Author: David Newhoff

David is an author, communications professional, and copyright advocate. After more than 20 years providing creative services and consulting in corporate communications, he shifted his attention to law and policy, beginning with advocacy of copyright and the value of creative professionals to America’s economy, core principles, and culture.

An Open Response to Peter Sunde

Dear Peter:

I read this morning on Motherboard that you have “given up your fight for the Internet.”  This is the second time I’ve come across a public statement in which you say you are throwing in the towel on the ideological principles you, your partners, and your political allies believe were manifest by operating The Pirate Bay. And it’s the second time I’ve been motivated to respond.

The aspect of your recent statement that I find most striking is that one of your core complaints about the Internet we have today—the money-for-nothing Internet—is actually aligned with many of the same criticisms that I and my copyright-supporting colleagues have of the business models that tend to dominate Silicon Valley enterprises.  But the thing you clearly don’t get, Peter, is that this is the Internet you helped create.  You say the following:

“Look at all the biggest companies in the world, they are all based on the internet. Look at what they are selling: nothing. Facebook has no product. Airbnb, the biggest hotel chain in the world, has no hotels. Uber, the biggest taxi company in the world, has no taxis whatsoever.

The amount of employees in these companies are smaller then ever before and the profits are, in turn, larger. Apple and Google are passing oil companies by far. Minecraft got sold for $2.6 billion and WhatsApp for like $19 billion. These are insane amounts of money for nothing. That is why the internet and capitalism are so in love with each other.”

In a sense, you’re exactly right.  The stock market valuation of these companies is insane and most likely toxic. Many of these Internet giants that produce neither goods nor jobs nor any real progress, are designed predominantly to cannibalize what already exists in the market; and they entice investors with short-term ROI while creating no apparent long-term value.   But Peter, this is the culture you and your colleagues promoted.  This is what comes of evangelizing the idea that it’s okay to exploit other people’s investment of real labor and real capital in goods and services that would otherwise have regenerative value. And exploiting these types of investments is precisely what you and your colleagues did with The Pirate Bay.

At least part of the Internet you don’t like is what comes of preaching to a whole generation that they can have whatever they want, free of charge, as long as it’s just a mouse click away.  And indeed, we are lately seeing the wheels come off that naive (and frankly predatory) idea. As the leaders of Pandora and Spotify begin to see that “freemium” isn’t a business model; as Facebook’s video service “freeboots” the promised ad-share value out of the pockets of YouTube creators; and as the global network of pirate sites is revealed to be a malware-infested and sophisticated black market that preys on individual consumers, you seem to have missed the point, Peter. The “fight” you lost is not with the MPAA and the principles of real capitalism—but with the unfettered greed you helped foster on the Internet you asked for.

Capitalism isn’t really the problem. Done right, capitalism is by-and-large how a truly free society prospers.  And I believe that in my country—which is both free and capitalist—we have unfortunately regressed since the late-20th century in striking the right balance between the free market and necessary boundaries imposed upon that market. As a result, we have fostered a dangerous state of wealth consolidation and a corporate influence on public policy almost matching that of the Robber Barons of the late 19th and early 20th centuries. These forces are fueling a reactionary and populist trend in my country’s politics that you have stated you hope gets worse quickly so the whole capitalist system fails fast, so that people like you still have time to “fix” the world.  You say that you have failed, Peter, and you have. But you don’t understand why.

You do not recognize that you and your friends already ran a computer model on the world you envision and watched it fail.  Yet, you have learned nothing from your experiment.  You say, “I know Marx and communism did not work before, but I think in the future you have the possibility of having total communism and equal access to everything for everybody.”  This may be one of the most revealing statements that an evangelist of the “pirate ethos” has ever made.  Because, Peter, you have already personified—even dabbled in—the worst ills of capitalism that Marx accurately identified, but you are also mucking about in the absurdity of communism to which Marx was entirely blind.

As founder/operator of The Pirate Bay, you became a rapacious capitalist, exploiting human labor and rejecting certain legal boundaries designed to protect the rights of that labor.  Marx warned against this kind of exploitation, and he was right.  But in your persistent belief that technology alone—like Marx’s abolition of private property—will naturally create “equal access to everything for everybody,” you are as naive as Marx in that you forget to do the rest of the math. You fail to ask the question, “Who is going to produce the everything to which everyone is entitled equal access?”

Perhaps you forget that Karl Marx lived a great deal of his life sponging off the generosity of his pal Friedrich Engels, much as you perhaps still don’t seem to understand that The Pirate Bay only existed by sponging off the works of filmmakers, musicians, etc.  And even as you admit defeat in what you believe was a fight for the soul of the Internet, it’s interesting that you do not see a parallel between the collapsed Soviet Union and your failed experiment in media piracy. Both quite expectedly transitioned from a centralized—perhaps even idealized—form of labor exploitation to what is now a broadly distributed network of corruption and organized criminal activity.

I realize that your native Sweden is among the most socialist nations in Europe, that it enjoys a very high standard of living due to its unique fortune to maintain a golden balance between socialist and capitalist policy. I also recognize that a belief that “communism could still work” is a popular notion among many millennials, including some number in the United States.  But I strongly believe this sentiment is partly due to pure naiveté; it is partly a reaction to our failure to reign in the worst abuses of capitalism; and it is partly the result of your generation growing up spoiled by all the free stuff available via your digital toys.  (And that last part is your fault, Peter.)  While I do believe my country might learn a few things (e.g. in areas like education and healthcare) from our more socialist cousins in Europe, there is always a danger in failing to at least understand whence things come, whether we’re talking about a habitable planet or a work of fiction or even those digital toys themselves.

In fact, the computer or smart phone in your hand, which has so profoundly shaped the world view of your contemporaries, would not exist without the very systems you hope come crashing to a halt so that you can presume to “fix” them. I know I cited these details in another post, but do you even know what’s in an iPhone, Peter?  Five metals that have to be mined in places like Chile, Peru, South Africa, and Australia; eight rare earth minerals, nearly all of which are mined in China; human labor performed in conditions of varying degrees of decency and depravity around the world; global shipping protected by international navies; stevedore and trucking and other labor regulated by various local unions or other systems of commerce; and a staggering array of international trade agreements and treaties, all so you can have a device on which you may tweet that you hope we have a “total system collapse.” Really?

Like so many people in your generation, Peter, you have passion and you have talent.  But if you want to change the world, you first have to grow up and get real about how it actually works.

Piracy is increasingly hazardous, says Digital Citizens.

I imagine most people, whether they’re users of pirate sites or not, haven’t paid much attention to the growing number of safety warnings associating content theft with identity theft and related crimes against consumers.  For one thing, the whole idea of media piracy itself has, for too long, enjoyed undeserved credibility as a so-called victimless crime performing a social good broadly described as “sharing.” Or it’s been framed in economic terms by various pundits as a natural market reaction to outdated distribution and pricing models. And more than a few notable Internet activist organizations have either explicitly or implicitly evangelized the notion that piracy is fundamentally free speech, which enables said activists to label various efforts to mitigate piracy as “chilling speech.”

But over the last year or so, several studies have been conducted—I believe I have cited most of them—which demonstrate that piracy is one thing for sure:   dangerous.   Anyone with a computer, a bank account, a business, children, etc. should probably set aside both their preconceived attitudes and their ambivalence on the subject of piracy and read this new report commissioned by Digital Citizens Alliance (DCA) and conducted by RiskIQ.  Here’s just one hypothetical scenario that can happen to anybody:

You don’t visit pirate sites yourself, but your kid might without your knowledge, or even without necessarily knowing what he’s doing. Maybe he was just looking for mods for Minecraft or innocently trying to watch some anime cartoon, and you’ve never worried much whether he’s visiting legal or illegal sites.  But simply by stumbling onto a pirate site, this new DCA report indicates that your kid is at least 28 times more likely to infect the family computer with malware that can be used to drain your bank account, slave your computer for ad fraud (as described in my recent post citing the IAB report), or seize control of your computer to hold for ransom with a 72 hour window to pay several thousand dollars or kiss your data goodbye.

The DCA/RiskIQ report is aptly named Digital Bait in that it studies a growing sophistication among cybercriminals in the use of content theft sites—and presumably even misleading “free content” links—to hook users by downloading truly insidious malware to their devices. Businesses and entrepreneurs are particularly vulnerable to Denial of Services attacks in which the hacker takes down a website and demands a considerable ransom in order to restore the site to public visibility (y’know in the name of free speech and all).

RiskIQ estimates, just from the sites within the scope of this study, that 12 million U.S. users per month are being exposed to malware attacks, and DCA says this is merely the tip of the iceberg.  According to the U.S. Department of Justice 16.2 million consumers have been victims of identity theft representing financial losses totaling more than $24.7 billion. And the problem is currently growing in both scope and sophistication in the cybercriminals’ ability to use malware to scam their victims.

For instance, one of the more disturbing developments in malware is that a user no longer has to click on an infected link to contract the virus. Called “drive-by-downloads,” the Digital Bait report estimates that 45% of the malware in the scope of its study can be delivered invisibly without requiring the user to click on anything.  The report also indicates that more than half of the malware being delivered are Trojans, and many of these are Remote Access Trojans (RATs), which I discussed in this post after DCA published a report on this relatively unsophisticated form of hacking. Individuals can buy any of several RAT software kits for a few hundred dollars and start controlling a victim’s computer with an easy-to-use graphic interface that requires little-to-no coding skill.  RATs can be used to harvest financial information or to spy on victims, including turning on webcams and microphones. Personal data can then be used for ransom; or IP addresses,  particularly of young girls, may be sold in a black market exchange.

Not surprisingly, the report identifies that all of this growing malware activity is supported by a mature, underground “crimeware economy” operating on the Dark Web.  To quote the report:

“The DarkNet allows individual hacking groups to specialize in specific categories and to earn money for delivery of goods and services to other criminals. For example, one organization may specialize in developing the malware that is installed on consumer devices and sell it on the web. Another organization will be responsible for distributing and installing the malware on consumer PCs or mobile devices. A third group that runs a forum might also purchase stolen consumer credentials and resell them in the DarkNet.”

For years, copyright owners have focused on advertising, which remains the primary revenue source for many of the most popular sites dedicated to providing unlicensed “free” content.  But as the advertising community continues to collaborate on fixing the flaws in digital advertising ecosystem, which cause financial loss and harm to brand value, this  will likely motivate cybercriminals to more aggressively dangle the lure of “free” content to draw consumers into malware traps.

On the other hand, a likely silver lining in this growing relationship between mass copyright infringement and serious harm to consumers is that copyright holders and Internet companies should find common cause in seeking both voluntary and law-enforcement remedies to the problem.  After all, the spread of malware harms the entire Internet economy, and it as much in Google’s interests as it is in the creative industries’ interests to seek solutions.

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A Guide to Critiquing Copyright in the Digital Age

Anybody can write an editorial criticizing copyright on the Internet. It’s easy and fun! By following this basic guideline to creating an effective rebuttal to any proposal for protecting or enforcing copyrights online, you’ll discover that very little understanding of the issues is required. Once you get the hang of it, you’ll see that you can apply these techniques to nearly all of your editorials by simply exchanging a few names, dates, or legal proposals.  Here’s how it’s done …

1. Remind readers how cool it was when we killed SOPA.

No matter what central point you want to communicate, you will engender confidence in readers by writing a SOPA lead, which should include a recap of how much fun we had bringing about that bill’s staggering defeat. 🙂 It does not matter if your main criticism or recommendation has anything to do per se with the fundamental mechanisms or intent of the original SOPA/PIPA bills.  Since most readers never really understood SOPA/PIPA four years ago, invoking SOPA is the ideal prelude to any criticism you want to make related to enforcing copyrights on the Internet.

In your SOPA lead, be sure to use buzzwords, preferably draconian or overreach. These are highly effective words because readers remain generally unaware that the legal remedies in SOPA already apply in domestically-focused cases of online infringement.  Please refer to the glossary of suggested buzzwords found in the Use of Utter Bullshit described in Appendix B of this guide. DO NOT UNDERESTIMATE THE VALUE OF UTTER BULLSHIT.

To help you with your editorial writing, you will find many examples of the SOPA lead throughout the Web, but here’s a well-constructed version by Mike Montgomery, executive director of CALinnovates, that appeared in The Hill last week:

“Recently, the idea of felony streaming once again reared its ugly head. Making streaming copyright infringement a felony is a terrible idea and an example of backward thinking that creates further rifts between tech and entertainment at a time when these two sectors are not only reliant upon one another, but melding. As some may recall, this kind of backward thinking famously and furiously failed before when it was a key part of the ill-conceived effort known as SOPA-PIPA (Stop Internet Piracy Act / Protect IP Act). So strong was the backlash against these would-be laws and their breathtaking overreach, to this day, the term “SOPA-PIPA” sends chills down the spines of lawmakers.” 

Note how Montgomery uses the SOPA lead in this case at the end of the paragraph to implicitly—rather than explicitly—support his assertion that a current proposal to make infringement via streaming a felony is “a terrible idea” and that it naturally drives a wedge between Hollywood and Silicon Valley.  By effectively using the SOPA lead in this way, the editorial author can avoid discussing technical details, which might  inadvertently contextualize what is actually being proposed, in this case, in the Commercial Felony Streaming Act. For instance, it would be unhelpful if Montgomery attempted to explain why the unions DGA & IATSE—which represent middle-class labor in all areas of motion pictures and television—are endorsing felony streaming. It’s better not to get bogged down in those types of details. If the proposal you want to criticize comes from any part of the motion picture industry, just write Hollywood; if it comes from musicians, just write the recording industry. Keep it simple, broad, and vague in order to properly follow Guideline #2.

2. Remind readers that all remedies to infringement are basically SOPA.

By avoiding technical details, Montgomery demonstrates that there is no need explain why he believes delivering infringed material via streaming should carry a different penalty than delivering infringed material by other means. Instead, by effective employment of the SOPA lead, he can assume the reader will give him the benefit of the doubt that it is both terrible and divisive—just like SOPA! (See how easy that is?) And as a bonus, some readers may even believe that receiving infringed material via streaming would also be a felony, which is exactly the kind of confusion that helps our constituents kill proposals without needing to understand what they are. 😉

Also note that Montgomery effectively connects his SOPA lead to the body of his editorial by a fairly thin thread when he writes that the felony provision was a “key part” of the proposed bills. This is an excellent use of utter bullshit. After all these years, readers are not going to remember that this felony provision was at some point attached to one of the bills but was never central to the remedies proposed by either bill. By avoiding just the right details, you can remind readers that all remedies to copyright infringement are basically SOPA; and then you can proceed to vamp on one of several recommended themes (See Appendix A), which are largely variations on Guideline #3.

3. Remind readers that the copyright industries hate the future.

In this case, we see Montgomery has chosen to segue to the popular theme Hollywood is out of touch, as follows:

“Toughening up the rules around copyright infringement through felony streaming legislation, though, is not the answer to Hollywood’s ills. Legitimate streaming services that, but for their best efforts, violate copyright law already are subject to $150,000 in statutory damages per infringed work. That penalty is more than big enough to make incumbents and start-ups do their best to ensure that no content streaming on their sites violates copyright.” 

Notice that by not trying to explain why he thinks elevating infringement via streaming to a felony is terrible and divisive, Montgomery is free to cite the proposal as yet another example of Hollywood’s reluctance to innovate into the streaming market. If properly executed, this technique should distract readers from considering empirical data—for instance, the rapid expansion of legal streaming platforms for filmed entertainment. This kind of observable evidence could indicate that Hollywood may actually be innovating in the streaming market, which would potentially refute the underlying theme as Montgomery has proposed. But an effective editorial using the techniques we recommend should help readers ignore this kind of contradictory evidence.

We would also not want readers to wonder, in this case, “Who are these legitimate streaming services inadvertently infringing despite their best efforts, to whom Montgomery refers?” Instead, we want readers to imagine that there are scores of innovators who would be afraid to enter a market where infringement via streaming is a felony. AVOID EXAMPLES OR SPECIFICS. It is always better to refer to innovators and innovation generically and hypothetically. Remember that above we said vamp, meaning to extemporize. This is critical. One of the most effective ways to enhance your editorial is to follow Guideline #4.

4. Make some crazy shit up.

This is not the same thing as utter bullshit, which is more akin to what we like to call a reality inversion technique (See Appendix I). Making some crazy shit up is more creative; it’s your opportunity to let your imagination make the editorial your own (not that we encourage ownership of writing per se). For instance, here’s Montgomery making up some pretty crazy shit:

“But the key idea to focus on is “best efforts.” A streaming platform is incentivized to make its best-faith effort on an ongoing basis to ensure that all copyright holders are getting paid but very often the records of who holds those copyrights are unclear. A song might have had 12 writers on it but only ten are listed. Should an executive at a music streaming company be penalized with a giant fine, or jail time, because he didn’t know about those two extra writers?”

That last part about the 12 songwriters, and the executive acting in good faith but going to jail anyway is an excellent example of making crazy shit up and a superb use of the buzzword jail. If you can scare the bejesus (See Appendix K) out of your readers, they may not ask themselves probing questions like these:

What the hell is he talking about?

Does the law really work that way?

Have I ever heard of a case anything like what he’s describing?

These are the types of questions you want to avoid provoking among readers, which is why that SOPA lead is so vital. Think of it as a shield that protects you against readers noticing that you might be making some crazy shit up. Don’t be afraid to get creative! And that brings us to Guideline #5.

5. Write a misleading headline.

You do not have to deliver on the promise of your headline in the body of your editorial. Remember, millions of readers will only ever glance at the headline, so pick one that reinforces a general bias that’s good for our industry but makes us sound reasonable—and that fits the length of a tweet!  As you see, Montgomery has chosen the headline Time for Hollywood and Silicon Valley to stop fighting over copyright. Thousands of social media followers are apt to “Like” and share that headline without knowing what the article actually says. (This is exactly the kind of grassroots activism of the future that the copyright industry likes to hate on.)

Notice how Montgomery’s headline might make a reader think the author has written some kind of thoughtful compromise on copyright between the named parties. DO NOT WRITE SUCH AN EDITORIAL. Instead, as we have seen, the central argument of Montgomery’s article boils down to the following:  That Hollywood is only focused on legal remedies to infringement because it has not accepted the future potential of streaming. That’s not exactly what the headline implies the article will be about, but when we combine the misleading headline with the central argument made in the article itself, we get Hollywood should stop fighting over copyright.  Pretty cool, right?

Ordinarily, if Montgomery’s core argument were presented as a thesis without a SOPA lead, and without employing the techniques described above, some readers might immediately doubt his premise in light of the dramatic growth in legal platforms for streaming filmed entertainment, news, and sports.  And this doubt could, in turn, prompt readers to consider whether or not huge investment in legal streaming and legal remedies for mass copyright infringement might have to coexist in a sustainable, digital marketplace. But by effectively using the techniques in this guide, you can distract the reader from these and many other complex questions.

Good luck. And thank you for being a member of The Future! 🙂

THIS JUST IN:  An expert rebuttal to Montgomery written by Matthew Barblan and Devlin Hartline of The Center for the Protection of Intellectual Property.