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).
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