IndustrySOPA, PIPA On Hold, But a New Threat on Horizon

SOPA, PIPA On Hold, But a New Threat on Horizon

SOPA and PIPA protests appear to have caused enough backlash to make Congress and Senate think twice about passing controversial legislation... at least during an election year. So why is a data retention bill on the calendar again?

Late last week, announcements came down putting both PIPA and SOPA on hold. Nevada Senator Harry Reid has postponed the Protect I.P. vote, while House Judiciary Committee Chairman Lamar Smith announced the committee will “postpone consideration of the legislation until there is wider agreement on a solution.”

Meanwhile, Smith is again pushing his Protecting Children from Internet Pornographers Act of 2011; it has been amended, passed the required committees, and was put back on the Union Calendar December 16, 2011. Who wouldn’t want to protect children, you ask? They must be monsters! This is precisely the mentality that may see H.R.1981, known as the Data Retention Bill by protesters, pushed through, as it aims to force all U.S. Internet service providers to retain all customer IP addresses for 18 months.

Don’t count either PIPA or SOPA out for the count. Though this type of backlash is a politician’s worst nightmare in an election year, vested parties are none too pleased the bills didn’t pass and will continue to pressure lawmakers to enact anti-piracy legislation.

PIPA, in particular, may be up for a vote in just a few weeks. Senator Harry Reid closed his press release announcement with a promise for PIPA’s return:

“I admire the work that Chairman Leahy has put into this bill. I encourage him to continue engaging with all stakeholders to forge a balance between protecting Americans’ intellectual property, and maintaining openness and innovation on the internet. We made good progress through the discussions we’ve held in recent days, and I am optimistic that we can reach a compromise in the coming weeks.”

In his press release, Chairman Smith again tried to hammer home the monstrous piracy issue and the devastation it causes:

“The problem of online piracy is too big to ignore. American intellectual property industries provide 19 million high-paying jobs and account for more than 60 percent of U.S. exports. The theft of America’s intellectual property costs the U.S. economy more than $100 billion annually and results in the loss of thousands of American jobs. Congress cannot stand by and do nothing while American innovators and job creators are under attack.

“The Committee will continue work with copyright owners, Internet companies, financial institutions to develop proposals that combat online piracy and protect America’s intellectual property. We welcome input from all organizations and individuals who have an honest difference of opinion about how best to address this widespread problem. The Committee remains committed to finding a solution to the problem of online piracy that protects American intellectual property and innovation.”

Indeed, it will be interesting to see just who lawmakers are willing to work with and which perspectives they entertain in reworking PIPA & SOPA or drafting a new bill.

Just One Consideration for the Next PIPA/SOPA Round: The Actual Cost of IP Theft

There are those who, like the Cato Institute’s Julian Sanchez(former Ars Technica Washington Editor), believe the piracy problem has been artificially inflated by Hollywood. He set out to investigate what he called the “bogus numbers” attributed to the MPAA and U.S. Chamber of Commerce in a January 1, 2012, New York Times article; figures that have been drilled into the American conscious by Senators, Congressmen and SOPA supporters throughout its debate.

One you might have heard from is the statement “According to the Institute for Policy Innovation, more than $58 billion is lost to the U.S. economy annually due to content theft.” The MPAA marched this figure out numerous times over the past few months, including in this pro-SOPA press release of December 16, 2011. This figure stems from a report by Stephen E. Siwek for the Institute for Policy Innovation, The True Cost of Copyright Industry Piracy to the U.S. Economy (2007).

Sanchez illustrates how Siwek arrived at the figure $58 billion by using a “dubious multiplier” to count the same money two, three, or four times in a single calculation. And to what figure did he apply this sketchy multiplier? His beginning assumptions came from a different MPAA report that claimed merely $6.1 billion in losses for the US movie industry. That report was commissioned to a firm called LEK Consulting by none other than the Motion Picture Association of America.


Interestingly, Siwek uses previous reports he’s written as sources for his research (see red arrows above), including a 2005 report called Engines of Growth: Economic Contributions of the U.S. Intellectual Property Industries. Hardly qualifying as unbiased research, that report was commissioned by NBC Universal. Yet findings from that study were used to fuel the IPI report, which has widely been used by SOPA supporters to propagate the “$58 billion is lost to content theft annually” myth.

Are you still with me? There is an excellent and detailed explanation of how this little game of telephone worked at TechDirt. Incredibly, Sanchez reveals in How Copyright Industries Con Congress that some unsubstantiated figures used by SOPA supporters and lobbyists to hammer home the need for anti-piracy legislation date back as far as 1986.

In a nutshell, NBC Universal and the MPAA commissioned reports, which became the foundation for another report, which produced a loss figure the MPAA could march to lawmakers as fact.

Even in his January 20 statement condemning the shelving of SOPA and criticizing the government for “failing to act,” MPAA Chairman and former Senator Chris Dodd promises that millions of American jobs will continue to be lost or affected by piracy.

At the very least, before another penny of taxpayer money is wasted on the war against piracy, the MPAA, U.S. Chamber of Commerce, NBC Universal, and other SOPA supporters have some ‘splainin to do. Some actual, verifiable idea of just how rampant the problem really is would go a long way after this time and money-wasting debacle.

Other Factors to Examine While SOPA & PIPA Are Shelved

The Recording Industry Association of America also expressed their consternation in a press release, saying, in part, “The Senate had an opportunity to have a national conversation about an important and urgent issue: protecting American workers and consumers from foreign criminals. It is a shame that the Senate will not have that debate next week.”


RIAA is choosing to overlook the obvious: there was a national conversation about it. It just wasn’t the one RIAA wanted.

In SOPA Explained: Why It’s Bad for the Web and How to Stop SOPA,” we looked at a number of potentially problematic issues in detail.

  • Who actually created the piracy problem and is it the job of Congress to legislate or the entertainment industry to evolve?
  • Are lawmakers listening to and consulting with tech industry experts in a meaningful way?
  • What measures must be included to protect free speech, innovation and the online economy?

SOPA and PIPA are resting. They are not dead and make no mistake about it: there are influential powers with vested interests pushing for their revival.

The public backlash against this dangerous legislation was swift and powerful; tens of millions were affected, millions were inspired to reactthrough protests.

Before these bills are brought back, or similar legislation even considered, lawmakers need to take a long, critical look at the money behind the movement. We have a piracy problem that may or may not have been overstated, an industry opposed to adapting in the way others have had to, and the question of why those who profited from distributing piracy apps and widgets are now among those most vocally pushing anti-piracy legislation.

The motivations of those pushing for harsh online controls that extend beyond U.S. borders have been challenged and exposed. It is the government’s duty to ensure they are serving the interests of the people they are elected to represent, not those entities funding their election campaigns.

The Next Threat to Online Privacy and Freedom – Data Retention

In the meantime, Rep. Lamar Smith is trying to resurrect H.R. 1981, the Child Protection/Data Retention bill. Despite vocal opposition from the ACLU, EFF, and at least 37 other human rights and privacy organizations (see their letter to the U.S. House Judiciary Committee), Smith and co-sponsors of the bill would like to make a law requiring proactive monitoring and retention of all IP addresses.

Despite the economic burden on ISPs, despite the fact that the bill requires data collection and retention on ALL users and creates a database rich for hackers, despite objections that this steamrolling of personal privacy would actually do very little to catch offenders, Smith is determined to push ahead with it.

If you have any lingering questions about the motives of those behind this bill, check out 112th Congress Committee Report 112-281 Part 1, in which you’ll find this little gem:

“In addition to proposing limiting retention to just child pornography investigations, some have also proposed limiting law enforcement access to the records to only child pornography investigations. This limitation too is flawed–and was rejected by the Committee at markup.

The Internet is not simply home to child pornography crimes. It is a virtual world where thousands of crimes are carried out every day–including telemarketing fraud, drug trafficking, human trafficking, cyber attacks, and terrorist plots. The lack of a uniform data retention mandate affects these types of investigations as well.”

This bill is not about crimes against children. That’s just window dressing designed to push through an Orwellian law that would see all citizens monitored and their activities recorded, at the expense of ISPs. U.S. law already allows the collection of IP addresses when a person is suspected of a crime, and this law extends far beyond use in crimes against children. To be clear, the report states, “The Committee rejected an amendment to limit access to IP address data to only certain crimes against children and related offenses.”

To voice your opposition against H.R. 1981, the Data Retention bill, visit the Electronic Freedom Foundation’s Don’t Let Congress Order Internet Companies to Spy on You page.

Please leave any additional protest or petition resources in the comments.


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