The Threat to Estonia's Open Internet (72)

Photo: Jacques-Alain Finkeltroc
1/24/2012 9:45 AM
Category: Opinion

Under the guise of intellectual property rights enforcement, Europeans could become victims of the US political system's dependence on corporate money.

The Wikipedia-led blackout on January 18 in protest against SOPA and PIPA appears to have been a big success. The blackout raised awareness among the general public about the nefarious effects of the legislation and forced many in Congress to reconsider.

It would be a mistake, however, to think that the internet is only under threat in the United States. The same forces that are at work trying to push the anti-piracy web censorship bills through the US Congress are at work around the world. In Estonia they are working through the American Chamber of Commerce in Estonia (AmCham) and the US Embassy, which are actively lobbying the Estonian government for stronger anti-piracy laws.


Lobbying With False Claims

In an open letter sent to two Estonian ministers last year, AmCham makes a number of unfounded claims. They claim, for instance, that there is poor intellectual property rights (IPR) enforcement in Estonia. However, Estonia’s IPR laws and enforcement, at least in the commercial space, are quite adequate. Operations, including websites, that exist for commercial exploitation of unlicensed rights, are already illegal and get shut down. The operators can be imprisoned for up to three years.

Another AmCham claim is that stronger IPR enforcement will lead to more tax revenue and more jobs in Estonia. This is simply not true, because a euro can only be spent once. If for some reason draconian anti-piracy laws were to lead to higher sales of music and movies, this will happen at the expense of other industries where those euros will then not be spent. Jobs might be created in one sector but those will come at the expense of jobs destroyed in another.

The sector most likely to benefit from such a shift in spending would be the entertainment industry in Hollywood. A few high-paying jobs would be created in California and many low-paying jobs would be destroyed in Estonia. More money will leave Estonia, as a result of which less taxes will be paid.

Since commercial infringement is already dealt with in Estonia, it stands to reason that what AmCham really wants is to deal with non-commercial infringement with which no financial benefit is extracted by the infringer. Such infringement has existed since well before the internet, and the entertainment industry has done well in spite of it, or more likely because of it. The industry, however, claims each infringement is a lost sale. By this reasoning, lending a book to a friend, or borrowing a book from the library, is also a lost sale for book publishers. By strictly following AmCham's logic, we should be closing all libraries and ban the lending and resale of books.

Except, of course, that the lost sale doctrine does not add up. Based on the claims of losses made by American music and film associations in some court cases, the entire worldwide loss to piracy would amount to a figure far exceeding the size of the entire world economy. Obviously it is totally impossible that real losses to piracy are anywhere near such a figure; people just don't have that kind of money to spend on entertainment. The claim that a copied work is a lost sale is largely bogus; after all, the vast majority of copied works would never have been bought. There are, however, indications that copying has helped artists get exposure, the worst thing for any artist after all is obscurity.

 

Effective Protection of Intellectual Property Will Destroy Free WiFi

The AmCham letter calls for stronger laws: “Infringers have, in a significant part, moved their operations to the internet requiring state implementation and enforcement of laws that will provide effective protection of IPR in the electronic environment.”

The important words in the quote above are “effective protection.” This is the crux of the problem. They will start by wanting to prevent or punish non-commercial copying: for instance, by monitoring people's internet activities and fining those who are caught downloading, or worse, cutting their internet connections. Not doing so would certainly not be effective in stopping infringement. Thanks to content industry lobbying such laws have in recent years been passed in France and New Zealand. In France one of the first victims was a schoolteacher who didn't even know what a torrent was and most likely had had his WiFi network used by someone else without his permission.

Such an outcome was to be expected. After all once a law like that is in place, pirates, who are known to be more tech-savvy than the general population, will resort to two alternatives. The first is gaining entry into someone else's WiFi network. A WiFi access point is relatively hard for the average person to secure properly, some protocols can be cracked with freely available software, and some WiFi hotspots have predictable default passwords. Most people don't change the default password and when they do they tend to use weak passwords. It is totally unreasonable to expect the average person to properly secure their WiFi.

Yet in countries like Germany, not properly securing your WiFi is a punishable offense. That is akin to saying that everyone must put a fence around their property that prevents others from entering. Not only is this unfeasible, it is a basic violation of fundamental property rights, as allowing others to use your property is such a right. The same fundamental property right should entitle anyone to leave their WiFi network open for others to use.

The second option for pirates will be to use open internet access points – which in Estonia happen to be ubiquitous. Of course if suing for non-commercial infringement is allowed, sooner or later, the pubs, restaurants and hotels offering free WiFi will be receiving legal threats and fines because someone downloaded something via their connection. It will be simpler for businesses to close their free internet access points, rather than face the legal harassment and risk of huge crippling fines that could result from one of their clients downloading something illegally.

When that happens, the Open Internet, an item of national pride in Estonia, will effectively be dead.

Those internet access points that remain, will instead be charging for use, in part to cover the risk of getting fined and in part to identify the person they give access to. Instead of internet access everywhere for everybody as we have now, we will have internet access for the rich.

As free internet is known to attract customers, closing down free access points will also significantly damage the turnover of those businesses.

The fact that you can currently always easily and cheaply get on the internet wherever you are is a huge benefit to the economy in general. It speeds up the pace of business, and allows for faster gathering of information. The economic slowdown that would result from closing all those internet access points will cost jobs and reduce tax income.

 

The Hunger for Litigation and Extortion

AmCham writes: “This puts an undue financial and judicial burden on businesses [...]. Civil laws should guarantee [the] mechanism of damage compensation, without having to go through lengthy, complicated or costly procedures for achieving redress through the courts.”

This problem affects everyone seeking redress in court, proceedings come at a cost, and both sides must be heard before any sanction is imposed in order for justice to be fair. For some reason, AmCham thinks that media corporations should be able to accuse anyone without bearing the cost of litigation, or the cost of discovery for that matter. Instead they want the Estonian taxpayer to foot the bill.

Those accused by the corporations AmCham represents would of course have no recourse to public funds to defend themselves. Since procedures can indeed be costly and lengthy, most people will likely choose to settle even if they are innocent, because settlement will usually be less expensive than going to court. Such "pay up or else" schemes – some refer to them as extortion schemes – are currently affecting thousands of people in other countries.

In the USA the fine for sharing one song can go up to 225,000 dollars. Every sane person knows that this is ridiculous and has no relation to any damage that may have been done by non-commercial infringement. Unfortunately these laws are used against normal people to set an example and to scare others to pay the settlement fees the “pay up or else” schemes demand.

For instance, Jammie Thomas, a single mother of four, was fined 1.92 million dollars by a court for sharing 24 songs. Her legal troubles started in 2005 and still continue to this day with appeals and retrials. In 2007 Joel Tenenbaum was fined 675,000 dollars by another court for sharing 31 songs back in 2003. His case is still dragging through the courts too.

Such lengthy court cases and fines are wholly disproportionate to the violations they seek to redress. Furthermore the courts, which are a limited taxpayer funded resource, should not be wasting their time in this fashion. If we listen to AmCham's IPR lobby, Estonian families will soon be facing similar legal threats and as a result become easy victims of the extortion practices currently afflicting many people in several other countries.

 

Lobbying as a Business Model

Over the years the content industry has lobbied for tougher laws and extensions of copyright terms. Both in the USA and the EU, copyrights have been extended by decades as a result. Not too long ago copyright lasted for 50 years after the author's death, it has since been lengthened to 70 years. One argument used for this extension was to compensate for losses to piracy.

Copyright extensions amount to a huge transfer of public property to the private sector, in exchange for absolutely nothing at all. Works that should have been in the public domain are now in private hands instead. Can anyone imagine the uproar if a large segment of public lands were suddenly given to a few big corporations without any compensation to the public? Yet when it comes to works in the public domain, no one seems to care.

The legacy content industry wants it both ways. They are using piracy as argument to lengthen and expand copyrights on the one hand, and they are using piracy as an argument for more strict enforcement on the other. We could argue, however, that through previous extensions of copyright terms, the legacy content industry has already been handsomely compensated for the supposed losses to piracy, thus voiding the need for further action on their behalf.

 

Involvement of the US Embassy and Obama Administration

Thanks to Wikileaks, we know that the US has been putting pressure on Sweden to toughen its copyright laws, leading to the adoption and implementation of a law known as IPRED – which makes non-commercial file sharing illegal and forces internet service providers to reveal the personal details of suspected  infringers  to copyright holders.

The leaked State Department cables further revealed that the US was also pressuring Spain over the same issue. More recently a letter leaked to a Spanish newspaper brought to light that the US Ambassador to Spain threatened the country into adopting the so-called Sinde Law. This included the threat of putting Spain on the Special 301 list, something that could result in American sanctions against it. The Spanish Sinde Law is more like SOPA, in that it allows for entire websites to be taken offline within 10 days of a complaint, even if only some content is considered to be infringing.

It is no surprise that the US government is lobbying on behalf on the legacy content industry. Hollywood has been, and still is, a big sponsor of Obama's election campaigns. It is unfortunate that European countries are now becoming victims of the US political system's dependence on corporate money that effectively requires US politicians to push the interests of the corporations that finance their campaigns.

Revelations in Sweden and Spain make it rather likely that the US is putting pressure on the Estonian government too. It is also telling that a US Embassy employee is a member of AmCham's IPR committee, suggesting that there is some coordination going on.

 

Not Representative of All US Companies

The US Chamber of Commerce is a strong supporter of SOPA, a law that would put any service hosting user generated content at risk. Had such a law been on books before, companies like YouTube and Facebook might never have seen the light of day, because they allow people to exchange copyrighted material. Regardless of all the other legitimate uses of these services, their mere inability to magically prevent all infringement would be enough to get them shut down under these proposed laws.

Not surprisingly, SOPA has encountered much resistance from companies and organizations in the technology sector. Companies like Google, Facebook and Twitter, and organizations like Wikipedia and Mozilla all openly oppose these bills, as do several prominent politicians, including former vice president Al Gore and presidential candidate Ron Paul.

Some big internet companies, such as Yahoo, have even canceled their membership of the US Chamber of Commerce ostensibly due to their support of SOPA and incessant lobbying on behalf of the legacy content industry.

 

Keeping the Internet Open

With the SOPA debacle in the USA, the legacy content industry has shown that it seeks to protect its own narrow self-interests, regardless of the costs that this may impose on others. We can safely assume that likewise they would have no qualms to sacrifice free WiFi in Estonia if that would serve their interests. That would of course be a huge price to pay for the protection of the narrow business interests of a few big American corporations.

Of course AmCham would claim, as the US Chamber of Commerce has done with the effect of SOPA on free speech, that these are not their intentions. That might be true. The intention of their lobbying efforts is obviously to put more money in the pockets of the big media corporations whose interests they represent. However, the inescapable side effects are what I have outlined above. Whether those effects are intended or not hardly matters; what matters is that they will occur.

The problem is not a lack of IPR laws, the problem is the ever advancing encroachment on the lives of ordinary people by big corporations, especially those in the entertainment sector who seem to have a large sense of entitlement. Their efforts seek to gain more and more privileges to protect their own narrow self-interest at the expense of everyone else. This should be stopped, at least if we want to continue enjoying the economic, social and cultural benefits of an open internet.

 

Otto de Voogd is a digital freedom warrior, a member of the non-profit Estonian Internet Community and a volunteer Mozilla contributor.


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