In March 2007, the former Clinton administration official who helped shape the Internet as we know it finally admitted his policy hadn’t worked.
Hunched over a tabletop microphone at a copyright conference hosted by McGill University in Montreal, Canada, Bruce Lehman talked about the effects of a law hated by most of the academics in his audience. As Clinton’s commissioner of the United States Patent and Trademark Office, Lehman ran the National Information Infrastructure Task Force Working Group on Intellectual Property Rights. Assigned by the White House to set rules of the road for the emerging Internet, he championed policies that became the 1998 Digital Millennium Copyright Act, a law that was supposed to extend copyright to the online world without slowing its growth. Instead, it became a prime example of the law of unintended consequences.
“Unfortunately, at least in some areas, our policies haven’t worked out too well,” Lehman admitted, looking vaguely uncomfortable in a tan jacket and red tie.1 He put some of the blame on music and movie companies that didn’t act quickly enough to develop new business models for the digital age. But considerable blame also goes to the law he helped design.
The Digital Millennium Copyright Act, a compromise between media conglomerates on the one hand and telecom companies on the other, devastated the first group and helped the second soar. As Lehman recommended, the law makes it illegal to circumvent copy-protection technology, such as the encryption on DVDs and some digital downloads, or distribute a tool to do so.2 It also gives “safe harbor” to Internet service providers and some online companies so they’re not liable for copyright infringement based on the actions of users.3 That safe harbor made it easier for sites like YouTube to become valuable forums for amateur creativity. But it also let them build big businesses out of professional content they didn’t pay for.
Until he started working on the Clinton administration’s online policy, Lehman was best known as the first openly gay man to get a high-level government position through the Senate confirmation process. But his role as head of the patent office gave him significant authority. The top U.S. copyright official is the register of copyrights, who works in the Library of Congress, in the legislative branch of government. So Lehman emerged as the closest thing the executive branch had to a “copyright czar.”4
Many of the professors in Lehman’s audience believed the law’s “anticircumvention” provision interferes with free speech, since it makes it difficult to digitally copy music or movie scenes in order to remix or excerpt them for purposes of commentary. But Lehman was more upset that the music business was dying and other parts of the entertainment industry were facing similar problems, because the anticircumvention policy he pushed for didn’t make up for the devastation caused by the safe harbor provision to which he reluctantly agreed.
Like most of the government officials he worked with in the Clinton administration, he thought digital technology would help the U.S. media business, not threaten to destroy it.
Although it might seem hard to believe now, there was a time when copyright law was of interest mostly to copyright lawyers. It’s a complicated topic, intellectually abstract even to most attorneys. But as digital technology makes it faster and easier to copy music and movies, consumers are more inclined to wonder when exactly they’re breaking the law.
The answers aren’t always obvious. Duplicating a CD may or may not be legal, depending on the purpose of the copy. (DVDs, which have copy protection, are covered by the Digital Millennium Copyright Act.) Many other issues raised by new technology fall into a gray area, and the prohibitive cost of litigation tends to keep some of them there for a while.
In the United States, the Constitution gives Congress the authority “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Over the years, that definition grew to include film and music—first compositions, then recordings. And Congress repeatedly extended those “limited Times,” from twenty-eight years to, in 1976, fifty years after the death of the author.5
In the United States, copyright is primarily an economic instrument, a government-granted monopoly on the right to sell a work—for a limited time and with some exceptions. Until recently, the media business controlled its products by maintaining the exclusive right to copy them—hence, copyright. Depending on the nature of the work in question, this can include the right to reproduce, distribute, perform, and display it. When media was distributed physically—on paper or on disc—the first two mattered most and almost always overlapped.
To understand copyright as a monopoly, think of a performer like Bruce Springsteen, whose recordings are owned by Columbia Records under the terms of his recording contract, which assigns those rights to the label. In practical terms, Columbia has the exclusive right to sell his recordings. Since the market has only one legitimate supplier of Springsteen albums, the label can basically set its price. This monopoly is meant to compensate Columbia for investing in Springsteen, who in turn receives royalties as well as marketing and promotional support.6 Like any monopoly, copyright keeps the price of Springsteen albums higher than they otherwise would be, especially if they could be freely transferred online. But the monopoly is very narrow; it doesn’t extend to rock anthems about New Jersey, or even to other artists’ recordings of Springsteen’s songs. And by allowing artists to make money on their work—either by selling it or by making an arrangement with a company that can—copyright gives them an incentive to produce more of it.
Although the logic behind copyright hasn’t changed much, the laws themselves have always adjusted to new technologies, from piano rolls to cable television. Until relatively recently, most conflicts about copyright laws involved companies within, or at least close to, the businesses that depended on them. When songwriters wanted to make sure they received royalties when other performers recorded their compositions—a right they were granted in the Copyright Act of 1909—they faced off against another part of the music business. The opposing companies didn’t challenge the thinking behind copyright, because their own businesses relied on it as well.
The copyright dispute that changed that—and set the stage for the battles over the online world—was Sony Corp. of America v. Universal City Studios Inc., sometimes called the Betamax case. In 1976, several movie studios sued Sony to establish that the company, which did not own a studio itself at the time, would have secondary liability for copyright infringement committed with its videocassette recorder. (Sony’s Betamax was a proprietary technology that quickly lost market share to the VHS.) After eight years of legal battles, the Supreme Court essentially legalized the VCR in a 5–4 ruling that held Sony wasn’t subject to liability on the grounds that the device was “capable of substantial non-infringing uses.”7
The Betamax case was the first major legal issue to set copyright holders against an industry with interests radically different from their own. Beneath all the overheated rhetoric—the Motion Picture Association of America’s chief executive, Jack Valenti, famously said, “The VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone”—the dispute had its roots in an economic conflict very much like the one that exists online today.8 Movie studios wanted to sell films in a format that couldn’t also be used to copy them, such as the LaserDisc technology introduced in 1978. (Whether this could have succeeded in a market without the VCR is hard to know.) Electronics makers realized that consumers preferred—and might pay more for—a machine that could also record movies and television shows.
The Betamax case also shows why secondary liability is both important and controversial. No one disputed that it was illegal to duplicate a store-bought videocassette in order to sell copies, just as no one disputes the illegality of uploading an entire television show to YouTube today. But it’s impractical, if not impossible, to police this kind of private behavior. So although neither Sony nor YouTube would commit direct copyright infringement, rights holders had an interest in holding them liable for secondary copyright infringement. In some cases, when a particular tool can be used for practically anything, this seems absurd: no one seriously suggests that carmakers should be liable if their vehicles are used in robberies. But it seems equally unrealistic to argue that a Web site called the Pirate Bay should have no responsibility whatsoever for the infringement it encourages. No auto manufacturer has ever marketed a product called the Getaway Car, complete with a device that switches license plates while the vehicle is in motion in order to evade police.
The Supreme Court’s Betamax decision also complicated copyright by holding that “time-shifting”—recording broadcast television for later viewing—qualified as “fair use.” The judicial doctrine of fair use provides an exception to copyright law to prevent it from placing undue limits on free speech. It allows journalists, scholars, and artists to quote or excerpt works in order to comment on them. (How much can be taken legally depends on the purpose and length of the excerpt, the nature of the work itself, and its effect on the work’s value.9) By deciding that it also applied to consumers’ use of media, the Supreme Court opened up a range of issues that are still being debated today.
Although many anticopyright activists refer to fair use as a right, it’s really an affirmative defense of copyright infringement—that is, one that acknowledges the act was committed but maintains that it’s legal. “People who call it a right are just doing that to emphasize their politics,” says David Nimmer, a UCLA Law School professor who with his father wrote Nimmer on Copyright, a treatise that has become the standard reference work on the subject for lawyers.10
As soon as Lehman introduced the idea of an anticircumvention law in 1994, fair use became a rallying cry for activists who claimed that music and movie companies were trying to restrict it—along with free speech. If it became illegal to crack copy-protection systems, consumers wouldn’t be able to make otherwise legal backup copies for personal use—a reasonable concern for $200 software packages but not really such a big deal for $15 DVDs. More important, some argued, it would be impossible to express ideas by remixing music or quoting text.
Courts have not agreed, since those who want to comment on a work using the work itself can retype a passage of text or record music on tape. When defendants who had distributed the code that unlocks DVDs argued that the Digital Millennium Copyright Act represented an unconstitutional restriction of fair use, the court rejected this as an “extravagant claim.” “We know of no authority for the proposition that fair use, as protected by the Copyright Act, much less the Constitution, guarantees copying by the optimum method or in the identical format of the original.”11 Desirable as it might be, convenience is not a right.
As with the Supreme Court’s Betamax case, the debate over the Digital Millennium Copyright Act was an economic conflict dressed up in rhetoric about rights. On one side were the major labels and studios, at the height of their power and with good connections in the White House. On the other were electronics manufacturers, telecom companies, and Internet idealists—groups that hadn’t yet worked together and didn’t even seem to have much in common. But they would end up influencing the law just as much.
The information superhighway became important to the Clinton administration’s economic plan even before anyone actually knew what it was. Al Gore was prescient enough to see the potential of technology that could transmit information many times faster than phone lines. But no one knew what data to transmit or who would pay to get it. When Lehman first turned his attention to technology in 1993, only academics and early adopters were online, mostly with university access or dial-up connections. An e-mail address was a sign of sophistication.
In Clinton’s vision, the manufacturing jobs that would be lost to trade deals like the North American Free Trade Agreement would be replaced by better opportunities in the United States. Lehman and the administration assumed that many of those jobs would come from the rapidly expanding global market for American-made entertainment. Other countries would manufacture machines; the United States could make the music, movies, and video games they played.
“They had a vision of where the country should be going as we entered the twenty-first century,” Lehman says today. “It was about trying to create an economic policy that would be good for my country, and hopefully others too—to have an economy that wasn’t just based on backbreaking physical labor but on the fruits of the mind.”
People tend to think of the Internet as a group of private Web sites governed by consensus and computer code. But the U.S. government provided some of the science, funding, and vision.12 Even after the Internet was essentially privatized in the mid-1990s, a 1998 law prohibited federal, state, and local governments from taxing it.13 These decisions were made to encourage commerce, and Lehman moved in the same direction. He thought online networks wouldn’t attract a mass audience without mainstream music and movies, so he pushed the anticircumvention provision to make major labels and studios comfortable doing business online. “It wasn’t the lobbyists who came to us,” he says. “It was an initiative of the Clinton administration and of mine.”
Technology entrepreneurs like to cast entertainment executives as out of touch with the new digital reality—old white guys who have secretaries read them their e-mail. Some are. But their Washington lobbyists started preparing for the digital world in 1994, when even the hippest prognosticators didn’t know what the future would look like. That year Peter Gabriel made the cover of Wired for his role in defining the future of music—by releasing a CD-ROM.14
With Lehman’s support, music and film companies started lobbying Congress to protect their interests. The movie studios wanted the DVD format they were developing to be illegal to hack. Record labels were even more involved, and they pushed for legislation that would require “Webcasters” to pay for recordings they played online, even though traditional radio stations only paid songwriters.15
Lehman laid out his agenda for online copyright regulation in July 1994 with A Preliminary Draft of the Report of the Working Group on Intellectual Property Rights, unofficially known as the Green Paper. The proposed anticircumvention policy caused a stir in the Silicon Valley start-up scene, which reacted as though the new guy from the corporate office confused his computer’s CD-ROM tray with a cup holder: Don’t these guys know that information wants to be free? But the Green Paper got much more attention in Washington for the way it began to define what would legally count as a copy. In the normal course of data traffic management, Internet service providers often “cache” temporary copies of files to make their networks run faster. Although individuals don’t use these copies, the paper made telecom company lawyers realize that they could still be covered by copyright.
“The Green Paper was a surprise because, as I recall, it described the Internet as one giant photocopy machine,” says Sarah Deutsch, an associate general counsel at Verizon. “It came to my attention because we were doing all the things it said they would hold us responsible for, like caching. It proposed that every temporary copy would be an infringement.” The paper implied that Internet service providers would need permission to make these copies—in effect, to manage the flow of data on their own systems. Apart from any ideological debate, telecom companies argued—quite reasonably—that this would stall the growth of the Internet. If they couldn’t run their networks efficiently, why would they invest millions of dollars to wire the country with broadband access?
The telecom companies soon had another cause for concern. In February 1995, the Church of Scientology sued the Internet service provider Netcom after a former minister posted copyrighted documents on an online bulletin board Netcom hosted.16 Since the documents had some legitimate news value, their publication could be considered fair use, and the case rallied online activists, who warned that copyright laws could be used to suppress free speech. Telecom companies were more concerned about how the court’s decision might affect their business. (Netcom and the Church of Scientology eventually settled out of court.) And they grew even more worried after a 1996 circuit court decision held that a flea market had secondary liability for sales of counterfeit recordings that took place there.17
With both media and telecom companies pressing Congress to define rules for copyright online, legislators were ready to listen in September 1995, when Bruce Lehman’s group released a second draft of its recommendations: The Report of the Working Group on Intellectual Property Rights, also known as the White Paper. At least initially, Congress was more responsive to the entertainment industry. Senators Orrin Hatch (R-Utah) and Patrick Leahy (D-Vt.) championed the National Information Infrastructure Copyright Protection Act of 1995, which would have made it illegal to circumvent copy protection, and a similar bill was soon introduced in the House of Representatives. At first, their prospects for passage looked promising.
“That was the high point of our ability to enact legislation to deal with challenges to copyright,” says Fritz Attaway, then the senior vice president for government relations at the Motion Picture Association of America (MPAA). “We were well organized. We had tremendous support from the administration, Bruce Lehman in particular. We had Orrin Hatch as chairman of the Senate Judiciary Committee, who took a personal interest. And we had Jack Valenti.” A former special assistant to Lyndon Johnson who had run the MPAA since 1966, Valenti was one of the most influential lobbyists in Washington until his 2004 retirement.
Telecom and electronics companies weren’t exactly powerless, though. Worried that an anticircumvention law would limit the ability of its member companies to sell devices like DVD duplicators, the Consumer Electronics Association (CEA) lobbied against the law. Galvanized by the risk to their business, telecom companies asked their supporters in Congress to insert language in the National Information Infrastructure Copyright Protection Act to protect them from copyright liability and, when that effort failed, to keep the bill from moving out of committee. In an attempt to negotiate a compromise, Congressman Bob Goodlatte (R-Va.) organized a series of meetings between the two sides in the spring of 1996. But the telecom companies managed to block the bill and fundamentally change its successor.
The ongoing legal struggle between technology companies and media conglomerates has always been characterized as one of small start-ups challenging established giants. “If you look at copyright as a whole, you had a phenomenal lobby without pushback from anybody, except a little bit from us and a handful of law professors,” says the CEA’s chief executive, Gary Shapiro. “We’re David and the content industries are Goliath.”
Not exactly. The Recording Industry Association of America (RIAA) and especially the MPAA do have enormous influence in Washington, both from the money they donate and from the perception of glamour associated with their respective industries. But the computer business had an aura of innovation, and the CEA funded and ran an ersatz consumer group, the Home Recording Rights Coalition, which could generate letters to Congress. And the telecom industry, which deals with a dizzying array of federal regulations, outspends the music and movie businesses by a significant margin. They all found common cause with activists and library organizations, which framed the debate over the bill as a struggle for free speech. When Congress began debating the proposed bill, Verizon’s Deutsch says, “they woke up a sleeping giant.”
In a January 1996 Wired article about Lehman’s proposals, the legal scholar Pamela Samuelson wrote, “Lehman aims to be the sheriff who will kick those anarchic digital cowboys off the Net and make the electronic frontier safe for businesses that want to set up shop there.”18 But Samuelson didn’t note that the bill’s opponents also wanted to make the Internet safe for businesses—they just happened to be different businesses. Plenty of activists wanted information to be free so they’d have an easier time selling computers, Internet access, or online advertising.
Some of the rhetoric was far more radical. In February 1996, the Grateful Dead lyricist turned digital activist John Perry Barlow published “A Declaration of the Independence of Cyberspace.”19 Barlow was reacting to the Telecommunications Act of 1996, which had plenty of faults. But he came up with one of the more overblown manifestos in the history of the Internet, which is no small distinction:
Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather.
We have no elected government, nor are we likely to have one, so I address you with no greater authority than that with which liberty itself always speaks. I declare the global social space we are building to be naturally independent of the tyrannies you seek to impose on us.20
The “Declaration” went on in that vein, mixing the wide-eyed utopianism of the New Left’s 1962 Port Huron Statement with the didactic tone of John Galt’s climactic speech from Atlas Shrugged. Since Barlow didn’t have any particular authority to represent the online world, his declaration had the same legal impact as a few college kids declaring their university a nuclear-free zone. But he tapped into a powerful strain of Silicon Valley libertarianism that rejects any form of Internet regulation—except, in most cases, when it happens to help the technology business itself.
Whatever its logical flaws, Barlow’s thinking became influential in shaping the idea of “online rights” as somehow distinct from those in the physical world, a concept that lacks much real legal support. In 1990, Barlow had started the Electronic Frontier Foundation with the activist John Gilmore and Mitch Kapor, who had designed the early PC program Lotus 1-2-3 and founded the Lotus Development Corporation. The organization was founded to defend civil liberties online, it works to protect privacy and free speech, and it maintains more independence from big technology companies than most other online advocacy groups. But it also came to see copyright as a barrier to free expression and to litigate against measures to protect it online.
Copyright does impose some limits on free speech, since it prevents individuals from using published works, except for purposes covered by fair use. But in the United States, which places a greater emphasis on freedom of speech than most Western countries, courts have consistently held that the two need to be balanced—partly because copyright also encourages free speech. “The Framers intended copyright itself to be the engine of free expression,” according to the majority opinion written by Justice Sandra Day O’Connor in a 1985 Supreme Court case. “By establishing a marketable right to the use of one’s expression, copyright supplies the economic incentive to create and disseminate.”21
One reason the Digital Millennium Copyright Act inspired so much opposition was that Hollywood was also pushing Congress to again extend copyright protection. After the term of copyright was lengthened to fifty years after the death of an author in 1976, Disney and other studios lobbied for the 1998 Copyright Term Extension Act, which added another twenty years. (It would also lengthen the protection for works of corporate authorship, such as movies, from seventy-five to ninety-five years.) Since the law would keep Disney’s early cartoons from passing into the public domain, opponents derisively called it “the Mickey Mouse Protection Act”—with considerable justification, since it was a giveaway to Hollywood. The law, signed in October 1998, didn’t do much for media companies other than Disney, since there isn’t much of a market for movies or music that old. And it’s hard to say how much it even did for Disney, since Mickey Mouse’s likeness would still have trademark protection after the cartoons were no longer covered by copyright.
One thing the law did do was give the moral high ground to activists like Samuelson, who wanted to weaken copyright in other ways. Technology and telecom companies were happy to take the side of public interest groups fighting against large corporations, a strategy that had its roots in the Consumer Electronics Association’s creation of the Home Recording Rights Coalition in 1981. It framed an industry dispute in terms of public interest, and this tactic has been remarkably effective ever since. Even if you believe that the Consumer Electronics Association happens to sometimes serve the public’s interest, it’s hardly a public interest organization.
“I represent both the technology side and the library side, and there’s a symbiotic relationship,” says Jonathan Band, the counsel for the Library Copyright Alliance, who has also worked for technology companies. “You always want to say what you’re doing is in the public interest and not your own mercenary interest. So [the fair use ideologues] were obviously very helpful for the technology companies.” Later, technology companies would return the favor with significant funding for organizations that work to loosen copyright laws.
“The principal opposition [to the bill] really came from the Consumer Electronics Association, which has always opposed copyright, and the telecom companies, which didn’t want to be bothered with paying attention to content,” Lehman says. Their strategy worked. The bill stalled.
When the technology business stymied Lehman’s efforts in Washington, he changed the battleground. The Clinton administration had also charged him with leading the U.S. delegation to the World Intellectual Property Organization (WIPO) in Geneva, which was itself starting to look at how to update copyright law for the digital age on an international level. So he brought his ideas there, figuring he’d have an easier time, since WIPO had historically attracted representatives only from copyright industries like film and music.
“I perceived that there was an opportunity to take these treaties and turn them into something that would be to our advantage,” Lehman says. “We went to Geneva and started to make a deal.”
By the end of 1996, when negotiations happened in earnest, the telecom companies had followed. “For the first time, you saw all of these communications companies show up in Geneva,” Verizon’s Deutsch says. It was new territory for them. Deutsch remembers marveling that WIPO changed the carpets in the elevators daily. Chimes announced the beginnings of meetings, which took longer than expected. Since the negotiations took place in December, “we called it the miracle of Hanukah,” Deutsch jokes, “because at WIPO they could take a day of process and make it last eight days.”
Among other things, the WIPO Copyright Treaty signed at the end of 1996 required countries to pass the kind of anticircumvention laws Lehman wanted. That put pressure on Congress to sign a bill that enacted the treaty. As anticopyright activists point out, this is a common way of extending intellectual property protections, and they now have their own lobbyists at international bodies like WIPO.
In the summer of 1997, the Senate and the House of Representatives each introduced a pair of bills: one to implement the WIPO treaty and another to give Internet service providers safe harbor.22 Neither had the votes to pass alone, so the two sides jousted for advantage. In September 1997, when the House Judiciary Committee’s Intellectual Property Subcommittee held hearings about online liability for copyright infringement, Johnny Cash spoke about online music piracy, and Jack Valenti argued that a U.S. delay in implementing the WIPO Copyright Treaty would set a bad example for other countries with economies that didn’t rely as much on intellectual property.23 As influential as Valenti was, however, he met his match in Roy Neel, a former aide to Vice President Al Gore who had become chief executive of the United States Telecom Association. Although Neel lacked Valenti’s larger-than-life personality, he made a convincing case that telecom companies couldn’t possibly filter all the information on their networks. This is obviously true, but the real issue was more complicated: What, if anything, did they have to do to prevent or discourage copyright infringement?
After 1997 passed without progress, Senator Hatch hosted negotiations between entertainment industry and telecom lobbyists. As a lawyer and songwriter whose state has several big technology companies, including Novell, Hatch understood what both sides wanted. In the first few months of 1998, lobbyists came to terms with the fact that the bills would be joined. To balance the safe harbor, they hammered out the concept of the “takedown notice” (often called a DMCA takedown notice, after the bill that created it). If copyright holders found an unauthorized copy of their work online, they could send a notice to ask an Internet service provider or another neutral party to take it down.
Although telecom companies pushed the bill, safe harbor applies to a wide range of companies that transmit and store content for users. The provision does not apply to companies that control content or get a direct financial benefit from infringing activity, by selling individual movies or albums, for example. (Also, the safe harbor protects companies only from secondary liability for the actions of their users, not direct liability from their own.) Since both sides realized the Internet would develop quickly, some of the specifics were left vague: the law requires services to cut off “repeat” infringers and act on takedown notices “expeditiously.” The devil, media companies would later discover, was in details like those.
Both sides felt some urgency during these negotiations. The telecom companies wanted to clarify their potential liability before a court did. Hollywood was in even more of a rush: along with some technology companies, the studios had just introduced the DVD, and they wanted to give its copy-protection system some legal teeth. The major labels were eager to introduce a copy-protected digital product themselves. Since no one wanted to miss the end of the congressional term and have to start again, both sides compromised a bit.
“This became the political price we had to pay to get the anti-circumvention stuff through,” says Allan Robert Adler, the lobbyist for the Association of American Publishers. On the inauspicious day of April 1, the House Judiciary Committee merged WIPO Copyright Treaty implementation and safe harbor for copyright liability into one bill and sent it to the House.24 About a month after that, the Senate did the same and passed the bill a few weeks later.25
Then, before the bill could become law, the telecom lobbyists did what Lehman did in Geneva: they maneuvered for a home-field advantage. They had the bill sent back to the House Commerce Committee, which was far more sympathetic to their interests than the Judiciary Committee. “What happened was something that has become very common since then—a competition between the Commerce and Judiciary committees,” Lehman says. “Judiciary had been lobbied for years by copyright businesses—it’s generally a very pro-IP [intellectual property] committee. But Commerce is very involved with telecom, so they’re the big powers there.”
As public advocacy groups point out, no one involved in crafting the Digital Millennium Copyright Act seems to have spent much time thinking about what was best for the public. But while those groups imply that the MPAA and the RIAA simply got the law they wanted, the truth—perhaps just as disturbing—is that it was a backroom deal between two powerful interest groups. Even the exceptions to the anti-circumvention provision beloved by online groups came from lobbying the Commerce Committee. In Washington, an “activist” is often a lobbyist who happens to be on your side.
“What you try to say is, ‘This language is terrible.’ You want to have this whole ‘parade of horribles,’ even though you might only really be concerned about one,” says Band of the Library Copyright Alliance. “I remember one day I was in my shower just trying to think, ‘How could this possibly be a bad thing?’ ” Ultimately, Band and his allies secured exceptions in the law for encryption research and reverse engineering. “By then,” he says, “it was just to get as many carve-outs as possible.”
Finally, more than four years after Lehman presented his plans, Bill Clinton signed the Digital Millennium Copyright Act into law on October 28, 1998. The bill certainly helped Hollywood. The encryption on DVDs was broken the next year—in part by a fifteen-year-old Norwegian hacker.26 The code he released online spread too quickly for studios to stop, which led activists to say copy protection was useless. But the Digital Millennium Copyright Act ensured that technology companies couldn’t legally market a DVD duplication device, and that made copying DVDs inconvenient enough that most people paid for them. Within years, DVD sales dwarfed theatrical revenue.
Ironically, the industry that was most maligned for lobbying in favor of the Digital Millennium Copyright Act gained the least from it. The major record labels hoped an anticircumvention law would offer legal protection to a new locked digital format they planned to introduce as the Secure Digital Music Initiative, but it never got off the ground. And although they eventually started selling copy-protected music on iTunes, every album they released was already available on unprotected CDs. It didn’t do much good to protect iTunes files when the same music could be easily ripped from a CD.
Within a year after the Digital Millennium Copyright Act was signed, the major labels faced a piracy problem larger than they—or anyone involved in the lobbying process that led to the law—could ever have imagined.
Lobbying for the Digital Millennium Copyright Act took place in a world of technology we barely remember: VHS tapes, CD-ROMs, earnest manifestos about the potential of “cyberspace.” For better and worse, however, this law created today’s “Web 2.0” world of YouTube, Myspace, and ubiquitous broadband. Online piracy not only flourished; it became the “killer app” that generated demand for broadband online access. (There are no reliable statistics on how important this was, but the amount of data traffic that consists of pirated content suggests it must have been a major factor, especially before the rise of legitimate online entertainment services like Netflix and Hulu.) Tim Wu, a Columbia Law School professor who writes about copyright and telecommunications policy, said that the law was so important to “user-generated” content sites like YouTube that it was “the Magna Carta for Web 2.0.”27
Some copyright holders—especially those from industries that don’t use copy-protection systems, like music and photography—didn’t get that much out of the deal. The safe harbor provision that freed online companies from worrying about copyright infringement meant creators and content companies had to monitor the Internet for unauthorized copies of their work. This is expensive for any company: Viacom has said it spends $100,000 a month policing online infringement of its copyrights.28 For independent artists—photographers, small bands, and writers who own rights to their work—it’s practically impossible. Since they don’t have lobbyists, their voices are rarely heard.
YouTube is now considered a respectable business, the go-to Web site for viral videos, independent art, and even presidential speeches. But the site became famous—and attracted enough viewers to be sold to Google for $1.65 billion in November 2006—partly for hosting copyrighted clips like music videos and the famous “Lazy Sunday” skit from Saturday Night Live. Although YouTube’s motto is “Broadcast Yourself,” the site used to show plenty of content to which it didn’t have rights. And the company has been sued for copyright infringement by Viacom, as well as by several other companies.
“I don’t think anyone anticipated something like YouTube,” says Verizon’s Sarah Deutsch, whose company obviously also benefited from the law. “But where the DMCA didn’t work, Google developed its own filtering technology.” The company now takes voluntary steps to block infringing content, presumably to advance its negotiations with media conglomerates.
Several movie studio lawyers say they’re fairly satisfied, if not totally happy, with the steps YouTube now takes to reduce piracy. (Viacom’s suit is over YouTube’s actions prior to early 2008.) But what about other companies? Scribd, a site that lets users post documents the way YouTube lets them display videos, can be used to make public information easily available, but it draws considerable traffic for hosting an array of pirated books. Pirated television shows and sports events are a major draw for live-streaming sites like Justin.tv and Ustream, which allow users to stream live video the way YouTube lets them upload short clips. All of these sites have plenty of legitimate uses, but the fact that almost all of them try to strike distribution deals with entertainment companies suggests they need professional content to build a viable business. Since they essentially have the content already—and, depending on the outcome of Viacom’s lawsuit, little incentive to remove it—they can negotiate at a substantial advantage.
As telecom lobbyists argued a decade ago, it seems unreasonable to hold Internet service providers liable for any copyright infringement that occurs on their networks. But the interpretation of the law used in the summary judgment in favor of YouTube—correct or not—gives Web sites no incentive to remove copyrighted material before they receive a request. So they leave it online, especially since it helps them draw an audience. And while copyrighted content makes up a small amount of what these sites make available, it can account for a significant amount of views or downloads. YouTube’s own employees believed that more than three-quarters of the site’s views came from copyrighted content, according to internal e-mails that came out in the course of the Viacom lawsuit.29 (YouTube does not reveal this kind of information.) Much of the site’s most popular video is programming other companies paid to create.
The safe harbor even creates a perverse incentive for sites to do as little as possible to limit copyright infringement. Let’s say the founders of an online company see a South Park clip on their site. If they remove it, they could reveal their knowledge of infringement, and arguably lose the safe harbor that protects them from other lawsuits. If they do nothing, they can say—with whatever degree of plausibility—that they didn’t know it was there or that, for all they know, it may have been uploaded by the copyright holder. (Part of YouTube’s argument in Viacom’s case against it is that since Viacom uploaded some clips, it had no way of knowing what the company had authorized.)
The Digital Millennium Copyright Act also makes other kinds of enforcement difficult. “Were it not for safe harbor, the record companies would have been able to go to the ISPs and take Napster off the networks,” Lehman says. “You would have still had file sharing, but I don’t think it would have been as big.”
Since part of the Digital Millennium Copyright Act came out of the WIPO Copyright Treaty, other countries adopted similar laws. In May 2001, the European Union passed the Copyright Directive, which required member states to pass anticircumvention regulations into law (but left them some flexibility in how to do so).30 Most countries in Europe also have safe harbor, as well as a system for filing a takedown notice. In practice, some foreign companies respond to Digital Millennium Copyright Act takedown notices, even though they’re not subject to U.S. law.
The law also affects what kinds of businesses entrepreneurs start. “Every business since the DMCA has been designed to take advantage of the DMCA, which means it’s about aggregating user-generated content and relying on the DMCA as a vehicle to take things down,” says the Associated Press’s general counsel, Srinandan Kasi. The law should make it possible to start such sites, which have become an important part of the Internet. But it makes it all too easy for them to boost their audience with professional content. Not only do those aggregators draw viewers (or readers or listeners) away from sites that pay to provide programming; they drive down the price for advertising because their costs are so low.
This “user-generated” business model has such significant advantages that it’s soaking up investment capital that might have gone to companies that produce the content they present. In the 1990s, investors funded companies like CNET and Slate, which produced original journalism. But it’s hard for them to compete with sites like the Huffington Post, which pay to create only some of the content they sell ads against. Given the choice, why invest in creating anything at all?
At McGill University’s 2007 copyright conference, most of the academics in attendance disdained the way the Digital Millennium Copyright Act had allowed entertainment companies to lock up their content with technology. But Bruce Lehman was more upset that the act hasn’t protected the interests of artists. He pointed out that labels were having so much trouble making money selling albums that they were asking musicians to sign over some rights to their revenue from songwriting, merchandise sales, and live performances. And he worried that music was entering a “post-copyright era” in which labels would be unable to invest in career development and artists would be left to compete for the patronage of wealthy supporters the way Mozart and Salieri vied for the favor of the Viennese court.
“Our intention,” he said, “was not that the music business would be flat on its back and many of the other industries we wanted to promote would be in trouble.”