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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?

 

 

Will Congress Bring Songwriters a Lump of Coal or Justice?

October 17, 2017 3 comments

It is axiomatic that as government expands, liberty contracts. Songwriters are among the most highly regulated workers in America, so on the continuum of liberty, guess where songwriters score? Most people are surprised by that unadulterated, and rather bleak, fact. After all, songwriters don’t make anything toxic or build in places they shouldn’t or dump chemicals in a waterway. Songwriters don’t have monopoly power. Songwriters don’t even get to set their own prices—the government largely does that in a very expensive and Kafka-esque process. They just write songs.

Not only are songwriters highly regulated workers and are forced by the government (or to use a term from political theory, “the Sovereign”) to bend a knee, the Sovereign has abdicated the enforcement of the laws protecting songwriters to the songwriters themselves except in rare criminal cases. Not only has the Sovereign failed to afford songwriters the same level of protection as the desert tortoise, the Sovereign actually requires songwriters to enforce the laws themselves. Sounds like a reality show.

So rather than getting even more government, songwriters are due for either getting the Sovereign out of their commercial lives, or if justice fails them yet again, at least getting the Sovereign to actually enforce the law.

Why is this important now? Because the Congress has conducted a “review” of the laws affecting songwriters and it’s possible that the Congress now is about to actually do something in the waning days of the current session of Congress. For songwriters, the holiday season is a good time to remember the most terrifying words in the English language: I’m from Washington and I’m here to help.

The Royalty that Time Forgot

The Sovereign compels songwriters to license their songs in two principal ways: The compulsory license for “mechanical” copies (Section 115 of the Copyright Act) and the rate courts (under a 1941 consent decree for ASCAP, the longest running consent decree in history, and a comparable one for BMI dating from 1964). The government set the mechanical royalty rate for the compulsory license at two cents per song per copy in 1909 and then forgot to raise it until 1976 when in its largesse, the Sovereign raised the rate to 2.75 cents per copy—inflation alone would have put the mechanical at 12 cents in 1976. That shadow of that injustice has dogged songwriters ever since and to this day.

Imagine for a moment if the Sovereign had set any other wage in 1909 and then forgotten to raise it for 67 years.

Today that same rate is 9.1 cents where it was set and forgotten in 2006—eleven years ago. So songwriters live in the shadow of that “minimum” statutory rate for which they never got relief from the Sovereign.

The Current Landscape

The main threats to songwriters from Washington come from one bill and the failed administration of two agencies: The Copyright Office and the Department of Justice. All these threats emanate from what is likely the largest lobbying cartel in history, the “MIC Coalition” an organization created for one purpose in my view: to crush songwriters once and for all. The MIC Coalition seems devoted to fixing prices for songwriters at zero or as close to zero as they can get them as far as I can tell.

The bill in Congress is the proposed Transparency in Music Licensing and Ownership Act (HR 3350) which is fully backed by the biggest of big businesses (MIC Coalition) to the detriment of the smallest of small businesses (songwriters). This legislation would impose yet another formality on songwriters by creating a massive database that would supersede the current copyright registration system for one purpose—denying songwriters the right to sue for statutory damages and attorneys fees in cases of copyright infringement. According to this legislation, if your song is not on the government’s list, then you can’t use the one big stick to drive compliance with the Sovereign’s own rules governing compulsory mechanical licenses.

Why is that? Because you are most likely to be suing a member of the MIC Coalition, or more precisely suing a member of one of the several trade association members of the MIC Coaltion—the DIgital Media Association (or “DiMA” in the logo above). The Digital Media Association is comprised of Amazon, YouTube, Apple and Spotify among others and has long been a stake in the side of the creative community. That’s right—one trade association member of the MIC Coalition represents three of the biggest corporations in the commercial history of the United States.

One alternative to statutory damages would be for the Department of Justice to assume a greater role in the enforcement of the copyright law. But the MIC Coalition has no intention of allowing that. No, no, no. The plan is to create a Gargantuan “gotcha” in order to take away statutory damages and attorneys fees as a right of any copyright owner to sue and replace it with….nothing.

Agency Failures

It is well to remember that the U.S. Copyright Office is a pre-New Deal legislative branch agency that has none of the civil or criminal enforcement powers we have come to associate with post-New Deal regulatory executive branch agencies. While the Copyright Office issues regulations, the Sovereign predominately leaves the enforcement of these rules to creators, publishers and labels to enforce at great expense. This is the one place that the Sovereign seems to want the market to work—the part where the Sovereign abdicates its primary purpose, that of protecting the people. Like I said, the desert tortoise fares better than the songwriter.

The Copyright Office does have power to affect the market by refusing or failing to act, however. For the last two years or so, the Copyright Office has permitted over 50 million and counting “address unknown” notices to be filed on compulsory song licenses using a backwater loophole of the Copyright Act. The loophole deems a song owner to be “unknown” if the owner’s contact information and song ownership is not available in the public records of the Copyright Office. This means that unless you have gone through the expensive and lengthy formality of registering with the Copyright Office for all your songs, you are “unknown”. If a cover recording of your song appears on a digital music service, then rather than track you down before using the song, the service can simply file—at great expense—an “address unknown” notice with the Copyright Office. This has resulted in approximately $5 million in filing fees to the Copyright Office to date according to an estimate from Paperchain.

And who is filing these notices and paying these fees? Google, Spotify, Amazon, iHeart, Pandora—all members of the MIC Coalition price fixing cartel. Think that’s a coincidence? Using this loophole, these corporate giants pay a zero royalty for their compulsory licenses. Hence, the cartel attempts to fix the price for songs at zero or as close to it as they can.

The Copyright Office permits these filings to occur and to my knowledge has raised no objection to it. They are unmovable on this point while they watch songwriters burn down. (I have a longer article on this “address unknown” issue here.)

The Department of Justice is currently engaged in a massive charade called “100% licensing”. This new and abrupt change in the way the DOJ interprets the ASCAP and BMI consent decrees was brought about under the auspices of a former outside lawyer for Google who was installed as a senior official in the antitrust division of the DOJ. What this interpretation means is that on co-written songs, the longstanding practice of each songwriter on a co-write administering their share of the song is thrown out the window. Instead, each songwriter is required to license 100% of the song, including their co-writer’s share. (Recall that Irving Azoff challenged Google by forming Global Music Rights and requiring a separate license for his writers who withdrew from the government-regulated PROs.)

The BMI rate court judge ruled against the DOJ—but the Sovereign is now appealing that ruling. The DOJ’s handling of the situation was so bad that songwriters actually sued the DOJ.

What is to be Done?

First—the DOJ should drop the appeal of the BMI rate court ruling against 100% licensing.  It’s a waste of time and creates substantial hostility among songwriters.

Second—the Copyright Office should stop accepting address unknown filings and refer the matter to the Congress to close the loophole. Digital services could also refuse to post recordings for which they have no publisher information, which is action most likely to produce unknown information from the market.

Most importantly—the Congress should not introduce yet another distortion in the market with some unicorn database that will never work.

As we approach the season of hope, it is well to echo what songwriters and publishers have told Congress for years: Songwriters need more liberty, not less.

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.

@musictechsolve: Defiance or Collaboration? The Role of the Presidential Signing Statement in MLC Board Appointments

November 20, 2019 Comments off

[This post first appeared on MusicTech.Solutions]

Even though they have a long history, Presidential Signing Statements are not exactly front and center in every civics class or constitutional public law class in America.  You may be hearing about them for the first time now.  But that doesn’t mean they have not been an important part of Constitutional law-making and jurisprudence.

Presidential Signing Statements were first used by President James Monroe in 1822 in the form of a “special message” to the Senate. Presidents Andrew Jackson, John Tyler and Ulysses Grant also issued signing statements, but they were used infrequently until the 20th Century.  Then their use picked up quite a bit starting with President Theodore Roosevelt and continuing to the present day.  So the use of Signing Statements is quite bipartisan.  While Signing Statements may not themselves have any actionable legal effect, they should not be ignored, either.  As the MMA’s Signing Statement relates directly to corporate governance and accountability (one of our pet topics on MTP as applied to what SEC Commissioner Robert Jackson called “corporate royalty” at Spotify, Google, WeWork, Facebook and others), this post may be of interest on an issue that has not been covered by the music press.

The MMA Presidential Signing Statement

Not surprisingly, there is a Presidential Signing Statement accompanying the Music Modernization Act (“MMA”) specifically relating to Title I and at that specifically relating to the MLC board appointments.  The relevant language is:

One provision, section 102, authorizes the board of directors of the designated mechanical licensing collective to adopt bylaws for the selection of new directors subsequent to the initial designation of the collective and its directors by the Register of Copyrights and with the approval of the Librarian of Congress (Librarian). Because the directors are inferior officers under the Appointments Clause of the Constitution, the Librarian must approve each subsequent selection of a new director. I expect that the Register of Copyrights will work with the collective, once it has been designated, to ensure that the Librarian retains the ultimate authority, as required by the Constitution, to appoint and remove all directors.

Let’s explore why we should care about this guidance.

According to Digital Music News, there have been changes at the Mechanical Licensing Collective, Inc. (“MLCI”) the private non-profit permitted under Title I of the MMA:

[I]t appears that two separate MLC board members are jumping ship.  The details are just emerging and remain unconfirmed, though it appears that two members — one representing indie songwriters and the other on the publishing side — are out of the organization.

Because the board composition of MLCI is preemptively set by the U.S. Copyright Act along with many other aspects of MLCI’s operating mandate, the question of replacing board members may be arising sooner than anyone expected.  As MLCI is a creature of statute, it should not be controversial that law-makers play an ongoing role in its governance.

The Copyright Office Weighs In

The Copyright Office addressed board appointments for MLCI in its first request for information for the designation of the Mechanical Licensing Collective (83 CFR 65747, 65750 (December 21, 2018) available at https://www.govinfo.gov/content/pkg/FR-2018-12-21/pdf/2018-27743.pdf):

The MLC board is authorized to adopt bylaws for the selection of new directors subsequent to the initial designation of the MLC. The Presidential Signing Statement accompanying enactment of the MMA states that directors of the MLC are inferior officers under the Appointments Clause of the Constitution, and that the Librarian of Congress must approve each subsequent selection of a new director. It also suggests that the Register work with the MLC, once designated, to address issues related to board succession.

When you consider that MLCI is, for all practical purposes, a kind of hybrid quasi-governmental organization (or what the Brits might call a “quango”), the stated position of the President, the Librarian of Congress and the Copyright Office should not be surprising.

Why the Controversy?

As the Songwriters Guild of America notes in comments to the Copyright Office in part relating to the Presidential Signing Statement (my emphasis):

Further, it seems of particular importance that the Executive Branch also regards the careful, post-designation oversight of the Mechanical Collective board and committee members by the Librarian of Congress and the Register as a crucial prerequisite to ensuring that conflicts of interest and bias among such members not poison the ability of the Collective to fulfill its statutory obligations for fairness, transparency and accountability.

The Presidential Signing Statement, in fact, asserts unequivocally that “I expect that the Register of Copyrights will work with the collective, once it has been designated, to ensure that the Librarian retains the ultimate authority, as required by the Constitution, to appoint and remove all directors.”

SGA regards it as a significant red flag that the NMPA-MLC submission to the Copyright Office devotes the equivalent of ten full pages of text principally in attempting to refute this governmental oversight authority, and regards the expression of such a position by NMPA/MLC as arguably indicative of an organization more inclined towards opaque, insider management control than one devoted to fairness, transparency and accountability.

So the Presidential Signing Statement to the MMA is obviously of great import given the amount of ink that has been spilled on the subject.  Let’s spill some more.

How might this oversight be given effect and will it be in the public record or an informal process behind closed doors?  Presumably it should be done in the normal course by a cooperative and voluntary collaboration between the MLC and ultimately the Librarian.  Minutes of such collaboration could easily be placed in the Federal Register or some other public record on the Copyright Office website.  Failing that collaboration, it could be done by either the Department of Justice (unlikely) or by individuals (more likely) asking an Article III court to rule on the issue.

Of course, the issue should not delay the Copyright Royalty Judges from proceeding with their assessment determination to fund the MLC pursuant to the controversial voluntary settlement or otherwise.  One could imagine an oversight role for the CRJs given that Congress charged them with watching the purse strings and the quantitative implies the qualitative.  The CRJs have until until July 2020 to rule on the initial administrative assessment and appeal seems less likely today given the voluntary settlement and the elimination of any potential objectors.

Since the Title I proponents drafted the bill to require a certain number of board seats to be filled by certain categories of persons approved by Congress in a Madisonian balance of power, the Presidential Signing Statement seems well grounded and furthers the Congressional mandate.

Yet there is this conflict over the Presidential Signing Statement.  What are the implications?

A Page of History is Worth A Volume of Logic

The President’s relationship to legislation is binary—sign it or veto it.  Presidential Signing Statements are historically used as an alternative to the exercise of the President’s veto power and there’s the rub.

Signing Statements effectively give the President the last word on legislation as the President signs a bill into law.   Two competing policies are at work in Presidential Signing Statements—the veto power (set forth in the presentment clause, Article I, Sec. 7, clause 2), and the separation of powers. 

Unlike some governors, the President does not enjoy the “line item veto” which permits an executive to blue pencil the bits she doesn’t like in legislation presented for signature.  (But they tried–Line Item Veto Act ruled unconstitutional violation of presentment clause in Clinton v. City of New York, 524 U.S. 417 (1998).) The President can’t rewrite the laws passed by Congress, but must veto the bill altogether.  Attempting to both reject a provision of a new law as unconstitutional, announce the President’s intention not to enforce that provision AND sign the bill without vetoing it is where presidents typically run into trouble.

Broadly speaking, Presidential Signing Statements can either be a President’s controversial objection to a bill or prospective interpretive guidance.  Signing Statements that create controversy are usually a refusal by the President to enforce the law the President just signed because the President doesn’t like it but doesn’t want to veto it.  Or to declare that the President thinks the law is unconstitutional and will not enforce it for that reason—but signed it anyway.

The President can also use the Signing Statement to define or interpret a key term in legislation in a particular way that benefits the President’s policy goals or political allies.  President Truman, for example, interpreted a statutory definition in a way that benefited organized labor which was later enforced by courts in line with the Signing Statement.  President Carter used funds for the benefit of Vietnam resisters in defiance of Congress, but courts later upheld the practice—in cases defended by the Carter Justice Department.  The practice of using Presidential Signing Statements is now routine and has been criticized to no avail for every administration in the 21st Century including Bush II, Obama and now Trump.

Since the 1980s, it has become common for Presidents to issue dozens if not hundreds of Presidential Signing Statements during their Administration.  So it should come as no surprise if the Department of Justice drafted up the statement for the MMA prior to it being presented to the President to be signed into law.  (See the American Presidency Project archives https://www.presidency.ucsb.edu/documents/presidential-documents-archive-guidebook/presidential-signing-statements-hoover-1929-obama)

Defiance or Collaboration?

What does this mean for the MMA?  The President certainly did not call out the statutorily required board membership of the MLC as an unconstitutional overreach that he would not enforce.  To the contrary, the MMA Signing Statement expresses the President’s desire that the legislation comply with the requirements of the Constitution.

Moreover,  the MMA Presidential Signing Statement is not a declaration about what the President will or won’t enforce but rather interprets a particular section of a long and winding piece of legislation.  (Title I principally amended Section 115 of the Copyright Act—now longer than the entire 1909 Copyright Act.)  This kind of interpretation seems to be consistent with the practices of prior Presidents of both parties, not an end-run around either the veto power or separation of powers.

Failing to acknowledge the admonition of the signing statement would seem an unnecessary collision both with long-standing jurisprudence and with a sensible recommendation from the President of how the Librarian, the Copyright Office and the Justice Department expect to approach the issue in collaboration with the MLCI.  That’s possibly why the Copyright Office restated the Signing Statement in the RFP.

Title I of the MMA is a highly technical amendment to a highly technical statute.  A little interpretive guidance is probably a good thing.  Collaboration certainly makes more sense than defiance.

@artistrights: As Predicted, Google Refuses to Comply with EU Copyright Directive #ThisIsWhatMonopolyLooksLike

October 8, 2019 Comments off
richard_gingras_11-20-2011

Journalist enemy #1

The first time I met with the French Minister of Culture, we met at their offices at the historic Palais-Royal complex which is also home to the Comédie-Française, the oldest active theater group in the world (founded in 1630).  The French take their culture very seriously.  One would do well to remember that in your dealings with them.

But of course, Google doesn’t give a rip about France, culture, French culture or the French Minister of Culture.  And as predicted, Google are refusing to comply with the new European Copyright Directive as transposed into French law.  (Once passed by the European Parliament, the Directive must be implemented at the nation state level–Google has no time for the nation state, either.  The law goes into effect in France on October 24.)

Having suffered a spectacular loss in the European Parliament, the American multinational Internet company is now going to bring Silicon Valley justice to France.

Agence France-Presse reports:

Google said Wednesday it will not pay European media outlets for using their articles, pictures and videos in its searches in France, in a move that will undercut a new EU copyright law.

The tech giant said it would only display content in its search engine results and on Google News from media groups who had given their permission for it to be used for free.

The announcement, which will result in free content gaining higher visibility, comes after France became the first EU country to adopt the bloc’s wide-ranging copyright reform in July….Google had warned after the European Parliament vote that the change would “lead to legal uncertainty and will hurt Europe’s creative and digital economies.”

Of course what Google meant was that Google will do everything Google can to hurt Europe’s digital and creative communities because they’re pissed.  Make no mistake, it’s not Google’s compliance with the law that is producing harm in France, it is Google’s refusal to comply that does so.

French President Macron made the country’s position clear:

“A company, even a very large company, cannot get away with it when it decides to operate in France,” the French president insisted, during a visit to mark the centenary of the La Montagne newspaper in the city of Clermont-Ferrand in central France.

“We are going to start implementing the law,” he said.

According to Emmanuel Legrand’s excellent newsletter, Google is refusing to pay French news publishers for free-riding on their expensive news when delivered in Google’s massive monopoly on news aka search results:

French minister of culture Franck Riester was particularly incensed by Google’s decision. “I met with the head of Google News [Richard Gingras] this morning at the Ministry of Culture,” said Riester to journalists on the day Google made its decision public. “I sent him a very strong message about the need to build win-win partnerships with publishers and news agencies and journalists. The answer he gave me a few minutes later was stonewalling. This is unacceptable.”

Apparently this philistine from Silicon Valley not only has no respect for the law or the democratic process, he also has no respect for French culture.  Be clear on this–the French law was passed in the European Parliament over Google’s unprecedented astroturf lobbying campaign AND it was passed at the national parliament IN FRANCE.  The people were heard TWICE.

And if Mr. Gingras wasn’t insulting enough to Europeans and the French people from his cozy option-packed Silicon Valley enclave, he sure doesn’t know how to handle himself with the French minister of culture.  Here’s a hot tip–the Peter Pan thing is not a good look outside the Googleplex paedocracy.

But understand this–as I predicted, Google has no intention of complying with the Copyright Directive and will dump as much money as it takes in legal fees, PR campaigns, fake news and astroturf until it has exhausted all possible claims, trials, appeals, lobbying, the works.  Why?

Because THEY LOST AND THEY ARE PISSED.  What you are about to see play out is what happens when the richest and most powerful media company in commercial history strikes back.  What happens when the Silicon Valley company with control over the world’s newspapers says a people should know when they’re conquered.  No blow is too low.  And I keep saying, there’s only one thing they understand which is not fines.  You can’t get fines big enough to hurt them.

What gets their attention is anything that affects their behavior–and that means injunctions or prison.  They have no appreciation for anything we do to create music, movies, news, photographs, illustrations or any other work of authorship.  For them, it’s there for the taking.

In a prescient 2008 book review (entitled “Google the Destroyer“) of Nicholas Carr’s The Google Enigma, antitrust scholar Jim DeLong gives an elegant explanation of Google’s thuggish behavior:

Carr’s Google Enigma made a familiar business strategy point: companies that provide one component of a system love to commoditize the other components, the complements to their own products, because that leaves more of the value of the total stack available for the commoditizer….Carr noted that Google is unusual because of the large number of products and services that can be complements to the search function, including basic production of content and its distribution, along with anything else that can be used to gather eyeballs for advertising. Google’s incentives to reduce the costs of complements so as to harvest more eyeballs to view advertising are immense….This point is indeed true, and so is an additional point. In most circumstances, the commoditizer’s goal is restrained by knowledge that enough money must be left in the system to support the creation of the complements….

Google is in a different position. Its major complements already exist, and it need not worry in the short term about continuing the flow. For content, we have decades of music and movies that can be digitized and then distributed, with advertising attached. A wealth of other works await digitizing – [news,] books, maps, visual arts, and so on. If these run out, Google and other Internet companies have hit on the concept of user-generated content and social networks, in which the users are sold to each other, with yet more advertising attached.

So, on the whole, Google can continue to do well even if leaves providers of is complements gasping like fish on a beach.

What you’re seeing in France is the onset of gasping.

Victory in Europe: The Two Years War over the Copyright Directive has Begun

May 30, 2019 Comments off

[This post originally appeared in the MusicTechPolicy Monthly Newsletter.]

If you’ve heard about the new copyright law in Europe, you’ve probably heard that the new rules with either break the Internet or bring Big Tech to heel.  I’d suggest neither proposition is true but not for the reasons you might think.  The reason is that Big Tech has absolutely no intention of complying with the law unless they are made to do so and few-if any- governments have the stomach to make them.

Cynical much, you may think?  Not really.  Hardly a day goes by that some new horror story doesn’t break about some awful business practice at Google, Facebook, Amazon or Twitter.  Lawmakers wring their hands, maybe fine the company concerned and everyone goes back to sleep until the next eruption.  Those fines are in the billions, but the bad behavior continues.

There’s a simple explanation for why.  It should be obvious by now that relying on good corporate citizenship is no more likely to produce a good outcome with Big Tech than it has  been with Big Anything Else.  You can dress them up in hoodies, they can tell you to lean in and that they won’t be evil, but “trust me” has not worked out very well so far.

Not only has “trust me” not worked out in terms of outcomes, it also hasn’t resulted in compliance with the law.  And this is the real reason why the bad behavior continues.  It’s not that these horror stories are “glitches”–no, the platforms that produce the inhuman results are working exactly as they are designed to do.  Do you really think that companies like Google, Facebook and Amazon aren’t able to control their platforms, algorithms and applications?

No, these companies make things that work very, very well.  For them.  They wrap them in extraordinary spin and mythology and deceive their users into increasingly addictive behaviors.  At their core, all these platforms are in two business lines–surveillance capitalism and addiction.  They use access to music and movies and journalism as a honeypot to draw in users whose data they can scrape and resell in an unvirtuous circle.

Face it–the Amazon shopping jones is not that different that a Home Shopping Network addiction, and none of the engineered behavior addictions from Silicon Valley are that different that Brown & Williamson Tobacco chemically engineering their product to be physically addictive to smokers with the messaging to match.

Nowhere is the unvirtuous circle more obvious than in Europe during the run up to and final passage of the new European Copyright Directive.  It cannot be overlooked that the European Commission fined Google billions of dollars twice during the period that overlapped with the ultimate passing of the Directive, for a total of $6.8 billion.  Those fines seem large, but were barely discussed compared to the braying from YouTube over the Copyright Directive.

According to leading European newspapers, Google and Facebook in particular fought the Directive with tactics that are reminiscent of Russia’s Internet Research Agency that we have all become too familiar with.  Bots, spam, interference lobbying and outright threats to Members of the European Parliament, the lot.  YouTube used its platform to spread misinformation about the directive through “YouTube creators” and reportedly targeted the children of MEPs who supported the Directive.

In the end, Google and Facebook were able to turn certain parts of the Directive their way but understand this–the Directive is simply that.  A directive at the “federal” level of the European Union.  That directive now has to be put into national laws by each legislature in the 28 countries that are members of the EU before it has any legal effect.  This can take up to two years  Therein lies the rub.

If past is prologue, Google, Facebook and their Big Tech fellow travelers have absolutely no intention of ever complying with the Directive.  They will lobby away as much of the Directive as possible at the member state level–that effort was already under way before the dust had settled much less the just concluded voting for Members of the European Parliament.

They then will sit back and wait to be sued.  The courtroom is where Big Tech most excels in tying the wishes of voters into knots.  By the time there is a final non appealable judgement from the highest court of competent jurisdiction in each member state including forms of appeal that no one has even thought of yet, Google will have probably backed new legislation and collected political IOUs that Google plans to use to reverse all ground gained in the Directive.

And in the meantime, the greatest income transfer of all time will continue as Google and Facebook suck the life out of creators for their fast buck profits and stock market largesse.

The only thing that will get their attention is action that affects their behavior-breaking up these companies in particular.  But understand that any government that takes them on is essentially going to war with a corporate country that is probably better funded and nastier than any government.

Getting justice from Silicon Valley will be an apocalyptic story worthy of Skynet.  But don’t think you can affect their behavior with your so-called laws that they have no intention of obeying.  Kyle Reese is not coming.

Don’t get me wrong–I’d rather have the Directive than not.  Just don’t deceive yourself into thinking the fight is over.

The fight is just beginning.

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.

 

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