are available for use on PCs, Macs, PDAs, PlayStations, Xboxes, GameCubes, GameBoys, cell phones, and the Internet. Every day, this software is being upgraded with new features, pricing structures, and usage options.
Unparalleled numbers and types of magazines, newspapers, newsletters, journals, novels, and other written works are created, published and disseminated every day. They are available through hard copy, paperback, audiotape, eBook, CD-ROM, email alerts, and a wide variety of other digital formats. They can be bought or accessed at bookstores, supermarkets, airport newsstands, drugstores, libraries, web sites, and even parking garages.
A wide variety of multimedia creative works, like photographs, needlework designs, and graphic designs, are widely and legally available, both online and off.
Recorded music - and I mean major label content through legal channels - is more widely available than ever before. CDs are sold everywhere. XM Satellite and Sirius beam down hundreds of channels of digital radio. Hundreds of webcasters, big and small, stream thousands of channels of overwhelmingly diverse music. Interactive streaming is available through dozens of services, such as the new Napster, Rhapsody, MusicNet, Musicmatch, and MusicNow. A rapidly growing list of online services, including iTunes, Napster, Rhapsody, ArtistDirect, eMusic, Liquid.com, and BuyMusic, offer downloads of hundreds of thousands of tracks. While musical diversity on over-the-air radio may have contracted, there has been an explosion of offerings through these alternative channels.
Sheet music and music books - nearly extinct from store shelves - have experienced a renaissance in availability through the online service Musicnotes, which allows anyone with a computer and a online connection to digitally download a broad array of sheet music, or to order hard-to-find music books.
The creativity and availability of movies has exploded. Movies have evolved from silent pictures to talkies, to animation, to computer animation, to computer-generated live action, to combinations of everything in between. They are now sequentially released through theaters, pay-per-view, airplanes, DVD and videocassette rental, cable, satellite, and broadcast television. Even though the current broadband market cannot sustain an online movie business, thousands of reasonably-priced movies are available for online download and rental through services such as CinemaNow and MovieLink. While these purely digital services wait for a market to emerge, "Bricks and Clicks" rental services operated by Netflix and Blockbuster have found profitable ways to utilize the Internet.
The truth is that entertainment consumers today have more to choose from, on more formats, with more flexibility, and at better prices, than ever before. Whether with regard to books, software, movies, TV programming, music, photographs, or artwork, today's consumer is like the proverbial kid in the candy store.
Needless to say, the abundant availability of digital entertainment counters the editorial's contention that the entertainment industries are trying to halt technology. Certainly, content owners can improve and expand their online offerings, but the objective evidence indicates they are wholly intent on doing so. Much as I might like to bang some heads together in the entertainment business, this isn't the issue where entertainment heads need banging.
Once again, I understand, without supporting, the objective the editors hope to achieve based on their false premise. The editors want content owners to adopt current P2P technology as a distribution mechanism. But for the life of me, I cannot understand the logic of their proposed mechanism for getting there. To repeat, the editorial proposes that Congress "herd the unruliest industry folks around a table and compel them to develop ways to take advantage of - rather than just try to halt - technology."
Judging by their perspective, I feel certain the editors would roundly condemn just this sort of compulsion in a closely analogous circumstance. If Congress proposed to herd the unruliest technology industry folks around a table and compel them to develop a uniform DRM technology, I assume the editors would oppose it as a dreaded, innovation-stifling technology mandate. But what is the difference between a congressional mandate that the entertainment industry adopt certain technology, and a congressional mandate that the technology industry adopt certain technology? I just don't see it.
I'm not saying it's inappropriate for Congress to help stimulate the continued development of legitimate online services, but just that I prefer persuasion rather than compulsion. Furthermore, I don't think Congress should focus its persuasive powers exclusively on the entertainment industries. For instance, technological interoperability has long posed an impediment to the rollout and success of legal, online content services. It may be time for Congress to take a more active role in encouraging industry-led solutions to this problem.
The nature of the problem is easy to describe to any consumer who has tried to jump into the digital content fray. A well-meaning consumer buys songs through the Apple iTunes store rather than downloading illegal files from Kazaa. But then, he finds those songs don't play on his Creative Nomad MuVo digital music player, which he bought for a substantial sum only last year. Another well-meaning consumer finds he cannot sign up for Movielink because he refuses to use Internet Explorer as his browser. Another finds that, in signing up for different digital media services, each attempts to establish a different media player as his default, the result being substantial annoyance and inconvenience when trying to use a service.
These and many other interoperability problems create serious impediments to consumer adoption of online content services. While the techno-savvy may have the knowledge and will to figure it all out, the mass-market consumers won't jump on board until things are as easy as "point and click."
Segments of the entertainment and technology industries appear to recognize the interoperability problem. A variety of such companies, including the Universal Music Group and Microsoft, recently established the Content Reference Forum to explore solutions to a subset of these interoperability problems. I think Congress should promote such developments, and use the hearing process to tease out and overcome obstacles to interoperability solutions. While such efforts do not constitute congressional compulsion, and certainly wouldn't constitute technology mandates, they could be helpful.
The grand finale of the editorial spells out just the sort of congressional compulsion - I'll call it an entertainment mandate - the editors contemplate. The editorial suggests that congressional compulsion "begin with an idea forwarded by Internet provider Verizon: to create licensed subscriptions with sharing included in the price." While the editorial doesn't offer further detail, I assume it references previous advocacy by Verizon executives of a compulsory license for P2P file-swapping. Basically, this proposal involves a government requirement that copyright owners allow P2P users to swap their creative works in exchange for compensation established, collected, and distributed by the government.
On so many levels, such a compulsory license is a wrong-headed idea.
First off, given the shortage of affordable housing and inadequacies in access to health care, is this truly the most urgent and compelling case in which to abrogate private property rights? Is convenience of access to entertainment the place where government should first intervene? An affirmative answer would indicate a pretty distorted perspective, if you ask me.
Additionally, why is it the property rights of copyright owners that must be abrogated? The government could stimulate online access to entertainment by usurping the property rights of any number of industries. If it mandated artificially low broadband access fees, the government could stimulate growth of the broadband market, and thus increase incentives for entertainment companies to adopt a variety of online business models. Or, if the government established price controls on computers with multimedia functionality, it would stimulate growth in the market of online media consumers, and likewise increase incentives for online entertainment businesses.
Of course, I acknowledge these are pretty outrageous ideas. But, I think they are no more outrageous than the suggestion that, for the same reason, the government should usurp property rights in copyrighted works.
Putting aside these philosophical objections to such a compulsory license, there is the little issue of feasibility. It just wouldn't work.
While there are already a number of compulsory licenses for specified uses of copyrighted works, they are qualitatively different. Also, their mere existence of these licenses does not signify their success.
For the past two years, I and other Members of the House Judiciary Committee have been struggling to craft legislation to completely overhaul the compulsory license, or CARP, system. This overhaul is necessitated by the demonstrable failures of the compulsory license system. The most notable failure was the recent, lengthy, outrageously expensive, and universally unsatisfactory establishment of rates for webcasting of sound recordings.
While I am proud of the CARP reform bill we have crafted, it represents the third total overhaul of the compulsory license system in recent memory, so I am not going to guarantee success. The nature of compulsory licenses - government establishment, collection, and distribution of compensation for select uses of private property - makes them imperfect contrivances in the best of circumstances.
Furthermore, what the editors propose would be the mother of all compulsory licenses. Current compulsory licenses cover very narrow, easily defined circumstances affecting limited numbers of licensees. For instance, the Section 118 license allows public broadcasting entities to use certain copyrighted works, like sound recordings, in very specific instances. Or, the Section 116 license allows operators of coin-operated jukeboxes to perform the musical compositions embodied in the sound recordings on the jukebox.
In contrast to these limited compulsory licenses, the editors propose that the government set up a system allowing hundreds of millions of P2P software users to make and distribute unlimited copies of, apparently, any copyrighted work. The logistics are unfathomably complicated.
From whom does the government collect the money - each individual consumer, ISPs, P2P software distributors, computer manufacturers, or phone companies? How does the government decide how much to pay a copyright owner for the swapping of her needlepoint design, versus how much to pay the owner of corporate database software? How does the government account for the loss of sales through other distribution channels? If the license only covers certain types of copyrighted works, how does the system prohibit the swapping of unlicensed works, and who designs it to do so?
A fair system for compensating copyright owners would account for the relative use and value of their works. Thus, there would have to be a detailed system for tracking file-swapping. Would such a system require that ISPs develop and implement technology that identifies and records each individual P2P file-transfer? Or would the government implement such a tracking system? What are the privacy implications of either approach?
Will the P2P system be limited to U.S. consumers? Does technology exist to create such a limitation? If not, who will be required to develop it? Or, will U.S. consumers and U.S. entities subsidize the swapping habits of other nations?
If an ISP subscriber has no desire to engage in file-swapping, can they opt-out of the required payment? What is the process, and the cost of the process, for doing so? What technology ensures that a consumer who has opted out cannot engage in file-swapping anyway? If there is no such technology, then won't every consumer just opt-out? If the threat of a copyright infringement suit is all that dissuades a consumer from gaming the system, then aren't we just back to square one?
I could go on, and on, and on, because the problems with the P2P compulsory license idea are really that huge. As an academic exercise, crafting such a system could be great fun. As a practical matter, it is not feasible to create an efficient, reasonably inexpensive system that pays creators fairly for P2P swapping of their works.
Interestingly, I wonder whether the editors understood the implication of the compulsory license they propose for the Los Angeles Times itself. Ostensibly, such a license would allow unlimited P2P file swapping of every Los Angeles Times, from today's edition to the first ever published - and with the advertisements removed, of course.
The editors may have realized this, and if so, should be applauded for their selfless decision to forgo advertising, newsstand, subscription, commercial database, and re-publication revenue in exchange for a government-set fee. If they didn't realize this, they might want to rethink their proposal. And if they didn't intend that the compulsory license cover the LA Times, I wonder why they think the creators of newspapers should be exempted from a compulsory license that covers copyrighted works of a less newsworthy nature?
While I reject the idea of a P2P compulsory license, I agree that with the editorial that Congress should not bury its collective head in the sand on copyright issues. It's just that my legislative prescription is quite different. Rather than legalizing P2P theft, I think Congress should educate the public about the illegality of P2P file-swapping, and enhance the legal tools for combating it. And, in fact, the Subcommittee of which I am Ranking Member is currently considering legislation to do just that.
This legislation is an amalgam of H.R. 2517, introduced by the Subcommittee Chairman and myself, and H.R. 2752, introduced by Rep. John Conyers and myself.
The legislation advances a variety of interconnected objectives. It encourage more criminal copyright prosecutions by providing more prosecutorial resources and removing impediments to these prosecutions. Furthermore, it helps educate the public about the perils and drawbacks of copyright infringement. As such, this legislation should play a key, if modest, role in combating online copyright piracy.
On the educational side, the bill directs the FBI to develop a program to deter copyright infringement online, and directs that the program include warnings, which could be in the form of emails or instant messages, to individuals engaged in infringing activities. It directs the Department of Justice, in conjunction with the Copyright Office and Department of Education, to undertake a copyright education program that emphasizes the importance of copyright and the effects of copyright infringement. Finally, as to education, the bill ensures PC owners receive clear and conspicuous notice, and provide consent, before downloading P2P file-swapping software that jeopardizes their privacy and security.
The bill has a variety of provisions that promote copyright prosecutions. The bill authorizes additional funds for the Department of Justice to investigate and prosecute copyright crimes. It clarifies that infringements of unregistered works can be prosecuted, and facilitates the ability of the Customs service to seize unregistered, infringing works. Another provision increases the availability and training of FBI agents to investigate intellectual property crimes.
During Judiciary Committee consideration of this bill, I am also hopeful of adding a facsimile of another provision included in the Conyers-Berman bill, H.R. 2752. This provision would remove an unwarranted impediment to criminal copyright prosecutions of egregious P2P file-traffickers. Specifically, this provision would clarify the valuation threshold for proving felonious copyright infringement.
Under current law, a prosecutor must prove that a P2P file-trafficker has copied or distributed 10 or more copies with a retail value of $2,500 or more within a 180 period. Apparently, prosecutors are worried that judges will find the retail value of a song made available through a P2P network to be no more than the 99 cents it would cost to download through iTunes. If so, a felony cannot be proven unless the P2P file-trafficker has made more than 2,500 songs available through a P2P network.
I believe this interpretation of the felony valuation threshold is wrong. The retail value of a song made available through a P2P network is whatever the copyright owner would have charged to license such a distribution. In other words, what would you have to pay the copyright owner for the right to distribute unlimited copies of her song for free to more than 3 million people? Most likely, far more than $2,500 for even one song.
Since prosecutors do not appear to believe this common-sense interpretation will prevail, we need to adopt legislation to ensure the felony valuation threshold reflects this reality.
To my mind, such legislation is a modest, narrowly targeted, and entirely reasonable approach to dealing with rampant copyright theft. It only seeks to educate the public, and remove unwarranted impediments to criminal prosecution.
As a result, its prospects for passage should be quite good. Furthermore, Senate Judiciary Committee Chairman Orrin Hatch, together with Senators Dianne Feinstein and John Cornyn, recently introduced two bills containing a number of similar provisions. The bipartisan, bicameral support for these provisions should bode well for their prospects.
However, in the public environment that you see reflected in the LA Times editorial, I wouldn't take anything for granted. As has happened with previous anti-piracy bills, I expect to see them demagogued by piracy profiteers. In fact, it has already begun to happen.
Thanks again for the opportunity to give my perspective of the copyright debate. I would be glad to take questions now.
