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Film, Music Industries Battle Leading Internet Companies Over Online Piracy

U.S. film, TV and music producers are taking aim at leading Internet companies for allowing Web users to easily search and access pirated media. Jeffrey Brown explores options for policing pirated media with the Open Internet Coalition's Markham Erickson and the Motion Picture Association of America's Michael O'Leary.

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    And we turn to a fight over how to police pirated media on the Internet.


    Mr. Holmes, I have a feeling you're in danger.


    Oh, how I have missed you, Holmes.


    The sequel to the blockbuster "Sherlock Holmes" officially opens in theaters across the country tomorrow. But it may also be found in pirated versions online by typing in the right words on any number of Internet search engines.

    They, in turn, allow one to navigate to sites where illicit copies are available for viewing. Many of those pirate websites operate overseas. But now American film, TV and music producers are fighting back, taking aim at other American companies that they think are allowing this to happen, including Internet leaders such as Google and PayPal.

    Those tech giants, in turn, are taking out full-page ads in major newspapers, joined by free speech advocates and venture investors, to argue that the proposed legislation would endanger Internet commerce and online speech. The bill, known as the Stop Online Piracy Act, is now wending its way through Congress. The House Judiciary Committee took it up today.

    And we have our own debate now with Markham Erickson. He is the executive director of the Open Internet Coalition, representing more than 50 of the largest Internet companies in the country, including Google, PayPal, Netflix and Twitter. Michael O'Leary is a senior vice president for the Motion Picture Association of America.

    Michael O'Leary, start with you just to get the arguments on the table briefly here. How exactly do film producers get hurt? Give us an example. And why do you think turning up the heat on the portals to these sites is the right way to stop the piracy?

    MICHAEL O'LEARY, Motion Picture Association of America: Sure.

    Well, I think that it's important to look. It's not just the producers of films that are hurt. It's millions of Americans who make their livelihood in the film and television production industry all across the United States.

    It's not necessarily the names you see on the marquee when you walk into the theater that are hurt. It's the names that roll through the credits at the end of the movie. It's the people who build the sets, costume designers, caterers. Those are the people who are hurt, because pirates, many of them hiding overseas, outside the reach of U.S. law, are stealing products, distributing them and profiting from them on the Internet.

    And, as a result, you have less production in the United States. You have fewer opportunities to work. So that is where the damage is being done. We think that what's being undertaken in the House right now is a very reasonable, very focused approach that deals with all aspects of the Internet food chain that help cut off these illegal sites from the American consumer.

    We're not going after the intermediaries. We're simply trying to work with them. And what we're saying is that all of the people along the way, the ad brokers, the payment processors, the ISPs, the search engines, they all play a role in making the Internet safe and lawful for everyone.

    And this law would simply cut off access from rogue sites that are based overseas from the American market. And we need all of those players to be involved.



    Markham Erickson, first, do you acknowledge piracy is a problem? I mean, all over the Internet, one can get copyright — there are copyright violations.

  • MARKHAM ERICKSON, Open Internet Coalition:

    Well, sure. People are doing bad things on the Internet. And we agree that there are ways to try to deal with the very real problem of sites that are located outside of the jurisdiction of our court system and our legal system that are engaging in theft and illegal activity.


    What's the problem with the way they are proposing?


    The problem is, the proposals in Congress right now are not targeted to the problem of dealing with offshore illegal piracy.

    We think there is a way to deal with that. And we've proposed a solution, which is to follow the money. The offshore sites are there to make money. They're there to profit from illegal activity. The companies I represent — represent are some of the biggest ad networks and payment processors in the Internet ecosystem.

    And they want to work with the rights-holders that, when an offshore site is engaged in illegal activity, they will shut off the economic lifeblood to those sites. And, if they do that, those sites will disappear.


    Alright, but I want you to give me a specific example, too, of what would happen under the proposed legislation to the companies you represent. What are they afraid of, exactly?


    It's not really that they are afraid of what will happen to them. They will be able to survive.

    What this issue has highlighted is that there are entities from all across the political spectrum, from the Tea Party Patriots, to the ACLU, to law professors, to Internet security experts, who have said that the proposals in the solutions are quite extraordinary.

    They would for the first time impose technology mandates, where Congress is actually designing technology solutions to try to deal with the problem of offshore piracy. And they would do that by trying to have intermediaries begin to manipulate the way users access those offshore sites.

    We think that is actually a way that will not solve the problem of offshore piracy. And leading Internet security experts, people like Stewart Baker, the former general counsel of the National Security Agency, have said it will actually increase instances of piracy and it will actually hurt our Internet ecosystem.


    Well, let me ask Mr. O'Leary, because the argument — the argument is that the legislation potentially fights the very way that the Internet works, in a sense, and has implications well beyond what it is you are trying to get.


    It's just absolutely not accurate.

    Markham indicated that there are experts on his side of the argument that feel that way. There are experts on our side of the argument that would argue that that's not accurate. I would just ask you to look at who is supporting this legislation. You have all of the major cable ISPs, the National Cable Telecommunications Association, their member — their membership, Time Warner Cable, Comcast.

    Those are companies that put millions of dollars every year into their networks, and they would not knowingly support a piece of legislation if they thought that it was going to hurt those networks and hurt their investment. It's just not an accurate statement to say that this is somehow going to damage the Internet.

    This is an argument we have heard before. It's been wrong before, and we believe it's wrong this time as well.


    And what — Mr. O'Leary, what about the proposed other — the alternative route for dealing with this that he raised?


    Well, I think that it's the — to look at it from a positive perspective, it's encouraging to see a recognition that something has to be done about this problem.

    I think that what we have concerns with the alternative proposal is that it sets up a separate court in the ITC. And that is not something which is necessarily used to deal with copyright. It's slow. It's bureaucratic. And, frankly, when someone is stealing from you, you don't have 12 to 18 months to work — to let the bureaucratic court process work.

    What we're proposing, what has bipartisan support, we have a broad support from not just the political spectrum, but across all types of American businesses is something which is a tool which will allow law enforcement to go after bad actors that are hiding overseas. We think it's more effective and more efficient.


    Mr. Erickson, I mean, how big — I saw that Wikipedia threatened to shut down its site in protest over this. How big a deal is this for the companies you represent?


    Well, it's a major step backwards in federal Internet policy to have Congress and courts begin designing the architecture of the Internet.

    And we think there's a better way. If you follow the money, if you make payment processors and ad networks shut off the funds to these offshore sites, the sites will go away, and you don't create the collateral damage by having members of Congress design technology solutions that won't work.

    If they worked, it would be another thing altogether. But they won't work, and Internet security experts actually say it will harm the Internet. If you look no further than WikiLeaks, governments for several years tried to shut down WikiLeaks, to no avail. It wasn't until governments said to the payment processors, we want you to stop submitting payments to WikiLeaks that WikiLeaks ended up shutting down. They simply couldn't pay their bandwidth costs.


    Now, Mr. O'Leary, just for the rest of us, frame this for — the why we should care, why we all should care. I mean, this has the feel of one giant group against another giant group, as often is the case in Washington legislation. But why should the rest of us care?


    Well, I think you should care for a couple of reasons.

    First of all, the setup piece indicated that this is really about the entertainment industry. As I alluded to earlier, there are people from all across American business that support this legislation. The Chamber of Commerce is one of the biggest supporters and all of their members. And so this is really about the ability of American businesses to compete in the global economy.

    The second reason you should care is, at the end of the day, this is about protecting American jobs. And what you see on the Hill today and what you're going to see in the months as we move ahead with this piece of legislation is bipartisan membership of Congress coming forward to protect American jobs.

    And at a time where our economy is struggling as mightily as it is, we need to send a strong message to thieves around the world that it's not OK to steal American product, American hard work, and profit from it.


    Okay. Okay.

    And a brief response from you, Mr. Erickson. Why should we care?


    Well, a leading Booz Allen study showed, of — the 200 leading venture capitalists in the United States said that the solution in this bill would result in an 80 percent decrease investment in Internet technologies. That's about $38 billion a year that would be taken off the table in developing new communications tools.

    There is a better way. We can craft a solution working with the MPA and others to fight piracy without destroying the Internet.


    All right, Markham Erickson and Michael O'Leary, thank you both very much.


    Thank you.


    Thank you.

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