The US-Colombia Free Trade Agreement: Policy Laundering in Action

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As we've discussed at length on this blog before, "policy laundering" happens when new policies are enacted in obscure international documents, such as U.N. treaties or bilateral trade agreements, and are not debated in Congress or regulatory agencies in the normal way. This hides the source of policies and provides government officials, elected and appointed, with a convenient excuse for agreeing to what might otherwise be unpopular or controversial provisions.

Sometimes these laundered policies do require Congressional implementation--for example, Title I of the Digital Millennium Copyright Act is called the "WIPO Copyright and Performances and Phonograms Treaties Implementation Act." But when Congress votes on these laws, they're done deals. The United States has already committed itself internationally to pass them which makes it harder for a typical member of Congress to object.

But another kind of policy laundering happens when international agreements do not require that Congress change the law, but instead prevent Congress from changing the law in the future. There's a clear example of this in the recent US-Colombian free trade agreement, which was negotiated by the Bush and Obama administrations and presented to Congress last October. It goes into effect next month. Article 16.7.9 of the agreement states:

[N]o Party may permit the retransmission of television signals (whether terrestrial, cable, or satellite) on the Internet without the authorization of the right holder or right holders of the content of the signal and, if any, of the signal.

Similar provisions have been in past agreements, and there is likely to be similar language in the forthcoming Trans-Pacific Partnership. (By the way, sometimes international agreements that constrain the US in the future like this are never even voted on by Congress, on the basis that they are "compatible" with US law as it stands. ACTA is an example of this.)

Without knowing the legal context this provision might not seem that big of a deal. Why would either Colombia or the United States ever want to create an exception to copyright law to allow online retransmissions of broadcast signals without the consent of copyright owners?

Except that's exactly how cable and satellite TV works today. Comcast or DirectTV don't have to get permission from copyright owners carry broadcast content. Rather, they get "retransmission consent" from broadcasters which gives them the right to carry the broadcast signal, and a statutory license clears them from copyright liability. Local broadcasters in no sense license (or sublicense) or their programs to cable systems; rather, the cable/broadcaster relationship exists outside copyright entirely.

This is a strange system and it often surprises people who are not familiar with how copyright and media law intersect. But it's the system that Congress has set up, and it should be up to Congress to decide whether to expand it to include online video distributors, phase it out, or keep it the same. As a matter of fact, PK has argued that there's no reason why an online system can't qualify for the statutory license today, though of course many people disagree. But whatever your views on the merits it's strange that this extremely specific bit of public policy has been negotiated as part of a trade agreement. Is whether an online video platform can qualify as a cable system really a trade issue?

In this case Colombia and the US have executed a "side letter" that explains some of the reasoning behind the provision:

With respect to the obligation set out in Article 16.7.9, if, at any time more than two years after the entry into force of the Agreement, it is the considered opinion of either Party that there has been a significant change in the reliability, robustness, implementability, and practical availability of technology to effectively limit the reception of Internet retransmission to users located in a specified market area, that Party may request, and the other Part agrees to enter into, consultations to review the continued applicability of of the obligation set out in Article 16.7.9 and whether, in the light of technological and other relevant developments, it should be modified, which agreement shall not be unreasonably withheld.

So it's not just the case the the US has entered an agreement with Colombia about the proper technological architecture of video delivery systems. Now we know that the reasoning behind doing so is to ensure that the business model of broadcasting, a technological relic that depends on no-longer-necessary conceptions of geographic exclusivity, is preserved indefinitely in the future. This is bad by itself. But of course geoblocking technology already exists and has for many years. So at least this bad policy, enacted for bogus reasons, can be revisited when an annoying technology that already exists is reinvented.

Like it or not the US appears to have bound itself internationally to keep some aspects of our outdated media laws unchanged. Under US constitutional doctrine, treaties and other international agreements have no greater weight than any other law and like any other law they can be modified or repealed. But there are consequences to repudiating international agreements--increased tariffs for US companies abroad, for instance. These act as a practical bar to policy reform.

This sort of shadow policymaking short-circuits the normal process. For example, the FCC is currently reexamining the implications of online video for traditional media regulation. It has put the issue out for public comment, because this kind of issue requires on-the-record input from a broad range of stakeholders. But if the policies in the Colombia-US FTA are carried out, the FCC will be limited in its ability to modernize media regulation--its policies on retransmission will come to nothing if they're blocked by unchangeable interpretations of copyright law, and the closed process of trade agreements will trump the open process of media reform.

Again, what does any of this have to do with "trade"? It's no secret that rightsholders would like to increase their control over the media ecosystem and are often at odds with various distributors. We can have an honest debate about whether statutory retransmission licenses are a good policy. But these issues should not be part of US trade policy and the government officials who are responsible for promoting US economic interests abroad should not be taking sides in the ongoing arguments between content companies and the Internet, or broadcasters and cable. Instead, they should be promoting the interests of the American people. Prohibitions on specific kinds of media reform don't do that.

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