Home > Uncategorized > Geist Blows It Again: Stay out of the business, Mr. Chips

Geist Blows It Again: Stay out of the business, Mr. Chips

July 13, 2010

Susan Crawford, founder of One Web Day and the recently-departed Special Assistant to President Obama for Technology and Innovation, put it this way: “I was trained in the Internet Age by people who believed that nation states were on the verge of crumbling and that anything an [ISP] wanted to do [was irrelevant]…we could geek around it. These people were irrelevant.” Of course, when she started working for a nation state, she apparently became more cosmopolitan in her appreciation for the distance between the utopian Internet Age her mentors taught to her and the resilience of the nation state as a matter of political geography and legal reality. “Geeking around” the nation state is still pretty radical stuff. There’s an extremely long way between the open society and London, or Paris, or Moscow, or Kathmandu, or Washington.

Or Ottawa. Michael Geist seems to overlook this in his most recent facile analysis of other people’s property which would have his readers believe that the reason Canada has not seen much uptake in the digital retail space is because of business decisions, not because Canada has failed to implement the same treaties that the rest of the major world economies have done that is the first step toward building a market with market rules.

(For those who do not recognize the name, Michael Geist is aka “he who shall not be named,” according to a prominent Canadian artist), or alternatively “the wonderful Michael Geistaccording to Lester Lawrence “AceLessig III, author of “The Starving Artist Canard” among other works. Mr. Wonderful is advisor to the U.S.-backed Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic and the paid consultant to Industry Canada. SGCIPPIC‘s external advisory board includes Lessig the American, the American EFF legal director, the American director of the American EPIC, and the American Pamela Samuelson, who is also a board member of the American EPIC and the American EFF—in short, 100% Yanks. So this Canadian affiliate of the Samuelson-Glushko system is to IP in Canada kind of what Alcoa of Canada is to Canadian industry.)

According to Michael “Mr. Wonderful” Geist, the reason Canadians can’t get certain goods digitally is not because Canadian copyright laws are weak and largely unenforced, not because of the Isohunts or Pirate Bays, and certainly not because of Canada’s failure to reform its copyright laws which Geist has uniformly opposed. (See, e.g., the “Canadian DMCA” passed by Canadian puppet governments at the behest of the all-powerful Big Media.)

“While frustrated Canadians may be inclined to call on the government to ‘fix’ the problem, the reality is that this is a business issue. Geo-blocking will only disappear if the business models they support give way to global approaches that make the borderless Internet a reality.”

So according to Geist, the reason for geo-blocking (i.e., letting a good be available in one country and not another by requiring that a service block a set of IP addresses) is because of a “business decision” that could have been made more swiftly. Delays in the launch of iTunes Canada was, we are told, largely because of territory-based licensing that is “old” and wedded to those pesky nation states that Susan Crawford thought could be geeked around. And then of course there are the rights of the citizens of such nation states, more specifically their artists– but Geist fails to mention that “small” point.

As Susan Crawford experienced, there is a radical difference, an extreme difference, between the “borderless Internet” or the “open society” that allows the technologically advanced to “geek around” the nation state. Not to mention the mainstream views in national governments whose laws protect their citizens’ rights, including Canadians. Geist tells his readers, “Apple iTunes arrived in Canada nearly two years after the U.S. edition not because of copyright laws, but rather because a new round of negotiations was needed with copyright owners to obtain the necessary approvals.” Actually, ITMS US for Mac launched April 28, 2003 with the Windows version of iTunes launching in the Windows format the following October. ITMS Canada launched in the Mac and Windows formats on December 4, 2004, barely a year later.

I would like to pay Geist the compliment of saying the statement is simply false, but it’s not even possessed of sufficient truth value to be able to call it out. The statement confounds “approvals” with “copyright laws” in such a fundamental and elementary way that it makes one wonder how someone with Geist’s exalted 38 page resume could have missed the issue so completely. Aside from the itty bitty Windows coding issue.

The main reason that iTunes launched outside the US later than the US store (strictly from a rights perspective) has nothing to do with “approvals” (whatever that’s supposed to mean) and everything to do with obtaining licenses under Canadian copyright laws and more importantly the Canadian rates that were to be paid and how they were to be paid to Canadians—because of the rights created in Canadian artists, companies and collecting societies by Canadian law. Same as for iTunes UK, Europe, Japan, Australia and so on.There is also the little matter of setting up, staffing and paying for a transborder business and the fact that Apple launched multiple stores outside the US during 2004-2005—meaning that these same negotiations must have taken place simultaneously in multiple countries with different people.

And here’s a newsflash—one of the biggest licensing hurdles to get over in these deals is local repertoire—not major labels. Nobody in their right mind would launch a music retailer in a country without a rich offering of local music. The major reason these negotiations took some time was that unlike the US, the copyright laws outside the US did not permit record companies to pass through the mechanical reproduction license for musical compositions. So the local collecting societies issued licenses and received payments for the benefit of their members.

The larger question might be why is the digital media marketplace in Canada is far less developed than other major economies. This is quite out of step with the historical release patters of physical goods—that is, an observable direct corollary to the online counterpart. Most split territory distribution deals are US and Canada and ex-North America. This is in no small part due to a shared language, shared border, common law history, and some cultural commonalities. A far more likely explanation is the lack of legal certainty and political risk in the operating environment. This is particularly true in the murky opposition to effective copyright laws both inside and outside of Industry Canada.

This isn’t the first time that Geist missed the fundamental copyright distinction—recordings are artists, songs are songwriters. Repeat. Sorry folks—no Yanks Under the Bed on this one.

These delays were not due to “approvals.” The delay was due to the law and the normal time it takes to launch a global brand–actually done in record time by one of the great all-time marketing and business teams in nearly perfect execution.

It would be a radical and extremely corrosive departure in the name of some borderless “open society” to ignore the local laws of the many countries in which cultural business is done that are designed in large part to protect their local cultures from corporatization by outsiders seeking to “geek around” these protections. Because in order to give effect to a “borderless” licensing regime, somebody somewhere would have to grant the licenses and collect the money and maybe even eventually pay the artists–shocking thought, I know.

And who might we look to in order to accomplish this gargantuan task of worldwide compulsory licensing? ACTA, maybe? No, no, not that. What entity is out there that might like to dictate to artists what their rights are and how much money they are entitled to? Who is setting up monopsonistic registries as fast as they can? Perhaps someone who might want a chicken in every pot and a share of advertising revenue for every citizen of the world? Who might be interested in promoting this idea of the “borderless” global license because it scales?

I just wonder. Perhaps a member of the CCIA that Geist likes to puff up?

But the more interesting question is when compulsory licenses are available—such as the mechanical license in the US or the streaming sound recording license for webcasting—why is it that the Isohunts and Pirate Bays or their users do nothing to take advantage of these licenses? Even when these licenses have been available for a hundred years in the case of mechanicals and a decade in the case of streaming?

Launching a legitimate international business online is no small task. But it has absolutely nothing to do with “approvals” and everything to do with local licensing laws and managing multinational operations. I for one have no desire to see a “borderless” global licensing regime that would take precedence over the protections afforded to artists by their local laws, particularly moral rights laws.

But I think I know who does. And it’s not out of an abundance of concern about preserving local cultures or artists and it’s not the guys who got the licenses.

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