ArtsWatch: GAO Questions Industry Estimates Of Piracy's Harm

Doubts over estimates' accuracy mostly due to covert nature of the problem
April 19, 2010 -- 10:13 am PDT
By Philip Merrill / GRAMMY.com

The Recording Academy actively represents the music community on such issues as intellectual property rights, music piracy, archiving and preservation, and censorship concerns. In pursuing its commitment to addressing these and other issues, The Recording Academy undertakes a variety of national initiatives. ArtsWatch is a key part of an agenda aimed at raising public awareness of and support for the rights of artists. To become more involved, visit Advocacy Action @ GRAMMY.com and sign up for Advocacy Action E-lerts.

On April 12 the U.S. Government Accountability Office reported on its efforts to quantify the damages caused to the economy by counterfeiting and piracy. Industry efforts were smacked down as inadequately rigorous, but the GAO was unable to recommend a proper approach. The illicit nature of piracy received most of the blame since it causes a lack of data. The report suggested a more careful approach would be needed, using formulas based on assumptions that dealt with each of the many industries affected. The Copyright Alliance called attention to the agency's acknowledgement that damages go beyond lost sales and said, "…it is important to note GAO's endorsement of the fact that piracy has a multiplier effect that ripples throughout the economy." The report notably included views expressed by consumer advocates that infringement produces benefits such as saving consumers money and granting access to creative works before their release date. This report was called for by the same legislation that created the new position of U.S. Intellectual Property Enforcement Coordinator and relates to comments the IPEC received last month. Although the quantitative estimates produced by content industries are severely questioned by this GAO report, the consequences are worse for consumer advocates' insistence that enforcement actions should only be taken after a rigorous cost-benefit analysis has been performed. When it comes to quantifying economic harms caused by piracy — let alone so-called "benefits" — it seems an adequately rigorous approach remains beyond what today's state of the art can accomplish.

The House of Representatives passed H.R. 3125, the Radio Spectrum Inventory Act, on April 14. Describing the bipartisan bill before its passage by a vote of 394–18, Rep. Rick Boucher (D-Va.) said, "It directs the [Department of Commerce's National Telecommunications and Information Administration] and the [Federal Communications Commission] to undertake a comprehensive survey of the nation's spectrum and report to us on current spectrum utilization, with recommendations of which, if any, of the least utilized blocks of spectrum should be reallocated for commercial use or be subjected to spectrum sharing with commercial users. The measure is a thoughtful approach to meeting the extraordinary spectrum demands the nation will soon face." Companion legislation S. 649 is pending in the Senate.

On April 14 the Senate Commerce Committee heard testimony from FCC Chairman Julius Genachowski regarding the National Broadband Plan. Genachowski expressed confidence in his agency's ability to make satisfactory progress despite the size of the job, the court setback to FCC authority covered in last week's ArtsWatch, and some senators' strong opposition to the FCC reclassifying Internet service to gain greater regulatory authority. Consumer advocates Public Knowledge noted that no senators complained in 2005 when the FCC used its own authority to reclassify Internet service under looser regulations.

Speaking to a group of French regulators holding a Net neutrality conference on April 13, European Commission Vice President and Commissioner for the Digital Agenda Neelie Kroes announced she will launch a public consultation on Net neutrality by summer and report the results before next year. In her remarks she endorsed the FCC's other five Open Internet rules but suggested Net neutrality needed an agreed-upon definition before a regulatory approach could be determined. She observed that some concerns could be met by enforcing other regulatory approaches such as minimum quality of service requirements, fair competition rules, or restrictions on Internet service providers' marketing language. Kroes seemed to believe it would be regulatory overkill to forbid charging companies a fee to guarantee high-speed delivery of their content because such a prohibition would inhibit future business models.

Since the UK's Digital Economy Bill became law earlier this month with strict antipiracy provisions included, attention has shifted to questions of what regulatory details remain to be put in place. On April 13 the Los Angeles Times editorialized that the focus on account-holder liability could stifle public Internet use at libraries and coffee shops. Separately, BPI Chief Executive Geoff Taylor told Billboard.biz that the UK recording industry organization would have to initiate lawsuits against some individual Internet users because the bill's legal protections for consumers make that a necessary first step before technical measures can be used to reduce online infringement.

Anticipation of Common Sense Media's upcoming digital literacy curriculum has included coverage in The New York Times and Cnet News. Designed for grades 5–8, it includes a standalone unit on "Respecting Creative Work. How to get credit for original creations and respect other's creative property."

On April 14 the Library of Congress announced it will archive public Twitter posts since the service's inception in 2006. The most recent tweets will be preserved after a six-month delay. The library portrays this as consistent with its efforts to preserve other digital material of historical importance.

 

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