THR: What is the status of the Stop Online Piracy Act? Is the legislation dead, or will there be compromise between Hollywood and Silicon Valley?
Dodd: I regret that Steve Jobs isn’t around today. At least he understood the connection between content and technology. The fellow who started eBay, Jeff Skoll, gets it [Skoll is founder and chairman of the film company Participant Media]. There are not a huge number of people who understand that content and technology absolutely need each other, so I’m counting on the fact that there are people like Jeff and others who are smart and highly respected in both communities. Between now and sometime next year [after the presidential election], the two industries need to come to an understanding.
THR: Are there conversations going on now?
Dodd: I’m confident that’s the case, but I’m not going to go into more detail because obviously if I do, it becomes counterproductive.”
Does that mean online piracy is harmless? Of course not. But the harm is a dynamic loss in allocative efficiency, which is much harder to quantify. That is, in the cases where a consumer would have been willing to buy an illicitly downloaded movie, album, or software program, we want the market to be accurately signalling demand for the products people value, rather than whatever less-valued use that money gets spent on instead. This is, in fact, very important! It’s a good reason to look for appropriately tailored ways to reduce piracy, so that the market devotes resources to production of new creativity and innovation valued by consumers, rather than to other, less efficient purposes. Indeed, it’s a good reason to look for ways of doing this that, unlike SOPA, might actually work.
It is not, however, a good reason to spend $47 million in taxpayer dollars—plus untold millions more in ISP compliance costs—turning the Justice Department into a pro bono litigation service for Hollywood in hopes of generating a jobs and a revenue bonanza for the U.S. economy. Any “research” suggesting we can expect that kind of result from Internet censorship is a fiction more fanciful than singing chipmunks.”
Secretary of State Hillary Clinton. Law professors Mark Lemley, David S. Levine, and David G. Post note, however, in response:
It would be not just ironic, but tragic, were the United States to join the ranks of these repressive and restrictive regimes, erecting our own “virtual walls” to prevent people from accessing portions of the world’s networks. Passage of these bills will compromise our ability to defend the principle of the single global Internet—the Internet that looks the same to, and allows free and unfettered communication between, users located in Boston, Bucharest, and Buenos Aires, free of locally imposed censorship regimes. As such, it may represent the biggest threat to the Internet in its history.
“Well, yes,” they’d have to say. “If you add code to the browser that implements DNSSEC, you’ll have to add code that circumvents criminal hijackings of the DNS system. And that code can be declared illegal by the Attorney General pretty much whenever he likes. You can litigate about it, of course, but if you lose, the AG can shut down all shipments of your browser until it’s been revised to the satisfaction of his staff and their advisers in Hollywood.”
Faced with that advice, would you implement DNSSEC?
Neither would I.
In fact, I wouldn’t even allow the DNSSEC guys to write an extension that implemented their protocol. And so, by poising a sword of Damocles over the browser companies, SOPA will kill DNSSEC.
Let’s hope that the opposition to SOPA hasn’t punched itself out against the first version of the bill, because this version is badly in need of a knockout punch.”
The DMCA online safe harbors have worked pretty well over the past 13 years. I don’t know that anyone loves the compromise, but everyone seems to have done OK. We’ve seen an explosion of UGC websites fueled by the safe harbor, and content owners as an industry have done pretty well for themselves financially and have developed a working relationship with most major UGC sites.
The Stop Online Piracy Act, with its ridiculously named subpart the “E-PARASITE Act,” doesn’t expressly modify 17 USC 512. Nevertheless, it is a full-fledged assault on the safe harbor’s scheme. It employs the same basic notice-and-takedown structure of 512, but it applies the cutoff obligations to payment processors and ad networks (thus effectively reversing Perfect 10 v. ccBill and Perfect 10 v. Visa), expands—for the first time—the takedown obligations to trademarks (thus embracing and expanding Gucci v. Frontline), expands the takedown obligations to cover anti-circumvention in addition to the 17 USC 106 rights, expands the reasons why a rightsowner can complain, and does not give the governed intermediaries any business incentive to stand up for user content. On the latter point, because SOPA is designed to cut off the cash, each and every UGC item potentially jeopardizes its entire economic enterprise of a website hosting it. In other words, if the website goes offline because of cash flow problems caused by the cutoff attributable to a single UGC content item, all of the UGC on that website goes dark because of a single content item. Talk about collateral damage.
Thus, among other adverse consequences, if SOPA passed, it effectively repeals 17 USC 512 by shifting most of the action to the notice-and-takedown process in SOPA. In doing so, SOPA radically changes the balance between content owners and UGC websites. Despite the FUD from the content industry and other bill supporters about the supposedly serious problems caused by “rogue” websites and the supposedly fine-grained targeting of this bill, make no mistake—this law mortally threatens the entire UGC community.”