The British ISP industry has spent a small fortune of its customers’ money fighting the people who would, in a saner world, be its business partners – only to suffer a crushing defeat. On Tuesday Lord Justice Richards threw out BT and TalkTalk’s judicial review against the 2010 Digital Economy Act.

Yet as trench warfare goes, they may consider it worth every penny.

It should be remembered that the telcos’ reasons for opposing the Act are very different to those of “digital rights” activists. For the activists, every day is the first day of the Counter Reformation. Every copyright enforcement proposal is fatally flawed: the task is quite simply to say “no” to every one that pops up. But ISPs are in fact a lot more pragmatic.

For the ISPs, it’s all about minimising risk and, at the end of the day, lowering their compliance costs. They don’t think copyright enforcement is spoiling the unicorn’s grazing meadow – they just think it’s going to be scarily expensive. And this concern takes precedence over innovation, the creation of new markets, growth, and ultimately profits. In short, they see more value from keeping the wild west much as it is today than they do from building on it – despite empirical evidence (pronounced “Sky”) that people cheerfully pay for content if it’s convenient and good value.

There is another advantage to the ISPs for pursuing a strategy of prevarication, in that it has successfully delayed the introduction of the 2010 Act. The original timetable envisaged letters being sent to copyright infringers in early 2011 and, should file-sharing have miraculously failed to cease after that, technical measures being imposed against diehards round about now. This is the sanction that copyright-holders wanted – attaching a real consequence to what today is a casual and risk-free grabbing of a bunch of movies and music. The first letters may not now go out until mid to late 2013.

In a shorter timeframe – in under three years, in fact – France introduced the vastly more ambitious (and more bureaucratic) HADOPI framework.

So focus has instead turned to the much vaunted successor to the 2003 Communications Act, and that’s where ISPs and copyright industries have come to blows. Remember that the DEA was a series of amendments to the 2003 Act. The Ministry of Fun says it wants draft legislation by April, and as you read this the Green Paper is being rewritten; the first draft was acceptable to nobody. So MPs will in effect be discussing the DEA’s replacement. Given the foot-dragging from the Mandarinate – our permanent government – it is hard to see how the Act has a vigorous life ahead of it.

In the meantime, private legal cases are filling the vacuum. Last year the Newzbin2 ruling established that ISPs were liable under copyright law – and despite shrill squawks from Consumer Focus and other activists that complying with this would bankrupt ISPs, the cost turned out to be minimal: £5,000 a pop to block a site with the ISP picking up the bill. Sky preemptively halted access to Newzbin2, avoiding the need to reach into its pockets.

But as I wrote when the SOPA hysteria was at its peak, copyright enforcement hasn’t kept pace with the technology; it’s all too easy to evade a web block which means the demand for cheap and effective redress hasn’t gone away.

Mechanisms and agreements must be created to stop the rip-off of creators ranging from you, dear reader, and the wedding photographer bloke down the road to Sony Pictures – and it must scale to encompass all these examples. These agreements don’t have to be legislation if enlightened self-interest prevails. But ISPs remain in a game theory-like trap; the first to move is judged to lose, so nobody budges an inch.

All this leaves the internet looking shabbier than it should be. Britain has a long historical legacy of enlightened private agreements and its citizens pay for movies and music. It should be a testbed for radical market experiments for the world to observe. But can you think of a decent service that’s launched over an IP network since Spotify? The action takes place off the net.

The leader of the French National Front party, Marine Le Pen, wants Hadopi scrapped and replaced with a blanket licence to compensate creative industries. The extreme right party’s freetard-friendly gambit has caused the Socialists, who also oppose Hadopi, to rethink their policies.

According to The New York Times, Parti socialiste members have moved away from support for a blanket licence, and now support Hadopi alternatives such as site-blocking – and may still tax ISPs and search engines.

Alliances between the pirates and far right parties are increasing. Most notoriously, the Pirate Bay was bankrolled by Carl Lundström, the heir to the Wasabröd fortune. Lundström financially supported the Progress Party and the racist Keep Sweden Swedish campaign, and was linked to a racist attack in 1985. [Swedish / English Translation.]

One participant in the recent ACTA demonstration in Vienna reported:

“The event was very ‘young male geek’ oriented, with a few sprinkles of diversity, mainly some political parties, including some some right wing fringe parties I had never heard of before.”

The Pirate Party UK was founded on similar angry-bloke disaffection, and feelings of victimisation and powerlessness, which far right parties have traditionally exploited.

Despite electoral success in Berlin, the Pirate Party has flopped in Sweden and the UK. In the wake of the Digital Economy Act, the PPUK could barely muster over 100 votes – or 0.3 per cent of the vote – in each constituency in which it fielded candidates.*

More problematic for politicians of any hue who wish to woo the ideological copyright infringement vote is that whacking freetards remains popular with the general public, who reason that if they pay, then others shouldn’t be able to freeload. Half of the public backed internet suspensions in last year’s Google survey.

Even people who admit to downloading unlicensed goodies support stronger enforcement penalties. Work that one out.

Bootnote

It doesn’t help that they’re not completely on top of events.

“Feargal Sharkey you certainly do not speak for me!” stormed the PPUK’s Laurence ‘Loz’ Kaye at the anti-ACTA demonstration 10 days ago. We infer that he was unaware that Sharkey had quit his post as head of UK Music last November.

A mob that’s filled with self-righteous fury isn’t very discriminating.

In 2000 an angry crowd attacked a paediatrician after he was mistakenly named as a paedophile. Last year the Olympic cyclist Chris Hoy was abused by football fans who mistook him for match referee Chris Foy. And last month, a small Scottish farm certification agency, SOPA, received torrents of abuse from ‘digital rights’ campaigners who were upset about the United States’ proposed Stop Online Piracy Act.

Once it’s got its blood boiling, the mob needs new targets. Now it’s set its sights on ACTA, an international treaty to combat counterfeiting and piracy. Rallies will take place tomorrow. ACTA lost its digital copyright provisions long ago, but the mob hasn’t noticed. Many of the claims made for ACTA are completely false.

Even Ars Technica, which fomented the anti-SOPA campaign, has felt obliged to correct the anti-ACTA myths that are circulating on social media. The website recently lamented that the internet is “awash in inaccurate anti-SOPA”, busting the myths of the anti-ACTA crusaders.

ISPs are not obliged to monitor traffic, Ars points out. ACTA contains no web-blocking provisions or graduated response regime. It won’t block generic drugs.

In fact, as I pointed out at the time, ACTA is a non-binding agreement that doesn’t, in any case, apply to countries such as the UK, which have their own IP enforcement initiatives. The passage of the Digital Economy Act in 2010 made the entire discussion moot.

I recently asked the Dark Side what they hoped to get from ACTA.

“Nothing. The trademark and counterfeiting people really need it. There’s nothing in it for us, or for any copyright holders,” one entertainment industry lawyer told me.

Ars is fighting a lonely battle. If somebody has become alarmed and wants to believe the worst – they will. There’s a long history of net activists claiming that proposals will “break the internet” and are “the worst laws ever” because these are proven rallying calls for energising their base. As environmentalists have discovered, the Big Exaggeration works, at least in the short to medium-term. If as a campaigner you have a specific outcome in mind – passing a piece of regulation or blocking one – then the fib focusses the politicians. The ends justify the means.

It comes at a fatal price, however. In the long-term the public realises how cynical the original stunt was, and then returns the cynicism with added interest. Climate campaigners now complain that nobody believes them any more. It’s not because the public has become climate skeptics – far from it. They’ve just become weary of serial alarmism. Matilda cried “fire” once too often.

So why are people marching in London and around the world tomorrow against ACTA? Well, the flippant answer is that they don’t get out of the house very often and need the exercise. But I think there’s something deeper, that’s often overlooked.

There is something quite specific about this flavour of digital rights internet paranoia that marks it as unique and distinct from other political paranoias, such as the anti-communism of the John Birch Society or, hundreds of years before that, fear of witches. I call it “pseudo masochism”.

What is pseudo masochism?

There is no doubt that paranoia thoroughly permeates the digital rights lobby, giving it its lifeblood. It’s even in the quite remarkable digital rights activists’ very own handbook. This useful guide, written by Becky Hogge (formerly of the Open Rights Group) is a publication funded by (you’ll never guess) George Soros; it recommends activists refrain from mentioning creator’s rights – which are supported by the public – in favour of vague principles such as “openness” and freedom. (A ‘freedom’ that turns out to be cockroach.)

In James Boyle’s comic Theft,
copyright makes you mentally ill.
Boyle served on the Hargreaves Review of IP

The paranoia is the basis upon which academics, such as Lessig and James Boyle, form their world view. It regards every attempt to advance the primitive utopia of the internet as the snake in the Garden of Eden.

So as the thoughtful copyright lawyer Terry Harte has pointed out, every law “breaks the internet” and is “the worst law ever”.

“Let’s get rid of this legislation so we can start enjoying culture again,” said one Berkman scholar in a recent televised postmortem on SOPA.

The Berkman Center is an influential think-tank attached to Harvard Law School.

It was pure Lessig-speak, and I am often surprised how closely the Children of the Lessig God exhibit all the symptoms of recently released cult members: their sense of self-respect, and sense of the value and robustness of the human individual, doesn’t seem to exist. Because their network is perceived to be under attack, they feel under attack personally. They’re frightened of their own shadows.

This kind of hysterical overstatement is quite redundant. I, personally, had enough reason to oppose SOPA-style web blocking on the principled basis that we shouldn’t ban people from simply viewing a web page that doesn’t corrupt or deprave.

And I support copyright enforcement on the basis those rights are valuable (and will be to our grandchildren), but unless they can be enforced somehow (there are better ways than web blocking) they become meaningless. And that’s a shameful legacy to leave future generations of creative people.

But I didn’t need a bogus technical argument to oppose this flavour of enforcement. SOPA-activists shrieked that web blocking broke DNS, which is a falsehood. Several European countries already implement DNS-level blocking of sites for copyright reasons, and the internet hasn’t broken.

Let’s be reasonable

The argument is very much about the future of the net, it’s true, and what digital networks might look like in the future – particularly what kind of economic activity they might enable for our grandchildren. But sensibly, most people reject the idea that the choice on offer is between a utopia and a dystopia – two imaginary worlds.

In reality, it is hard to get excited about the very diminished world offered to us by Google and Facebook – the one they call an interconnect utopia – when it has the economy of a malfunctioning Banana Republic, where talent isn’t rewarded, our private activities are catalogued and pathologized, and rational argument is closed down by roaming herds of nasty bullies.

Activists gathering this weekend for what is looks like a mechanical, almost ritualistic, activity don’t seem to realise that far from fighting the net’s problems, they’re adding to them – and have even come to embody them. ®

Angry copyfighters barraged a small Scottish food certification agency with abuse last week – in the belief they were protesting against hated US anti-piracy legislation.

The Scottish Organic Producers Association – whose website is at sopa.org.uk – was perplexed when it found itself on the receiving of dozens of nasty and illiterate emails.

Remarkably, nothing about the site’s design – including pictures of sheep, vegetables, Angus cattle and fruit – did anything to suggest to the furious freetards that they’d got the wrong SOPA – or that something might be not quite right.

Dozens of emails were submitted via a form on the the association’s website. Techie Gavin McMenemy told us that the nastygrams had subsided by the end of last week. Here are a couple of examples received by the agency, which certifies organic farmers in Scotland.

One from ‘Josh Chard’ pleaded:

Stop what you are doing. NOW. Your laws are stupid!! We love entertainment. I\’d copyright all i want!! Problem? I\’d do it to entertain friends, Family and even strangers!! You pass and you\’ll be hated everywhere in the world! Why can\’t you fat fuck americans get this in your uneducated heads?!

Topped by this one:
you suck eggs mother fucker sopa

Well, that’s telling them.

But perhaps in the overheated minds of the angry Boing Boing reader, it’s all part of the same giant conspiracy. Look very closely at these pictures:

Is that really a tractor? And that may look like a hen shed – but could it be a secret, RIAA-built holding facility for copyright criminals? Think about it.

I am going to propose something that may sound radical, but really isn’t. Legislation like SOPA ideally isn’t necessary in an ideal world, and this idea comes about through voluntary agreement. The Stop Online Piracy Act was proposed because of a tragic impasse, a lack of agreement between two powerful and deeply entrenched sides. Although one side has moral force on its side, being ‘right’ doesn’t mean it’s going to ‘win’. Like a classic game theory tragedy, both sides are losing.

To understand why I shall tell you a story. If management sages and internet gurus annoy you – it’s a story you might enjoy.

When he died in 1903, the prolific Victorian journalist and author Herbert Spencer was thought to be one of the cleverest people in the land, and England’s greatest philosopher. Such was his reputation, there was a clamour to bury him in Westminster Abbey. But in reality, Spencer was a hard-working clot, whose reputation fell more sharply and quickly than that of a disgraced fraudster.

Spencer knew all the right buzzwords, but was loathe to read past the first chapter of a book. Spencer even carried ear-plugs in case he was exposed to interesting new ideas, as he feared intellectual stimulation might keep him awake; he often inserted the ear-plugs midway through a conversation. He masked all this, and his books were phenomenally popular, because he stuck to opaque but calming generalisations. Rather than resolve a matter, his generalisations allowed him to waffle around it. (He also heaped on masses of detail to sidetrack the reader). When the novelist George Eliot complimented the old man on the lack of wrinkles on his forehead, Spencer replied that he’d never encountered anything that ever puzzled him.

Spencer may have been the Victorian Malcolm Gladwell, or Tom Peters, or Tim O’Reilly. Generalisations are a great way of avoiding looking at what’s really going on, and tackling a subject with arguments from first principles. Social media has turned this kind of showy avoidance of reality into a massive multiplayer game. Twitter is an ocean in which armies of cliches swim pass each other. You can even badge your avatar to remove any doubts in the audience about nuances in your position: ‘STOP SOPA’ being the most recent. SOPA has indeed been stopped, or fatally gutted.

While the legislation is now moribund, the underlying concerns behind SOPA haven’t gone away. No amount of bloviating is going to resolve this. The main provision of SOPA (and PIPA) is website-blocking, which has no friends here at El Reg. But SOPA will return next year, and the year after, until the issues have been tackled head on. The STOP SOPA stickers will return. It’s all avoidable and getting quite tedious.

The internet has a problem

In the Panglossian worldview of Silicon Valley, everything is perfect on the internet, it’s the best of all possible worlds, and any tinkering with this robs humanity of its last Utopian hope. This is a view of the world that actually owes much to religion, or the desire to recreate the certainty of religion. It’s faith-based, and isn’t a view grounded in reality, especially the reality of doing business. On the internet, fame may arrive quickly, but financial reward doesn’t follow. It’s the only area of business where this is true.

Now this is quite different to the argument that life must be fair: we know it isn’t. We don’t expect the bestselling fiction book to be the most subtle or sophisticated, or the No 1 record to be the greatest work of art (although many have been great works of art). You do need expertise to turn talent to popularity – but that’s a different argument. Nor does money guarantee success, and therefore security; that again is another argument. Financially successful businesses are quite entitled to drive themselves into the ground, and many do. The simple reality remains that in all fields of commerce – with the vital exception of one – money follows popularity.

The SOPA supporters’ argument is that this is entirely down to theft. Before we get down to it, let’s look at the specific core proposal. SOPA and PIPA have other measures, and some are important and hardly controversial. But SOPA was really written for one tactical purpose.

The hypocrisy of web-blocking

The meat of SOPA was concerned with blocking rogue foreign sites – such as The Pirate Bay – from being accessed by Americans. Site-blocking is regarded as illiberal and unloved, and may ultimately have been totally unnecessary, as we shall see. A block list, according to SOPA critics, put the United States on a par with regimes such as China, which prevent their citizens from reaching the internet. It’s certainly hard for US diplomats or policy-makers to take the moral high ground when preventing their citizens from merely seeing a website that is unlikely, on its own, to corrupt or deprave. Merely looking at The Pirate Bay shouldn’t be a crime. This was a strategic error by the IP industries: you may punish people for their actions, not their possible actions.

Yet the hysterical case made against SOPA was quite often dubious. SOPA was solely concerned with rogue sites beyond US jurisdiction, and so could not "make YouTube disappear", as angry anti-SOPA bloggers wanted us to think. And the ‘censorship’ argument needs the cold blast of reality to give it some context.

Remember that Google itself is a web censor on a quite significant scale, and in an arbitrary way. Last year, Google made 11 million sites disappear on a whim, removing the .co.cc domains from its search index because the sites were deemed by Google to be "spammy". Many were, but were all of them? We shall never know, and really, it’s beside the point: a single powerful corporation was making a subjective value judgement call to make a large chunk of the internet vanish. In this case Google was judge, jury and executioner, and the process had no ‘transparency’, another favourite buzzword of the critics. And this single corporation is a vertically-integrated operator of enormous social consequence. It holds monopolies on search and pricing; it creates de facto technical protocols; its decisions decide which small businesses survive or perish.

So this looks less like a row about censorship, but about who gets to do the censoring – and Google would dearly love to be in sole control. Bear that in mind the next time Google says it wants to keep the internet open.

As we know, Google benefits greatly from anti-social behaviour. In both the short-term and and long-term it has a strategic interest in not dealing with piracy. In the short-term, Google nets millions of dollars from its ad networks from pirate traffic. And long-term, rogue sites diminish the likelihood of a legitimate market of creators and consumers. So at some point in the future, having destroyed the legitimate institutions because they can’t make money, Google may slip into the role of the world’s de facto royalty collecting society – and creators will have nowhere else to go but Google. Meet the New Boss: he might not look like the Old Boss, but at least you got paid sometimes.

We’re nothing but our creativity

The deeper battle is a the historic one, about how much social and corporate responsibility new internet companies are obliged to take on board. The DMCA legislation of October 1998, correctly, let them off the hook for anything. This was done in the hope that new markets would be created without the constraints imposed by backward-looking copyright industries.

But now, after 15 years, things seem quite curious. It’s the web giants that are backward-looking, and who fight hardest against the creation of markets. (They’d much prefer to be personal data miners, rather than allow free commerce to flourish.) Silicon Valley has done very well wrapping angle brackets and pastel colour graphics around 30-year-old internet protocols and calling them innovation. IRC becomes Twitter, for example. As former vulture Ashlee Vance writes (a must-read), Valley’s Web innovation may not leave very much for our grandchildren – and is acquiring all the vanity of Hollywood.

Web companies may have thoroughly outgunned property rights owners in terms of light and noise generated online fighting SOPA, but that’s because the professional industry lobby groups focus like lasers on the lawmakers. And here, with the rise of China, the deeper argument is being won.

China today mirrors the dynamic growth of the United States 100 years ago, and has the same buccaneering disrespect for other people’s stuff. Which leaves the question of how to compete. The West doesn’t do manufacturing any more, so the ‘intangible’ or ‘invisible’ inventions are much more important. The West can’t afford not to protect its inventors and creators: if it can’t, there’s nothing to build the service economy of the future upon, and life becomes a diminishing series of asset bubbles. This is simple, brutal economics, and Utopian waffle about internet freedoms do not cut much muster – at least not on a planet where unicorns don’t have the vote, and the emerging Eastern economies are delighted to take what they can.

And the specific problem SOPA was designed to address – exquisitely demonstrated here by this independent film-maker at Pop Up Pirates – is very much a live one. Rights-owners argue that it’s because their property rights aren’t enforceable. For years we could argue that ‘harm’ took place because of the absent of cheap, decently-priced legitimate services. But with cheap streaming services coming online, that’s hard to argue now.

So there’s a problem, and we don’t like web-blocking legislation as a ‘solution’. Fair enough.

Wrinkle avoidance strategies

For years, copyright industries avoided old-age wrinkles by using enforcement to retain control – working against the grain of technology, rather than with it. Copyright industries are not natural enforcers, when they try it, they’re quite spectacularly clumsy. Take your pick from from an unsavoury list over the years that includes remote kill-switches for media, or creating and distributing millions of spoofed music files containing noise, or plans to insert spyware onto your PC that locks your computer or deletes your music. All pretty dumb. More recently, they’ve started to work with the implications of digital networks: with UltraViolet you buy a license, rather than repeatedly purchasing limited rights over and over again. That’s a step forward.

And it’s the sort of progressive thinking conspicuous by its absense in Silicon Valley, and its armies of ‘copyfighters’. They love the war too much for it to end. And to keep fighting, you must avoid thinking about constructive, mutual agreements. That might cause wrinkles. Spencer’s ear plugs are firmly in place.

Well, to return to where we started, legislation is quite unnecessary. That is, if ISPs abided by a clear and open voluntary code to respect creators’ rights, which required booting out the few serial offenders; if ad networks refused to support parasitic foreign companies; and if search engines shared revenue with media companies to whence they drove traffic, we wouldn’t need new laws. This is not a fantasy – it’s going to happen in the UK, remember. The UK has website-blocking legislation on the statute book, but Culture Minister Ed Vaizey wants a voluntary agreement – a most liberal solution – instead. Alas ISPs, service providers and search engines today see only risk in being socially responsible, not an opportunity.

As Friday’s exasperated joint White House statement points out, the copyright worries are justified, and entitled to some kind of enforcement – they won’t go away. A property owner must be able to enforce their property rights, with legal backup, and the effective sort, or the rights become meaningless. They shouldn’t be able to do so easily or cheaply, lest this becomes a substitute for innovation, for finding talent and marketing it effectively.

"Don’t limit your opinion to what’s the wrong thing to do, ask yourself what’s right," the Three Czars demand.

However, Silicon Valley’s problem – and one activists have – is that they’ve never thought about it like this. They’ve never seen a voluntary copyright enforcement backstop they liked: they were all problematic. Campaigners instinctively oppose everything – leading to ever more bonkers legislation.

Like Spencer, Silicon Valley doesn’t seem to want worry about it, it doesn’t want too many wrinkles in old age. This is why I call SOPA "what goes around, comes around" legislation. It isn’t nice, and it isn’t necessary, but we’re all here because Silicon Valley’s web companies refuse to grow up. The White House just told them they should. ®

The Business Department BiS has launched a copyright consultation, inviting views on the recommendations raised in the "Google Review", as the "Hargreaves Review into IP and Growth" became known.

Hargreaves was tasked with looking for changes in UK IP law that could stimulate economic growth. Ian Hargreaves’ review featured significant input from the IPO, formerly the Patent Office, which was once at the Ministry of Fun, but is now an ideologically supercharged hothouse within BiS. Hargreaves and the bureaucrats faced two significant challenges.

One is that the small and medium-sized businesses that try and create wealth using the patents and copyright systems have a very different view of the "problem" than Google does, or a bureaucrat does. Patents are ruinously expensive for a clever inventor to defend, and many can’t afford to do so. Copyright can’t be cheaply or effectively enforced online – a big problem for the entire supply chain in various sectors from photographers and visual artists, to independent film makers, to labels – to name just a few.

When digital SMEs were actually asked what they thought of the IP landscape, they were quite emphatic. Only 10 per cent thought copyright was unfair, 7 per cent said it stopped them innovating, and only 5 per cent thought the UK copyright regime stopped them innovating. Large majorities of two-thirds or three-quarters thought copyright fair, and encouraged innovation. These figures, by the way, are from a report included in Google’s submission, created at Google’s expense… [pdf].

Over half of SMEs want better enforcement of their rights as inventors and creators. 52 per cent of SMEs said the costs of IP enforcement deterred them from using the system. It might have been expected, therefore, that Hargreaves would focus his time on enlightened enforcement suggestions, making policing cheap to stimulate growth.

But any attempt to enforce IP brings out the Chicken Little crowd, honking furiously that the sky is falling in on them. To enforce copyright online risks destroying the Unicorns’ natural habitat: the cybernetic meadow.

So the empirical evidence was not the answer Cameron and his Special Advisors wanted to hear. Hargreaves dealt with this by ignoring the empirical evidence, and by leaning on anecdotes instead – and then hoping somebody would manufacture some evidence more favourable. This duly arrived in the summer, from the IPO, in its rushed "economic impact" – which promised enormous riches to the nation if the Google Review was implemented. We picked apart here and here too, where it verges on the surreal.

The second problem facing Hargreaves is that there’s very little scope for wriggle room when it comes to IP. Nations that sign up to Berne and WIPO, and European nations that sign up to the ECD, can’t do much more than withdraw from the system wholesale. There is scope for how some exemptions are implemented, though, and the Google Review seizes on these with gusto.

So Hargreaves recommended – and we are invited to comment upon – new exemptions for format-shifting and parody, a widened exemption for non-commercial research and revising the exceptions for education and disabilities. UK Music said the format shifting exemption was "long overdue" but asked why British musicians were being penalised. The format shifting exemption is permitted under the EC Commerce Directive providing that the member state provide "fair compensation" – and most do. In Sweden iPods carry a levy of €19. But the IPO doesn’t want to introduce one.

The Government also wants comments on Orphan Works clearance, making it easier for libraries to profit digitised collections, and the Daily Mail to lift photographs from Twitter. This revives Clause 43 of the DEA that was shot down.

But Orphan Works is part of the main course – a huge proposed change in copyright.

If you ask nicely, we’ll give you your rights back

What’s new is that the Government also wants comments on something that hardly featured in Hargreaves at all – and hasn’t been part of the public debate – a copyright registration system.

Under international treaties, you own your stuff, you say how it’s used, and these rights are is automatic – you don’t have to sign up to any creator’s rights members club. An Extended Collective Licensing regime turns these rights and obligations upside down. Creators would have to opt-out of an ECL system. A work not covered by ECL becomes an orphan (heads you lose, tails we win).

Whitehall-watchers say ECL is the personal crusade of the IPO’s top ideologue Ed Quilty, who privately floated the idea of opt-in copyright registration two years ago, but was rebuffed. He has seized upon Hargreaves as a Trojan Horse for ECL and has been doubly-blessed: the BIS minister responsible Baroness Wilcox – who provides a foreword to the consultation – hasn’t got a clue what is going on, or what the implications might be. It’s also a stealth project – ECL was omitted from the Executive Summary that only hurried politicians and the media ever read. Since this augurs the biggest break in copyright law for a century – and has huge policy implications for UK – you’d think it would merit some debate.

Amateurs should be as alarmed, if not more so, than professional creators about the consequences of market destruction – if you’ve ever posted a photo to Flickr, you should take note. There’s a good layman’s discussion here. It concludes:

…in sectors where an ECL scheme is imposed, authors will lose the right to control the use of their works unless they take the steps required for them to opt out. Otherwise their works may be used commercially without their authorisation. They may also be used in ways that are distasteful to the author, damage his or her reputation, or injure the future market for the work. What is currently being proposed is the mass appropriation of private intellectual property, much of it belonging to the original creators, and its licensing to commercial corporations, with archives and libraries that hold copies of the originals receiving inducements to participate.

[emphasis added]

In other words, the state is stealing your stuff for the ‘common good’. Don’t say you haven’t been warned.

Finally, you can begin to get an idea of how much of Hargreaves was written by the IPO, when you read the proposals to vastly expand the scope of …. the IPO itself. This is enthusiastically endorsed by the consultation paper: "more for us to do, please", it says, "how big do you want the IPO to be?". (We paraphrase). There’s a problem with this in that the IPO, which nominally has the job of bringing clarity to IP issues, and supports IP-based businesses, instead brings confusion and finds ever more ingenious ways of screwing them.

But this kind of mission creep is what happens when you invite bureaucrats in to help with the typing. ®

Hollywood’s big plan to update the industry for the digital era – UltraViolet – comes to the UK on 26 December, the consortium behind it has revealed. It will be an inauspicious start, represented by just one new movie release, but there’s no mistaking the ambition of the project. Three years in the planning, UV is Hollywood’s attempt to get right what the music business has got woefully wrong, and it isn’t unreasonable to describe it as the biggest shift in thinking in the history of the movie industry.

Since the launch of VCR systems in the mid-1970s, consumers have merely bought a limited licence to watch a movie. New formats have been an excuse for Hollywood to get us to repurchase the content. But digital networks have made a nonsense of that notion, and enabled a huge new range of diverse devices and formats.

So, through UltraViolet, punters will buy a universal, lifetime right to watch a movie in any format they want; it may be streamed to any device from the cloud, or downloaded to any device. A purchase of a UV BluRay pack or DVD contains a redemption code that automatically grants these rights to stream or download the movie too. Eventually, UV-enabled TVs and set-top boxes ought to make it all seamless: you own the movie for life, and should be able to play it anywhere.

Perhaps more significantly, the scheme is devised to encourage retail participation. Users can manage their UV accounts through the web, or through apps such as Warner’s Flixster. Netflix, LoveFilm and FilmFlex are also supporters. And supermarket giant Tesco is one example of retailer banking on UV to enter the home movie business. Tesco is expected to create UV accounts automatically from customers existing Tesco cards, if user so wish.

I had a preview this week – here’s a report.

UV is an account-based system, but an account can have up to five members, and the key account-holder can set several levels of access for the members of a household: so kids can’t see adult-rated movies, for example. Three members of the same account can watch streams simultaneously, say, if they are in separate rooms or geographical locations.

The account can be managed through the website uvvu.com, or a partner app or website. So expect to see UV embedded into Amazon and Tesco accounts, or Netflix and LoveFilm profile pages, from which it can stream to your set-top box or PC.

I saw the Flixster app used to manage the library, acquire a licence, and stream a movie to an iPad. The Flixster app runs on iPhone, iPad, Android and Blackberry, and integrates Rotten Tomatoes reviews into the app. It was all pretty straightforward. There will be dozens, and probably hundreds of ways of doing this, all with your personal library at the end of the network.

"We don’t expect people to be indentured to one retailer all their lives," is how Mark Teitell, executive director of the DECE consortium behind UV, explained it to me.

(So here endeth the era of the proprietary ‘ecosystem’, perhaps.)

Getting started

To set up a UV account you don’t need to give much information: pretty much just an email account that can be validated. No credit card information is required. This is by design – to encourage retail participation. The first UK movie to contain the UV redemption code will be Final Destination 5. Warner tells us all new theatrical releases will contain a UV code, and all major studios will be giving it some marketing welly from the middle of 2012 onwards.

Streaming just starts – there’s no user device authentication, it just fires up. I gather that up to 12 devices can be authenticated for streaming – just delete one you don’t use any more, or allow them to drop out as new ones are added. The consortium hopes this will be enough for most accounts.

The next stage in the UV roadmap will be downloading – and here the consortium needs to agree a common file format, which it expects to have in place some time in early 2012. This will be an umbrella for five industry DRMs. Yes, it’s DRM, but again with enough flexibility built-in (the DECE hopes) so that users don’t notice. The whole idea is not to use DRM to force you to pay each time, but to reward you for paying with lots of options. Once the file format is in place, the consumer electronics giants and set-top box manufacturers such as TiVO are expected to launch their UV-ready consumer gear. Sony, Samsung, Toshiba, LG, Fujitsu and Panasonic are DECE members.

An inauspicious start, then, come Boxing Day? Not so, argue the studios: with UV you’ll already have a lot more out of the box than Hollywood has ever given you. You’ll have a lifetime licence, and the flexibility to stream to any device from the cloud. Warner says most of its new theatrical titles including Happy Feet Two, Sherlock Holmes: A Game of Shadows and The Dark Knight Rises will be UV-ready.

Brave new world?

It’s hard to underestimate the shift in thinking here. It’s a seismic shift in attitude by the entertainment industry, and one that’s taken some people by surprise: note this tweet from a campaigner at the taxpayer-funded quango Consumer Focus, made just only two weeks ago. It isn’t just consumers that the DECE needs to educate, it’s "professionals" who might need to change their script.

The only notable refusenik is Disney. Disney has a close relationship with Apple, which has its own proprietary ‘ecosystem’ for accessing movies – requiring Apple’s iTunes, Apple’s DRM and hardware. But DECE members think that might be Disney’s problem, rather than UV’s:

"All of the studios behind UV will make sure they’re UV compatible by the end of next year," Robert Price of Fox told us. "It’ll be odd if it doesn’t have a UV number.

"This is a nascent launch. Where we are today isn’t where we’re going to be in two years’ time…"

This may not be what the corporate sponsor Google, which benefits from internet piracy and fights enforcement proposals, had in mind when it funded the research. Google is currently leading the opposition to the new SOPA legislation in the US, which obliges service providers to take greater responsibility.

Perhaps, as in Brecht’s poem, Google wishes “to dissolve the people and elect another”, until they get the answer they want.

Columbia University, who Google funded to conduct the survey, has a very hard time spinning it favourably for their corporate paymasters. They resort to the old trick of rephrasing the question until it got the desired answer. (Statisticians sometimes do something similar: it’s called “torturing the numbers until they confess.”)

Asked if websites should be “censored”, 46 per cent said yes, and 49 per cent said no. Fewer agreed if the question was posed in a way that implied legal content was being accidentally blocked. And asked if “the government” should “censor” websites, the number fell still further, with 36 per cent in favour and 64 per cent disagreeing.

The researchers stopped short of asking whether the public approved of the government unlawfully kidnapping their children while they censored websites and burned the Holy Bible just for fun, which is a pity. But you get the general idea. The answer depends on the question.

Two UK surveys have both shown strong public support for stronger law enforcement for online infringement. Even pirates agreed with the proposition that they were doing something a bit iffy, and would stop.

Which brings us to what wasn’t asked in the survey. There are some serious omissions.

In the UK, a mere 11 per cent disagreed with the statement that: “It is important to protect the creative industries from piracy.” But remember this new study is Google-funded research; they don’t want vital context like that spoiling the numbers. The same UK survey also showed that whacking free-riders is popular; 51 per cent polled in the UK thought serial copyright leechers should be punished more strongly, including many “pirates”. That question wasn’t asked by Columbia, either.

The survey instead asked if people had ever committed online copyright infringement, and the answer tells us something we already know: many people have, and the number rises among under-30s. It doesn’t ask if this is a regular occurrence, and how much is casual and how much is “hardcore”. The survey does ask how much of people’s personal collection is pirated, but what would be more useful is a “flow rate” (like the GDP measure), not the accretion, so we haven’t really learned anything about habits or behaviour.

The researchers instead ask whether the public like any of the punishments on offer, and guess, what? They don’t really like any of them very much.

Early data from France suggests most people stop pirating after just one letter, the number of people who have received two is tiny. Spending money on recorded music is now optional, and the copyright industries hope that people who love music go back to buying more, rather than spending the “saved” cash on beer and other entertainment, as they are free to do now. This is the justification for the legislation.

(Which is clumsy stuff, as your reporter never ceases to point out; there are other ways of discouraging anti-social behaviour than blocking sites).

No industry research into piracy is ever believed by opponents of digital copyright enforcement, the so-called “copyfighters”. This is for two reasons: studies have in the past have notoriously exaggerated the economic impacts of piracy for tactical reasons. Much like alarmist Greens, copyright groups want the threat to be seen as exceptional, requiring exceptional action. But secondly, pirates don’t want to acknowledge that piracy does anyone any harm – so they block their ears.

“What’s that you say? Never paying for anything hurts the creator? That can’t be true. And oh, I can’t hear yoooou!”

In fact, that seems to be exactly what happened here.

Big media companies would like the freedom to use artwork they find on the web without having to worry about lawsuits or negotiating market rates with creators. The web is awash with unattributed “orphan works” – and thanks to cheaper technology, social networks and self-publishing, there’s more being published than at any time in history.

There’s also a strong case for releasing enormous amounts of cultural work that doesn’t have a traceable author, and institutions such as the British Library would like to release this and commercialise it. These are also, confusingly, called “orphan works”.

The problem is, how can you release these cultural works without imperilling the professional market or the rights of amateurs whose work can end up as valuable front page commodity?

The British Library’s Ben White went head-to-head with Paul Ellis of the photographers’ insurgency group Stop43 – formed to fight orphan works legislation in the Digital Economy Act last year. It was feisty stuff and neither would back down.

While the snappers had carefully thought about the cultural problem – and had a proposal to encompass it – the British Library’s White had no time for the photographers. He favours compulsory extended licensing – which confiscates their digital copying rights – for the greater good. It works in Canada and Japan, he says, and if there are problems with it, they’re not apparent.

Ellis pitched the proposed National Cultural Archive, which would be an online marketplace that you can upload any picture to and Getty’s PicScout image recognition software will find similar artwork that’s available – be it royalty-free or with a price tag. This is useful if you have an image of unknown origin, or a picture you can’t use for copyright reasons, but would be happy with something similar.

Ellis likened the system to the proposed Digital Copyright Exchange marketplace, but described it as “rather more ambitious”. The copyright exchange was put forward by Ian Hargreaves, who led the so-called Google Review into intellectual property.

“Everyone is now a photographer. Those of us with Facebook accounts are published photographers,” said Ellis.

“Amateurs can match professionals… a photograph you take that appears on a front page has great commercial value – so why should you not participate in that value?”

The British Library sits on a lot of great material and has a powerful moral case for making its archives more widely available: that is its mission.

But it doesn’t seem to be able come up with an argument that avoids making other people worse off as collateral damage; worse, it seems oblivious to those consequences. This makes the library look extremely arrogant, and it projects a tremendous sense of entitlement. “We can see how orphans could harm anyone,” they argue, “but that’s not our problem.”

A good litmus test of any claim of digital rights is whether its success causes avoidable collateral damage to other groups. Should one group lose just so another can gain? MPs were a bit more aware of the complexities of the debate, after this week, and quite a bit better informed.

In the meantime it seems bizarre that Facebook and the BBC are able to strip metadata from photographs that are uploaded to the site en masse. They know the authorship of almost everything uploaded to the site – but then throw that away. They’re “orphan creators” on an industrial scale.

And it’s fascinating to see big publishers, who complain long and hard about internet piracy, suddenly twig the financial benefits of rolling over copyright.

Yarr!

Now we know why what was widely called the “Google Review” into intellectual property came to the conclusions it did. And we have it from the horse’s mouth: not Google, but Professor Ian Hargreaves and his team at the IPO, who “guided” him.

If you recall, a year ago the Prime Minister David Cameron revealed that the Google founders that they could never have founded Google in the UK, because of its copyright law. Even Google could never substantiate the quote, or provide a citation. Rather than getting a public inquiry, and shaming, of a foreign corporation for misleading our PM so badly – Google got the government to explore how the law could be altered… to benefit companies like Google.

So the review began with a mistake, and its guiding philosophical idea was a naive, simplified, and fantastical version of the world. This set the tone for what followed.

Hargreaves came across as wry and likeable, as he always does, but his words revealed the bien pensant view of the internet, its potential, and its commercial challenges.

“Politicians are afraid to address [copyright] because of fear of damaging the entirely legitimate and desirable wishes of musicians and other creators to have a fair level of protection, so they can make a return on their own work. I do disagree how this machinery has spread, and become an undesirable regulatory restraint on the internet [our emphasis] and the internet’s effects on the economy“

He continued:

“That is a very, very big risk for an advanced knowledge economy like the UK to run. In my view we can’t afford to run it. It’s urgent; the government has to take the action I have recommended it take”.

The sky was falling, he’d felt a piece of it land on his head. And he hammered home this urgency in his conclusion, in case you missed it:

“The digital revolution is not one-third complete, based on the penetration of the internet around the world. If we don’t ‘Get with the Pace‘, we will pay a significant economic price.”

There are several flaws to this approach.

The graph below illustrates the recent commercial fortunes of two technology companies. One of these has negotiated with incumbents and innovated to establish platforms that create new markets. It didn’t lobby for the rules to be changed. It worked with what rules there were. It created an explosion of economic value.

The other company, by contrast, lobbies intensively for the rules to change (one of the recipients of its cash shared the stage with Hargreaves), so its costs can be lowered. It’s why we were here. The first is Apple, and the second is Google.

Now, what this shows that there is more than one approach to dealing with incumbents and the legal and regulatory status quo. The empirical data here clearly tells us that platform creation within the rules is not only possible, but actually far more lucrative than the slightly sleazy backroom business of lobbying for the rules to be changed. It also demolishes the “pace” argument – which is an appeal to the Precautionary Principle: that if we don’t do something drastic very soon, we’ll face a far greater cost. (See Iraq, WMDs). By creating markets for digital content, Apple ran counter to the perceived wisdom of internet gurus that people would never pay for it. Newspapers have followed suit with paywalls, with some success. Apple killed Free.

Hargreaves’ view of internet growth is based on one particular view of the world – and it happens to be one one that isn’t very good at producing growth. Hargreaves is evidently a decent and intelligent man, he is just basing his judgments on a view of the world that is Utopian, and feels very dated. This leads to the other problem, which is that his argument is based on exceptionalism, and makes demands of groups that it shouldn’t.

Viewed sociologically, the argument is that one group needs to become weaker, just so another can prosper. History shows that time and again, technological innovation allows many parties to prosper – no technology content market has yet done otherwise, or removed rights. If I was an internet guru, I would call this the Orlowski Principle, and Tweet it like mad. But it’s actually the way good policy is conducted since the Enlightenment.

Yet for some reason, Google prefers to seek to change the rules rather than create new markets. Your speculation on why they adopt this approach might be is as good as mine.

This Google isn’t working

Google isn’t very good at consumer products, as the late Steve Jobs told Larry Page, but it should be able to do large scale platforms. Maybe it isn’t very good at doing the negotiations – with finance and creative industries – needed to push this through. Maybe all of its best ideas are invisible. Maybe it doesn’t do ideas. Maybe it’s innately fearful and conservative – as large record companies were for years, clinging to the CD, and failing to create digital markets or physical replacements.

Google is still a one-club golfer, and that club, its advertising brokerage, doesn’t really begin to unlock the potential value – as Apple’s content store has shown. Whatever the reason(s) may be, academics such as Hargreaves seem not to have really taken these developments on board: they appear only too keen to endorse Google’s view as the one true way of achieving growth.

For Hargreaves, the internet creates such a unique, singular moment of historical anxiety, we can suspend traditional ideas of fairness. It shouldn’t make us deaf, though.

Read more at The Register.