Part 1 - Three reasons why the Digital Economy Bill will damage British businesses
Part 2 - What can be done? Five steps the UK content industries could take to offset piracy losses
A few weeks ago I chatted with a single dad in his 40s, working in a brewery. He's a biker, Sun-reader and towards the right politically, hating to see his taxes used to fund free school meals or asylum seekers.
Nevertheless, Jack (let's call him) talked with great pride about his downloading habits. He had already seen Shutter Island tho it was yet to hit cinemas. He had hard drives packed with every feature you could imagine and had the unreleased new Matt Damon film torrenting at home while we spoke. When I suggested to him that the film industry was struggling and without people paying for films the good ones might stop being made, he said he couldn't remember the last good film he'd seen, that most of them were terrible with overpaid actors and not worth paying for. When I mentioned the proposed legislation in the Digital Economy Bill he didn't blink - at worst he said he would go back to his former method of having a Love Film subscription and copying every film he received onto a hard disk, and swapping the files with his work mates, who were quick to educate him on the latest software or technique. I asked him if there was a film he downloaded that he really liked, if he would consider paying something after watching it to help the filmmaker make more, and he paused a few moments before diplomatically saying that most people he know would consider that they've already seen it, so what's the point.
This conversation illustrated for me two key points: that there is a good reason for the film industry's concern about downloading; and that the proposed new legislation won't make the slightest difference to Jack and pirates like him. Indeed he looked excited by the challenge of a new cat and mouse race with the powers that be, like being alerted to speed cameras on his sat nav.
Yet, the proposed new Digital Economy Bill will allow any foreign company to block a British website or disconnect a British business, school or family from the web without first having to go to court (and with no penalty if they make a mistake).
Some organisations have even argued that it shouldn't even be debated by MPs before it becomes law. And indeed it appears that on Tuesday the Bill is expected to get one or two hours debate rather than the 80-90 hours such a bill would normally receive because of the planned election announcement. As a result, the most substantial piece of legislation about the Internet in British history is likely to be pushed into law without any debate by elected representatives.
There has, however, been much online discussion of the Bill, with some 18,000 letters sent to MPs, with The Register's Andrew Orlowski describing it as 'the political issue for people who don't want to do politics'. He defines the polarised positions of the debate well:
"On the one side is [the] idea that coercion will cause "behaviour change", leading to the public embracing the current set of retail choices. This permits them to apply the might and logic of physical distribution control in a digital world, and avoids embracing structural reform. On the other side is the idea that music just had to be free, just because some people demanded it must be - therefore it had no value... The possibilities that new technology opens all go legal eventually, as black markets go white. To deny this - as both sides do - requires self-interested and incredibly unimaginative arguments. We got no shortage of those."
At this point I would like to state categorically that I am not a 'freetard'. I have pointedly avoided downloading music and films illegally, against the incredulity of many friends and colleagues - in part so that I could one day write this article. I have - I confess, downloaded one episode of Heroes, after my iTunes purchase went thru but didn't download and I couldn't wait to see it, and I also tested the Tribler software after learning it was being used in a major EU-funded project with the BBC, by successfully streaming a Torrent of a Harry Potter film (an activity that combined with an IP Spoofer would be untraceable under the Bill). Beyond that my only torrents are from filmmakers who chose to distribute their work that way as it costs them nothing (unlike the £1.50 or so per download it would cost via Amazon S3 storage).
I am - as I have been since setting up Netribution ten years ago, and trying to map the world of film finance - concerned about the future for indie filmmakers if everyone takes the attitude of Jack. Nevertheless, this rushed Bill as it currently stands would be a disaster if it was ever implemented and I urge you to ask your MPs to give it the debate it deserves - if not to block it altogether. Here's why:
1 - The consequence of site blocking = you can't visit this website
A late amendment to DEB by the Liberal Democrats (as a way to prevent control over Copyright Law being subject to the whims of the Secretary of State at the time) will let any copyright owner ask that a website be blocked from the Internet if there is a 'substantial' amount of infringing content on it. Although the process can be opposed by an ISP and taken to court, if the ISP loses, all legal costs must be met by them so takedown requests would only be refused with the biggest sites such as YouTube or MySpace. With no financial incentive to defend websites, ISPs may start blocking hundreds of thousands of them on demand, regardless of the non-infringing content also hosted there. Writing about 120A on her blog panGloss, Lilian Edwards of the Sheffield Faculty of Law illustrates how obliging ISPs will be:
"In one amusing study , an Oxford team posing as rightsholders asked ISPs to take down a chapter from John Stuart Mill's On Liberty - out of copyright for several centuries. All the ISPs complied without a murmur."
Picture this scenario. Netribution publishes an article with an exclusive that a big movie star punched a TV producer backstage at a London awards ceremony. The studio representing the star submits a site blocking request for Netribution and - given that as a user-generated website, where we do not own the content that has been posted here by our users - our site would get blocked. Most of our photos are publicity stills and posters, yet it would be easy to argue in a court that a substantial proportion of the images on this site were 'infringing' as we've no paper-trail to show these we were assigned a license - and of course Netribution is not worth enough to any ISP for them to consider fighting the studio request in court. So Netribution (and your blog or website) could get blocked as the UK adopts a law that goes one further than the great firewall of China in that it allows foreign companies to decide which websites British people can and cannot access.
2 - The consequences of web disconnection = I can't run my business
I share a nice home with four other creative people. Sometimes they go away for several months and rent their room out - and occasionally these new folk aren't the best sort and leave without paying their bills - it happened last summer. So it's entirely plausible that they could also use our web connection to download. Easily, then, visitors to the house - not to mention my flatmates' partners and close friends - as well as mistaken infringement where a wrong link is clicked or something is downloaded that appeared to be legitimate - could add up to three infringements and we get disconnected from the web indefinitely.
Our flat is packed with legal DVDs (I'm not a BAFTA member), hundreds of CDs and we spend a fortune on trips to the cinema and live music. Yet through an automated process - the mechanisms for which is about to be signed into law - I could suddenly be unable to update this site, check my bank accounts, administer the websites I manage, submit my VAT and tax returns, look for new jobs, promote new films and - well - do my job. Nor would I be able to go to the nearest coffee shop or pub to use their Wifi as no business will be able to risk running free wifi any more. I probably won't even be able to plug my laptop in a paid web cafe via ethernet, as they couldn't risk the chance I was downloading something.
In short my business goes bankrupt, I sign-on yet can't even search the web for jobs, and the British Digital Economy has become one of the least competitive places to do business in the world.
3 - The consequences of Clause 43 = large corporations still can rip off creators
After the sad death of British casting legend Mary Sellway, we were flattered to see the New York Times quote her interview with Tony Pomfrett on Netribution in their obituary. That same week Screen International printed an obituary and reproduced a photo by Tom Fogg from the same interview - again without permission or fee, but also without credit. Having credited them as source to countless news stories over the years, we were a little miffed, not least because they rarely returned our calls (but we moved on!). Clause 43, a peculiar addition to the bill, enshrines the right of Screen to do this, into law. In an attempt to deal with orphan works, ie works where the author cannot be found, the bill somehow assigns a right for use for any photos or images online where it's not immediately obvious who owns a photo (eg if the photo credit was on the first page of an article, while the article was found on page three).
It's the Alice in Wonderland part of the legislation which contradicts the arguments of the rest of it. Businesses and households risk ruin by losing web access, in order to protect commercial copyright owners. Yet your family holiday photos posted online can be exploited by commercial entities without asking your permission. More can be learned at the Stop 43 website.
The Bill has arrived at the demands of US studios, yet goes further than anything that America, would consider implementing domestically. Given the potential problems, open questions and the drastic last minute changes - one or two hours of Parliamentary time to discus it and no third reading is really insufficient.
Britain is a world leader in the creative industries - across film., TV, music and video games we are remarkably successful, and the sector contributes £112bn or 7% of GDP - almost 4 times more than agriculture - to our economy. Understandably, the support for DEB is built on a desire to protect this sector. Yet this proposed solution to the content sector's problems is built on misguided assumptions about how the web is won.
The Internet was meant to unfetter indie creatives from the stranglehold of studio distribution control, which long forced independent movies out of cinemas and off the shelves at Virgin, yet instead we have new battles - to get on the front page of YouTube or to persuade iTunes to sell our films. The biggest earner for content online is ads, yet Google have most of that market sown up - and we can't even get them to pay tax on the £1.6bn they earned in the UK last year.
Indeed, Britain is largely a web failure, beholden to the US giants (just as with film distribution). Of the top 250 most popular websites in the world, only two are British - the BBC and the Guardian. The BBC sits on healthy license fee income (tho it's budget is illogically threatened with 50% cuts), while the Guardian was the first UK newspaper to go online for free fully, and has stated that its business model, in opposition to Murdoch's, is multifaceted, with the free website supporting other profitable activity. But elsewhere we are tiny fry - the subscription business model of pioneering Friends Reunited, for instance, losing to the free, yet billion dollar turnover, 400 million member Facebook; QXL and Last.fm surrendered to foreign buyers.
The government is dependent on our high tech sector to help us into recovery. Yet while San Francsico looks set to implement free city-wide Wifi and continue to rule the Internet, the UK is just a week from effectively banning free public wifi and handing control over which website is visible and which homes and business have web access, to foreign companies. If the world's leading high tech economy - the US - isn't debating such laws, is it wise that the UK should?
So what can be done? Five steps to removing piracy losses
It's easy to condemn the bill, but there are scarce few alternatives around, so a critique needs to be accompanied with some alternative thinking.
I would firstly echo Paul Carr's excellent description of the Bill at Tech Crunch and suggestion that above all the legislation must not be rushed through before the election, as it is too important. If we get it wrong it could cripple British new media (and creative) businesses for the next decade. Furthermore, badly written legislation could be easily manipulated for censorship and backfire on the media industry as a whole with a public backlash against commercial media. Paul makes other good suggestions at the foot of his article: penalties for copyright owners who file spurious claims, and more protection for businesses/libraries/universities who offer free wi-fi. TechCrunch have also backed the creation of Coadec - the Coallition for the Digital Economy which looks at the Bill from a business perspective (unlike the excellent campaigners the Open Rights Group whose focus is more about civil rights).
But for the more pressing concerns of the content industry - for whom this bill may appear the only hope of salvation at a desperate time - I suggest five things that can be done to tackle piracy losses...