On the Gripping Hand

I wrote a submission to the Commerce Select Committee on the Copyright (Infringing File Sharing) Amendment Bill.

The PDF is available for a slightly better formatted reading experience

1. Thank you for the opportunity to make a submission on the Copyright (Infringing File Sharing) Amendment Bill.




2. My name is Mark Harris. I am an IT consultant for my own company, Technology Research and Consultancy Ltd. (TRACS). I have previously been a public servant, working for the New Zealand Post Office, PostBank, Inland Revenue, the Ministry of Research, Science and Technology and the State Services Commission E-government unit. I was the convener of the Government Information Managers Forum (GOVIS) for 3 years and involved for many more at a committee level. I have served 2 separate periods on the InternetNZ Council, and managed the .govt.nz domain for 8 years.




3. I am also an actor, and have been involved with theatre in Wellington for over 30 years, becoming a writer (2 plays) and director, a lighting and sound technician and designer, props maker, set designer and builder, as well as being involved in administration and organization for BATS theatre, Wellington Repertory Theatre, Stagecraft Theatre and Backyard Theatre.




4. I believe in the value of copyright but do not believe in the overvaluing of copyright. I have made submissions to the Government on the Anti-Counterfeiting Trade Agreement and the original section 92A of the Copyright (New Technologies) Amendment Act 2008 which this amendment seeks to replace. I write an infrequent blog On the Gripping Hand, on which I comment on these and other matters (http://tracs.co.nz/gripping-hand/). I wish to appear before the Committee to make my submission in person and answer any questions that may arise from it.




5. Firstly, I’d like to say that, while this amendment is more acceptable than the previous Act, in that Guilt on Accusation has been removed, requiring a standard of proof and formal quasi-judicial process, this acceptability is only relative. The amendment still has problems but, more importantly, is still the wrong thing for this country to enact.




6. I’d like to briefly touch on some of the key problems I see in the amendment itself, though I do not intend to spend much time on them.




7. The definitions are still loose, by my reading of the bill, especially that for “filesharing”:
   

   “file sharing is where material— “(a) is downloaded from the Internet; or “(b) is made available on the Internet by a user in a form in which the material may be downloaded by 1 or more other users; or “(c) is transferred, directly or indirectly, via the Internet from one user to another user”

8. That describes email, where information and “material” is transferred from one user to another, and hosting any sort of website, where “material” is downloaded from the Internet and/or made available for download. This is the point of the Internet – to make “material” available to other people.




9. I’m sure the officials will tell us that it is not the intent of the legislation to prevent people from carrying out perfectly legal activities, but that will not prevent a lawyer making use of any ambiguity in order to press his client’s case in court. If the grey area exists, someone will attempt to use it.




10. If the purpose is to prevent illicit sharing of content, let the legislation say so. At present, it does not, in my opinion. Legitimate companies use filesharing technology to distribute patches and updates to their software, open source projects use these techniques and others, web-hosting companies, non-profit organizations, charities and ordinary businesses all use email and the web, and all these will fall under the definition of “filesharing”. I submit that the Committee needs to think very hard about what the Act is supposed to achieve and whether this looseness will do that.




11. There has been a tradition in legislation of being as technology-neutral as possible, i.e. outlawing activities based on intent, rather than the tools used. I submit that this Bill is not technology-neutral and therefore runs the risk of stifling genuine opportunities for innovation by being unclear as to what activities are actually acceptable. Even if an actual complaint would not be upheld in judgement, the threat of a complaint being taken against a small company may be more than they are able to sustain. Unintended consequences of poor legislation can be devastating to small and medium enterprises.




12. I am not going to comment on the Tribunal process I am not a lawyer and there are others who are more capable of analyzing that than I am. I think there are some potential issues, but my objections are not with the details of the process. I have no doubt that the designers of the process have worked hard to get one that is as robust and fair as they can make it




13. My issue is with the entire process of enforcing copyright infringement:
    What is the problem that this Bill is trying to resolve?
    Will this Bill, once enacted, fix that problem?




14. According to the Bill:
    

    While the damage sustained by a copyright owner from a single file sharing infringement is generally small, the prevalence of infringing file sharing in the current digital environment is having a negative cumulative effect on New Zealand’s music, film, and software industries




15. According to the Regulatory Impact Statement:
    

    We are unable to accurately estimate the costs to the industry from illegal P2P file- sharing since attempts to scale the problem have been fragmented or based on limited data sets. It is also complicated by the changing business environment. The industry is in the midst of a technological revolution with an explosion of channels, formats, and business models. As revenues drain away from the industry, businesses are struggling to adapt. Consumers have also reacted to these changes in ways that the industry has not anticipated, increasing uncertainty in the industry.




16. In fact, the Ministry and the “copyright industry” representatives such as RIANZ, APRA and NZFACT are unable to present ANY evidence of ANY costs to any of their industries. Globally, the recording and associated musing industries, and the motion picture industry, have all had record years in terms of revenues and profits. I note that there is a blank “omitted” portion on page 3 of the RIS – why any information should be omitted from a regulatory impact statement is beyond me but, if it contained verifiable evidence of the size of the problem, I would expect it to be presented.




17. Where are the musicians and songwriters who have been forced out of business by filesharing? Where are the former film-makers who no longer practice their craft because someone copied their movie online? Why are they not testifying loudly and with their bank statements in hand, to prove that this is a significant issue for the Realm of New Zealand, so significant that we must create repressive legislation? I submit to the Committee that they don’t exist. There are some creators (to use a broad-brush term) who have spoken out in various fora, but not with any evidence, only fears that something might be happening and that it may change how they operate. On the other side, there are many case studies from musicians and software companies testifying to the fact that they have made money from sharing files on the Internet – the bands Radiohead and Nine Inch Nails, and writer Cory Doctorow are often cited as examples, but there are many others, overseas and in New Zealand.




18. The only area that statistics show has been materially affected is the sales of plastic discs that we call CDs and DVDs. And the above statement points out why that is occurring: people are changing the ways that they choose to receive their entertainment. Rather than change with the market, these industries have chosen to attempt entrenching their business models in legislation, such as this Bill and its underlying Act.




19. The General Accounting Office of the US Government recently reported that the numbers used by the industries to justify their demands for stronger enforcement could not be verified. One of the problems signaled by the GAO is that government officials admit that they simply reply on statistics and reports from the entertainment industries without conducting research on their own. These reports naturally lack transparency about the source of the figures and are often written to sell a political agenda through lobbying efforts. The RIS continues this trend.




20. The fact that the industries most concerned with the ‘issue’ of filesharing cannot quantify any losses in a verifiable manner should be of extreme concern to policy makers and legislators. When I ask the question “What problem is the Bill trying to solve?”, I hear no answer from the Ministry of Economic Development except repetition of that which the recording and associated industries have told them.




21. I submit to the Committee that this is not a good enough basis for legislation. Without a clear understanding of a) what the actual problem is (if there is one) b) how big a problem it is and c) how much it will cost to implement a ‘solution’ for a problem that may not exist, then there is no way the Ministry can confidently predict that their ‘solution’ will actually resolve any matter.




22. The “3 strikes” concept (dressed up as “graduated response” and a few other euphemisms) is being pushed around the world as the solution to the undefined problem of filesharing. The recording and movie industries have issued report after report with dubious analysis and numbers that indicate that the creative world is dying because of copyright infringement and that only internet termination can save it (previously, the same logic was used to justify suing filesharers, or at least threatening to sue them). While Korea and France (and non-legislatively, Ireland) have implemented legislation around this, Germany has explicitly rejected it, as has the European Parliament. Significantly, suggestions that the US adopt such a measure can’t even get to first base on grounds of free speech.




23. I submit to the Committee that termination of an internet connection will do nothing to inhibit illicit filesharing and may well cause harm through other unintended consequences. Computer users shared files long before the Internet came around, as did music fans. We used floppy disks and cassettes then – now we have flash drives and MP3 players, which are often more efficient vectors than the Internet, given the substandard network infrastructure in New Zealand that is laughingly called “broadband”.




24. Additionally, the Bill summary states:
    

    This Bill provides a regime that aims to—

    • deter file sharing that infringes copyright:
    • educate the public about the problem:
    • compensate copyright owners for damage sustained from copyright infringement by file sharing:
    • provide sanctions for serious copyright infringers:
    • limit ISP liability that may result from account holders’ infringing file sharing




25. I submit to the Committee that the Bill will not do anything about the first point, as mentioned above, and will be unlikely to do anything about the second, given the amount of information that is already out there and yet the activities continue. The framers of the Bill do not seek to educate, they seek to frighten citizens into compliance. That’s a very sad place for a government to be, regardless of the political stripe.




26. I submit to the Committee that the Bill will not be able to compensate copyright ‘owners’ as there is no way of measuring what impact filesharing has had on their business. What the Bill seeks to do is establish a revenue stream that hasn’t existed before. If you can’t show figures that indicate actual damages, how can you estimate actual compensation?




27. I submit that the sanctions provide by the Bill are meaningless, in a true sense, because “serious copyright infringers” will have many other means of continuing their activities. Technologically, it is trivial to do so. Other commentators have discussed how simple it will be to get a new Internet account with a different provider. If a “serious copyright infringer” is taken to be one who is making money from infringement, this will be regarded as a business risk and they will make continuity plans accordingly.




28. I hope that this Bill, if passed as is without some last minute amendment, will actually protect ISPs as intended, but I sincerely doubt it. I anticipate it being a platform for litigation well into the next decade. The iiNet case in Australia recently is an indication of what we can expect.




29. Let me be clear: I fully understand that filesharing exists and that some material shared is covered by copyright and is therefore being shared illegally under laws written before the technology and culture around it existed. What I question is whether this has actually caused material damage to the holders of those copyrights. Independent studies have shown that filesharers actually spend more on music than non-filesharers, both from digital and physical sources.




30. As Doctorow has said, the problem for creators is not piracy but obscurity – filesharing has enabled many musicians and bands and writers and artists to put their material in front of new audiences who can sample it and decide whether or not to support the artist directly through donations, payments for higher quality content, non-digital scarcities up to and including the opportunity to perform on the artist’s next album. We’re seeing an expansion of business models and increased disintermediation of gatekeepers such as record labels and movie studios (in the case of EMI both at once)




31. The problem here is not filesharing or even copyright infringement under old rules. The problem is a disruptive sea change in technology that is causing old business models to become irrelevant. It’s not even about people wanting material for free – evidence shows that people will pay even when they don’t have to IF they want to, IF they feel that the object of payment is worthwhile.




32. The issue facing the content industries especially is an unwillingness to change their business models, even in the face of their irrelevancy. Content business models are about selling scarce things, such as albums and movies. When things can be copied at little or no cost, they are no longer scarce. These industries now want legislators like you to impose artificial scarcities through legislation such as this Bill.




33. In summary, I submit to the Committee that this Bill is:
    • a solution that won’t work for
    • a problem that doesn’t exist at
    • a cost that can’t be calculated
    • to suit business models that are obsolete.