Society Can’t Have What Authors Don’t Create

Photo by Pond5

As a follow-up to my last post responding to Public Knowledge’s allegations of “regulatory capture” at the US Copyright Office, I thought one of their accusations deserved its own post.  When copyright law is discussed as a broad principle—either in a practical or philosophical context—critics such as PK, Techdirt, the EFF, and Fight for the Future seem to view copyright from a collectivist perspective, stressing that its purpose is to serve society, which is the only reason why it should ever serve the author.  As a result, these parties have at various times raised a fuss over statements to the contrary made by Register Pallante, and this sentiment was reprised in the “report” by Public Knowledge,  Here’s what the report says:

Perhaps the starkest evidence of cultural capture can be found in statements by the current Register of Copyrights, Maria Pallante. She has, at various times during her tenure, commented that:

  • “Copyright is for the author first and the nation second.”
  • “I think the problem we have today in terms of imbalance that we might feel in the copyright statute is that we have gotten away from the equation that puts the authors as the primary beneficiaries, followed by the public good.”

The report at this point also cites two of Pallante’s statements about enforcement, but that’s a separate topic.  The reason these “author first” quotes twist the copyright skeptic’s knickers stems from their focusing on the IP clause in the Constitution, which reads to promote the progress of the sciences and useful arts as a predicate to the congressional power to enact IP laws.   There can be little doubt that the Framers did have a practical goal in mind when writing IP into the general legislature—that America would one day be all big and have science and culture just like Europe. But they had philosophical principles in mind, as well.  And in both practical and philosophical contexts, the skeptics are wrong to criticize Pallante, let alone to cite these quotes as evidence of her “cultural capture” by big-money rights holders.

Practical Copyright

This one is just mathematical. In the simplest terms, it should be obvious that there is no way for works to be of any benefit to society until they are first created by authors. If Mark Twain doesn’t write the book, we don’t get to read the book; and if anyone can prove the inverse, that would be a powerful magic indeed.  In this purely functional context, Register Pallante’s quotes merely reflect the only order of operations that can occur between creator and consumer, regardless of any other specifics pertaining to the application of copyright law.

If copyright does not first provide the author with a property right in his or her labor, society doesn’t get anything.  To those who would counter this by doubting copyright’s value as an incentive—insisting that the author will create anyway—even if this were true, it is a position that moots the accusations lobbed at Pallante about the proper function of copyright. Instead, the assertion that copyright does not incentivize is a wholesale rejection of its utility, one which obliterates any discussion about the proper functioning of that utility.

Copyright’s Philosophical Beginnings

As Americans, we tend to focus a lot on the practical—usually on the commerce part of the equation—and leave the philosophical to the realm of political rhetoric.  But the early arguments made for the protection of intellectual property, in both the state and federal legislatures, were predicated on the natural rights of the individual, and not on the individual’s fealty to society.  In fact, one could say that John Locke’s assertions about the natural rights of the individual make a case for those rights in spite of society.  This is because Locke’s Two Treatises on Government (1689) are argued from first principles in rebuttal to a treatise favoring absolute monarchy.

Locke asks the hypothetical question why the individual wants to abandon his absolute, natural liberty to the state at all and concludes that among the reasons is the protection of his property.  And because property in Locke’s definition includes the individual’s faculties and capacities, property, therefore, includes the products of those faculties and capacities.  So, the philosophical foundation for intellectual property in the United States is actually predicated on the natural rights of the individual just like the rights codified in the First Amendment.

Madison was well aware of these first principles when he wrote in Federalist #43, “The utility of this power will scarcely be questioned. The copyright of authors has been solemnly adjudged, in Great Britain, to be a right of common law. The right to useful inventions seems with equal reason to belong to the inventors. The public good fully coincides in both cases with the claims of individuals.”

In context to its philosophical heritage, the IP clause does not grant the right of intellectual property to the individual any more than the First Amendment grants the right of free speech to the individual. Both were held to be natural rights; and by affirming these in the law, the state promises to protect those natural rights. This is a manifestation, more or less, of what Locke had advocated 100 years prior to the assembly of the First Congress.

But what about promoting progress?

Back in 2012, Congresswoman Zoe Lofgren (D CA), who represents Silicon Valley, criticized Register Pallante’s “author first” statements when she said, “It seems to me that the Constitution is very clear that copyright does not exist inherently for the author but for the benefit for society at large.”  But Representative Lofgren’s asserting the obviousness of the “promote progress” part of the IP clause is an indication that she doesn’t know her history as well as she knows what’s in the interest of her tech-industry constituents. As copyright scholar Terry Hart addressed in his response at the time, the IP clause in the Constitution isn’t quite so clear as Lofgren thinks. In fact, we have a rather thick body of caselaw in which the courts have consistently reiterated the plain reasoning cited above:  that unless the author first creates, society gets jack.  (NOTE: Oliver Wendell Holmes never used jack in this manner.)

Additionally, there is a rich anthology of debate over exactly what the Framers meant by each of the key terms in the IP clause, which really is something of a grammarian’s enigma. For instance, it has taken a fair bit of judicial haggling to ultimately determine that the word science now firmly refers to copyright law while the term useful arts refers to patent law. But get this:  based on the argument for interpreting meaning in the parallel construction of the clause, that pesky word discoveries maps to useful arts (i.e. patents). And that’s a constitutional conundrum because we are taught even in grade school that a discovery is the antithesis of an invention and is, therefore, the exact word one would use to describe something that is not patentable! You can patent an invented toaster but not the discovered laws of physics that make bread crusty.

Like “discoveries,” both “promote” and “progress” have been variously interpreted in the courts and in legal scholarship, often revealing the biases of the interpreters.  In a very interesting paper, Sean M. O’Connor of University of Washington Law School makes a case for a French influence in the Framers’ choice of words based on his analysis that Madison and others were highly cognizant of the Encyclopédie published in 1751.  Through this lens, the word “progress” would only apply to achievements that could be quantifiably measured to make progress, and this would nullify the entire universe of creative works produced by copyright — and probably quite a few technological innovations to boot. (How many apps could be said to make measurable “progress”?)  Still, O’Connor concedes that this French-influenced interpretation of the clause is an academic exploration in the strictest sense and not a proposal for application of the law.

So, regardless of how one chooses to argue Framers’ clear intent—which is not as clear as Zoe Lofgren implied—I doubt very much that we would choose to reverse history and un-create the American oeuvre.  In this regard, we can know for sure that the Framers could not have imagined the technology-enabled explosion of creative works in the U.S. in the 20th century, and whether one favors the chicken or the egg, it’s hard to dispute that we have a lot of chickens and a lot of eggs.  Individuals and society have benefitted tremendously from copyright.

Public Knowledge and kindred organizations are leaning on weak scholarship when they criticize Register Pallante, or any other copyright expert, for stating that copyright is for the author first and society second.  It’s easy to invoke constitutional clauses in a PR context and claim “obviousness” in the Framers’ intent, but most of the clauses are one sentence long while the laws and histories built upon them fill the pages of some very heavy books.

Posted in Copyright | Tagged , , , | 4 Comments

Public Knowledge Declares Copyright Office is Full of Copyright Professionals

Photo by Pond5
Photo by ra2studio

In a document Public Knowledge has the conceit to call a “report,” the organization now proposes that the US Copyright Office is trapped in a state of “regulatory capture.”  Usually, this is a term reserved for a condition that arises when the people who work at a regulatory agency become either culturally or economically too close to the industry they’re supposed to be minding.  The most obvious and acute example we’ve seen is when employees working at the SEC have been offered lucrative gigs on Wall Street and this kind of big-money careerism drives their regulatory decision-making.   (See The Big Short for a brief dramatization of the phenomenon.  And don’t pirate it!)

The Copyright Office, of course, is not a regulatory body like the SEC, though it does certainly play a leading role in setting copyright policy for the nation through its analysis and recommendations on a variety of topics.  The USCO does not decide legal cases or pass copyright laws. Part of the Office’s mandated role is to consider a broad range of copyright-related issues, while accounting for the views of a diverse group of stakeholders, and to make recommendations that uphold the full scope of copyright’s purpose, including exceptions and limits to legal protections for rights holders.

Given the mission of the Copyright Office, the institution tends to attract employees who (brace yourself) think copyright is a good thing and who are predisposed to emphasize copyright’s benefits to the nation. That’s going to irk anyone who views copyright as a negative–like the folks at PK–but it certainly does not mean the office is “captured” by large, corporate rights holders.  PK’s accusation is one that might play well in a climate of general distrust of all government agencies, but the evidence they present in order to prove that the Copyright Office is amok with industry sycophants is not only thin and circumstantial, but is also remarkably hypocritical if one takes a peek under the rug in the Public Knowledge foyer.

One might notice, for instance, that Public Knowledge co-founder Gigi Sohn is now lead counsel at the FCC, which has been pushing a “set-top-box” proposal that the Copyright Office has critiqued within the ambit of its statutory role. What PK doesn’t like, I suppose, is that the CO disagrees with their assertion that the FCC proposal “has nothing to do with copyright,” so now PK has moved into full-court press to discredit the whole Office as functionally biased.  One might think that with Gigi Sohn as the common denominator in this story—and Google as the clear winner if the FCC proposal were to pass—PK would tread a bit more lightly with accusations of cultural “capture,” but not so much.  When you’re shielded by the appearance of representing “public interest,” you can get away with almost anything.

The Revolving Door Accusation

To support its premise, Public Knowledge, with McCarthy-like righteousness, presents a list—a table of thirteen former or current employees of the Copyright Office who either have worked for private-sector, rights-holding organizations prior to working at the Office or who are now working for these private entities after their terms at the Office.  That thirteen copyright attorneys over a 22-year period might be employed in some capacity for copyright owners is a rather unremarkable observation, but PK seems to think it’s a smoking gun.  Of course, they had to stop the list at thirteen because the fourteenth former CO employee might have been leading copyright attorney William Patry, who now serves as senior counsel to Google (I guess they didn’t want to mention that one).  Or, as one of the named thirteen, Steven Tepp, observes in his response, PK also didn’t bother to list the many other Copyright Office employees who, “went to Internet and tech companies, the Smithsonian, the FCC, and other places that no one would mistake for copyright industries.” One might almost get the idea that experienced copyright attorneys pursue various career paths or something.

To be utterly pedantic about it, is PK actually suggesting with its little chart—that the IP law firm, where Marybeth Peters took an advisory role after leaving the Copyright Office in 2010, only gave her that job after they confirmed that 16 years’ worth of her copyright analysis as Register consistently favored “industry”?  And which industry would that have been exactly?  The D.C. firm named by PK provides counsel on copyright, patents, and trademarks; and you can bet your boots they’ve had a few technology clients, and probably quite a number of other clients outside the unholy trinity of music, motion pictures, and publishing.

PK also notes that Peters now serves (part-time) on the board of Copyright Clearance Center, a private organization that states, “Our vision is to create global licensing and content solutions that make copyright work.”  That almost sounds like 21st-century innovation to streamline digital content licensing, which is exactly what CCC does.  So how is this career move by Peters evidence of “capture” at the Copyright Office? It’s not. PK is assuming nobody will look at the details and will accept their premise at face value.

Now, I could point out that a “revolving door” table comprising a few hundred key federal employees would list in its right-hand column not a variety of private-sector roles, but just one company called Google.  And that in itself is not a smoking gun, per se.  Google produces a lot of highly-skilled technologists, who perhaps should work in the public sector.  But if we’re talking cultural “capture”, let’s be real.

Views on Copyright

As consequential evidence of the CO’s “capture,” Public Knowledge accuses the office of contorting copyright law; serving the interests of rights holders; advocating for expanded copyright; sticking its nose where it doesn’t belong; ignoring stakeholders; and (bizarrely) being generally ignored or rejected by the courts, Congress, and other agencies.  Holy smear campaigns, Batman, that’s quite a laundry list of accusations. But then, it’s SOP for Public Knowledge to present the part of the story that supports their accusations while ignoring the rest of the facts.

For instance, it is true that the courts have at times disagreed with the recommendations or interpretations of the Copyright Office.  But quite often, they haven’t.  Welcome to the law. Debate on principle or interpretation is part of the process and always has been. So, unless Public Knowledge wants to roll up its sleeves and present real data—not cherry-picked anecdotes—that show clear evidence of consistent bias in the USCO and conflict with the courts, then what they really appear to be saying is, “The CO disagrees with us, so it must be corrupt.”

One could cite numerous examples as to why this accusation is unfounded, but a rather compelling one would be the Copyright Office’s latest round of Rule Making on exceptions to Section 1201 of the DMCA.  As I reported in this post, the recommendations from the CO reveals that the Office generally favored the parties petitioning for exceptions rather than the rights holders arguing against those exceptions.  According to Tepp’s rebuttal cited above, the 22 exceptions allowing circumvention of TPM is an unprecedented number.  Meanwhile, Section 1201 of the DMCA is a fairly contentious issue among copyright watchers and direct stakeholders, but it’s a subject that remains arcane for most citizens.  As such, it seems like a perfect opportunity for the Copyright Office to exercise the “maximalism” of which it now stands accused, yet the record reveals exactly the opposite trend.

Why is Being Anti-Copyright the Only Non-Corrupted View?

Public knowledge states the following as a prelude to its accusations that the Copyright Office is on a perpetual copyright contact-high from partying with rights holders:

“Beyond the revolving door, frequent gatherings—both formal and informal—of Office staff and industry representatives provide further evidence of cultural capture. For example, the Copyright Office organizes a series of ‘Copyright Matters’ lectures, both ‘to provide education and training’ to Copyright staff and to serve as a larger ‘community forum.’”

Remember when Obama, as a brand new president, was going to speak to kids at the start of the school year, and the Republicans went all ape-shit and declared, “He’s going to indoctrinate the kids!!” That was a pretty crazy-pants moment for America, right?  Same thing here.  Yes, let’s be clear once again:  the Copyright Office generally believes copyright is good for the country. You will also find employees of the EPA who dig clean air, several members of HUD opposed to homelessness, and at least a few folks at the DOD who err on the side of security and are prone to wearing uniforms.

Maybe Public Knowledge thinks the Copyright Office is culturally corrupted because so many of PK’s own copyright positions are just kinda bananas to people who know the law and who don’t view copyright as a pernicious regime.  Y’know on account of the fact that copyright has been pretty good for us. For the first 50 years, the U.S. hardly had much of a culture industry at all, but by the mid 20th century, it was the world’s leading producer of creative works, and that production created a lot of really good jobs—way more jobs than all of the internet giants combined have produced or are likely to produce.

Even beyond copyright, though, Public Knowledge’s “report” compiled of innuendo and half-truths reflects a core dysfunction, in my view, with all contemporary politics. It almost doesn’t matter what the issue is, the theme across the political spectrum is one of tearing down institutions and systems rather than any engagement in a good-faith debate that might actually improve a system. This is understandable because the game is rigged.  We have allowed corporate values to write public policy in far too many areas, and people are being hurt as a result.  But PK is not critiquing—let alone debating with—the Copyright Office, it’s gunning for its very existence and gunning for copyright law itself.  If anyone believes that agenda is in the public interest, they are sorely mistaken.


Posted in Copyright, Law & Policy | Tagged , , | 1 Comment

Sci-Fi Film Written by AI is Still Fundamentally Human

Image by Pond 5
Image by Pond 5

Back in June, ArsTechnica hosted the online debut of a short film called Sunspring. Directed by Oscar Sharp and featuring the actors Elizabeth Gray, Humphrey Ker, and Thomas Middleitch, the film was made for the Sci-Fi London film festival according to guidelines for the 48-Hour Film Challenge, and it placed in the top ten out of hundreds of entries.  What is most distinctive about Sunspring, though, is its screenwriter Benjamin. No last name.  At least not one he’s told anyone yet.  You see, Benjamin is an AI.

Writer Analee Newitz describes Sunspring as the product of Sharp’s own fascination with artificial intelligence, which led to his friendship and collaboration at NYU with researcher Ross Goodwin. Listed in the film’s credits as Writer of Writer, Goodwin is the chief architect of the AI—an LSTM recurrent neural network—that would eventually name itself Benjamin. “To train Benjamin, Goodwin fed the AI with a corpus of dozens of sci-fi screenplays he found online—mostly movies from the 1980s and 90s. Benjamin dissected them down to the letter, learning to predict which letters tended to follow each other and from there which words and phrases tended to occur together,” writes Newitz.  The whole process itself is very interesting, and I recommend reading her article to learn more.

The finished film is definitely engaging, though I would not personally subscribe to the descriptions hilarious and intense as stated in Newitz’s headline. But to each his own, and headlines are headlines.  What Sunspring emphasizes for me, of course, is not a contemplation of machine intelligence but the significance of human interpretation. Benjamin’s absurdist script is a list of non-sequiturs, both in dialogue and stage direction, making the film project an experiment that almost asks the question, “Can we make a watchable movie based on the screenplay of a madman?”  The answer is of course you can.  Because cinema is very much an interpretive medium—both for makers and viewers. We can’t help but interpret; it’s what humans do.

The distinction between Sunspring and the oeuvre of human-crafted, experimental, non-narrative cinema—sometimes comprising stream-of-consciousness writing akin to Benjamin’s composition of algorithmic probability—is subtle to the point of nitpicky. Sunspring is odd, yes, but barely so if one is familiar with a film like Daisies or Hallelujah the Hills or the works of David Lynch.  The difference, of course, is that Sunspring’s absurdity—at least at the script stage—is accidental while these other works are not. Having said that, though, artists do make instinctive choices all the time that defy literal analysis, and audiences make poignant meaning from of these expressions that were never intended or even considered by their authors.

Sunspring’s script is humorously absurdist, though presumably not in a manner of which its author could possibly be aware.  The experience of watching the finished product shares strands of comedic DNA with the same mechanism that makes the Bad Lip Reading series work—because it’s funny when a real person or a character says something absurd in an earnest manner.  When BLR has Mitt Romney on the 2012 campaign trail say to a supporter “Thank you for the bench,” the same comedy chromosomes are at work as when Sunspring’s Humphrey Ker says, “We’re going to see the money.”  Benjamin has no idea why these things are funny, but they are funny in a non-literal way that is indisputably human.

Sunspring may represent a baby step toward the expectation that an AI will inevitably write a traditional, narrative screenplay for a major motion picture.  As I wrote in a very early post, a comparison between human-only, formulaic script development and machine-made or assisted, formulaic script development may prove to be indistinguishable.  Instead of leading down that path, however, Sunspring reminds us that cinema is often most compelling when convention and formula are broken.  And giving the responsibility to an AI of writing the blueprint for a film is certainly one way to achieve broken conventions—not unlike the artist who might experiment with narcotics to break down barriers to his or her subconscious.  Naturally, the more an AI resembles or reflects us, the more we assume its destiny is to replace us.  This is always the two-part conversation, right? There’s the gadget question that asks what an AI can accomplish, but there’s also the existential question that asks at what point we can say the AI has an identity, which is really a reflexive inquiry about our own existence.

So, here’s a hall-of-mirrors thought exercise:  might a more advanced AI than Benjamin have written a very different screenplay for the film The Enigma Code about the life and work of Alan Turing?  Personally, I like certain things about that film but was ultimately disappointed because I felt the work neglected an opportunity to explore the narrative in which the father of AI—the inventor of the Turing Test to determine the “identity” of the machine—was a man who literally had to pretend to be someone he was not.

So, if Benjamin’s great-grandson were the co-writer of a biopic about Alan Turing, might “he” bring a unique empathy for Turing’s duality given the AI’s own centaur-like existence?  And if so, wouldn’t we have to call that writing?  I think we would. On the other hand, absent the capacity for empathy or the existential question, the script is just barely structured words on a page that, as in Sunspring, only humans can interpret has having any meaning at all.

Posted in Digital Culture, Film | Tagged , | 1 Comment

The Librarian of Congress is not the nation’s copyright authority.

Library of Congress Main Hall Washington DC, USA Photo by Marco Rubino Pond5
Library of Congress Main Hall Washington DC, USA
Photo by Marco Rubino Pond5

Just because the surgeon general serves at the pleasure of the president, that doesn’t mean we think the president is, therefore, the more qualified expert in medicine.  We want a president to have views on domestic healthcare in general but not to have opinions about actual medical practice.  That would be scary.

Yet, solely on the grounds that the U.S. Copyright Office operates within the Library of Congress, many of the usual copyright antagonists—Public Knowledge, EFF, et al—are lately promoting the idea that the Register of Copyrights is meant to follow the Librarian’s lead with regard to copyright policy.  This rhetoric has been buzzing a little louder since the nomination of Dr. Carla Hayden to the position of Librarian, who copyright skeptics view as an ideological ally, and who will be sworn in on September 14th. Although Dr. Hayden is exceptionally qualified for this position and, like all librarians, has her own views about the role of copyright, the office she is about to hold has at no time in history performed the duty of the nation’s authority on copyright law and policy.

For the first 107 years after the 1790 Copyright Act was passed, there was no U.S. Copyright Office at all. Copyright law itself was a patchwork of state and federal statutes; the courts were still parsing the meaning of the IP clause and looking to England for precedent; and authors’ works were registered by depositing copies with the federal courts in each state.  Meanwhile, the Library of Congress was exactly that—a department located in the front of the U.S. Capitol, staffed by fewer than ten people, and containing a book collection of some 80,000 volumes by the early 1860s.

In 1864, President Lincoln appointed Ainsworth Spofford to the position of Librarian of Congress, and it was Spofford who had the first grand ambitions for what the Library could become.  His vision included growing a vast collection of works for the nation and building a monumental facility where the collection would be housed.  In order to expand the collection, Spofford lobbied to have the copyright registration and deposit functions centralized at the Library, a procedural change that became policy with the second general revision of the copyright law in 1870.  Moving deposits to the Library worked to so great effect that by 1874, according to the LOC website, there were more than 70,000 books piled on the floors of the office.

So, the procedural change in deposits grew the collection rather quickly, but Spofford lacked the funding (and the room) to fully handle the workload he’d asked for. An 1893 New York Times story refers to an eight-week delay in issuing copyright certificates as well as a significant backlog of filings and correspondence pertaining to copyright.

New York Times - January 1893
New York Times – January 1893

Most of Spofford’s energy by then was focused on building the new facility itself, but when the doors opened in 1897, figures as notable as Melvil Dewey were already advocating a new role for the Library that went beyond merely amassing the largest repository in the world. Dewey’s view was that the Library of Congress should become “a center to which the libraries of the whole country can turn for inspiration, guidance, and practical help.”

So, in July of 1897, Spofford stepped into an assistant role, and the Library was reorganized as an institution that would fulfill this new mission of which Dr. Hayden will now be the new custodian and leader.  Later that same month, the Copyright Office was established as a separate entity within the Library; and a figure with specific expertise in copyright law, Thorvald Solberg, was appointed as the first Register.  Solberg was directly involved in drafting the 1909 Copyright Act and in directing American policy with regard to international copyright and trade. Every Register since Solberg has fulfilled this advisory role on copyright policy.

New York Times - August 1893
New York Times – August 1893

Spofford’s legacy of deposits to the Library via the copyright registration process has been maintained, and this keeps the public collection growing as intended. At the same time, the Librarian of Congress has often provided comments and views on various issues to the Copyright Office but historically defers to the Register with regard to specific policy recommendations.  Just like every other agency in the country, the USCO has grown along with copyright law’s increased complexity as  protectable works have scaled in volume, variety, and means of distribution.

In 1897, when this division of labor was first established, the medium of motion pictures was in its infancy, and the first Pianola (player piano) had just been invented two years prior. Copyright law was likewise still relatively primitive and about to collide with the mechanical age when the 1909 Act would truly begin to reflect to the modern world we know today.   In contrast to the 1890s, when the first registered “movie” at the LOC was 45 frames long, the 21st century USCO has a separate Visual Arts Division that operates under one of three Associate Registers.

The complexity of contemporary copyright touches multiple sectors of the American economy, representing more than 5.5 million jobs and an estimated 6.5% of GDP. As such, the Copyright Office is called upon to provide counsel and guidance to courts, Congress, other federal agencies, and the general public on a wide range of topics that implicate copyright law. Although the Register of Copyrights is organizationally subordinate to the Librarian, it would be a huge mistake to confuse this with a functional subordination.  The two offices perform very different and very necessary roles. The parties who are recently seeking to dismiss the Copyright Office as having neither authority nor expertise to perform its mandated duties are standing on historical quicksand.  Nobody should throw them a rope.

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Motion Picture Unions Opposed to FCC Set-Top Proposals

Photo by ponsulak Pond 5.
Photo by ponsulak Pond 5.

As noted several times on this blog, it takes a lot of highly skilled people to make a film or TV show, and these people generally do not own any copyright interest in the works they help make or any equity in the production companies.  Motion pictures and television production is a project-to-project business. Crew members and performers are not full-time employees of either studios or production companies and may go months between jobs; they’ve been “gig-economy” workers since long before anyone thought that term was a new thing.

Just like most labor in the United States, today’s motion picture craftspeople are the beneficiaries of hard-fought rights—many negotiated decades ago—to share in the financial rewards of successful products they do not own.  Films and TV shows are mostly made by middle-class, freelance workers whose average, annual incomes comprise not only day rates and overtime, but also residuals and health and pension benefits.  These terms are negotiated and managed for most crew and performers by the unions DGA, SAG-AFTRA, and IATSE. These unions are opposed to the FCC “Set-Top Box” proposal because, as it stands, the proposal would break the licensing structure on which their compensation packages are based.

To be a sustainable workforce, performers and crew members generally need to remain on the net-positive side of several averages—average number of days worked, average number of shows worked that succeed, and average number of shows that succeed in the market overall.  By taking the macro view of the ways in which these workers are compensated over time, it’s very much a rising-tide-raises-all-boats paradigm.  The successful show that Props Master A works on feeds the health and pension program of Make-up artist B, who might work a show that doesn’t make it. The spread of investment across multiple shows keeps the pool of skilled labor generally sustained among the various gigs and periods of unemployment between gigs.

Photo by sokolodv Pond 5.
Photo by sokolodv Pond 5.

It should be clear to anyone that if you disrupt the means by which labor is compensated, labor has a habit of not working.  And as stated in previous posts on this subject, the FCC proposal cannot be called a consumer-focused plan to introduce better and cheaper TV options if the plan simultaneously kills the means of production. This is exactly what the proposal can do by enabling companies like Google to create a parallel, commercial video service without licensing any of the programming.

It’s Not About Boxes

FCC Chairman Wheeler emphasizes the amount consumers spend renting set-top boxes from cable companies, and then “digital rights” groups like EFF and Public Knowledge echo the sentiment that this proposal is about innovative technology (just like the VCR) that will give consumers more flexibility in viewing options for programming that we’re already paying for. And it will unleash us, they say, from the rental boxes owned by the cable companies.  But the rental fees thing is a smokescreen for what’s really going on because the box rental part of our cable bill isn’t the biggest line item; there’s nothing in the proposal that would technically lower the cable bill; we’re free right now to go buy boxes and not rent from the cable providers; and the new licensing market is already providing consumers with viewing options way “beyond the box.”

The big talking point that is most likely to confuse consumers is that the new box Google wants to sell us would only make programming available for which “we are already paying” via the Multichannel Video Programming Distributors (e.g. cable companies).  This is the central reasoning why supporters of the proposal claim that it does not implicate a copyright infringement, and it’s the kind of talking point that will sound reasonable to consumers.

But this reference to our subscription fees completely misrepresents how the producers—and therefore all the labor represented by the unions—get paid for the programs they make.  Our subscription fees to MVPDs do not pay to produce multi-million-dollar TV shows; they never could.  The license fees paid by the MVPDs to the producers are what pay for production, and those licenses are predicated on a complex variety of ways the MVPD expects to exploit its limited or exclusive access to the content.

The simplest and most obvious example is advertising. If, under the FCC proposal, the MVPD that has licensed programming is forced to deliver that programming free of charge to Google, which may then re-distribute the content however it wants and then advertise against the programming from its own ad services, the MVPD’s ad revenue will go down almost immediately.  So, when a new slate of shows is produced, the MVPD’s incentive to pay current market-value license fees is diminished while Google, which captured part of the ad market, isn’t paying anything at all.  Secondarily, new-market distribution channels like Hulu would see no incentive to license programming under such a regime, which gives lie to the notion that this entire proposal is about competition to benefit consumers rather than what it is, which is a government giveaway to Google.

I never quite understand why it should be hard to recognize that less is less—that if license fees for programs go down or if new channels for licensing are cut off, there can be no result other than less production or production of lesser quality. And the FCC proposal would appear to create exactly these conditions—possibly more quickly than people think.  The producers and MVPDs aren’t blind.  If the FCC proposal were to pass, they’ll revise their business strategies immediately, and that could include producing a lot less work within just a couple of years.  At a time when we’re clearly seeing a Golden Age of the small screen in quality writing and production—and in flexibility of viewing options—it is unfathomable that the FCC would advocate unraveling the licensing regimes that have made all this bounty possible.

What’s in it for Google?

I know I’ve repeated Google in this post despite the fact that there are other manufacturers hoping to sell boxes under the FCC proposal.  But if the value of getting into this line of business is predicated on advertising and data mining—which it has to be—it’s pretty hard to imagine that Google would not very quickly dominate this space and become the only game in town.  I understand Radio Shack, for instance, plans to make boxes, but as that company doesn’t have an online ad business or a data mining business, their boxes would presumably serve Google’s pipelines for a piece of the revenue.  If that’s how this would shake out, the “competition in boxes” story is pure illusion.

If the producers, the MVPDs, and the unions are all correct that this plan can only undermine the means of production and inevitably reduce production quantity, quality, or both, what does even Google—let alone the rest of us—gain in the long-run?  When variety of quality content is reduced, then advertising value is reduced and so is data mining value.  Google has a long track record of earning revenue by exploiting works it hasn’t licensed; but in this case, its parasitical model can actually limit the means by which the company typically generates revenue.  So, what’s the long-term plan here?  It’s hard to say. But it’s not hard to see in the short term how this proposal is bad for creators in the film industry and bad for consumers who want to see great television continue to thrive.

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