The first round of comments in the Federal Communications Commission’s proposed rulemaking on network neutrality have been filed, and there are a number of filings of interest to copyright owners and creators. I’ve taken the liberty of summarizing a few here, with links to the full filings. Note that according to the FCC web site, it has already received more than 23,000 filings this month alone, so the selection here is but a small slice. Note the filings below have varied opinions on the merit of issuing rules, but they all raise important concerns regarding creators’ rights.

There are a number of themes being explored below, including the harm by piracy to creators; restrictions on pro-consumer offerings of creative works; how poorly crafted regulations could impact pursuit of high quality of service with creative offerings; how free speech could be harmed, not helped, by poorly crafted regulations; and the ability to ensure that illegal traffic is not legally protected.

More than 300,000 workers in various entertainment-related unions spoke out in a joint filing by the American Federation of Television and Radio Artists (AFTRA), Directors Guild of America (DGA), International Alliance of Theatrical Stage Employees (IATSE), and the Screen Actors Guild (SAG). They wrote that they:

[S]upport the availability of broadband Internet access to all Americans in order to allow for the lawful flow of content; however, broadband policy will be incomplete as long as it fails to address theft of content via unlawful Internet distribution. Internet theft threatens grave harm to the output of our nation’s creative industries, and to the artists and craftspeople who make up the membership of the Guilds and Unions. In this rulemaking, the FCC has an opportunity to greatly improve the odds for combating online theft of our members’ work. The Commission should ensure that any rules it adopts will strengthen, not weaken, the rights of those who create this American resource.

Reasonable network management by ISPs, the unions write, should permit them “to block other harmful distribution via the Internet – namely, content distributed in violation of copyright, depriving our members of jobs and compensation.”

A similar approach was taken by the Songwriters Guild of America:

SGA shares the Commission’s desire for a free and open Internet. However, while the nondiscrimination principle appears unobjectionable on the surface, it in fact would have serious adverse consequences for songwriters, other creators and copyright owners, and should be significantly revised or deleted. In short, the nondiscrimination principle: (1) addresses problems that are largely hypothetical, and (2) would enshrine actual practices that have led to the decimation of the music industry and the impending demise of the profession of American songwriting and music composition. For the reasons stated herein, SGA encourages the Commission to focus on the real issues – which include copyright piracy and bandwidth congestion — and to avoid the distractions advanced by a small minority of interested parties with an economic stake in preserving the current piracy-infested Internet regime. SGA respectfully submits that, if the Commission changes course in the manner suggested by America’s songwriters, U.S. broadband consumers and the public interest will then be properly served.

That message was echoed by BMI, a performing rights organization for composers:

BMI’s principal concern is to ensure that any net neutrality rules adopted by the Commission do not have any unintended adverse impact on the ability of copyright licensing organizations to protect the copyright interests of the songwriting and publishing communities. Specifically, BMI believes that the Commission should not adopt any non-discrimination rules for Internet Service Providers that have the effect of preventing them from assisting copyright owners to monitor and police the rampant infringement of music copyrights on the Internet. In this regard, BMI supports in general terms the comments filed by the Songwriters Guild of America (“SGA”).

Many of the commenters pointed to remarks — by net neutrality promoters FCC Chairman Julius Genachowski, House Commerce Committee Chairman Henry Waxman (D-CA), and a key sponsor of net neutrality legislation, Rep. Ed Markey (D-MA) — supporting the notion that ISPs should be free to block illegal traffic at the network management level. ISPs should not only be empowered to combat infringement but should be encouraged to do so.

Take the Motion Picture Association of America, which makes this point while noting it is also relevant to the FCC’s Broadband National Plan, a separate proceeding about to be presented to Congress:

Combating copyright theft online will not only help provide consumers with legitimate access to the content of their choice, it also will help this country’s creative industries to continue to serve as an engine for economic growth and job creation. The motion picture and television industry alone, which comprises more than 115,000 businesses in all 50 states, is responsible for 2.4 million American jobs and more than $41.5 billion in wages to American workers. Online content theft directly and significantly erodes these economic contributions and the vital role that the motion picture and television industry, like all creative industries, can and should continue to play in America’s economic recovery. Likewise, inasmuch as illegal content currently clogs broadband pipes and undermines consumer confidence in the safety and security of the Internet, a reduction in unlawful online activity would help the Commission achieve its goal of widespread broadband deployment and adoption.

(Disclosure: MPAA President Dan Glickman and I both spoke in favor of broader broadband deployment coupled with robust online copyright enforcement, at a September 17, 2009, workshop hosted by the FCC regarding the National Broadband Plan. My statement, which focused on individual artists, is here.)

MPAA went on to note that the FCC can help promote enforcement of copyright owners’ rights online:

MPAA urges the Commission, as it considers its approach to network neutrality, to make clear that ISPs are not only permitted, but encouraged, to work with content owners to employ the best available tools and technologies to combat online content theft. Service providers also should be encouraged to work with content owners to implement consumer education programs that can help law-abiding Internet users find legitimate sources for online creative works, while simultaneously warning repeat infringers that they risk consequences if they continue to violate the law.

It is critical for the continued development of legal services, noted the Recording Industry Association of America, for online infringement to be targeted in order to ensure the continuation of legal alternatives:

It is essential that the Internet be a place in which copyrights are respected and in which the lawful commercialization of entertainment content can flourish. It is thus critically important that ISPs have reasonable tools at their disposal to address the unauthorized exploitation of copyrighted works, which frustrate the viability of lawful forms of online commerce, waste network resources, crowd out legitimate applications, and harm our culture… The Open Internet NPRM acknowledges that the proposed Open Internet principles should not apply to “unlawful” content, such as copyrighted works distributed without authorization, and that ISPs may engage in reasonable network management practices to address such uses of their networks. Unlawful use of the Internet to traffic in unauthorized copies of copyrighted works, including music and music videos, frustrates both legitimate efforts to bring such entertainment content to consumers online and the ability of law-abiding Internet users to use networks to their fullest potential. In these Comments, we encourage the Commission to stay its course and explicitly support, encourage and endorse ISP efforts to fight piracy. These efforts should include, but not be limited to, adopting reasonable network management practices that reduce the unauthorized copying and exploitation of copyrighted works and encourage users to engage in legitimate business transactions for music.

The MPAA picked up on this theme as well:

Equally important, as the Commission considers its nondiscrimination and transparency objectives, it should remain cognizant that a free and thriving Internet depends on continuous innovation and business model experimentation. In particular, as the Commission has acknowledged, compelling creative works are likely to be among the key types of content that drive broadband adoption. If this content is to be attractive to consumers, it must be delivered with a high quality of service and without latency, jitter, pixilation or interruption. The Notice reflects a proper concern that an overly-broad approach to nondiscrimination could risk foreclosing the development of consumer-oriented new business models, and that special quality of service assurances may be appropriate in order to “provide consumer benefits.” Thus, especially given the nascent market for the delivery of online video, MPAA believes that the Commission’s goals would be well served by an approach to network neutrality that allows for different means by which content providers and ISPs might arrange to deliver content, other than in instances involving demonstrably anti-competitive consequences or effects.

This brings in the Quality-of-Service (QoS) issue, which despite the rapid rise in robustness of broadband networks remains an issue and will always be an issue; any technologist will tell you that QoS capability increases at least as fast if not faster than delivery robustness. Thus the importance of network management.

Let’s look at the filing of the Information Technology and Innovation Foundation think tank, which by the way is by far the most substantive filing I read, going through the FCC’s NPRM in great detail on numerous points, many of which are beyond the scope of both this blog (and my comprehension). They cite Paragraph 137 of the FCC NPRM, which raises the question of prioritizing traffic for quality-assurance purposes, with ITIF noting “[t]o be considered reasonable, a network management practice needs to benefit users, not simply the provider.” Access to a robust, buffer-free consumer entertainment experience online certainly would seem to apply.

This issue of QoS is addressed in more detail by the Association for Competitive Technology:

There are two types of customers who are already purchasing enhanced QoS offerings from broadband service providers: end-users (primarily enterprise customers) and content providers. Not all content providers demand enhanced QoS. This option is demanded only by those content providers that supply QoS-needy content. Real-time applications represent an important type of QoS-needy content. Real-time video, Voice over Internet Protocol, and online video games cannot be experienced properly by the end-user if isubjected to jitter. Accordingly, real-time content providers demand enhanced QoS.

However, the QoS offerings aimed at content providers are the target of net neutrality proponents. Net neutrality proponents speak of “access tiering” — that is, offering tiered levels of QoS at different prices — as if it is some hypothetical strategy that will be employed at some future date to foreclose unaffiliated content providers. In reality, tiered QoS offerings are already here at different layers of a broadband service provider’s network, and for legitimate technical and economic reasons. Content providers are voluntarily entering into contracts with broadband service providers presumably because content providers (and their customers) value the service enhancements more than they care about the prices for the enhancements.

Enhanced QoS is not forced upon content providers as part of some bundle of services that the providers otherwise do not want, or because the broadband service provider has monopoly power over the supply of one of the products in the bundle. Furthermore, broadband service providers offer enhanced QoS at a surcharge to content providers, not because they are trying to foreclose potential rivals in an upstream market or to degrade the quality for content providers that decline the QoS option, but because it is costly to offer such enhancements and because a managed network ultimately generates benefits for Internet users.

The comments by the Software and Information Industry Association tie QoS and infringement together nicely:

SIIA concurs with the FCC analysis that the proposed rules “would provide broadband Internet access service providers substantial flexibility to take reasonable measures to manage their networks or to address quality-of-service needs, and to provide a safe and secure Internet experience for their users.” (¶108) As explained by the FCC, the rules would not protect unlawful content, and thus would not in any way prevent “reasonable practices employed by a provider of broadband Internet access service to … prevent the unlawful transfer of content.” (¶135) Thus, the principles “do not, for example, apply to activities such as the unlawful distribution of copyright works.” As the FCC correctly states in the NPRM, such unlawful distribution “has adverse
consequence on the economy and the overall broadband ecosystem.” (¶139) SIIA strongly concurs with this element of the FCC’s proposal.

Several commenters others noted the last thing the FCC should do is inhibit innovation, such as in the area of online copyright enforcement, which is improving in efficiency and accuracy at a rapid pace. Here’s the MPAA’s take:

Ultimately, the Commission should ensure that content owners and ISPs have the flexibility to innovate and develop the next generation of tools and techniques necessary to fight the scourge of unlawful online conduct. MPAA is confident that, if given the opportunity, the ingenuity of private industry will yield new generations of ever-more-sophisticated online protection technologies, which will be needed because content thieves are themselves constantly evolving their practices and developing new technologies to evade law enforcement and network management.

It didn’t seem to matter where the parties listed here fell on the actual merits of the rulemaking, they were consistent in their anti-piracy message. Take the Entertainment Software Association, which made clear that it “expresses no position here on the question of whether net neutrality principles are appropriate or necessary.” Citing multiple examples of how a robust Internet has revolutionized gaming for millions, they then made this point:

We support the FCC’s efforts to address anti-piracy concerns through appropriate language in the proposed rule and related commentary. In particular, we support defining “reasonable network management” in a way that explicitly permits broadband Internet access service providers (hereinafter, “broadband ISPs”) to prevent the unlawful transfer of content.

Many independent filmmakers are sympathetic to drafting NN rules, but still make clear the real harm done to them by piracy, such as described in the filing by the Independent Film and Television Alliance:

We also applaud the Commission’s determination that the regulations it proposes will not protect illegal content or the illegal delivery of content. Digital piracy of films and other video programming threatens the creative community’s ongoing ability to finance and make available the content sought by consumers and these acts of piracy must not be condoned.

The Institute for Policy Innovation was eloquent on the importance of online infringement:

Unless intellectual property rights are protected, content owners will withhold, rather than make available, their content. In order for our broadband networks to meet consumer expectations, they need to be rich with content. The U.S. economy produces more rich content than any other nation, and this creative content is an important component of U.S. global competitiveness. Rich content made available over broadband networks can become an even more important component of U.S. economic growth so long as property owners are assured of the ability to protect their content.

The fusion of the property rights of network owners and content owners is the ability of the content and network industries to work together on solutions that lead to content availability and protection over broadband networks. It is in the interest not only of consumers but also of network and content owners that means for protecting intellectual property over networks, including digital technologies for watermarking authorized content and detecting unauthorized content, be permitted to develop and to be deployed.

Several ISPs echoed this notion of having a shared interest with copyright owners regarding the targeting of illegal traffic on their networks. For example, AT&T noted the NPRM is “in tension with Section 230(c)(2)” of the Communications Act, “which expressly protects Internet service providers’ ability to take “any action . . . in good faith to restrict access to or availability of material that the provider . . . considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected.” The ISP went on to note that regulators must be careful even when speaking of regulation of lawful content, because new rules “could also interfere with their ability to protect against copyright violations, since effective efforts to police intellectual property rights cannot rely solely on ex-post responses to individual, already-adjudicated violations.”

The association for the cable industry, the NCTA, also emphasized the importance of their ability to manage lawful vs. unlawful traffic:

[I]n offering Internet service to their subscribers, cable operators and other ISPs ave never been required or expected to participate in the transmission of material provided by content and application providers with whom they have no contractual or other relationship, where they have reason to believe that such material may be unlawful. In particular, cable operators – whose business has always depended on and respected the rights of copyright owners and copyrighted works – should not be restricted in taking steps to prevent the transmission on its facilities of unlawfully pirated material.

A cable ISP, Time Warner Cable, put it this way, echoing AT&T and others both on the importance of targeting infringement and facilitating robust, legal and consumer-friendly services:

Herein lies one of the most significant flaws in the NPRM. With its broad and vague prohibition on “discrimination,” the NPRM would make it difficult if not impossible for broadband Internet access service providers to pursue various means of expanding consumer choice. The proposed nondiscrimination requirement would run the risk of interfering with customization and choice, even though preserving such attributes goes to the heart of the rationale for regulating. For example, consumers may see value in a service plan that blocks P2P traffic as a means of offering enhanced service or preventing minors from stealing copyrighted material.

Cable ISP Comcast had a specific ask for the FCC in this regard: “Create a presumption that any management practice that utilizes ‘best practices’ promulgated and publicized by trade associations, industry consortia or working groups, or a government advisory committee, as well as any practices that address recognized legitimate network management concerns – e.g., congestion management, security, spam, copyright protection, law enforcement needs, etc. – are reasonable.” In a footnote (204), Comcast also pointed to a joint statement by Google and Verizon Wireless that made clear “that these issues are legitimate matters for network management is beyond dispute.”

Meanwhile, Verizon picked up on the difficulties regulations could pose on the development of robust, legal services through partnerships with ISPs and copyright owners:

For example, the Commission proposes to regulate pricing of Internet services for the first time by effectively imposing a price of zero on a variety of services a network provider might offer to application or content providers. Proponents of net neutrality are already advocating further regulation to control everything from the prices end users pay for access to networks to how network capacity is allocated and used to what content may be legitimate – all of which would increase the costs paid by consumers.

One of the most interesting arguments to surface in the comments was the issue of free speech. The U.S. Supreme Court called copyright the “engine of free expression,” and a similar point was made by AT&T, relating it back to QoS:

The Commission’s rules would also violate the free-speech rights of content and application providers (including AT&T itself) that may seek to enter into prioritization and enhancement arrangements with ISPs in order to improve the quality of their offerings and ensure that their ‘speech’ is heard in a certain manner and by the widest audience possible. These ‘speakers’ may want to offer commercial services, entertainment content, or even political speech—and they may determine that an arrangement with an ISP (such as a multicasting arrangement) is the least expensive way to get their message to the most people with the highest quality and assurance… content providers seeking to provide their content in exceptionally secure ways to avoid copyright infringement might have a similar interest in reaching special types of transmission arrangements. Yet under the rules proposed in the NPRM, content and application providers would be precluded from reaching such a deal under any circumstances. Instead, they would be required to speak no differently from any other speaker on the Internet.

ITIF takes the issue of free speech head-on:

Given that the protection of free speech is a matter of public interest, and has in fact been offered as the rationale for attaching restrictions to differentiated services, why is there not an explicit rule in the proposed regulatory framework to address viewpointbased discrimination? Much, it not all, of the legitimate public interest outcry in favor of net neutrality regulations would be satisfied by such a condition.

There’s much more to read, and much more to say, about this round of FCC comments, and of course this isn’t the last of what will be filed. But hopefully this has been a useful start to your exploration.

This entry was posted on Tuesday, January 19th, 2010 at 2:39 pm by Patrick Ross and is filed under FCC, creators, internet, network neutrality, piracy, property rights. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.