This statement, with appendices attached, is also available in PDF format.
September 17, 2009
I’d like to thank the Commission for inviting me to speak at today’s workshop on the role of content in the broadband ecosystem. There’s little doubt that online content produced by the entertainment industry serves as an important driver for both broadband adoption and utilization, and I expect that content to be the focus of most of my fellow panelists. In my comments, I hope to first provide a different perspective—one that highlights the important work being done by innovators, independent and amateur creators—and to then sound a note of caution. Any measures taken to protect content online must take into account all creators in the broadband ecosystem, must not obstruct the free flow of information online and must protect the privacy of end users.
Online content extends far beyond the boundaries of Hollywood. User generated content, in its many forms, has enriched the lives of Americans and rivals studio content in terms of popularity. In the online video market, for example, nearly 42 percent of all videos viewed online are hosted by YouTube.[1] Of the tens of billions of videos that YouTube streams each month, nearly one fourth of the top 100 most viewed videos are clips created by end users, not studios.[2]
As you might imagine, not only is user-generated content popular—it also serves a diverse set of needs. Amateur podcasters inform the public about events that are ignored or underreported on by the national news media.[3] Universities showcase their course materials and lectures via “OpenCourseWare” to members of the general public, many of whom would normally not possess the means to pursue higher education in a traditional setting.[4] Even Presidential candidates have harnessed the power of user-generated content, encouraging users to submit debate questions via YouTube in 2008.[5] And yes, many users, “vidders” and mashup artists use copyrighted clips to express themselves through commentary, criticism, and parody under the legal doctrine of fair use.
Meanwhile, innovative technology companies are empowering users to access and create the content of their choice in exciting new ways. Apple’s iTunes provides easy access to the best of big studio content as well as user-created podcasts.[6] Boxee’s “app box” allows users to automatically promote the media they enjoy to friends, putting “traditional” web video sources like Hulu, CNN, CBS, and Comedy Central on equal footing with user generated sources like YouTube, BitTorrent, and online video networks like TWIT.tv and Revision3.[7] Hardware manufacturers are embedding web interfaces into new HDTVs to allow easy-to-use online video streaming from the comfort of the consumer’s couch.[8] Clearly, a great deal of creativity and innovation is taking place on the Internet, and up until now, it’s been a level playing field. This innovation must be allowed to continue without undue restraints so that users can reap the benefits of increased choice, affordability and greater convenience and exercise their right to free speech and public discourse.
Before Taking Action, the FCC Must Collect Empirical Data About Online Infringement and its Actual Effect on the Entertainment Industries
Since assuming the office of Chairman of the Commission, Julius Genachowski has stated numerous times that he will ensure that decisions made by the FCC are data-driven.[9] With this in mind, the Commission should seek out independent empirical studies that quantify the extent of, and actual harm caused by, online copyright infringement. No policymaker can deliberate a solution unless she fully understands the problem. Though the content industry has cited studies in the past that purportedly address the financial losses resulting from online infringement, many of these industry-funded studies have proven unreliable. One widely cited study produced by research firm L.E.K. for the Motion Picture Association of America (MPAA), claimed that 44 percent of all Internet traffic on University networks was infringing in nature.[10] Three years after releasing the study, the MPAA was forced to admit that the 44 percent figure was inaccurate—the correct figure, according to the MPAA, was 15 percent.[11] EDUCAUSE, however, asserts that the correct figure is, in fact, 3 percent.[12] And while Congressman Arlen Specter asked the MPAA to provide its methodology for the study to Congress in 2006, the MPAA has yet to make this information available.[13]
If the FCC is to address the matter of online copyright infringement, it must first seek out reliable, empirical studies produced by impartial third parties. In fact, many such studies are already available. In a Harvard Business School working paper on the topic of file-sharing and copyright, Felix Oberholzer-Gee and Koleman Strumpf embarked upon a literature review of studies published on the topic of online copyright infringement.[14] Among the studies they list, many differ from those cited by the entertainment industry and assert that the impact of infringement on sales of entertainment products is far less negative than is often acknowledged. Some of these studies even suggest that online file-sharing does not effect sales, or that online file-sharers are more likely to buy entertainment products than those who do not engage in file-sharing, which suggests a positive, rather than negative, relationship between file-sharing and sales.[15] The Commission should consider all available data when researching the impact that file-sharing has on the entertainment industry, including those studies cited by Oberholzer-Gee and Strumpf.
Copyright Filters Are Not Suitable for Use on ISP Networks
As the comments submitted in this proceeding attest, many in the entertainment industry are looking to automated copyright filtering technologies to solve the problems caused by the unlawful exchange of copyrighted content online.[16] While such technologies are being heralded as a fail-safe solution, they are, in fact, critically flawed. Simply put, a copyright filter is a blunt instrument and is not suitable for use on an ISP network. Public Knowledge has already submitted for the record a whitepaper that these flaws in great detail. I’d like to briefly address a few of the reasons why copyright filters are not a viable solution.[17]
A close analysis of copyright filtering technology reveals that ISP-level filtering will be ineffective at best and at worst, harmful to the network, end users and the goals of the National Broadband Plan. By virtue of their design, filters will be both overinclusive and underinclusive—that is to say that they will fail to identify all unlawful uses of content while blocking lawful uses.[18] As a result, automated filtering will block, delay or degrade lawful content, including but not limited to content that makes fair use of copyrighted content for the purposes of parody, satire and critical commentary. In so doing, copyright filters will discourage citizens from exercising their free speech rights online. While big studio content is important, we should recognize that user-generated content is an equally, important part of the broadband ecosystem and as such, it deserves an equal degree of protection. For this reason, copyright filters, which would automatically block all uses of copyrighted content online, including those aforementioned fair uses, are not appropriate tools to curb infringement.
A. Copyright Filters Will Harm the Network and User Privacy
Copyright filtering will also alter the behavior of data networks on a fundamental level, slowing down traffic, impeding the operation of high-latency applications and compromising the privacy of all Internet users.[19] In so doing, copyright filters will discourage investment in the Internet ecosystem, prevent innovators from developing exciting new applications, dissuade users from fully utilizing their broadband connections and raise the cost of access for consumers—all the while undermining some of the most important goals of the National Broadband Plan.[20]
B. Copyright Filtering is Likely to Result in Unintended Consequences
Copyright filtering at the ISP level could also result in unintended consequences that will likely result in greater harm than good to its proponents. Users will likely devise methods for circumventing the filter, in order to access the content of their choice without interference.[21] The methods that will likely be used—encryption and protocol obfuscation—will decrease the efficiency and speed of the network.[22] What’s more, the architects of the filter will be forced to pour a tremendous amount of resources into research and development in order to thwart those users who seek to circumvent the filter, resulting in increased costs for both the user and provider.[23]
In addition, the core technology behind copyright filtering also holds the potential to be misused for purposes of censorship. The timeliest example of this sort of misuse comes from Iran, where content filtering technologies were used to block access to popular websites like Twitter, YouTube and Facebook, in the wake of widespread political unrest.[24] Apparently, the Iranian government first installed this hardware for the purported purpose of blocking pornography, citing “lawful intercept”—an internationally-recognized concept that “relates to intercepting data for the purposes of combating terrorism, child pornography, drug trafficking and other criminal activities carried out online.”[25] This example illustrates that the act of filtering is a slippery slope. While filtering technology might be deployed to serve a legitimate purpose—be it to stem the flow of child pornography or illegally obtained copyrighted content—when placed in the wrong hands, that same technology can become a highly effective instrument of private or governmental censorship. Once such technology is installed at the ISP network level, it is all too easy to use that hardware for undemocratic ends.
C. Copyright Filtering is Content Management, Not Network Management
In the context of the National Broadband Plan, the entertainment industry is urging that copyright filters be considered a form of reasonable network management, and as such would not violate the FCC’s broadband principles or other principles of openness. This characterization is misleading and obfuscates the manner in which filters operate. Copyright filters decide how data packets should be treated based on the content that they carry. As such, copyright filtering is a form of content management rather than network management and has no place in the National Broadband Plan.[26] Notwithstanding the question of whether the FCC has the authority to mandate copyright filters (discussed below), the Commission should not unduly burden ISPs with technology mandates and to the extent that the Commission addresses network management in the context of the National Broadband Plan, only those methods that are neutral and nondiscriminatory should be permitted.
A Three Strikes Regime Would Allow Private Companies to Decide Who Should Have Access to the Internet
Another blunt instrument that is being recommended by some in the entertainment industry is the so-called “graduated response” or “three strikes” regime.[27] Under this system, ISPs would be compelled to kick users off of their networks after receiving three notices from copyright holders indicating that a user was suspected of sharing content in an unlawful manner.[28] Never mind the industry’s poor track record with regard to the accuracy of such notices:[29] three strikes lets the entertainment industry decide who gets kicked off the Internet based on a mere accusation of unlawful activity—without any judicial finding that infringement actually took place. Three strikes does not contemplate any judicial review and users would have no legal recourse or ability to challenge the accusations made. If we implemented such a regime devoid of due process in this country, we would be allowing private companies to cut citizens off from the most effective conduit for civic engagement, economic opportunity and education that is currently available, based purely on allegation. Indeed, the French Constitutional Council recently struck down a three strikes regime in that country, citing the Declaration of the Rights of Man and of the Citizen, a founding document of the French Revolution.[30] “…[W]hereas under section nine of the Declaration of 1789, every man is presumed innocent until he has been proven guilty, it follows that in principle the legislature does not establish a presumption of guilt in criminal matters,” the Council wrote in its ruling.[31]
Needless to say, such a mandate, if instituted in this country, would be contrary to the goals of the National Broadband Plan.
The FCC Does Not Possess the Authority to Mandate Either Copyright Filtering or a Three Strikes Regime
The FCC has tried to step into the business of copyright regulation before. In its Broadcast Flag ruling,[32] the Commission required that hardware that connects to public networks contain technology designed to prevent some kinds of copying. The FCC’s ruling was reversed by the D.C. Circuit, which held that the agency exceeded its authority when it adopted rules requiring digital media devices to prevent some unauthorized (but not necessarily illegal) copying.[33] Before that, the Commission was reversed when it tried to mandate that all broadcasters add video description information to their programming.[34] In both cases, the D.C. Circuit held that the FCC had overstepped the authority given to it by Congress.[35]
If the FCC were to mandate the use of copyright filters on ISP networks or a “three strikes regime,” it would once again be stepping outside of its jurisdiction. Neither of these mandates would constitute the regulation of “communication by wire or radio”.[36] Instead, both of these scenarios would transform the FCC into a copyright agency and would, in practice, limit rights of fair use. The FCC’s authority to regulate “communication” does not give it the general authority, absent an express delegation of power from Congress, to regulate content.[37] Additionally, under any mandated scheme involving copyright filtering or three strikes, disputes would undoubtedly arise hinging on whether a particular unauthorized use is in fact an illegal one. The FCC has no authority to hear or decide this kind of dispute, and cannot require that network operators become “copyright cops.”[38] It has no power at all to regulate copyright absent an express delegation of power. As Sen. Patrick J. Leahy, Chairman of the Senate Judiciary Committee has written, Title 47 “grants…the FCC…no express authority…to address the complex issues of intellectual property matters[.]”[39]The Commission should not heed calls for it to again exceed its authority by instituting policies that would, in practice, constitute copyright law.
Solutions and Remedies
If we wish to prevent content from being shared unlawfully online, we should first look to those existing strategies and remedies that have proven successful. The most effective solution will always be the simplest one: for the entertainment industries to make content widely available online at a fair price and to allow users to access that content at the time of their choosing and on their device of choice. The current state of the market serves as a testament to this fact. Movie studios have found great success selling and renting films through services like Netflix,[40] music labels have seen consistent growth in the sales of online music via services like iTunes[41] and literary publishers have generated great excitement through their support for devices like the Amazon Kindle.[42] Those studios who have threatened to hold back content unless certain, unproven protection mechanisms are put in place, as some did in the Broadcast Flag proceeding, only encourage users who seek that content to obtain it through unlawful means.[43] I applaud those content providers who have made their products available online at a fair price and hope that they will continue to expand their offerings as others follow suit.
Within existing law, content providers also have access to a number of legal remedies for combating the unlawful use of their content online. The Digital Millennium Copyright Act’s notice-and-takedown system provides a framework for removing infringing content that is hosted online. Some ISPs have agreed to pass infringement notices on to end users; a practice that the entertainment industry itself has found discourages users from engaging in unlawful conduct in the vast majority of cases.[44] And as always, the entertainment industry has the ability to combat the unlawful sharing of content by cutting that content off at the source, by targeting large-scale infringers, hard-goods counterfeiters and other unlawful providers who make infringing content widely available.
Conclusion
Ultimately, our goal should be to encourage the creation, sale and use of content online, which in turn, will further the goals of the National Broadband Plan. Digital entertainment is a valuable driver for both broadband adoption and utilization. By fully harnessing its potential, we can increase access to broadband for all Americans, educate users on how to make full use of their connections, and improve the lives of citizens by delivering economic, civic and educational opportunities directly to their personal computers.
[1] “U.S. Online Video Market Soars in July as Summer Vacation Drives Pickup in Entertainment and Leisure Activities Online,” comScore, August 27, 2009 (http://www.comscore.com/Press_Events/Press_Releases/2009/8/U.S._Online_Video_Market_Soars_in_July_as_Summer_Vacation_Drives_Pickup_in_Entertainment_and_Leisure_Activities_Online).
[2] “YouTube’s Most Popular Clips: Still Mostly Free,” All Things Digital, August 12, 2009 (http://mediamemo.allthingsd.com/20090812/youtubes-most-popular-clips-still-mostly-ad-free/).
[3] “News Unfiltered: YouTube Embraces Citizen Journalism,” Ars Technica, May 20, 2008 (http://arstechnica.com/old/content/2008/05/news-unfiltered-youtube-embraces-citizen-journalism.ars).
[4] “MIT’s OpenCourseWare Project Continues Apace,” The Chronicle of Higher Education, March 23, 2007 (http://chronicle.com/article/MIT-s-OpenCourseWare-Project/15958).
[5] “In Obama-McCain Race, YouTube Became a Serious Battleground for Presidential Politics,” U.S. News and World Report, November 7, 2008 (http://www.usnews.com/articles/news/campaign-2008/2008/11/07/in-obama-mccain-race-youtube-became-a-serious-battleground-for-presidential-politics.html).
[6]See Apple Inc. website (http://www.apple.com/itunes/whats-on/).
[7] “Boxee Launches Update, ‘App Box,’ and Hulu RSS Support,” TUAW, March 6, 2009 (http://www.tuaw.com/2009/03/06/boxee-launches-update-app-box-and-hulu-rss-support/).
[8] “Internet-Ready TVs Usher Web Into Living Room,” Wall Street Journal, January 5, 2009 (http://online.wsj.com/article/SB123111603391052641.html).
[9] “The GigaOm Interview: FCC Chairman Julius Genachowski on Mobile, Broadband, iPhone and Innovation,” GigaOm, August 3, 2009 (http://gigaom.com/2009/08/03/the-gigaom-interview-fcc-chair-julius-genachowski/).
[10] “MPAA Statement on Motion Picture Industry Losses Due to Piracy Among College Students,” Motion Picture Association of America, January 22, 2008 (http://www.mpaa.org/press_releases/lek%20college%20student%20data_f.pdf).
[11] “Movie Industry Admits Error in Study on Campus Piracy,” The Chronicle of Higher Education, January 22, 2008 (http://chronicle.com/blogPost/Movie-Industry-Admits-Error-in/3632).
[12] “MPAA Admits Piracy Study Flawed,” Copyright Advisory Network, February 13, 2008 (http://librarycopyright.net/wordpress/?p=75).
[13] Ibid.
[14] See “File Sharing and Copyright,” Harvard Business School, May 15, 2009, p. 35-37 (http://www.hbs.edu/research/pdf/09-132.pdf) and “The Effect of File Sharing on Record Sales: An Emprical Analysis,” Felix Oberholzer-Gee and Koleman Strumpf, December 12, 2006 (http://www.unc.edu/~cigar/papers/FileSharing_March2004.pdf).
[15] Ibid.
[16] See Joint Comments of American Federation of Television and Radio Artists, AFL-CIO, MPAA et al., In the Matter of A National Broadband Plan for Our Future, GN Docket No. 09-51 (all referenced comments below can be found in this docket unless otherwise noted); Comments of Songwriters Guild of America; Comments of Arts+Labs at 6 (urging the commission to “stand by its existing four principles, including the right to reasonably manage the networks” to among other things prevent copyright infringement); Comments of the Entertainment Software Association at 4 (urging the Commission to clarify that the Internet Policy Statement permits network operators to use “reasonable network management to combat online piracy”); and Comments of Walt Disney Company.
[17]See “Forcing the Net Through a Sieve: Why Copyright Filtering is not a Viable Solution for U.S. ISPs,” Public Knowledge, July 22, 2009 (http://www.publicknowledge.org/pdf/pk-filtering-whitepaper-200907.pdf).
[18]Ibid., 7-24.
[19]Ibid., 25-37.
[20] See “FCC Launches Development of National Broadband Plan,” April, 8, 2009 (http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-289900A1.pdf).
[21]Ibid., 29-37.
[22] Ibid.
[23] Ibid.
[24] “Iran’s Web Spying Aided by Western Technology,” The Wall Street Journal, June 22, 2009 (http://online.wsj.com/article/SB124562668777335653.html).
[25] Ibid.
[26]Ibid., 5.
[27] “Digital Piracy Spreads, and Defies a Fix,” the New York Times, April 6, 2009 (http://www.nytimes.com/2009/04/07/business/media/07piracy.html).
[28] “Music Industry to Abandon Mass Suits,” Wall Street Journal, December 19, 2008 (http://online.wsj.com/article/SB122966038836021137.html).
[29] “Flunking File Swappers: Inside the RIAA’s Anti-P2P Machine,” Ars Technica, May 14, 2008 (http://arstechnica.com/old/content/2008/05/flunking-file-swappers-inside-the-riaas-anti-p2p-machine.ars).
[30] “Top Legal Body Strikes Down Anti-Piracy Law,” France 24, June 10, 2009 (http://www.france24.com/en/20090610-top-legal-body-strikes-down-anti-piracy-law-hadopi-constitutional-council-internet-france).
[31] See Decision n° 2009-580 of June 10th 2009, The Constitutional Council, June 10, 2009 (http://www.conseil-constitutionnel.fr/conseil-constitutionnel/root/bank/download/2009-580DC-2009_580dc.pdf).
[32] Digital Broadcast Content Protection, Report & Order & Further Notice of Proposed Rulemaking, 18 FCC Rcd. 23,550 (2003).
[33] American Library Ass’n. v. F.C.C., 406 F.3d 689 (D.C. Cir. 2005) (Commission exceeded its authority by requiring that devices respect the “broadcast flag”).
[34] Motion Picture Ass’n of Am. v. F.C.C., 309 F.3d 796 (D.C. Cir. 2002) (Commission exceeded its authority by implementing video description rules).
[35] Motion Picture Ass’n., 309 F.3d at 801 (“An agency may not promulgate even reasonable regulations that claim a force of law without delegated authority from Congress.”). Also, in American Library Ass’n., 406 F.3d at 698, the court explains,
The FCC, like other federal agencies, ‘literally has no power to act … unless and until Congress confers power upon it.’ La. Pub. Serv. Comm’n v. FCC, 476 U.S. 355, 374 … (1986). The Commission ‘has no constitutional or common law existence or authority, but only those authorities conferred upon it by Congress.’ Michigan v. EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001). Hence, the FCC’s power to promulgate legislative regulations is limited to the scope of the authority Congress has delegated to it. Id. (citing Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 … (1988)).
[36] American Library Ass’n., 406 F.3d at 703 (“The Federal Communications Commission may not lawfully exercise jurisdiction over activities that do not constitute communication by wire or radio.”).
[37] Motion Picture Ass’n., 309 F.3d at 801.
[38] Am. Library Ass’n, 406 F.3d at 702 (“[T]he Commission may not invoke its ancillary jurisdiction under Title I to regulate matters outside of the compass of communication by wire or radio.”).
[39] Letter from Sen. Patrick J. Leahy, Chairman, Senate Judiciary Committee and Rep. F. James Sensenbrenner, Jr., Chairman, House Committee on the Judiciary, et al. to Michael K. Powell, Chairman, FCC (Sept. 9, 2002).
[40] “Netflix Boss Plots Life After the DVD,” Wall Street Journal, June 23, 2009 (http://online.wsj.com/article/SB124570665631638633.html).
[41] “iTunes Sells 25% of All Music in the US, 69% of Digital,” Ars Technica, August 18, 2009 (http://arstechnica.com/apple/news/2009/08/itunes-sells-25-of-all-music-in-the-us-69-of-digital.ars).
[42] “The Lessons From the Kindle’s Success,” the New York Times, August 12, 2008 (http://bits.blogs.nytimes.com/2008/08/12/the-lessons-from-the-kindles-success/).
[43]Comments of Viacom, FCC Docket 02-230, at 1.
[44] “RIAA President: No Talk of Blacklisting File Sharers,” Cnet, December 19, 2008 (http://news.cnet.com/8301-1023_3-10127313-93.html).
