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What is the Intention of Justice? Notice and Stay Down is the Government’s Responsibility

September 21, 2015 Comments off

ARTHUR

Let’s get back to justice…what is justice?  What is the intention of justice? The intention of justice is to see that the guilty people are proven guilty and that the innocent are freed.  Simple isn’t it?  Only it’s not that simple.

From …And Justice for All, written by Valerie Curtin and Barry Levinson.

There is a new term in our lexicon:  Notice and stay down.  What does it mean?

It is a way of encapsulating a distortion of the law that large multinational corporations are using to their immense profit by middlemaning the theft of other people’s property in the weaponized Internet.

In the late 1990s, the large ISPs had a legitimate concern.  If they are providing ways for the many to connect with each other over the Internet by means of a technology that also enabled them anonymously to send digitized property by means of that technology–such as a file that contained a copy of a sound recording or an image–they need to be protected from responsibility for things like copyright infringement.

They needed a zone in which they could operate, a zone that came to be called the safe harbor.  The deal essentially was that if you didn’t have a reason to know there was bad behavior going on with your users, a reason waiving like a red flag, then the government would provide a little latitude to reasonable people acting reasonably, assuming you otherwise qualified as an online service provider.

If a copyright owner thought there was infringement going on that didn’t qualify for the safe harbor, then the thought was that they shouldn’t have to file a lawsuit, they could just send a simple notice to the service provider.  If it turned out that there was a bona fide dispute, then the parties could go to court and hash it out.  The notice was perceived as an inexpensive remedy that would be available to artists who did not want to take on a lawsuit as well as large corporations with litigation budgets.

Sounds very civilized, don’t it?  Sounds like something that could be considered to be just.

The one thing that nobody thought was that there would be an amoral multinational corporation whose business model is in large part built on exploiting that safe harbor in a way that it seems inconceivable was the intention of the Congress.

Now we have that company–Google–bleeding copyright owners dry through exploiting this loophole while reaping great profits for itself.  Profits that it uses to hire an army of lobbyists to perpetuate its ability to bleed artists dry.  The circle of life.

And if you struggle against the “whack a mole” reality of the safe harbor, then the Google PR team suggests that there’s something wrong with you.

To be clear, Google is not the only one who benefits from the safe harbor.  But Google is the only company that Morgan Stanley estimates grosses $6 billion a year from YouTube.  That supported Kim Dot Com’s advertising business.  That profits from the sale of advertising for counterfeit goods.  No, Google is in a class by itself when it comes to exploiting the “safe harbor.”  Google behaves in a way that we would like to think hardly could have been contemplated by the U.S. Congress.

So now when we ask that some common sense be applied to this grotesque distortion of the law–this unjust distortion of the law–we are told that it’s not up to government to tell us what their law means, we are supposed to tell them how we would like to amend the law so that when you send a notice for the same work on the same service 100,000 times it stays down.

Whack a mole is not automatic–someone has to decide to repost the infringing file knowing it is infringing.  That actually defies the entire purpose of the safe harbor–that is not a little latitude for reasonable people acting reasonably.  Whack a mole actually describes a crime that should be investigated by the FBI.

Let’s get back to justice.  Not only are we being asked to tell lawmakers what their law means, the U.S. Government has utterly failed artists with the fundamental justification for the sovereign common to our jurisprudence and political theory.  It failed artists in the basic tenet of the social contract theories embedded in our Constitution.  The Congress failed to protect artists, failed to enforce the laws, and permitted the most blatant crony capitalism to reign supreme, essentially overseeing and giving legitimacy to one of the largest income transfers of all time.  You may think that’s a little soft–I’m being diplomatic.  The Congress permits Google to commit what I believe to be crimes, all day, every day.

And that’s the other point.  Unlike Socrates who suggested that citizens could vote with their feet, we cannot escape the Internet.  It can’t be said that we should just move to another country as Plato writes in the Crito.  Instead of protecting us from companies like Google and the criminal enterprises it supports through traffic and the sale of advertising, the government actually allows Google to install the gigabit Google Fiber so that massive theft can be accomplished even more massively.

So I would beg pardon here–I do not feel that it should be necessary for artists to tell the Congress what we would accept in the way of parameters for “notice and stay down”, at least not initially.  I think artists have the undisputed right to ask–actually to demand–of the Congress, what was their intention.

The safe harbor is their law.  They wrote it.  They voted for it.  They presumably have some idea what it is supposed to mean.  Many who voted for it are still in the Congress.  Isn’t the place to start a coming clean about what Congress intended?  Why should artists have to tell the Congress what the Congress’s intention was?

If it was the intention of the Congress (and President Clinton who signed the law) that the current state of play was the plan all along, then let them say that.  Google is on track to receive over 300 million take down notices this year alone.  If this was the Congressional intention, then let them say that.  If their intention was there should be no upper limit on the number of takedown notices any one company could receive in a year, then let them say that.  And explain themselves.

And let’s be clear–Google does not view these hundreds of millions of notices as a design defect, although that would be a perfectly reasonable starting place.  Google views 300 million notices as a feature set.

Neither should the starting place be some guess on the part of artists as to how many notices are too many, which is inherent in the “notice and stay down” concept.  The starting place should be whether there are too many being sent already and what is the punishment.

Because what is the intention of justice?  That the guilty are proven guilty.  But if lawmakers won’t tell us what it means to be guilty much less prosecute the politically connected wrongdoers, then what justice is that?

 

 

Celebrity Justice and the Hidden Agenda Behind Pandora’s Internet Radio Fairness Act: Screwing legacy artists

March 13, 2013 3 comments

In case you were wondering what ever happened to the so-called Internet Radio “Fairness Act”, here’s another little taste of what Big Tech has in store for artists–particularly “legacy” artists, meaning artists with strong catalog from the past.  Let’s say from before 1972.

What’s magic about 1972?  That was the year that the US Congress recognized a copyright in sound recordings (February 15, 1972 to be precise).  “Pre-72 masters” as the recordings are known were protected by state law before that.  So it is not that these older recordings are not protected–such as those by Ella Fitzgerald, Count Basie, Bob Wills, Duke Ellington, Louis Armstrong, Buddy Holly, Glenn Miller or Robert Johnson–it’s just that they are not protected by federal law.

True to form, Big Tech and their pals at the National Association of Broadcasters are busily trying to screw artists on pre-72 masters out of public performance royalties on digital performances (webcasting, simulcasting and satellite)–and positioning themselves to screw these artists out of royalties if the Congress amends the law to complete the circle and require the payment of royalties on terrestrial broadcast radio.

How? By amending state laws to create a sneaky loophole that cuts off the application of state law protection for pre-72 masters if it happens in their privileged environment–on the Internet.  And how are they doing it?

Big Tech has two big advantages over artists, particularly older artists–they can litigate everything into the ground, which they have shown a willingness to do (see Google v. The World, but especially Google against book authors, music and film makers).

The other is through lobbying–see the Internet Radio Fairness Act and Google’s labyrinthine network of front groups.  Since most of these companies have access to the public markets where they can essentially print money to fund their litigation budgets and lobbying budgets, artists and songwriters will never be able to compete in these areas.

So you won’t be surprised to know that the current strategy of Big Tech is to try to lobby their way to amending the law in each of the 50 states to eliminate the application of state laws protecting pre-72 masters to the privileged Internet class (which may shed light on the delay in re-introducing the Internet Radio Fairness Act after it died in the last Congress).

Texas HB 1043/SB 575

A prime example of this sneaky little plan to protect The Man 2.0 is a bill currently pending in the Texas legislature is HB 1043 (Texas House) and its counterpart SB 575 (Texas Senate).  The bill amends the relevant sections of Texas law (which happens to be found in the Texas Business and Professions Code):

SECTION 1.  Section 641.051, Business & Commerce Code, is amended by adding Subsection (e) to read as follows:

(e)  This section does not apply to:

(1)  a person engaged in Internet, radio, or television broadcasting who transfers, or causes to be transferred, a recording:

(A)  intended for or in connection with an Internet, radio, or television broadcast; or

(B)  for archival purposes; or

(2)  an Internet service provider that is only providing a conduit for access to the Internet that is used for the transfer of a recording by another person.

So just like that–with the stroke of a pen–The Man 2.0 will cut off webcasting royalties to generations of Texas artists, not to mention future royalties.  And this is coming to a state house near you just any minute if it’s not there already.

One of two things is happening here–either conservative Texas legislators are suddenly possessed with the idea of collectivizing property rights–unlikely–or the Internet lobby is  launching an all out attack on artist rights.

Let’s be clear:  This isn’t a slippery slope, a parade of horribles or any other rhetorical twist.

This is real, this is happening and it is happening right now.

Take Action

You should realize that it is entirely possible that the members of the Texas legislature who are carrying these bills are not 100% clear about how awful they are and just how much damage the legislation will do to Texas artists.  The same may be true of any legislators in your state if you live outside of Texas.  Very often a bill will be introduced in response to a constituent request and if it is not opposed by other constituents will sail right through.  So don’t come down too hard on the legislators.  Their bills may well be unintentionally pernicious.

If you would like to oppose the Texas legislation, you should contact the author in the Texas House, Rep. Tryon D. Lewis through his email comment form here.

You can contact the author in the Texas Senate, Sen. Robert Duncan through his email comment form here.

You should also contact your state legislators to find out if any similar legislation is being introduced in your state.

See our “Take Action” guide if you have any questions.

Funny How that Works: @edchristman reports: Irving Azoff, Top Radio Groups Reach Temporary Licensing Agreement

December 27, 2016 Comments off
mic-coalition-rmlc

The MIC Coalition

When two rational actors are economically interdependent on one another, disputes tend to get solved at a market clearing price.  So it is with Global Music Rights and the goliath Radio Music License Committee that itself is a member of the even bigger goliath MIC Coalition.  (My bet is that the Google-backed MIC Coalition is behind the bizarre push for 100% licensing by soon-to-be-former head of the US Department of Justice Antitrust Division, but that’s another story.)

As Ed Christman reports in Billboard:

While the Radio Music Licensing Committee and Global Music Rights continue to pursue anti-trust litigation against each other, the boutique performance rights organization started by Irving Azoff is offering temporary licenses that will allow radio stations to continue playing GMR songs without worrying about copyright infringement lawsuits.

According to a statement issued on behalf of GMR by lawyer Dan Petrocelli of O’Melveny & Myers, representing the PRO in the antitrust litigation; and a letter to RMLC members from RMLC chairman Ed Christian, radio stations have until Jan. 31 to sign an interim license agreement with GMR, which will cover them for playing the PROs songs through Sept. 30, 2017.

Each station willing to enter into the interim license has to contact GMR to see what their fee will be. However, the interim licensing agreement will leave each party the right to seek a retroactive fee adjustment, which could be based on a future licensing agreement subsequent to the interim license; the outcome of the antitrust litigation between the RMLC and GMR; or a possible rate settlement between the RMLC and GMR….

In fact, some music from songwriters in the Who, the Eagles, and by John Lennon and Drake, are no longer covered by ASCAP or BMI, and radio has been playing that music all along during 2016. But people familiar with GMR say they had no intention of suing for copyright infringement as long as RMLC was negotiating rates with the PRO.

Instead, they claim, the RMLC ambushed them with an antitrust lawsuit filed on Nov. 18  in the U.S. Eastern District of Pennsylvania Court by the law firm of Latham & Watkins. GMR filed its own anti-trust lawsuit, via O’Melveny & Myers, against the RMLC in California Federal Court on Dec. 6.

The songs at issue appear to be for GMR writers who left ASCAP in the last couple years, but arguably remain covered by ASCAP (and BMI) agreements expiring at the end of 2016–you know, next week.

What this comes down to, of course, is the one thing that the MIC Coalition doesn’t seem to think songwriters are much entitled to–property rights.  As my old law and economics professor Armen Alchien has written:

A property right is the exclusive authority to determine how a resource is used…One [attribute of private property] is the exclusive right to the services of the resource. Thus, for example, the owner of an apartment with complete property rights to the apartment has the right to determine whether to rent it out and, if so, which tenant to rent to; to live in it himself; or to use it in any other peaceful way. That is the right to determine the use. If the owner rents out the apartment, he also has the right to all the rental income from the property. That is the right to the services of the resources (the rent).

Finally, a private property right includes the right to delegate, rent, or sell any portion of the rights by exchange or gift at whatever price the owner determines (provided someone is willing to pay that price). If I am not allowed [or not required] to buy some rights from you and you therefore are not allowed to sell rights to me, private property rights are reduced. Thus, the three basic elements of private property are (1) exclusivity of rights to choose the use of a resource, (2) exclusivity of rights to the services of a resource, and (3) rights to exchange the resource at mutually agreeable terms….

Private property rights do not conflict with human rights. They are human rights. Private property rights are the rights of humans to use specified goods and to exchange them. Any restraint on private property rights shifts the balance of power from impersonal attributes toward personal attributes and toward behavior that political authorities approve. That is a fundamental reason for preference of a system of strong private property rights: private property rights protect individual liberty.

Or as Gloria Steinem put it, artist rights are human rights.  A host of human rights documents are consonant with this view, starting with Article 27 of the Universal Declaration of Human Rights (which, incidentally, was itself the inspiration for MTP):

Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.

The MIC Coalition routinely runs over the rights of recording artists to fair compensation for the use of their recordings, so it’s a fair assumption that they are used to riding rough on creators and intend to do so with GMRs writers.  We can all be thankful that GMR is both standing up for their songwriters and acting reasonably to allow business to get done.  Hopefully, mega media corporations will decide that their resources are better spent paying a fair royalty to the songwriters that drive their business rather than unproductive litigation.

 

Mr. Obama, Meet Mr. Kafka

August 4, 2016 1 comment

Someone must have been telling lies about Josef K., he knew he had done nothing wrong but, one morning, he was arrested….”And why am I under arrest?” he then asked. “That’s something we’re not allowed to tell you. Go into your room and wait there. Proceedings are underway and you’ll learn about everything all in good time….”

From The Trial, by Franz Kafka.

It occurs to me that President Obama will go down in history as the American president who hurt artists and songwriters more than any other.  And I can’t help noticing that right from the beginning of his Administration–perhaps even before he took office–Google has been an overwhelming influence on all aspects of his decision making.  It should not be lost on anyone that the consistent beneficiary of the economic and emotional devastation visited upon artists and songwriters has been Google–starting with this gathering of the tribes barely a fortnight after President Obama took office held at the swank San Francisco pied à terre of Google’s head lawyer:

free press invitation 3

Whether its the Administration’s abject failure to stop Google’s profit from brand sponsored piracy, Obama’s miserable record on protecting the property rights of creators to Google’s benefit, or the latest insult today from the Obama Justice Department on 100% licensing, it is clear that we seem to always come out on the short end of the stick when it comes to Barack Obama.  And I could go on, it’s not just these three points.

ginny hunt

Ginny Hunt, Google’s White House fixer.

Realize this–it’s not political.  Clearly.  Some of President Obama’s biggest contributors and most loyal supporters are from the music business, so unless there is some wild disparity in campaign contributions or other consideration coming from Silicon Valley in general or Google in particular, it’s clearly not political.

Google clearly has an inside track on this Administration, however.  In case you missed it, take a look at the number of White House visits by Google’s chief lobbyist Joanna Shelton (courtesy of the Google Transparency Project):

Google White House Meetings

That’s right–Google’s lobbyist has more access to the White House than the insurance industry, Exxon, Microsoft or Comcast.

And that doesn’t even count the famous Google revolving door:

rv-door-visulizatnoi-susan-molinari-1024x507

This is all of a piece.  It is what perpetuates that ennui of shadows, that foreboding that somehow, some way we have done something wrong.  For why else would they persecute us so?  Don’t you wish they would just tell us what it is rather than bleed us from 1,000 cuts with DMCA takedown notices or today’s absurd through the looking glass ruling by the Obama Justice Department on 100% licensing?

johannashelton-540x1158

As NMPA CEO David Israelite said in his statement about the bizarre ruling today, this contradictory mishmash that suggests an innate lack of the ability to think sequentially, this too leads back to Google and corrupt government run amok:

After a two year review of the consent decrees that govern ASCAP and BMI, career lawyers who were never elected nor confirmed to their positions, led by a lawyer who previously represented Google, determined that songwriters should have even fewer rights, less control over their intellectual property and be treated more unfairly than they already are.

The lawyer referred to is Renata B. Hesse, and we will have more on her in the coming days, including her violations of White House ethics rules (rules that don’t seem to apply to Google) and other odds and ends.  Hers is a timeline replete with strange coincidences, secret White House meetings, and missing chunks of resume, all held together by a common thread:  Whenever Hesse is around, Google seems to benefit.

hesserenata

It’s so blatant, you have to ask yourself why would government bureaucrats like DOJ antitrust lawyer David C. Kully stick their necks out so far in broad daylight.  Easy answer–because they’re not sticking their necks out.  These “jobsworths” are doing what they know the higher ups want them to do, and maybe even demand that they do.  Now where have we heard that defense before?

Of course–if you read the DOJ’s ruling, you won’t find one single name of anyone–nobody–mentioned in the text.  Nobody takes ownership of it.  There’s not even a name in the document metadata.

If these lawyers were so confident of their work product, wouldn’t they have pride of authorship?  Wouldn’t they want to be cited, quoted, pointed to?  Apparently not.  You don’t suppose that’s a sign of true cowardice, do you?

But remember this–it’s not just Renata Hesse.  There are hundreds of Google people planted in the government, and hundreds of government people planted at Google.  This is worse than Halliburton, Brown & Root, United Fruit, IT&T or Teapot Dome.  The difference is that it is extremely unlikely that anyone will ever investigate any of it.

What has happened today is that the Obama Administration has–to the great benefit of Google and the MIC Coalition–kicked the can down the road.

hesse

The Obama Administration have successfully managed to trick the entire music industry into believing that their intentions were good with a two year delay (at least) of “reviewing” thousands of aspirational comments from songwriters about how to make the consent decrees work better for everyone.

You will hear people say that the Justice Department acted in good faith, that they meant well, that they just couldn’t find one single proposal to adopt from the public comments including those made by the Copyright Office.  But remember you heard it here first…

That’s bullshit.

I don’t know how these people sleep at night, but it’s bullshit.  This game was rigged from the beginning.  It’s the only explanation that makes any sense.

Songwriters are now faced with having to dig into meager royalty payments (more meager than seven years ago due in large part to the inaction of the Obama Administration) to sue a defendant that literally prints money–the Obama Justice Department–just to get something that approaches justice.

So stay tuned, I will have a lot more to say about this corruption.  But if you have a vague foreboding that you’ve done something wrong but no one will tell you what it is, you’re right.

Mr. Obama, meet Mr. Kafka, the author.  You’ll remember Mr. Kafka from the Google Books case.

He was on to you years ago.

Is Irving Azoff sending a signal to all digital services and is Pandora receiving 5×5?

November 20, 2014 Comments off

Is Irving sending a signal to all digital services?  Oh, I just betcha he is.

There’s actually a pretty simple answer to the very public demand letter to YouTube from Irving’s Global Music Rights.  If Irving’s GMR has the public performance rights to these high profile songwriters it’s probably because the writers transferred their songs to GMR from wherever they were.  The songs had to start somewhere.

If those songs transferred out of the ASCAP, BMI and SESAC environment, then it’s likely that none of them are subject to blanket licenses granted by those societies.  That also means that those songs aren’t part of the US government’s iron fisted control over songwriters, either.  Which means that unlike at least ASCAP and BMI, GMR is under no obligation to license anything to anybody.

That means that it’s possible that anyone who had a blanket license with the societies now has to also have a deal with GMR.  If you think that is unusually fragmented, send your thank you note to the U.S. Department of Justice, followed closely by Pandora.  The dynamic duo of DOJ and Pandora have been doing their best to screw up collective licensing in the U.S. for years.

Well, Pandora, now you’ve got it.

Here’s how it could work.  Even though artists are subject to the compulsory license for sound recordings that is the backbone of Pandora’s business, songwriters that are not subject to the Department of Justice are free to say no.  That would include GMR songwriters, you know, the ones who write the hits.

If GMR songwriters decide they don’t want to be in Pandora, then Pandora can’t use the songs.

So YouTube may stumble around trying to come up with a theory other than Lex Google Sum, but they, too, are on notice that they don’t have rights to these songs.  That’s called “red flag knowledge” in the trade.  And red flag knowledge of infringement trumps the DMCA safe harbors.

Just in case you thought that 100,000,000 take down notices didn’t do the trick.

So Irving Azoff is broadcasting his intentions if you ask me.  Is anyone listening?

Google-Backed Creative Commons Wants Taxpayers To Subsidize Their Hustle

July 16, 2014 Comments off

Carrie Nation, Photo by Philipp Kester (1873-1958)

Somehow, I’ve always associated Creative Commons Corporation with the temperance movement campaigner Carry Nation.  I think it’s because both Creative Commons, especially the founder, and the 20th Century booze campaigner have similar goals.  Creative Commons furthers the purposes of the Google Nation and Carry Nation furthered the goals of the Prohibition Nation.

Both lobbied the government to impose their respective views on society through the force of law and most importantly get the taxpayer to pay for doing so.  Creative Commons, though is much more a 21st century campaigning phenomenon and takes millions from a cast of characters that include the Silicon Valley elites, like eBay founder Pierre Omidyar and direct contributions from Google, not to mention the Hewlett-Packard heirs. And whoever is behind the Mozilla Foundation (also rumored to be largely Google.)  Professor Jane Ginsburg of the Columbia Law School has an excellent piece on Creative Commons licenses (Public Licenses: The Gift that Keeps on Giving) that I recommend, and ASCAP’s Joan McGivern has a great piece on the subject which is also a cautionary read before jumping into the legal complexity of the Creative Commons system.  We also have a post from 2006 that warned of special issues arising from co-ownership of copyrights if one author decides to use a Creative Commons deed.

This pattern of giant contributions in the campaign against “Hollywood” is old news.  Now Facebook is joining in and gets out their checkbook as well, directly and indirectly.  This is well documented in the Google Shill List and Roger Parloff’s groundbreaking Fortune article documenting under the table payments by these multinational corporations to the Electronic Frontier Foundation in Google and Facebook’s New Tactic in the Tech Wars.

Back to the Commons

Once again, the Creative Commons Corporation’s yearning toward Big Government dominance was on display at the July 16, 2014 hearing before the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property and the Internet in the form of the testimony of Professor Michael W. Carroll, Director, Program on Information Justice and Intellectual Property, American University Washington College of Law.  Of course given the degree of direct and indirect government subsidies that law schools receive from taxpayers to keep paying law professors salaries…I mean keep turning out law students into a disappointing job market for young lawyers, one questions why the taxpayer has to subsidize these institutions.  (Particularly since law schools will tell you that the jobless are always some one else’s students.)

But it should not be surprising that Professor Carroll came to the IP Subcommittee looking for taxpayer pork and this time it was the $105 recordation fee the Copyright Office charges those who file notices in the Copyright Office’s recordation section.  One example of recordation is when you transfer your copyrights to someone else.  In this way, the Copyright Office is like a County Recorder for real estate.

The law also requires that when an author or applicable heirs exercise their termination rights they have to notify the world of the transfer–a transfer to their benefit–by filing a transfer notice with the Copyright Office and paying $105. Seems normal, right?  The alternative to the author paying this recordation fee is that the taxpayer should pay for it out of the appropriation for the Copyright Office’s operating budget.

Once the transfer is given effect, the author now has the ability to exploit the transferred work.  Creative Commons has identified a theoretical class of authors who will go through the colossal headache of getting the work transferred (which has spilled over to litigation occasionally) but then hand over the work to Creative Commons or essentially place the work into the public domain.  Only a law professor could believe that this theoretical class of transferees is big enough that the issue of who pays the recordation fee is important enough to take up the time of the IP Subcommittee and distract the Members from other pressing business of the Republic.

Yes, Professor Carroll’s most recent search for pork involves the Copyright Office having the audacity to charge $105 for recordations of notices by users of the Creative Commons Corporation’s “deeds” or “licenses” or whatever they are calling them this week to signify that the creator wants to put their work into the “sharing economy” (essentially the public domain).

Sharing is Caring for Multinationals

The “sharing economy” is the antebellum underpinning of much of the Web 2.0 monetary system–artists create a work for free and then let companies like Google sell advertising against it and grow their valuations.  This is what Lessig calls the “hybrid economy” (Lessig is the founder of Creative Commons after his stunning loss before the U.S. Supreme Court in the Eldred case.  Well…stunning to him.)

Of all the canards foisted on the professional creative community by the professional free riders, none has had such a sustained life as the “sharing economy” dodge.  I would suggest that the longevity of the fallacy is at the very core of Web 2.0 right alongside another reality: there is no free lunch.  If you do not pay for a product, that’s because you are the product.

How are these two frauds connected?  Fortunately, Lessig crystallizes the scam with yet another elaborate rationalization, his speciality.  Lessig tells us about the “hybrid economy” in his book “Remix”.  And what might the “hybrid economy” be?

“Where commercial entities leverage value from sharing economies.”

Think about that:  Where commercial entities leverage value from sharing economies–or more precisely, where commercial entities extract commercial rents (a/k/a “profits”) that are not redistributed to the creators of works being “shared”.  In other words, the commercial entity is given a supply of goods to sell and resell at no charge by creators, i.e., by use of uncompensated labor, often children.  (The use of child labor raises its own issues.)

Nowhere is this rather demonic paradigm more clearly revealed than in Lessig’s disastrous appearance on The Colbert ReportLessig found himself caught in a trap and tried to laugh his way out of appearing to be yet another exploitation monger from Silicon Valley.  I don’t know if Colbert intentionally set the trap, but either way we got to watch Lessig in a kind of verbal Chinese finger puzzle of Colbert’s making, but composed almost entirely of Lessig’s own hubris (at 1:12):

Colbert: “The hybrid economy is that everybody does the work, and Flickr makes the money!”

Lessig: “Don’t tell anybody!”

This actually is not funny, unless you think it’s funny that you are the product.  Then you should have a belly laugh.

On the one hand The Man 2.0 wants to say that the “sharing economy” is a noncommercial use of any copyrights that happen to find their way into the “sharing economy” (a/k/a Limewire, Isohunt, Creative Commons or YouTube).  On the other hand, The Man 2.0 wants to extract commercial rents from those user created works (a/k/a Limewire, Isohunt, or YouTube).  (You may prefer the machine-analog vocabulary that simultaneously draws attention away from free will and also commoditizes creativity, “user generated content”.)

Those user works may be original works, cover songs, family photographs or direct rip offs of other people’s stuff, but the principle is the same.  The user gets nothing, an underlying copyright creator gets nothing absent a deal to the contrary, and the “commercial entity” gets all the commercial value it can extract.

Lessig cites Flickr as an example of his “hybrid economy.”   So doesn’t this mean that people who give their copyrights away as part of Lessig’s ‘hybrid economy’–through his Creative Commons “sharing licenses”– can have their works exploited to profit commercial entities without compensation?  Is that what is really going on here? After all, when Flickr was sold to Yahoo! for millions in 2005 how much of those millions did the executives share with the people who ‘shared’ their content with Flickr?

Given the millions his causes have received from Google, it’s natural that Lessig would want to focus on Flickr as a distraction from Google’s YouTube, the real behemoth in the “hybrid economy”.  Ever try searching for “Casablanca full movie” on YouTube?  Guess what you get?  Casablanca the full movie, sliced into 10 parts.  In fact, try that search as “[your favorite movie title] full movie” and see what you get.  It’s probably up there and it’s probably sliced into 10 convenient little parts for you to do what you want with.

So is that a noncommercial use?  Perhaps if you look at the pages where these clips from Casablanca appear on YouTube you won’t find ads being served.  Does that mean that YouTube doesn’t benefit from having people searching and viewing these and thousands of other clips on the site?

These are rhetorical questions.  Here’s the fact–anything that weakens copyright or makes it more difficult to enforce (such as overwhelming the system with a sudden and sustained influx of infringers like YouTube) benefits Google, Facebook or anyone else adopting their shakedown business model.

Creative Commons is a key part of obfuscating the rights and fouling up the system even further.  For example, if you were to record a version of the song “Yesterday” written by Lennon and McCartney and put the recording out under a Creative Commons Corporation license, there is nothing in the license that grants any rights to the underlying composition–it is essentially a “buyer beware” quitclaim at best.  But it creates the impression in the user of the license that they can make that recording available online under a Creative Commons Corporation license.

Follow the Money

It is difficult to determine exactly how Creative Commons Corporation is funded except at the high level from its IRS Form 990 that typically excludes specific donors.  Good news, though.  A copy of the Schedule B from the Corporation’s 2008 tax return found its way onto the Internet:

Creative Commons 2008 Schedule B

Then recall that the mother in law of a Google founder was the President of the Corporation and is still the vice chair.  Recall also that Lessig was caught by the press raising Creative Commons contributions through a series of dodgy corporate structures that led back to the founders of an off shore gambling operation who paid hundreds of millions in fines for violating US law and was a key advertiser on Megavideo according to the Megavideo indictment.  (See “Poker Money and the Ethics Professor“.)

So keep these numbers in mind when you read Professor Carroll’s testimony, particularly the $1.5 million from Google, which has a direct commercial interest in perpetuating the antebellum “hybrid economy.”

Creative Commons and the Termination Right

Exercising the termination right is overly cumbersome and confusing to many authors and their heirs.  Creative Commons created and hosts an Internet based tool still in its beta version that provides those with a potential termination right a means of assessing whether and when they may exercise their termination rights. See http://labs.creativecommons.org/demos/termination/

Creative Commons did this to aid authors or heirs seeking to reclaim their copyrights for the purpose of sharing their works through a CC license.

In that regard, one obstacle is financial. Even after an author or heir has run the administrative gantlet, termination is not effective until they pay the Copyright Office recordation fee of a minimum of $105 for one transaction and one title. See Copyright Office, Calculating Fees for Recording Documents and Notices of Termination in the Copyright Office at http://www.copyright.gov/fls/sl4d.pdf.

While modest for economically valuable copyrights like those in a character such as Superman, this recordation fee is potentially cost prohibitive for scholars,  journalists, or others who have created and published many copyrighted works that they would like to share with the public through a Creative Commons license.

Creative Commons USA recommends that the Subcommittee consider a measure that would waive the recordation fee in cases in which the terminating party seeks to reclaim copyright for the purposes of making the work of authorship freely available over the Internet under the terms of an open license.

As noted above, the “termination right” is the right of some authors to reclaim their works in the U.S., which is a good thing that I have always supported.  (This is the “time bomb in record company vaults” idea which is a topic for another day.)  The general idea is that in order for the termination to be effective, the author must successfully reclaim the rights and then file a notice in the recordation section of the Copyright Office that notifies the world the ownership has changed (in the U.S. only, by the way.)

The Copyright Office charges a fee for this recordation as a means of cost recovery of the appropriated cost of providing this service to the public.  Given that the current fee represents about 1.5 hours of Copyright Office time, it is pretty clearly an average charge as some recordations will take more time.

Creative Commons–sitting on its millions–has the brass to come to the U.S. Congress and ask for some pork.  This is something that clearly benefits big corporations that want the safety from liability they get from certainty that a work is subject to the “free” license from Creative Commons. So why don’t these giant multinationals write a check?

If you believe as I do that Creative Commons Corporation is just a stalking horse for Google and what Eric Schmidt calls the Gang of Four, you will likely have no sympathy for the taxpayer further subsidizing the tax exempt Creative Commons Corporation or its goals.  You might even ask why it is that Creative Commons itself does not subsidize these recordation fees itself given the millions it gets from Google.

Of course, writing a check requires knowing who to write the check to, etc., and Creative Commons has gone the extra mile to avoid actually knowing who is using their system.  I wonder why?

Even so, this seems like exactly the kind of thing Creative Commons should be doing with their money.  It makes more sense than pounding the table in front of the Congress trying to create the impression that they represent authors and are entitled to pork it up with the best of them.  You don’t suppose that’s why they get funded, do you?

Because it sure seems to cost a lot of money to give things away for free.

 

Attention Mr. Almunia: Does YouTube’s Bad Behavior Tell You Something?

May 26, 2014 Comments off

Who took on the Standard Oil men and whipped their ass
Just like he promised he’d do
There ain’t no Standard Oil man gonna run this state
It’s gonna be run by folks like me and you

Kingfish, by Randy Newman

Monique Goyens, the Director General of the European Consumer Organization (BEUC), published an opinion piece in the leading German newspaper Frankfurter Allgemeine Zeitung (in both German and English) sharply critical of the embattled EU-Commissioner for Competition Joaquín Almunia and the controversial antitrust settlement that Mr. Almunia would like to reach with Google.  Or said another way, the controversial settlement that Google would like Mr. Almunia to reach with Google.

Mr. Almunia shouldn’t feel too badly.  The U.S. Federal Trade Commission let Google go free on antitrust charges, too.

Yes, the FTC actually hired Beth Wilkinson as the outside lawyer in charge of the Google antitrust investigation–because, you know, there just aren’t enough experienced antitrust lawyers among the professional staff at the FTC.  That would be the same Beth Wilkinson who was mentored by Jamie Gorlick when the two worked at the Clinton Department of Justice.  The same Jamie Gorelick who represented Google in the negotiation with Eric Holder’s Department of Justice of Google’s $500,000,000 settlement for violating the Controlled Substances Act.  The same Eric Holder who succeeded Jamie Gorelick as Deputy Attorney General during the Clinton Administration.  That would be the U.S. Federal Trade Commission that let Google off the hook entirely after Google gave money to an advocacy group that gave Federal Trade Commission Chairman Jon Leibowitz an award for his work.

But what’s interesting about Ms. Goyens’ critique of Mr. Almunia’s settlement with Google is that the EC competition laws are not only supposed to protect businesses, they are also supposed to protect consumers.  And Ms. Goyens’ association represents 41 consumer association in 31 European countries.  So Mr. Almunia needs to take this into account–a bunch of consumers aren’t buying his deal:

Increasingly, people who use Google are placing themselves in a virtual gated community, or what was once known as „a company town“ – you can go anywhere you like, as long as you use the company’s roads and you can buy anything you like, as long as you shop at the company’s stores.  Today, this online company town does not objectively lack the supply of anything, but the cost is a tremendous state of dependency.

Google is fond of saying that they lack a monopoly because their competition is “one click away”.  This is, of course, complete crap when it comes to the millions of people who were suckered into using Gmail, and Ms. Goyens makes short shrift of this argument as well:

Google continues to expand its range of activities and develop its own services and products – Gmail, YouTube, Maps, Calendar to name a few. It is becoming something of a gatekeeper to the internet and is uniquely positioned to direct consumers to information, while it continues to acquire a great deal of users’ personal information. To do without Google is often no real option when the worldwide number 2 – Baidu – is from China and could represent a language hurdle for most European consumers for the foreseeable future.

You have to understand that Mr. Almunia has been teasing this Google settlement for years.  The settlement is an alternative to a “Statement of Objections” which increasingly seems to be Mr. Almunia’s only realistic alternative.  A Statement of Objections is essentially a full blown antitrust investigation into Google and is something that Google really, really doesn’t want.  If Mr. Almunia continues down his current path, the European Commission is going to look not only toothless, but purposely ineffectual.  I mean, anyone who grew up in Texas politics would be lacking in manners and intellect enough to just assume the dude is on the take.  I don’t mean he’s getting brown paper bags of cash or selling cleans out of his trunk for walking around money, but something is just downright weird about the whole thing.  I’d need someone much smarter than me to explain it all, because surely Mr. Almunia has an explanation.  Perhaps one provided him by his new buddy Google Chairman Eric Schmidt, call sign “Uncle Sugar.”

If public officials try hard enough, it is possible that the public they purport to serve will hang a sign around their necks that’s really nigh impossible to remove.  Ms. Moyens gives us a taste of the kind of commentary that will no doubt dog Mr. Almunia the rest of his life if he continues on this path with his Google settlement:

After years of investigations and lengthy negotiations, the Competition Commissioner of the European Commission, Joaquin Almunia, has announced his intention to reach a settlement with Google. Despite the unanimous rejection of the proposed remedies by market players and consumer organisations, Commissioner Almunia has decided to leave the negotiating table empty handed.

The same is not true for Google. Not only do their latest set of proposals fail to address the problems identified by the Commission, but they appear to be tailored to maximise Google’s profits and commercial interests. The Commission is essentially offering Google a free pass to continue manipulating search results and excluding vertical service competitors from the online search market. The impact on consumer choice and innovation has been and will be significant.

The new proposals are based on the incorrect assumption that more prominent (and purchased) display of some of Google’s competitors is the best solution to discriminatory behaviour. Google and the Commission continue to ignore the views of the majority of complainants, third parties and the European Parliament to end its current practices of manipulation of search results.

Instead of remedying the discrimination within the market in which the California-based multinational is clearly dominant, the deal as it stands will provide Google with additional tools to strengthen this dominance. Side effects of the Commission coming away empty handed from a lengthy investigation will be the emboldening of Google and that future action by the Commission will be less likely and credible. Such a situation is worse than doing nothing.

Yes, worse that doing nothing.  Here’s a new data point for Mr. Alumnia:  Google’s bullying of independent labels in its “negotiation” (if you can call it that) with YouTube.

The very company that Mr. Almunia wants to let off the hook is threatening independent labels with a take or leave it deal that will penalize the labels on YouTube if they don’t give Google the terms it wants on an as-yet-unlaunched music service designed to compete with Spotify.  This will not only harm small businesses, but also the very consumers that Mr. Almunia is supposed to protect.

And why do you think that Google thinks they can get away with those threats, Mr. Almunia?

Because you let them.

What’s Next for Rapgenius, the “Internet Talmud”? Annotaking the World’s “Information” Whether the World Likes it or Not

November 15, 2013 Comments off

There’s always a risk to starting a post with a quotation that is both true and insightful, but ridiculous to the average person.  A quotation that seems to define buffoonery.  But here goes.

In his reporting on the Rapgenius deal with Sony/ATV that followed the NMPA’s licensing campaign for “lyric sites,”  Peter Kafka at AllthingsD included this statement from an unnamed source at Rapgenus:

Rap Genius is a monument to human knowledge. Like the Talmud before us, our goal is to add context to all important texts in people’s lives.

Now before you blame those crazy kids at Rapgenius for some kind of messiah complex, realize that they didn’t invent that reference to Rapgenius being like the Talmud.  No, that reference comes from Mark Andreessen, the Silicon Valley billionaire golden boy whose major contributions to tech make him something of a god in the Valley.  Andreessen’s venture fund invested in Rapgenius, which in the world of startups is the kind of thing that can make first-time entrepreneurs feel a bit…well, messianic.

Mark Andreessen posted on a Rapgenius forum this explanation for why he was investing in the company:

It turns out that Rap Genius has a much bigger idea and a much broader mission than that. Which is: Generalize out to many other categories of text… annotate the world… be the knowledge about the knowledge… create the Internet Talmud.

Yes, that’s right.  A quick tip for entrepreneurs:  These rich Valley guys are often in need of a reality check and once they get bored with their toy, they will very often leave you twisting in the wind.  Meaning, saddling you with what should be at least in part their own claims for copyright infringement because they invested in your infringement model.  Just like guess who.

The Internet Talmud Annotaking the World’s Information

Attention journalists, authors, musicians, recording artists, visual artists, photographers, film makers, actors and all those who support them–what Andreessen is telling you is that they are coming for you.  Andreessen is investing in Rapgenius the Internet Talmud, because he intends the company to be a kind of King of All Media, annotaking the world’s information whether the world likes it or not.

This is beyond passively investing in a company that may stray into a world of illegality.  This is an investor saying that the reason he intends to invest in the Internet Talmud is because of what they do and impliedly without regard to whether they have the right to do it.  Hence the use of “scholars” instead of “users” on the Rapgenius site.  And when you consider that Rapgenius, the Internet Talmud, incubated at the Silicon Valley venture capital firm YCombinator, all should become clear.

This is from the YCombinator blog post entitled “Kill Hollywood” released at the height of the Valley’s SOPA bloodlust:

Hollywood appears to have peaked. If it were an ordinary industry (film cameras, say, or typewriters), it could look forward to a couple decades of peaceful decline. But this is not an ordinary industry. The people who run it are so mean and so politically connected that they could do a lot of damage to civil liberties and the world economy on the way down. It would therefore be a good thing if competitors hastened their demise.  That’s one reason we want to fund startups that will compete with movies and TV….

So it’s intentional, folks.  There will be some pretty interesting emails no doubt, unless Rapgenius has been infected with the “Google mold” that causes laptops to explode and emails to vanish when justice comes knocking.  Then all that’s necessary is for Rapgenius to trot out lawyers from the anti-artist firm Durie Tangri to explain why annotaking the world’s information is actually “fair use”.  (Remember, this firm represented Google in the Google Books case against authors and after years of litigation suddenly decided to block class certification for the authors because as “[Daralyn] Durie responded [for her client Google]. “We care whether the law is being applied correctly, and the correct application is not to certify a class.”  Right.  Sure it is.  Not that it will screw the authors or anything.)

On A Mission from God

But the Internet Talmud explains that they are on a mission from God (kind of like Google, yes?) and that their future goals are clear and also consistent with YCombinator’s mission as they told Peter Kafka:

Lyrics are very important texts and so they’re a big part of this mission, but the vision of Rap Genius goes far beyond music and touches poetry, literature, the bible, political speeches, Supreme Court opinions, science, everything!

And text is just the beginning! Already the Rap Genius community is annotating images, movies, TV shows – all of human culture! Personally I can’t wait to click on the Mona Lisa’s eyebrows and see what they’re all about. Much love.

Sony/ATV and the NMPA have already said that they can’t do it without a license.  I hope that license is robust and contemplates a quick exit if necessary.

All creators need to be on notice–these guys may be delusional but they are serious as a heart attack, and their backers want to “kill Hollywood”.  They are telling you exactly what their plan is.

What are you prepared to do about it?

Hotel California Meets The Trial: Pandora “Wins” Against Songwriters and Franz Kafka is So Happy About It, Part 1

September 28, 2013 3 comments

They’re talking about things of which they don’t have the slightest understanding, anyway.

Franz Kafka, The Trial

The purpose of antitrust consent decrees is to prevent monopoly behavior that is harmful–a classic definition would be behavior that would allow a monopolist to restrict output and increase price in a relevant market.  For historical reasons that make less sense every day given the democratization of the Internet, U.S. performing rights organizations that are authorized by songwriters to represent their repertoire for the public performance right have been forced to operate under an antitrust consent decree with the U.S. Government, at least in the case of ASCAP and BMI.  This means that a federal judge retains jurisdiction over the licensing practices of these PROs and dictates to songwriters what they can charge for public performance.  And now the rate court seems to trump the clear intention of Congress as expressed in the Copyright Act in its decision in the Pandora case against ASCAP.  (An interesting coincidence:  The rate court judge in Pandora was the same rate court judge who drilled songwriters in the ASCAP DMX case–DMX being the last employer of Pandora’s new in-house counsel.  But lest you think the judge is always ruling in favor of tech companies, the same judge also ruled against songwriters in the Verizon ringtone case.)

And Your Little Dog, Too!

Set aside the fact that the FTC deems unable to prosecute a real monopolist–Google, for example–for much of anything, even when they send cars into your neighborhood and snarf down your WiFi data for their own purposes (and their purposes include copying your WiFi passwords stored in Android smart phones).

No, those songwriters, they have the full weight of the US government called down on them due to their antitrust lusting.  (And the full weight of the U.S. Government weighs a lot more than a 100 gallons of tax payer subsidized jet fuel at Moffett Field.)

If the ASCAP antitrust decree is intended to do anything, it is intended to stimulate competition.  This is why the decree includes this prohibition and protection for “music users,” i.e., licensees, and songwriters who are and continue to be members of ASCAP:

IV Prohibited Conduct. ASCAP is hereby enjoined and restrained from….

(B)  Limiting, restricting, or interfering with the right of any member [writer or publisher] to issue, directly or through an agent other than a performing rights organization, non-exclusive licenses to music users for rights of public performance;

And there is the basic function of the consent decree–songwriters can join together to collectively bargain for their songs as long as they retain the right to do so directly while still remaining members of the collective.  (For MTP readers outside the US, you will recognize this as a fundamental difference between US PROs and authors’ rights societies.)

Keep this in mind, we will return to this issue.

As a threshold matter, of course, recall that copyright is, as they say, a “bundle of rights.”  That bundle can be divided up based on the exclusive right concerned.  Songwriters may authorize an agent, such as the Harry Fox Agency (or HFA), to issue mechanical royalty licenses for their exclusive right in digital and physical distributions of reproductions of recordings embodying a song.

Songwriters may authorize an agent to pitch synchronization licenses for film and television for their exclusive synchronization rights.

And of course, songwriters may authorize their exclusive public performance right to a PRO such as ASCAP, albeit on a non-exclusive basis as we have seen that the ASCAP writer always retains the right to issue direct licenses for less than all of their rights.

Less than all in each case.  In fact, ASCAP is expressly prohibited from licensing much beyond the performance right by the consent decree.  One might say that licensing a limited category of rights that have not been retained by the songwriter is the whole point of ASCAP.

Less than all.

Keep this in mind, too, we will also return to this issue.

And you’ll need to remember it because the issue is never discussed or distinguished in the ASCAP rate court edict that took away part of the bundle of rights that comprise a non-dramatic musical work, a/k/a a song, and did so without just compensation.

The Government Says Back to the Future

What is truly odd about the Pandora argument and the ASCAP rate court edict is that both elaborately ignore the fact that the consent decree dates from 1941 and even the most recent modification of the consent decree dates from 2001–eight years before Tim Westergren announced “The royalty crisis is over” and another part of the U.S. Government established the royalty that Pandora would enjoy for compulsory licenses on sound recordings.

Think about what was happening in 2001 in the online music business–MusicNet was barely functioning, the Harry Fox Agency entered into its first rateless streaming mechanical license, and Napster was still locked into a death struggle in litigation.  iTunes didn’t exist.  Pandora hadn’t even had its first IPO.

Yet the government–the same government that lets Google buy its way out of all of its monopolist and criminal behavior–or gives it a pass outright–imposes an absurdly tortured structure on songwriters struggling to develop new business models in 2013.

And of course the only way that the government can impose its will on songwriters is to completely ignore the fundamental purpose of the ASCAP consent decree.

Think about it–why should songwriters not be able to take advantage of the clear benefits in lower transaction costs of entering into direct licenses with digital services, particularly incumbents like Pandora.  The government wants one of two things apparently: Destroy the PROs by forcing songwriters to withdraw all or none of their rights, or force songwriters to go back to the future by ignoring the efficiencies of the marketplace and keep songwriters trapped in a 2001 world.

Oh, and I forgot–by acknowledging the songwriter’s right to license less than all of their rights through ASCAP, that would get the government out of the songwriting business online.  And of course the bureaucratic imperative would steer a court away from limiting its own jurisdiction.  So three things.

Since it seems unusually sadistic for the government to desire any of these inevitable outcomes, we begin to see the rate court decision for what it is–a results oriented decision by a government representative that wanted to punish songwriters and benefit Pandora.  And preserve its own bureaucratic imperative.

This case might be a good moment to bring in the Department of Justice for some briefing on interpretation given the tectonic shifts in the relevant market in the intervening years, don’t you think?

Bundle?  We Don’t Need No Stinking Bundle!

The rate court edict simply takes away the valuable right to license the bundle of rights with the sweep of a pen (at p. 19):

ASCAP’s argument is predicated on the Copyright doctrine of “divisibility of rights” within a copyrighted work. It is true that “[t]he Copyright Act confers upon the owner of a copyright a bundle of discrete exclusive rights, each of which may be transferred or retained separately by the copyright owner.”United States v. Am. Soc. of Composers, Authors, Publishers, 627 F.3d at 71. But while the Copyright Act allows rights within works to be alienated separately in general, AFJ2 [the 2001 amended consent decree] imposes restrictions beyond those imposed by the Copyright Act on ASCAP. AFJ2 Sections VI and IX(E) deny ASCAP the power to refuse to grant public performance rights to songs to particular users while, at the same time, retaining the songs in question in its repertory.

Note that the rate court edict starts out talking about a right enjoyed by the copyright owner under the Copyright Act (and then there’s that whole Constitutional copyright clause inconvenience) then the court jumps to a conclusion regarding the 2001 consent decree imposed upon ASCAP, all without ever taking into account that the consent decree expressly contemplates–even orders ASCAP to permit–members entering into direct licenses outside of ASCAP.
A provision that arguably recognizes the Constitutional mandate expressed in the Copyright Act.

The point being–ASCAP cannot give more than it has.  That is true.  But it is not ASCAP that is limiting the scope of Pandora’s license, it is the songwriter that is limiting the scope of the license that ASCAP has the ability to issue.  The rate court edict confounds the owner of rights with the owner’s agent.  But of course it would have to in order to reach its conclusion.

The rate court makes much of the “four corners of the consent decree.”  The consent decree could not be more clear that the government clearly contemplated songwriters electing to issue direct licenses, not to mention using a different agent to give effect to this grant.

This is also known as competition.  You know–what the FTC is supposed to promote.

Another odd result is in the “all means all” assertion in the rate court edict discussing the difference between Pandora as an applicant for an ASCAP license and Pandora as a licensee (at p. 23):

Section IX(E)’s requirement that “[p]ending the completion of a [rate court proceeding], the music user shall have the right to perform any, some or all of the works in the ASCAP repertory to which its application pertains” makes clear that there could be no substantive difference relevant to this motion. “All” means all.

The Court is clearly telling songwriters that once you are in an ASCAP membership, even if the Copyright Act allows you to license parts of your rights in the copyright bundle–the very theory on which PROs exist in the first place–and even though the consent decree clearly says you can issue direct licenses while remaining a member of ASCAP–and even though Sony/ATV and other publishers actually negotiated and entered into such a direct license with Pandora–you shall not escape the long arm of the rate court.  Because even though the Copyright Act allows you to control parts of your copyright, the United States Department of Justice trumps the intent of Congress and the rate court will make it so.  Or the court thinks they would if they were asked.  Which they weren’t.

Yes, the rate court chose to ignore the fact that Sony/ATV and other publishers had fully negotiated licenses outside of the rate court’s authority and jurisdiction…sorry, I meant direct licenses mandated by the consent decree…why?

Because the publishers are not a party to the consent decree.  Of course, how did I miss that.

And if you thought that perhaps the Department of Justice might be helpful to the court in illuminating the consent decree, not to worry.  The rate court refused to invite the DOJ to even brief the issues.

[Editor Charlie sez: If you’d like to support ASCAP, you can sign the petition by clicking here!]

Continued in Part 2

Wolves in Sheeps Clothing Criminalizing All Who Oppose Them But for He Who Brings the $unlight: The Troubled, $trange, Fearful, Frightened World of Gary $hapiro, the Diogenese of Anti-Copyright Lobbyists

February 5, 2013 4 comments

[Editor Charlie sez: This post orginally appeared on December 15, 2011 and in light of Gary Shapiro’s recent  editorial–still looking for that copyright law that passes the CEA purity test–we thought it might be time for a reprise.  See also David Israelite’s excellent op ed responding to Shapiro.  Yes, like Diogenes, Gary Shapiro wanders the earth in search of “reform” he can support.  To paraphrase Saul Alinsky, when they stop asking for reform, you’ll know they finally have the bullets.]

We are reviewing the public statements of the lobbyist Gary Shapiro, a leading voice in the anti-copyright lobbying crowd for over a decade.  Why?  Because his speeches have a Groundhog Day aspect making me think “I swear I’ve heard this before.”  And it turns out that I have.  Many of the same phrases keep showing up in his public language, and not just once or twice–but for a decade.

Here’s a little sampling of the world that Gary Shapiro lives in–yes, a troubled, strange, fearful, frightened world where “Hollywood” (whoever that is) runs free and good men die like dogs.  Good men who would support protecting artist human rights if they could just find the right bill but no one ever seems to present the magical legislation.

But he would support it if he could ever find it.  He is like the Diogenese of the anti-copyright lobbyists, searching for an honest copyright bill but never finding it in a scary, frightening, evil world dominated by the creators whom he fights daily.

Here’s a sample, more to come:

“[Rep. Howard] Coble’s legislation [the DMCA] also would ban the manufacture or marketing of devices or services meant to circumvent copyright protection. This has alarmed electronics makers, who say home-entertainment products such as VCRs could fall under the ban.

Frankly, this scares us to death,” Gary Shapiro, president of the Consumer Electronics Association, told Congress.

The legislation would make on-line service providers liable in some instances for intellectual property stolen on the Internet. That provision upsets many telephone companies, which provide Internet access, and America Online, the nation’s largest on-line service.

Industry officials assert that copyright infringement costs them $20 billion a year in lost revenue. Until the problem is resolved, they say, the global electronic network will never reach its full commercial potential.

Some theft probably is due more to ignorance than criminal intent. With much of the World Wide Web accessible for free, many people assume material is there for the taking, but a significant portion is under copyright.

Future piracy will dwarf what’s happening if strong measures aren’t adopted soon, copyright owners say. “The Internet will be the crucial link in the pirate operations of tomorrow,” Valenti said in recent congressional testimony.”

Copyrights on the Web Gone With a Click, Chicago Sun Times, Oct. 6, 1997

And then there’s this testimony:

“Last week the motion picture industry announced that is forming a central laboratory, reporting directly to the CEOs of the major motion picture companies: “MovieLabs.” We fear that its purpose is to control technology via licensing, so only “approved” approaches can be tried. Gathering decision-making and licensing in industry consortia owned and controlled only by content proprietors can be, and perhaps is meant to be, a powerful weapon in the wake of Grokster. Proprietors do not need additional weapons at this time.”

Testimony of Gary Shapiro, U.S. Senate Judiciary Committee, September 28, 2005

Is this starting to sound familiar?

Certainly, creative work must be encouraged and original ideas protected. [Certainly, absolutely.  Obviously.  Exactly.] But this idea must be balanced with the need – and right – to promote broad public access to copyrighted works and to allow for technological innovation.

“It is simply unfair that companies who made their fortune taking works in the public domain and reformatting them for new technology are now preventing others from following the same business model. Congress took from the public and gave to Disney. And while most Justices recognized this was horrible public policy they also chose to find it Constitutional.

Gary Shapiro, on the Lessig defeat in Eldred.  January 15, 2003.

“Surely when it passed the DMCA, Congress did not envision that the Act’s subpoena provision would be used against home Internet users. Consumers should not live in fear that their ISP will be required to turn over their identity to any copyright holder simply because someone claims you’re doing something illegal.

“Instead of criminalizing its customers the RIAA and the recording industry should focus on developing easy, consumer-friendly business models that leverage the benefits of technology. At the same time Congress and the courts must acknowledge and reinforce the crucial distinction between illegal infringement and authorized fair use.”

Gary Shapiro, 2/4/2003.

“CEA strongly opposes the state piracy laws being promoted by MPAA. If enacted, these measures would have a profound and destructive impact on consumers’ rights to use lawfully acquired content for noncommercial purposes. The proposed laws also would outlaw the manufacturing and use of many existing consumer electronics products and hinder future technological developments.

“These bills are wolves in sheep’s clothing. While Hollywood claims they only impact cable piracy, they are so broad and vague as to criminalize legal products and consumer uses. In essence, these bills replicate the restrictions of the Digital Millennium Copyright Act (DMCA) without including any of the DMCA’s protections for consumers.

“It’s clear that Hollywood’s new strategy is to sneak around Congress and go to state legislatures, hoping to gain the anti-consumer restrictions that they have been repeatedly denied on the federal level. We call on the states to stand up for consumers by rejecting these bills, and for Congress to reassert its rightful jurisdiction over consumer fair use issues.”

Gary Shapiro, 4/2/2003

“Friday’s decision [at the trial court in the Grokster case] is a landmark day in the ongoing effort to balance the need to protect copyright with manufacturers’ right to innovate in the digital age. This decision reaffirms a fundamental principle as set forth by the U.S. Supreme Court in the Betamax case: a technology is legal if it is capable of substantial non-infringing uses.

The District Court was correct in ruling that the file-sharing services in question have legitimate uses and that these services, in and of themselves, are not responsible for any possible copyright infringement by their users. The decision is a critical piece of the puzzle in developing a new approach to intellectual property issues in the digital age.

Our industry depends on strong intellectual property protection, and we do not condone piracy or infringement. However, the Court’s decision correctly focuses not on consumer behavior, but on technology and innovation. Innovation helps the U.S. economy and consumers. Opponents should carry a heavy burden to show that a new technology is illegal. Technology developers should be able to create innovative, exciting new technologies without fear of copyright liability.

We will continue to work with the Congress and all interested parties to find a balanced approach to protect copyrights and maintain a legal environment that allows for technological innovation.”

Gary Shapiro 4/28/2003

“This [state law anti piracy] legislation would subject consumers and consumer electronics manufacturers to criminal penalties and fines based on an undefined ‘intent to defraud’ standard subject to case-by-case interpretation and expansion. For example, consumers could potentially be subject to criminal penalties if they attached a TiVo to their broadband connection if their cable agreement specified an exclusive relationship with a different manufacturer. Faced with potential liability under these laws, many retailers would choose not to sell clearly legitimate products.

I applaud those state legislators who have put the brakes on these bills pending further information, justification and explanation of their impact on consumers and manufacturers. All states must stand up for consumers by rejecting these bills and working with Congress and the consumer electronics industry to preserve consumers’ fair use and customary home recording rights in the digital age and to protect the ability of Americans to use the Internet without fear of arbitrary penalties.”

Gary Shapiro, 4/29/2003

“The [Theft of Service] bill also would impose Draconian civil and criminal penalties that are potentially vastly disproportionate to the conduct of the person charged with its violations. Indeed, the inclusion of potentially massive civil liability has not existed in theft of services law prior to MPAA’s model bill. It appears the real intent is to intimidate and sue anyone who makes, sells or uses any product that the MPAA or other content providers do not like or approve of. The impact will be anti-consumer, anti-competitive and anti-innovation.

Having been rightfully denied anti-consumer legislation of this sort by Congress, MPAA has switched tactics in an attempt to convince state legislatures to turn honest consumers, retailers and manufacturers into criminal and civil defendants.

Along with a wide range of consumer, retailer and technology groups, CEA urges state lawmakers to reject this ill-considered legislation in order to protect consumers, technology manufacturers, retailers, and their states’ digital economies.”

Gary Shapiro, 4/30/2003

“Proponents of these bills have tried to paint them as non-controversial, and have claimed that they accommodate consumer electronics concerns and enjoy broad support in the industry,” he said. “Neither is the case. Instead, CEA continues to call on all state legislatures to oppose these overly broad bills and to demonstrate support for consumers, competition and innovation – all of which stand in jeopardy….”

Gary Shapiro, 5/6/2003

CEA stands firmly against piracy and theft of service. However, as Governor Owens made clear, any bill addressing this issue must be narrowly drafted so it does not penalize lawful consumers, manufacturers and retailers.

“While we commend Gov. Owens for his courageous veto, we are troubled that harmful legislation similar to that rejected in Colorado remains pending in many states. Versions of this anti-consumer legislation are under active consideration in Texas and Tennessee, and one has been passed by the Florida legislature.

“The technology community joins retailers and consumer groups in urging lawmakers in these states to follow the lead of Governor Owens and reject this ill-considered legislation.”

Gary Shapiro, 5/22/2003

“Consumer Electronics Association (CEA) Vice President of Technology Policy Michael Petricone issued the following statement regarding the Texas Legislature’s adjournment without acting on the Motion Picture Association of America (MPAA) -backed Super DMCA bill, SB 1116:

Hollywood has been stymied in its attempt to do a Texas two-step on the backs of consumers. [That’s right, you’re not from Texas.] What was presented to Texas legislators as a communications security bill was recognized for what it was – a misguided and overreaching attempt to prevent consumers from attaching legitimate products to their home networks by the threat of huge criminal and civil penalties. The Texas Legislature is to be commended for rejecting such an anti-consumer, anti-technology proposal.

“In every state where similar legislation has seen the sunlight of open discussion and debate it has been decisively rejected. We are gratified that Texas has joined Colorado, Tennessee and Oregon in choosing not to implement this ill-considered anti-technology bill.

“At the same time, this battle is far from over. This bill is pending in other states, and is on the governor’s desk in Florida. In addition MPAA recently declared that it will continue its push to enact this punitive legislation across the country.

“MPAA’s latest threat is a call to action for every lawful consumer in the nation. We urge all Americans to contact your state and national lawmakers and insist that connecting a lawful product to a broadband network without Hollywood’s permission should not become a criminal act.”

Michael Petricone, 6/5/2003

“The Home Recording Rights Coalition (HRRC) today expressed concern that S. 1932 (the “ART Act”), introduced by Senators Cornyn (R-TX) and Feinstein (D-CA), is unnecessarily broad in its language and indeterminate in its potential consequences. While aimed at the recording and subsequent uploading of movies as they appear in movie theaters, it could be read to imperil legitimate fair use activity occurring outside the confines of theaters.

HRRC Chairman Gary Shapiro said, “The HRRC has long noted that the purloining of movies during or before theatrical exhibition, rather than consumer uploading, is the main source of new movies on the Internet. Therefore we are not opposed in principle to measures that tighten security in theaters, and in the motion picture industry chain of distribution. However, we are concerned about the breadth of S. 1932’s definitions and key provisions, which could be read to imperil ordinary fair use conduct that may occur well outside such venues and channels.”

Gary Shapiro 11/25/2003

“As currently drafted, the Inducing Infringement of Copyrights Act of 2004 (S.2560), introduced today, would stifle innovation and jeopardizes critical protections for innovators established in the U.S. Supreme Court’s landmark 1984 Betamax ruling, said the Consumer Electronics Association (CEA). CEA is urging the Senate Judiciary Committee to hold a hearing on the bill so that concerns can be heard and addressed.

The proposed bill adds a new and overly broad copyright cause of action for “intentionally inducing” copyright infringement, said the CEA, and thus could have a crippling effect on the development and introduction of new technologies….This new and separate copyright cause of action is so broad that it would stifle innovation. It essentially would grant copyright owners veto power over the introduction of any new technology for home and personal use.

By establishing this new and vague cause of civil action, it essentially gives content owners another tool in their arsenal to sue legitimate companies over any device, software, home network, programming guide or database drawn from or linked to copyrighted material that they deem objectionable,” continued Shapiro. “This gun hanging over the head of entrepreneurs, large and small, will stifle competition and prevent the introduction of products and technologies we cannot even begin to imagine.”

Gary Shapiro, 6/23/2004

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