March 30, 2012

SOPA could have had a compromise.

Filed under: Uncategorized — Tags: , , , , , , — admin @ 11:29 am

I have never really done this, but I’d like to respond to Paul Graham blog-style on here.

Paul, I have read many of your essays, and I’ve witnessed the “let’s break hollywood” initiative that you started, and I pretty much know where you stand on the SOPA issue. I also read your interesting analogy between content on the internet and air on the moon/earth. I feel you, I have been in the internet industry myself for many years.

BUT, I wanted to suggest to you what I think is a balanced / practical view of the matter, because you are a man who has a lot of great influence in the startup community, and I think your stance on the copyright issue makes a lot of difference. If any of my viewpoints resonate or affect your position, I think would help everyone.

Our society has grown up with this notion of “copyright” and “patents”. (I do not call them intellectual property because that is a loaded term.) They are simply government-granted monopolies to the authors and inventors, and their original goal is to promote the PROGRESS of science and the useful arts. The goal is to benefit the public.

Today, the situation has largely changed. Software patents in particular should be abolished (as I argue here: ). However, copyright is quite useful:

* It gives some recourse to blatant plagiarism. I do not think our society is ready for a completely wikipedia-style approach to art. Even Creative Comments licenses have attribution.

* It allows authors to feel that their “intellectual property” will be protected and frees them up to work on it. As a result there is less fear of freeriding — and yes, economic viability. Copyright makes the proprietary publisher / record label / magazine / news outlet model work.

(Note: this reason in no way justifies extending existing copyright durations forward or backward in time. We must fight that practice.)

* Copyright is what gives teeth to copyleft! If you want the biggest reason I think that copyright should exist, it is this: if enough “copyleft” type activities are organized over time, there is a competition between the open source (group-based) products, and the proprietary products like the ones you built with ViaWeb back in the day. Overall society wins from this competition. Over time, open source software can copy everything that the proprietary software does, provided there are enough people to put in this work. In fact the reason we can abolish software patents is because software is already copyright-protected, so to rip off a proprietary app, you need to write it from scratch! So the freerider problem is already solved for software.

Now I get into the one that causes the big controversy: Big Content.

* Copyright can be leveraged to justify big-budget productions, such as hollywood movies, and TV shows. The whole industry has grown up around this. Now, granted, they can command ridiculously high margins, withhold movies for years, and so forth. But this is the free market allowing them to do it. If you want to fight price fixing, fight the cartels that they form. At the end of the day each movie is a product that competes with any other movie. Just because we want to watch a movie, and get instant gratification does not change the economics of it. If the movie cost $20M to make, those bankrolling the movie should expect to have a chance to make a profit. Forcing the content industry to change their entire business model misses the point that laws are supposed to apply across the board. Copyright is certainly useful for helping small indie productions make a profit. You would have to lobby to have the law changed for the big budget productions, and justify why.

(Copyright makes movies, songs, etc. into “products”, which creates a mismatch: physical products have physical distribution and limited supply at each retailer. Songs and movies are just content and can be copied easier than ever. Government has to enforce this unnatural monopoly. But the problem is that for the little guys, copyright does protect them. It is true that every copyright holder, including the big guys with the popular movies, can withhold the content they create from us and artificially control the supply. But this is only painful because we crave their big budget movies, because they are not as interchangeable as we may like.)

. . .

Look, the entertainment industry may have lied about the number of jobs they are creating. The individual may be stuck in the past with their business models. All this is valid criticism. But what we must do is focus on their cartels, their old boys clubs, their culture of trying to sue grandmas with conglomerate agencies like RIAA and MPAA. We should discourage the price fixing they do to get huge margins. With today’s tools, more content can be created by less people, and more cheaply. That means there should be plenty of people competing with Hollywood soon, with Adobe AfterEffects and other new tools helping them. The question is only about the cartels and breaking into the industry. And frankly speaking, similar things exist in the tech space with Google/Facebook/Microsoft buying up companies, and VCs bankrolling startups. It’s just that in tech, there is much more variety and opportunity to do good, besides just delivering content to passive viewers.

If by “let’s break hollywood” you mean let’s break their ego-based, old-boys-club cartels, by all means we should challenge that. But if you mean that we should go after their copyright protections, I do not think there is a way to do it without huge collateral damage to our society.

PS: One last thing – about SOPA.

We all know it sucked. But the concern of the copyright industry was this — US produced movies were being downloaded by US citizens, from foreign sites more and more. Citizens that “might” otherwise pay for the movies (nevermind that they were screwing Netflix and taking their movies away).

I think there is a valid issue here, of enforcement and jurisdiction of the US government. There is a reason a “pirate bay” can’t grow to that size here in the US. It’s because the government takes down domestic sites dedicated to “intellectual property theft” if they are large enough to go after. That is part of the copyright protection.

But, of course, there must be due process. An insignificant pirate hub doesn’t become big overnight, and by the time lots of people know about it, the site can be brought to the attention of the government, and it can be sued. It may have taken years for the site to become that big. What’s another 30 days for due process to take place.

Similarly with SOPA! Personally I called my congressman and suggested the following amendment to SOPA:

When the dept of justice (or whoever is tasked with prosecuting these sites) finds a site, they contact it and issue a invitation to participate in domestic proceedings, and the invitation is good for a certain period (30 days for example). During this time, the site can respond, realize the problem, maybe make amends or reach a settlement. If they do not respond within the time period, then they are considered in default, and US financial institutions, search engines etc. could be compelled block them. However, at any time they can start legal proceedings within the US, and try to get reinstated, until the statute of limitations runs out (a few years).

This would have introduced the proper concepts of due process (inviting them to participate and offer them an opportunity to resolve the matter before taking drastic measures), jurisdiction (only US financial companies would be compelled to stop dealing with them, and possibly search engines, etc.) And IMHO it would be a good compromise.

To everyone reading this — thanks for getting to the end. I guess this letter is as long as one of pg’s essays. I have felt like many people  in the startup community, and I have tried to be open minded and get all the facts. I feel it is vital to bring this to pg’s attention as he and his batch of YC companies have a lot of effect on the world 🙂