Tag: USCO

Does Masnick Not Know That The Public Is Not An Online Service Provider?

Signaling one of the talking points I expect we’ll be seeing quite often as the DMCA fight brews—and it is brewing—Mike Masnick and others have declared that the Copyright Office, in its newly released report on DMCA Section 512, neglected to include the public among the stakeholders with a vested interest in the 1998 addition to the copyright law. In his first post on the topic, Masnick asks rhetorically Does the U.S. Copyright Office Not Know That Copyright’s Main Stakeholders Are The Public? Never mind that this is a retread of an unsupportable theme of his, but the premise sets up a false dichotomy that will be used as a pretense to campaign for the status quo of Section 512 — especially because the USCO has recommended a few areas for possible revision.

Let us first keep in mind that we, the public, are always the beneficiaries (or not) of policies relating to the interests of both copyright owners and online service providers (OSPs). Or, as my friend Neil Turkewitz puts it, “The public interest is always affected by decisions made by private actors. Indeed, it’s fair to observe that the public interest is itself a contrivance, and represents the constellation of interests of individual members of the public.”

We enjoy the benefits created by internet platforms just as we enjoy the works produced by rightsholders. Because the public interest is intertwined with the interests of both sides in this narrative, the legislative history (despite what Masnick claims) does not point to a triad of stakeholders in which the public is one prong. The DMCA was negotiated by two sides (both representing large, corporate interests) hammering out a deal in the late 1990s, at a time when nobody could have predicted how the consumer-based internet might evolve.

On the OSP side, when AT&T and the other telcos sought a shield against liability for the inevitable copyright infringements by the public, the primary rationale (and a reasonable one) was that investors would shun internet prospects if the service providers would be vulnerable to expensive and ongoing litigation. These companies did not lead with homilies on free speech or the fair use exception in copyright law. It was about business. So, let us not be blinded by the fallacy of presentism. When the Copyright Office says that 512 was intended to balance two competing interests—rightsholders and OSPs—that statement is neither inaccurate nor indicative of a disregard for the public.

One reason I imagine we will be hearing this rhetorical accusation about the allegedly missing public is that it softens the ground for declarations like this one:  “… the report mainly focuses on large internet providers liking the safe harbors, and copyright holders wanting it to be worse…and then claims that since only one side is ‘upset’ clearly that means things are out of balance,” writes Masnick. See what’s happening there?

By pretending that Section 512 is not the result of a two-sided arrangement, Masnick is able to make a mathematically impossible statement, implying that when one side of an agreement feels it isn’t working, this is somehow not evidence of an imbalance. Even if one has contempt for a particular side—and I think copyright critics’ contempt for authors is a matter of record at this point—if one side says an agreement is not working, this is the definition of “unbalanced.” Further, the implication that 512 is working just fine for the public is political theater. Not only could most of the public likely not explain what Section 512 does, but the public also does not enjoy any kind of liability shield under the terms of the DMCA.

It is frankly disingenuous to suggest that the public is ever represented as a whole constituency. And it is as arrogant as it is futile when people like Masnick presume to speak for the public. Which public would that be exactly? Are millions of creators of copyrighted works not part of the public? What about the millions of people whose livelihoods are dependent upon the creative industries? Or what about the public that simply enjoys creative works, which is pretty much everybody? John and Jane Q Public are not nearly so confused about the relationship between copyright and the works they enjoy as many critics like to suggest. And the conflicts inherent to Section 512 were, and remain, conflicts between rightsholders and online service providers. Period.

It is not wrong to maintain that the public has an interest in the implementation of Section 512, and in future posts, I’ll get into some of the proposed amendments that may or may not be considered by Congress. But because those forces hellbent on maintaining the status quo of 512 decided, as a first volley, to lob this allegation that the public was overlooked by the Copyright Office, I will insist that this is neither supported by the content in the report, nor remotely instructive to the purpose of legislative review.

Meanwhile, as long as Masnick et al insist upon conflating the public interest with that of the OSPs, we might want to keep in mind that the public has not exclusively benefitted from the catalytic effects of internet platforms over the last 20 years. We don’t see any headlines saying Songwriters Sell User Data to Troll Farms or Photographers Tied to Election Fraud or Poets Fueling White Supremacy Worldwide. Which force is more responsible for InfoWars, copyright or YouTube?

I know. Don’t blame the internet for every problem in the world. But a little common sense is called for, no? Is it a coincidence that platform expansion is concurrent with rampant ignorance raging through Western civilization like a forest fire? Huge swaths of the public are evidently so howling-at-the-moon stupid (thank you Aaron Sorkin for the expression) that they are willing to believe anything. So, I think we have reasonable cause to look askance at the dawn of the so-called information age and ask where we went wrong.

In that spirit, let us also remember that the purpose of copyright, as expressed in the constitutional clause, is to “promote science.” While “science” has long since been expanded to encompass the creative arts, the notion of enlightenment still lives in the doctrines of copyright. And to the extent the Copyright Office seeks to preserve that principle, it is unquestionably serving the public.

Critics Build House of Canards to Trash USCO Bill

Photo by jeancol1503

Well, here we go.  The network of copyright critics seems to be working out their main talking points for hating on H.R. 1695, which proposes to make the Register of Copyrights a presidential appointee (with Senate approval) rather than an employee of the Librarian of Congress.  Mike Masnick, founder/editor of Techdirt, has written a piece for The Verge that comprises (I think) all of the Greatest Hits from the anti-copyright songbook, including the popular jingle referred to in my last post about Mickey Mouse being the major force behind the 1998 Copyright Term Extension Act.

While it’s tempting to respond to each of the window-dressing fallacies deployed in Masnick’s article, it would also be tedious. (I just can’t come up with any more ways to mock the invocation of SOPA by that crowd.) As usual, Masnick wants to sell us an epic tale of Copyright vs. The Internet with statements like, “The copyright questions raised by the internet are existential.” He says this as though copyright law has never contended with technology before, or as if to imply that the internet is just a litigation or two away from being shut down.  And, of course, this “existential” threat will be masterminded by Hollywood and the RIAA through the new Register of Copyrights if the position were to become an appointee of the Executive.

This defies both historical evidence and common sense, concluding with the fact that the major rights holders are, at this point, all-in on this whole internet thingy. Like those companies that said “no thanks” to Trump’s EPA rollbacks because they’ve already invested substantially in going green, the proverbial, sinister Hollywood really has no interest in “breaking the internet.” Again, in reference to my last post, how much has Marvel invested in growing its franchise just on the Netflix platform alone?  Right. So, let’s put the doomsday hyperbole back in the crazy drawer where it belongs and talk about reality.

Politicizing to Criticize Politics

Masnick asserts two big bullet points in this article, one which coincides with one of EFF’s first responses, and one which coincides with Representative Zoe Lofgren’s testimony on Capitol Hill.  (Rep. Lofgren (D-CA) represents Silicon Valley’s district and is highly critical of copyright.)

The first major point Masnick (and the EFF) asserts is that if the Register position were to become a presidential appointee, this would “politicize” the role more than it already is and make the Register more vulnerable to industry influence.  With regard to bi-partisanship, the bill was introduced by Representatives Goodlatte (R-VA) and Conyers (D-MI) and passed out of committee with a vote of 27-1.  But beyond Congressional consensus, this “influence” allegation is an interesting one coming from a crowd that has already accused the last Register (by way of a smear campaign) of being about as subservient to major rights holders as one might imagine.

Nevertheless, Masnick et al seem to feel the next Register could “go to eleven” and be even more extra totally double-secret “captured” by Hollywood. And the way this will happen is by reorganizing the USCO relative to the LOC.  It’s an argument based on innuendo, laced with emotional triggers for readers (see references to SOPA & Disney); but there is no substantive case being made as to why this reorganization will increase the potential for inappropriate deference to major rights holders.

Let’s clear something up right now.  If you have a fairly high-profile job in the federal government, your role is at least a little bit political.  The Librarian can be politicized as can the Register of Copyrights no matter where he/she sits on the org chart. So, can we cut to the chase and just say that Masnick and other copyright critics are especially opposed to this change at this time because they see Dr. Hayden as a fellow copyright skeptic, and they would really like her to perhaps appoint another skeptic as Register?  In other words, they’re more than happy to have the role politicized as long as it furthers their view of the right agenda.

Meanwhile, there is no reason to assume that a supposedly “more political” pendulum will inevitably swing toward major rights holders like Hollywood studios. After all, the current President has a guy named Peter Thiel among his top advisors who absolutely espouses a world view consistent with the views of the internet industry.  I don’t see anyone from the recording or motion picture industries with such close ties to the White House at the moment; but this bill doesn’t actually give that much power to this or any other President. H.R. 1695 gives more power to Congress (ergo more public oversight than the status quo), and an amendment added by Rep. Jackson-Lee (D-TX) requires that the President choose a Register from a list of candidates approved by both the Congressional leadership and the Librarian of Congress.

As for who might end up on that list, it’s worth noting that in the quiet reality behind all this drama, there are probably a handful of candidates in the country who most copyright experts would agree are even qualified for the job.  Some of these favor stronger copyright protections, others favor copyright’s limitations.  Some are more ideological, others more centrist than the public might expect. And here’s a little secret:  they generally know one another, are in contact with one another, and respect one another’s differing views.

Misrepresenting the Role of the USCO

The second point Masnick stresses in his article is less speculative but not actually relevant to the purpose of H.R. 1695; and it is predicated on a misunderstanding about the role of the Copyright Office. He writes:

“Managing copyrights — effectively a giant database of creative works — is very much a librarian-centric job. Librarians are custodians of information, helping to catalog and organize it while also helping people research and find what they’re looking for. The Copyright Office today, like many old libraries, is filled with card catalogs.”

For a guy worrying about politicizing this issue, this is pure spin. In fact, Masnick is actually mirroring a tactic employed by Rep. Lofgren, who has tried to make this organizational change a referendum on Librarian Hayden herself. First, Masnick wants readers to think of the USCO as performing a library-like function; then he wants to point to past failures to properly modernize that function; and finally he wants to say that Dr. Hayden—and nobody questions that she is highly-qualified in her field—has a plan for modernization that will be disrupted by this organizational change.

But the Copyright Office is not a “giant database of creative works.” The complex, consultative function on copyright policy provided by the CO is an essential role performed by dozens of professionals with vastly different expertise than librarians. And both copyright experts and policymakers have known this for a long time.  To the extent that former Register Pallante, former Librarian Billington, or any past office-holders, are responsible for failures to implement IT initiatives, that’s on them and their tenures; but this has no bearing on the rationale for making the organizational change proposed in H.R. 1695. Moreover, former Representative Howard Berman (D-CA) writes the following in an editorial for The Hill:

“Claiming, for example, that former Register Pallante had done nothing on IT modernization rings hollow when it was Pallante who initiated and implemented a public consultation process, which led to publication of the most forward-looking IT modernization plan in the history of the Copyright Office.

The Library has thus far blocked implementation of that plan. While GAO reports have catalogued IT shortcomings at both the Library and the Copyright Office, these reports acknowledge that the problems at the Copyright Office are relatively few. Indeed the GAO has concluded these problems stem from the much larger, fundamental problems with the Library IT department, to which the Copyright Office is beholden.”

This suggests the very plausible conclusion that any past IT implementation failings were at least shared between the Copyright Office and the Library, and this provides no more grounds to abort the organizational change than it would be reasonable to hold Dr. Hayden responsible for past project-management problems.  Still, the over-simple argument Masnick wants to make is that a librarian will be better at the physical, data-management aspect of Copyright Office modernization.  Of course, that’s not why he and his colleagues are criticizing this bill. They’re hoping instead that Dr. Hayden will take a more hands-on approach to copyright policy, which has never really been a role the Librarian has played before or since the USCO was first established.

Masnick and other critics want to argue that the functional relationship between the Register and the Librarian is something more intrinsic than a circumstance of history that occurred 120 years ago.  But this simply isn’t the case.  As I’ve noted in other posts, the first Register was appointed in 1897 after influencers like Melville Dewey envisioned a new, national leadership role for the Library of Congress.  (And Dr. Hayden seems exceptionally well-suited to continue that vision.)

This change in direction for the Library led to the creation of a separate office for handling copyright registrations and, in a fledgling way, advising Congress on copyright policy. No Librarian ever truly performed the function of national expert on copyright as this would be inconsistent with both the function of the Library and the evolution of copyright law in the mid-late 19th century.

Right from the start, the Librarian and the Register were divided according to both function and expertise; and those roles have continued along separate, though related, paths as each department has grown. Attempts to frame this long-overdue, organizational change as a power-grab by Hollywood are unsupported by both history and by the process Congress is implementing to effect this change.

FilmOn Not a “Cable Provider” Says Ninth Circuit

A recurring narrative promoted by the internet industry and its cheerleaders is that the old creative industry, which relies on copyright law, is “outdated.”  The major rights holders, they keep saying, “cling to old models,” pretending the future is not happening.  Of course this new v old narrative is more than a misleading PR message—it is a gross hypocrisy if you follow the story behind the tweets, headlines, and comment threads.

Because if we were to summarize the story of copyright in cyberspace, it is generally one in which new business models seek to rely rather heavily on loopholes and loose interpretations of old law in order to succeed.  Time and again, the courts try to wrestle with new business ventures, whose owners hope for favorable interpretations of statutes that were written long before their models were imaginable, let alone possible. And much of the time, these “new” businesses represent various ways to exploit creative works without payment or permission.  Such is the case with a service called FilmOn, which hit a major setback this week in the Ninth Circuit Court of Appeals.

Essentially, FilmOn captures television broadcasts via the airwaves and then retransmits the content to paying customers over the internet. Several broadcasters, who are named collectively in the case as Fox, sued on the basis that FilmOn infringes the exclusive right of publicly performance. Like Aereo, FilmOn had argued in several courts that its service does not “publicly perform” works, but when the Supreme Court held that Aereo’s very similar model did infringe this exclusive right, FilmOn changed its defense strategy.

Instead of going for no licensing, FilmOn has been vying for cheap licensing by arguing that the company can be defined as a “cable provider” under the terms of §111 of the Copyright Act. “Cable providers” are eligible for compulsory, government-set licenses which obviate the need to negotiate with individual rights holders for retransmission of creative works.  A district court agreed that FilmOn qualifies as a “cable provider,” but the Ninth Circuit has now reversed that decision. And although the court has stated that both FilmOn and the broadcasters presented plausible interpretations of §111, the opinion appears to have turned on two factors:  context and deference to the Copyright Office.

In its analysis of the exception carved out in §111 with the 1976 Copyright Act, the circuit court notes the balance struck between the interests of copyright holders and the need to serve segments of the population that lived in remote locations.  §111 was designed to enable a network of local cable providers to make the large, capital investments necessary to serve these smaller markets without the added burden of negotiating terms with individual rights holders. Moreover, those cable companies were subject to FCC regulation, including “must-carry” provisions mandating certain content be transmitted just for them to be allowed to operate.  From the Ninth-Circuit opinion …

“… in 1976 the cable industry was a fledgling one; cable systems had little market power and little ability to overcome the considerable transaction costs they would incur if they had to negotiate individual licenses directly with copyright owners. Congress responded to these economic conditions by enacting § 111, which relieved cable systems of the need to sit down with every copyright holder before retransmitting their copyrighted broadcast works. … Fundamentally, however, § 111 was Congress’s attempt to balance the socially useful role cable systems had come to play, on the one hand, against the property interests and creative incentives of copyright holders, on the other.”

By contrast, the court observes that FilmOn is operating in a very different market as a business that a) does not have to make the kind of capital investments as 70s-era cable companies; and b) can reach far beyond a local market to potentially any viewer in the world via the internet.  So, although the court stipulates that FilmOn’s statutory interpretation of §111 is not wholly without merit, the panel ultimately defers to the assumption that Congress intended to maintain balance between protecting copyright and serving the remote markets via the more limited technology that existed at the time the statute was written.

Additionally, in light of its finding that both the broadcasters and FilmOn provide reasonable interpretations of §111, the court gave considerable weight to past testimony by the Copyright Office, which has, since the 1990s, asserted that internet-based companies like FilmOn are not “cable providers” under the terms of the statute.  Quoting from the preambles to the USCO 1992 and 1997 rulemaking proceedings, “… a provider of broadcast signals [must] be an inherently localized transmission media of limited availability to qualify as a cable system.” In other words, the ability to transmit globally via the internet exceeds the intent of §111.

Everything about the rationales applied to write §111, including the three tiers of statutory rates based on system size, is predicated on an analysis of local markets.  This includes matters like local advertisers who pay relatively low rates to reach a local customer base via their “cable providers.”  That small-town hardware store ad you see pays pennies on the dollar compared to a major brand reaching millions via national broadcast, and this factors into the calculus of what makes a “cable provider” eligible for which compulsory license under the terms of the statute.

There is simply no reasonable way to argue that a business like FilmOn, which retransmits a signal to the entire world via the internet, achieves the goals of Congress in establishing the compulsory license regime for “cable providers.” But as I say, this is a recurring theme in the copyright narrative. In the world of PR, these companies portray themselves as new, progressive, forward-thinking, etc.  But in order to avoid paying for the creative works they need to operate, they try very hard in the courts to look like they’re just business as usual.