New Bills in Congress to Tackle Piracy May Deliver More Problems Than Solutions

11/17/2011 03:45 pm ET | Updated Jan 17, 2012

Today there is a hearing in the U.S. House for legislation that represents a basic change in how the Internet functions. It's called the Stop Online Piracy Act (or SOPA), and while the bill is well-intentioned in its effort to address the threat of piracy of online content, many of us fear these measures go too far and could harm innovation.

In a few short years, the Internet has become a central element in our lives -- in large part due to content -- the articles, the multimedia, the online tools - that we find online that have made the Internet so essential. So it is in everyone's interest to protect the robust flow of digital content for lawful uses. When the creators of this content are not compensated because their work is stolen, this undermines key features of the Internet -- the rich store of digital products and commercially relevant information that creates value for consumers and jobs for innovators.

And while SOPA takes aim at the problem of online piracy, its regulatory approach does so in such a way that could threaten many features that make the Internet work and which allow users to access, create, share, and pay for online content. Specifically, many of us worry that the approach taken in SOPA will spark a lot of litigation that will dampen the environment for innovation, and undermine online security.

SOPA establishes a new "private right of action" that allows copyright and trademark owners to take action against lawful payment processors and advertising companies to compel them to take action against activity claimed to be illegal. In other words, a company that thought -- but had not yet established -- that a site linked to infringing content could take action in court to have the site taken down.

The prospect of such a litigious environment would also hurt the climate for innovation. Many tech start-ups are creating new ways of organizing information and bringing commerce to consumers -- approaches which rely on linking to other places online. Such tools provide valuable to the user. Under SOPA, these start-ups could face legal exposure if some site to which they link gives a pathway -- unintentionally or not - to infringing content. In other words, SOPA makes tech companies worry not just about their products, but those of ever other company with which they may come in contact. Such a heavy burden of information gathering to head off potential litigation with respect to potentially infringing sites leaves little time for innovation.

SOPA also undermines efforts to keep cyberspace secure by requiring technological approaches to block access to sites engaging in unlawful acts that facilitate piracy. Illegal sites registered in the U.S. would be blocked under SOPA, but this would encourage such sites to locate overseas -- where our nation's ongoing efforts to improve web security do not apply. The end result is a proliferation of less secure websites registered abroad -- sites that facilitate piracy out of reach of U.S. law enforcement.

Finally, SOPA strikes at the heart of the Digital Millennium Copyright Act (DMCA), a 1998 law that established a structure for the enforcement of copyright on the Internet, while establishing a "safe harbor" from infringement liability for internet service providers that act in accordance with the Act's requirements, including through a "notice and take down" process for removing content that infringes copyright. This law -- while not perfect -- did serve to create a legal environment where companies like Facebook, YouTube, Yelp and many others could grow and thrive knowing clearer rules of the road on the Internet.

Fighting online piracy is one of our nation's top economic priorities and we remain steadfastly committed to protecting intellectual property. Proponents of these measures argue that online piracy damages the U.S. economy through the theft of billions of dollars each year and harm consumers by defective goods bought on rogue websites. They are right on both counts and something should be done, but not through an approach that is so broad and heavy-handed as to threaten the entire system.

In its current form, SOPA is murky and raises a host of challenges to American innovation and the online economic ecosystem.

The DMCA -- which took years to craft -- has established a solid framework for this area and additional measures to address the problem should not undermine that valuable foundation. My concern is that the new regime proposed by SOPA threatens to inhibit innovation in the broadband ecosystem, impose burdensome regulatory requirements on the tech sector, while not effectively tackling the problem of online piracy. The message is simple: address the problem of online piracy head-on, but be deliberate as these measures are unclear and may deliver more problems in process of solving them.

Rey Ramsey is Chairman of One Economy and President and CEO of TechNet.