Congress Renews Efforts to Filter the Net

Lawmakers from both the Senate and House Judiciary Committees vow to pass the controversial Combating Online Infringement and Counterfeits Act (COICA) to “protect US jobs.”

Congressmen from the Senate and House Judiciary Committees warned reporters on Capitol Hill yesterday about the “continuing harm” that access to copyright infringing content and counterfeit products online pose to US economy, claiming the costs to the economy is more than $100 billion annually.

“Online infringement and the sale of counterfeit goods cost American creators, producers, and businesses billions of dollars and results in hundreds of thousands of lost jobs,” said Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.). “This theft is unacceptable at any time; it is devastating in our current economic climate.  Protecting American intellectual property on the Internet is not uniquely an industry or labor concern; it is not uniquely a Democrat or Republican concern.”

It is an American concern, and addressing it is crucial to our economic success and job growth,” he added.

They believe the solution is the Combating Online Infringement & Counterfeits Act (COICA). The COICA would give the Department of Justice an “expedited process” for cracking down on websites that illegally make copyrighted material available, including the ability to “prevent the importation into the United States of goods and services offered by an Internet site dedicated to infringing activities.”

ISPs would also have to “take reasonable steps that will prevent a domain name from resolving to that domain name’s Internet protocol address.”

“The success of our economy is in part tied to the success of America’s intellectual property industries,” said House Judiciary Committee Chairman Lamar Smith (R-Texas). “IP industries provide an estimated 19 million jobs to American workers and account for more than 60% of U.S. exports. Unfortunately, the online theft of America’s intellectual property results in the loss of billions of dollars and thousands of jobs.”

But, there are several problems with this line of reasoning.

The first is the myth of $100 billion dollars that online infringement costs the US economy each year. Tucked away in that number are padded figures about lost sales claimed by the entertainment industry which clings to the notion of one illegal download equals one lost sale.

Congress’ nonpartisan investigative arm, the Government Accountability Office, was tasked with quantifying the impacts of counterfeit and pirated goods on the US economy, and it said there is no way to discern a true “net effect…with any certainty.”

It added their effects weren’t as simple as lost sales or profits, that counterfeiting and piracy has had a range of effects, some negative, others positive. It cited lost profits and tax revenue as negatives for businesses and govt, but that consumers benefited from increased access and lower costs.

The second is the illusion that preventing US consumers from accessing these sites will create jobs and grow the economy. In the case of many of the “rogue sites” the COICA would target consumers aren’t paying to access copyright infringing content. They’re getting it for free from sites like The Pirate Bay or Megaupload. Preventing US visitors from accessing these sites won’t create new revenue for the US economy, it’ll merely shift it from whatever industry consumers are currently spending the money that may have otherwise been spent on purchasing non-copyright infringing content.

House Judiciary Committee member John Conyers (D-Mich.) also proved his lack of knowledge on the issue.

“The Internet has regrettably become a cash-cow for the criminals and organized crime cartels who profit from digital piracy and counterfeit products,” he said yesterday.

Last month the Social Science Research Council (SSRC), a U.S.-based independent nonprofit organization, released the results of what it called the “first independent, large-scale study of music, film and software piracy in emerging economies.” In it researchers found “no systematic links between media piracy and organized crime or terrorism in any of the countries examined.”

“Today, commercial pirates and transnational smugglers face the same dilemma as the legal industry: how to compete with free,” it noted.

The US Chamber of Commerce, in a bout of extreme hyperbole even for it, trotted out a “report” earlier this year that claimed 53 billion visits to “digital piracy” sites each per year is proof that they are profiting at the “expense” of the American creative industries.

It warns of shoddy products, malicious viruses, identity theft, and a whole range of threats “rogue sites” pose to US consumers.

“The criminals behind these sites are laughing all the way to the bank, stealing the best of American creativity and innovation at the expense of our jobs and consumers,” it says.

Is that really what we see in the case of practically every file-sharing site you can think of? Most are donation-based, and even if they do have ads somebody has to pay the server and hosting fees.

Senator Ron Wyden, the Oregon Democrat, has criticized the curious manner in which content industry has somehow managed to “piggyback” on the concerns of industries that trade in physical or “real merchandise.”

“The Internet is too important to our economy and to advancing American values to be inappropriately regulated and censored under the guise of protecting IP,” he said back in January.

Other critics like the Center for Democracy and Technology the have blasted the legislation for being tantamount to illegal censorship of the web, particularly since the COICA would place unconstitutional prior restraints on speech without adequate due process. In particular, it noted the perverse message the US would send to authoritarian countries looking for political cover to block sites under the guise that they violate local law.

A group of 87 prominent engineers who played critical roles in the development of the Internet even warned the legislation risks “fragmenting the Internet’s global domain name system (DNS).”

Despite all of this it appears that some Congressmen are determined to press forward with the issue. It may just be because of the COICA that we see the fruition of an alternative P2P DNS.

In any event, if an authoritarian regime like China can’t fully censor the Internet why do US lawmakers think an open society like the US can do an even remotely better job?

Stay tuned.

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