SOPA: Washington Vs. The Web
While a judge has to review the Attorney General's request to take down a site, nobody from the site being targeted must be given a chance to defend themselves before the judge grants the AG's request. The AG doesn't ask a judge for a search warrant under SOPA, it requests to take down an entire website without a trial -- or even a hearing.
Under current law, any U.S. website posting infringing content has to take the song or movie down at the request of whatever company owns the copyright. But under SOPA, companies could go directly to web hosting companies and require them to take down the entire website -- not just individual songs and videos.
As a result, SOPA creates a new opening for corporate command of the Internet. Under SOPA, web hosting companies that take down legitimate websites at the behest of copyright holders would be granted blanket immunity from any liability for losses caused to those legitimate sites.
"Nobody's responsible," says University of Virginia Law School Professor Christopher Sprigman. "A website is taken down, there are robust First Amendment standards that should prevent it from being taken down, and it gets taken down anyway. Well whose responsible? No one."
That model could also pave the way for a new business model among hosting companies. Instead of waiting for Hollywood to ask that a site be shutdown, hosting companies could agree to monitor web traffic for them for a fee and preemptively take down infringing sites without having to be asked, Internet activists warn.
"It would be a very tragic thing if in the name of protecting artists, we saw the most important platform of our time become the province of just a few companies deciding what is and isn't legitimate expression," says Casey Rae-Hunter, deputy director of the Future of Music Coalition, an advocacy group for independent musicians that staunchly opposes Protect IP and SOPA, emphasizing that what is good for corporate record labels often doesn't translate into positive outcomes actual musicians.
Big companies targeted by Hollywood may be able to win copyright disputes in court. But for small startups, the implications are more dire. At worst, the bill would force productive startups to shut down in their nascent stages. At best, companies would have to hire additional legal staff to protect against the threat of a SOPA lawsuit.
Hollywood and the recording industry will "sue startups," says Patrick Ruffini, a Republican strategist and founder of Engage LLC, which is running PR against SOPA, "and if you get a $6 million or $7 million lawsuit slapped at you, it's very hard as a startup."
Twitter, for instance, could be required to remove any link on its platform to infringing content or face DNS annihilation, Internet activists have warned.
SOPA's supporters insist they aren't after Twitter or other prominent tech firms. But they also oppose narrowing the legislation to remove connotations for sites like Twitter.
"It's already hard enough to build a legitimate new business as it is, and this would make it much worse," says Dennis Yang, vice president of Infochimps, a company that provides specialty data-set search services. "What's really scary is we won't know which productive new businesses won't get off the ground, because MPAA used this bill to kill them before anybody heard about them."
While DNS blocking may well lead to the delisting of legitimate sites, web experts say it would be extremely unlikely to actually hamper piracy efforts that involve even moderate levels of sophistication. When the domain "illegalfreemovies.com" is taken down, site operators can take all of their information to "newillegalfreemovies.com." And tech developers are developing workarounds for domain seizures. A third-party developer has already introduced a program for Mozilla Firefox, the popular open-sourced web browser that allows its users to program their own add-on features, that forwards users from a domain that has been taken down to its newly-registered name.
The House bill also includes a host of provisions to expand the scope of what constitutes criminal copyright infringement at home, and would even make make it a felony to stream copyrighted videos online. The tactics are so extreme that American libraries are urging Congress to reject the bill on the grounds that librarians could be jailed for making good-faith judgments that their activities were within the law.
Libraries have always provided copyrighted material to the public for free. But in recent years, major lawsuits have been filed against libraries for streaming educational videos in university classes, allowing college students to access chapters of books electronically, and compiling a database of "orphan" books that are no longer in commercial circulation.
All of these activities have generally been protected by "fair use" -- a legal doctrine that allows for free distribution of copyrighted information under a variety of circumstances, especially for educational use. But "fair use" standards have changed over time, from lawsuit to lawsuit. And with movie studios and publishing houses challenging the meaning of fair use under digital methods of distribution, a librarian who copies a DVD to the library's database and streams it in the library could find herself charged with a felony under SOPA.
"It's just freaky for libraries to find themselves in this kind of situation, because we're nonprofit, small-potatoes actors," Brandon Butler, Director of Public Policy Initiatives for the Association of Research Libraries, tells HuffPost.
In October, the Chamber continued to support Protect IP as indications mounted that the House version would not moderate the Senate bill, but instead launch a still more-aggressive assault on the Internet's infrastructure. By mid-month, Yahoo! had had enough -- it left the Chamber outright. No corporation had publicly left the Chamber since 2009, when Apple departed after the lobby shop officially opposed climate change legislation, siding with oil companies while peddling science-denialist talking points.
Google could leave the Chamber any day now, but unlike Yahoo!, Google is deeply involved in the Chamber's effort to allow American companies to bring money stashed offshore back to the U.S. at a greatly reduced or nonexistent tax rate. A tax holiday could save Google significant change: The company saves about $1 billion a year by pushing its profits to Ireland and the Netherlands, Bloomberg reported, but it only avoids paying U.S. taxes on that money so long as it never brings the money back to the states.
Leaving the Chamber would mean bearing the full brunt of the PR blow for its lobbying, as Google would no longer be able to shield its activity behind Chamber coalitions.
Since Leahy proposed similar legislation in late 2010, Google has been the most high-profile corporate opponent of the anti-piracy legislation. The company's business model depends on an open Internet, and some of its top properties, particularly YouTube, have long been targets for Hollywood and TV moguls.
Having a corporate ally is a clear boost for libraries, free speech advocates and open-Internet nonprofits, who don't have the lobbying might Google has.
But of all the corporate sponsors to have in Washington right now, Google is probably the least helpful. The Internal Revenue Service is investigating the company's tax maneuvering; the Department of Justice is reviewing its acquisition of Motorola Mobility; the Federal Trade Commission and a Senate panel are investigating whether its search tactics constitute an illegal monopoly.
But nothing has been more damaging on SOPA than Google's run-in with online pharmacies.
In August, Google paid $500 million to settle charges from the U.S. Department of Justice that it accepted ads from pharmacies that shipped drugs to American consumers in violation of American law. Many of these were violations that the government frequently tolerates, but by blatantly and repeatedly allowing ads from pharmacies that sell prescription drugs without a prescription, DOJ decided to take action.
"Google's been great on this, but their reputation has been systematically trashed in Washington by their opponents," says Aaron Swartz, co-founder of Reddit, whose group Demand Progress was an early Protect IP opponent, and which now boasts of organizing over 600,000 people to oppose it.
Roughly a week after the House bill dropped at the end of October, nine tech giants -- including Google, Facebook, Twitter, eBay, and HuffPost's parent company, AOL Inc. -- sent a letter to lawmakers urging them to reject the bill.
But on Capitol Hill, Google's name was the one that mattered. Things got especially ugly during the House hearing featuring Google's Oyama, a week after the letter was sent. Of the nine tech companies, only Google was invited to appear before the Judiciary Committee -- against five SOPA supporters. Lawmakers didn't hide their hostility.
"Google just settled a federal criminal investigation into the company's active promotion of rogue websites that pushed illegal prescription and counterfeit drugs on American consumers," Smith said at the hearing. "Given Google's record, their objection to authorizing a court to order a search engine to not steer consumers to foreign rogue sites is more easily understood."
On the Senate side, Google doesn't even have the backing of one of its own Senator, Democrat Dianne Feinstein. When HuffPost asked Feinstein, a Protect IP co-sponsor, if it was difficult for her to navigate the bill with Silicon Valley and Hollywood on opposite sides, she responded: "I don't believe that they are. I thought we had reconciled the issues. The bill's been passed out of committee." The response seems incredible given the outcry from Silicon Valley, and Google in particular, but the complexity of the legislation has left many lawmakers vulnerable to K Street spin.
Tech companies had also lost Wall Street as a key ally; by this fall, the baggage of earlier lobbying campaigns weighed heavily on the banks. During the first six months of 2011, banks worked Congress hard on debit card swipe fees, pressuring just about every member of the Senate to buck loyal campaign contributors in the American retail industry. The banks ultimately lost in Congress, but not before winning over several reluctant lawmakers. Persuasion came with a high price: Banks take a reputation hit every time they're in the news lobbying.
So for the time being, Wall Street is shying away from obvious feuds with other companies.
"Nobody likes this private right of action," says Peter Freeman, a lobbyist with the Financial Services Roundtable. "But we're focused on other things right now."
Never underestimate the ability of venture capitalists, who invest in new, job-creating companies, to charm Congress.
This fall, when it became clear that the House bill would cause havoc for tech companies, a handful of tech-friendly VCs, including Twitter-investor Union Square, sent a letter to Congress and flew to Washington to meet with lawmakers.
Rep. Darrell Issa (R-Calif.), chair of the powerful House Oversight and Government Reform Committee and an aggressive partisan whose top career campaign contributors include SOPA supporters AT&T and Microsoft, was particularly attentive to the substance of the issues involved, according to VC representatives who met with his office.
In December, Issa, a business owner himself, joined a small bipartisan group of lawmakers in proposing an alternative to the Leahy/Smith legislation. Issa jumped in with Sen. Wyden, who chairs the Senate subcommittee on international trade, and Sen. Mark Warner (D-Va.), a former venture capitalist who helped seed telecom company Nextel and a host of Internet companies.
"I got a company, Rosetta Stone, who gets pirated on a regular basis -- you've gotta have accountability around that," says Warner, referring to the language-learning software company with offices in Arlington and Harrisonburg, Va. "But ... I think the approach Senator Wyden has been working will strike a better balance."
The alternative legislation would drop all of SOPA's efforts against domestic websites, and would not allow the DOJ to engage in DNS blocking.
It would also kick arbitration of any foreign infringement claims to the U.S. International Trade Commission, which already handles issues of foreign piracy as a policy issue. After a formal public hearing, ITC would be empowered to regulate rogue infringing websites as unfair imports -- permitting ITC to cutoff any U.S. payment processors or advertisers from doing business with such sites, denying them access to American money and financial infrastructure.
It's not clear how much support the Wyden-Issa bill can secure: The Chamber declined to comment on it. But those backing the alternative don't have to actually pass their version to stall SOPA.
"There really is a worthwhile strategy in delay," says Tim Karr, campaign director for Free Press, a media reform nonprofit.
And the potential of SOPA passing in January has already sparked a new round of corporate interest in the legislation, forcing companies on both sides of the issue to throw money at any lawmaker who signals ambivalence on the issue.
Sen. Joe Lieberman (I-Conn.), a Protect IP co-sponsor, has suggested he's willing to jump ship. "I've been trying to gauge the concerns," Lieberman tells HuffPost.
The White House is intensely divided over SOPA and Protect IP, according to administration sources, and hasn't issued any statement on them -- suggesting the President won't be pushing piracy legislation as hard as he did for free-trade and the patent-reform legislation. And opponents of Protect IP and SOPA have the dysfunctionality of Congress at their backs. Next year is an election year, and congressional leadership will not want to force an issue that divides campaign donors anywhere near November.
It's a strategy that has worked before. In 2006, Congress pressed for legislation to give telecom giants the capacity to dictate traffic volumes to individual websites. Billions of dollars a year in corporate profits were at stake, and the bill had bipartisan support. But the legislation died, quietly, over several years.
"By pushing it off and pushing it off, we eventually killed it," says Adam Green, co-founder of the Progressive Change Campaign Committee, a long-time net neutrality defender.
This year's legislative tussles over corporate profits have been only tangentially related to the ordinary lives of American citizens -- they've essentially been about hidden fees. The price of the patent fight and debit swipe fees are reflected in more expensive consumer goods, but citizens don't see how much of that price tag results from a corporate dispute over intellectual property or merchant card charges.
But everyone uses the Internet. While many of SOPA's consequences would be hidden from public view in out-of-court negotiations, some effects will be felt directly. The intensely personal nature of Internet use has elevated this particular intra-corporate squabble to something the broader public is beginning to pay attention to.
"Congress is on the verge of wrecking the greatest engine of innovation and greatest platform for democracy ever known to human kind," says David Segal, Executive Director of Demand Progress. "And for what? For the sake of propping up an ossified industry that refuses to change with the times, but happens to make a lot of campaign contributions."
This article has been updated to reflect the involvement of entertainment unions in Creative America.
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First Posted: 12/14/11 06:01 PM ET Updated: 12/16/11 08:52 AM ET