Media and Communications Policy : Media Policy & First Amendment Foundation : The Media Institute : Free Speech, Media Regulation, Content Controls

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If newspapers ultimately survive, they might owe a debt of gratitude not only to Rupert Murdoch (as Patrick Maines suggested here recently), but also to two brothers who have combined their expertise in economics and the law to analyze the problem and come up with a potential solution.

As I wrote here earlier this month, online aggregators quite possibly could kill off newspapers by pirating the papers’ original news content.   Among the industry watchers who have studied this phenomenon are Daniel Marburger, Ph.D., a professor of economics at Arkansas State University, and his brother David Marburger, Esq., a partner at the Baker Hostetler law firm in Cleveland.   

The brothers have conducted an extensive analysis of both the economic and legal frameworks of the newspaper industry (print and online), and how these frameworks intertwine in the digital age.  In a number of papers and articles, the Marburgers have gone beyond the usual observations in two important ways: (1) They draw a distinction between “pure aggregators” and “parasitic aggregators”; and (2) they suggest a way of closing a loophole in copyright law that would seriously curtail the so-called parasites.

“Pure aggregators,” they say, use only a headline and maybe a sentence from the original news source, and then link back to that source (i.e., a newspaper website).  Pure aggregators are economically good for papers on balance because they drive readers to the newspapers’ websites.

“Parasitic aggregators,” on the other hand, take content from newspaper sites, rewrite it a bit, and then pass it off on their own sites.  These parasitic aggregators are bad because they retain readers rather than drive them to the newspapers’ sites.

In the Marburgers’ longest paper on the economic viability of newspapers, two section titles sum up the problem and its effect: “The federal copyright act allows parasitic aggregators to ‘free-ride’ on others’ substantial journalistic investments”; and “If the law does not change, newspapers continually will diminish their journalistic resources until they can subsist only by underproducing news or until they go out of business.”

The Marburgers’ solution would allow newspapers to seek redress for unfair competition under state statutory or common-law remedies for unjust enrichment – remedies that federal copyright law has in effect precluded since 1976.  They’re not suggesting a new law – just an amendment to Section 301 of the Copyright Act.

In this short space I am oversimplifying the Marburgers’ excellent analysis and recommendations – but I hope I can help draw attention to a thoughtful paper that is worthy of serious consideration and widespread recognition.   

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Microsoft’s Chief Counsel for Intellectual Property Strategy, Tom Rubin, recently gave a speech to the UK Association of Online Publishers that has made some waves.

At its most basic, Rubin’s speech was a call for greater copyright protection of “quality content,” and an appeal to content providers for new approaches to the dissemination of their content online.

“The evidence is in,” he says, “and I think we can safely say that the ‘information wants to be free’ approach not only does not work, actually it has been a disaster for almost all newspapers.”

Even if, as a columnist for CNET suggested, Rubin’s speech was meant to position Microsoft, at Google’s expense, as the “safe” technology partner for content companies, many of the specific observations, and the very language employed, provide a welcome contrast to the carelessness and condescension that mark so much of the digerati's take on the subject.

Speaking of the Evil One, turns out that Google and Yahoo! called off their joint advertising deal just in the nick of time.

A story in the December 2 issue of Am Law Daily quotes Sanford Litvack as saying that the Department of Justice was just three hours away from filing antitrust charges to block the deal when the two companies abandoned their pact.

Litvack says that had the deal not been withdrawn the DOJ would have challenged it under sections of the Sherman Act that “ban agreements that restrain trade unreasonably,” and “make it unlawful for a company to monopolize or attempt to monopolize trade.”

As noted here in September, because of its opacity and potential harm to online publishers and advertisers, the deal alarmed many people, including us. Glad to see it go away, unwept.
 

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The U.S. Supreme Court has an opportunity to chart a clearer course for copyright protection in the digital age if it agrees to hear a case from the U.S. Court of Appeals for the Second Circuit.  The matter involves a video-on-demand service offered by Cablevision Systems, and allegations by Cable News Network that the service constitutes the unlawful copying and public performance of copyrighted works.

The case raises at least two serious and unresolved issues.  First, who is responsible for making a copy of protected content?   The cable customer who makes a selection from the cable company’s video-on-demand service?  Or the cable company itself, for putting in place and making available the automated software that allows the customer to make that selection?  

Second, what constitutes a public performance?  Is a video-on-demand program viewed in the privacy of one’s family room a public performance?

Such issues are important because they go beyond the narrow scope of video-on-demand and touch on broader questions of how digital technology will be used to produce, store, transmit, and copy content across a variety of platforms – and how that content is to be protected in this digital environment.  Once again technology has far outpaced law and regulation, and is striding ahead in territories still largely uncharted.

How the courts map that territory will depend on how much value they place on protecting the creative rights of copyright holders.  Meanwhile, the digital age in general and the Internet in particular have generated a new class of content users (including many college professors) who believe that anything goes when it comes to obtaining and sharing copyrighted material.  (Remember Napster?)

In the Cablevision matter, however, professors of a different stripe have filed an amicus brief urging the Supreme Court to take the case.  Led by copyright guru Prof. Raymond Nimmer, this group of six law professors and one economics professor (all with impeccable intellectual property credentials) argue that creative rights are worth protecting and that the law should come down on the side of copyright owners.  (Two of the group, Dean Rodney A. Smolla of the Washington & Lee University School of Law and Prof. Stan Liebowitz of the University of Texas at Dallas, sit on the advisory council of the National CyberEducation Project, a program of The Media Institute.)

I agree with these professors, that the Supreme Court needs to take this case for the sake of digital information systems going forward.  I further agree that copyrights are essential – and that copyright protection needs to be clarified in this digital age.   

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You know that idealism has taken an odd turn when it’s associated more with the function and marketing of machines than with the creative work of human beings.  That is, or should be, the take-away from the latest copyright flap -- MPAA’s petition to the FCC for a limited waiver of that agency’s so-called SOC rules.

For those of you who don’t follow such things, the point of the petition is the film studios’ desire to market Video on Demand, high definition movies earlier than DVDs, and closer to their release date in theaters.  This would be done through deals the studios would make with video programming distributors like satellite TV, cable TV, and telecom companies like AT&T and Verizon.

Problem is that the program distributors are not allowed, without a waiver for the purpose, to market such films in the way (with SOC-enabled content) that would prohibit illegal copying and distribution, something the studios have reason to fear greatly.

In the grand tradition of all such, the petition has attracted not just the attention of the primary players -- the studios and program distributors on one side, and the video equipment manufacturers on the other -- but also the usual coterie of self-professed public- and consumer-interest organizations.

Seven such, led by the Washington group Public Knowledge, filed comments last week in opposition to the waiver, and their arguments speak volumes not only about their mindset toward such matters, but in a way that parallels the lack of regard for copyright in the larger universe of academia, much of the technology press, and among the digerati generally.

By all appearances, the biggest issue Public Knowledge et al. have with the waiver petition is an alleged frustration of “consumer expectations” that would ensue when owners of “legacy devices” (older high-def TVs that, unlike all of the more recent models, do not come equipped to recognize SOC data) find that they cannot order the movies at the earlier release date.

Though not guaranteed, both the logic and the language of the MPAA petition strongly suggest, however, that these same movies would still be available for purchase, VoD, at the later date that obtains today.  And in any case, they would also be available through premium subscription services, like HBO and Showtime, during the usual release window, about 9-12 months after their theatrical debut, and as DVDs in half that time.

Public Knowledge and company strain to characterize this matter in compelling language: “Users who purchase expensive multi-component HD-capable entertainment systems,” they say, “are likely to consider them generally future proof…. Even if early-release films do not appear on the list of VoD offerings for these users, customers will be left wondering why neighbors and friends -- those who subscribe to the same MVPD service at the same price, and have near-identical setups using different cables -- are not offered the same movies.”

The national interest in envy-free neighborhoods notwithstanding, the fear that someone will be disadvantaged because he has a digital device that, being older, can’t do things that newer ones can, seems like kind of a wobbly rock on which to build the church of the public interest.  This, because the clearest thing in the world about the Digital Age is that not only is nothing forever, nothing is even for very long.  And this is true of all things digital, from computers, to cameras, to PDAs, to satellite radios, and yes, even to TV sets -- all of which, in any case, are just machines!

The aspect of this, and related issues, that ought to be capturing the attention of public interest advocates, and “idealists” generally, is the human role.  In the making of films, for instance, it is human beings, not machines, who write the scripts, act the roles, design the sets, and direct the enterprise.   And it is these people, and their creative work, that should be at the forefront of our concern.

The issues raised by this particular MPAA petition aside, there is something these days that adds great poignancy, from an American perspective, to all things copyright related.  The United States faces international challenges that may be as daunting as those occasioned by the Cold War.  Specifically, we face the reality of global competition from countries both free and totalitarian, and with access to vital commodities, that is unlike anything we have ever known.

From behemoths like China, whose economy is projected to be bigger than ours in the foreseeable future, to countries like those in the Arab states, which are rich in oil, the USA is being challenged to find something it can do better than anyone else.  Because of our many freedoms, not the least of them freedom of speech and of the press, that thing is now intellectual property.  But it will need to be protected if it is to sustain us as a nation.

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For a company whose corporate motto is “Don’t be evil,” Google has an unfortunate capacity to look past the most obvious things.

Take, for instance, its stance in favor of “net neutrality.” Insofar as this concept is more than a slogan it’s a bad idea, and especially so as a matter of policy.  Legislation like the Internet Freedom Preservation Act, for example, invites real government regulation of the Internet as a solution to an imaginary problem.

As seen in the title of the congressional legislation, the language of net neutrality proponents, always over the top, has lately taken on a kind of goofy grandeur, with some — like Save the Internet, a coalition coordinated by Free Press — trafficking in such pap as “Net neutrality, the First Amendment of the Internet.”  (Of course it is.)

But what’s the attraction in all of this for Google?

The critics’ answer is that Google wants to ensure, whatever the cost to the future development and independence of the Internet, its own dominant, and free riding, position.

Google’s approach to the problem of copyright infringement also calls into question the company’s high-mindedness.

As charged in the case of Viacom v. YouTube,  Google is accused of flagrant violation of copyrighted material on the website of its YouTube subsidiary.  Google’s defense is that it takes down offending posts after being notified, and that this is sufficient under the safe-harbor provisions of the DMCA.

But in its complaint Viacom makes a compelling case that the takedown process is an endless loop of notifications and re-postings, and that, in fact, copyright infringement is at the heart of YouTube’s business plan.

A number of observers have suggested that Viacom’s lawsuit is just an attempt to win a favorable licensing agreement, and that in the end the parties will work out some satisfactory arrangement between themselves.

Perhaps, but copyright infringement is not a crime against humanity, it’s a crime against copyright holders, and if a negotiated settlement is the result, so be it.  This said, much might be usefully clarified if the dispute goes all the way through trial.

In any case, the point is that, as with net neutrality, Google’s posture regarding copyright infringement seems to be driven more by its own interests than by any sense of a community of interests.

By the standards of those of us at The Media Institute, which is primarily a First Amendment organization, Google’s lack of any meaningful concern or action regarding freedom of speech and of the press is the most troubling aspect of the company.

We would not have this concern if Google were just a small affair, or if the legacy media were fat and sassy.  But neither is the case.  Google is a giant while newspapers, for instance, are in a fight for their very survival.

Just to establish a frame of reference, as this post is being written (midday, July 10), here are the market capitalizations of some leading media companies: Time Warner, $50B; Disney, $56B; Washington Post, $6B; Gannett, $4B; New York Times, $2B; and McClatchy, $427M. And Google’s market cap?  It is just in excess of $172B!

In other words, the market values Google more than it values Time Warner, Disney, Washington Post, New York Times, Gannett, and McClatchy put together!  In fact a lot more — 45 per cent more.

And the rub in this is that, as an historical matter, the most important players in promoting and defending the First Amendment have been Hollywood and newspapers.  Yet these are two industries much beleaguered by the Internet, of which Google is the leader.

Against this background one might expect a company determined not to be evil to mount a major effort, if not in assistance to the old media, then in lending a hand in promotion of the First Amendment. Sorry to say, Google’s record in this regard is a blank slate.

It’s in the nature of the way the world works that one can “be evil” in more than one way.  One can do it by acts of commission, and one can do it by acts of omission.  Judging by the examples above, Google does it both ways.