Getting ready for the next SOPA

Never has legislation caused as furious and public an uproar in the technology community as the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA), sponsored respectively by the House of Representatives and the Senate to battle online piracy. These bills would give US government the ability to remove websites from the internet for alleged copyright or trademark infringement, a nuclear option for addressing an issue that requires a more surgical approach.

In Ovum's view, the proposed laws would not have their intended effect. Instead, they would decrease internet innovation and raise the cost of compliance to the copyright regime for internet startups and emerging competitors to traditional media companies. While the legislation has effectively been killed in its current form, technology companies should not be lulled into complacency with this temporary win, and should quickly craft their strategy for helping shape the bills' next iterations.

Opponents cite everything from censorship to violations of due process

Protestors claim the bills promote web censorship, impose undue regulatory burdens on businesses, and shift onto the platform the burden of proof on what is legal and illegal. Content owners and the government could ask for court orders, with vague governing guidelines, to block sites that house piracy in any form. This takes place at the domain level, giving corporations the ability to interfere with the DNS system, and therefore the basic architecture of the internet. This can be done simply with the suspicion that piracy exists. Protestors also note that the law broadens to provide substantial criminal penalties for streaming copyrighted digital content, with a maximum penalty of five years in jail for the offense.

Activism against the bills has been unprecedented

On January 18, 2012 thousands of websites prominently placed online explanations of the negatives around the legislation and what users can do to combat it. Many of these also went “dark” in protest, most notably Wikipedia and Reddit. Adding to the chorus of protest were major technology firms including Facebook, Microsoft, Google, Craigslist, and Twitter, with Google claiming it collected over seven million signatures against the bills. When GoDaddy, a well-known hosting company, initially came out for SOPA and PIPA in December 2011, it faced a mass exodus of customers, forcing the firm to reverse its position. Overall, enough opposition was mobilised to impel the White House to come out against the bills as they exist. While a broad coalition of engineers, lobbying groups, activists, and others fought the acts' passage, technology firms with threatened interests were major catalysts, building on open government/transparency efforts that clearly tracked who the supporters were and how they were linked with congressman.

Technology companies must now engage with legislation earlier

It is important to note that the bills were almost guaranteed to pass before the protests, with cross-party support at a time when so little in Congress is actually bipartisan. The technology industries traditionally have a small footprint in DC as compared to the entertainment and media groups, so the wave of opposition took politicians by surprise. In short, opponents began skirmishing with the bills too late in the game. An important lesson should be drawn from this: technology companies and consumer-interest groups must now begin to engage with congressional representatives to ensure future iterations of the bills will target piracy with more nuance and understanding of the Internet's structure. There is already some evidence to show this is happening, with technology industry lobbying outlays increasing substantially in Q4 of 2011.

Network mobilisation as a new form of lobbying

The web companies' ability to mobilise citizens against the potential laws points to a shift in power toward networks and away from hierarchies, allowing an internet-based campaign to succeed against inside connections and traditional lobbying efforts. In a way, internet companies may have stumbled on an indirect and cheaper form of lobbying for their interests by tapping into users' rights as citizens and equating an open internet with a fundamental right. Another method of engaging with the American legislative machinery may therefore be emerging. The next steps are to figure out how to rapidly create communities of interest around complex issues important to the industry that are not as extreme as SOPA and PIPA. A similar campaign to the one just completed is not likely to materialise again in the near future because mobilisation on that scale cannot be done repeatedly without creating the impression of a “boy who cried wolf”.

Helping Congress understand the internet

The original crafting of the bills illustrates that there was very little understanding of the internet among the legislators who sponsored it, and it took an unprecedented campaign with millions in opposition to simply postpone a vote and go back to the drawing board. It is easy to understand why counterfeiting is bad, but it is more nuanced to understand why the bills hurt the internet's structure. Technology and internet players must therefore invest in educating Congress about their industry. As the government seriously explores exerting a stronger regulatory power over the Internet, this is particularly important.

Another iteration of piracy legislation will return

Legislation looking to stem online copyright and trademark infringement will return, with good reason. Counterfeiting is a major problem that causes millions of dollars in losses and impacts the American economy in a real way. However, industries relying on this protection also have powerful incentives to restrict a fundamentally open internet, while concurrently raising obstacles to entry for disruptive startups that can challenge their business models. Support for PIPA and SOPA include a long list of major media and entertainment companies, and they will certainly regroup. Another bill, called the OPEN Act, is already on the table, and at this early stage seems to be more targeted than SOPA or PIPA. The technology industry must ramp up its engagement with both Congress and the content-creation players to negotiate the ever-present tension between innovating solutions to privacy versus strengthening the copyright regime.

Nishant Shah is a New York-based analyst in Ovum's public sector practice. You can read more posts from him here.