The 2012 campaign is almost over, which means Congress may soon be able to get back to business.One of the things it should prioritize is fixing a longstanding tax on innovation that most folks don’t know about, but they should: the unfair legal treatment of Internet radio.
Internet radio is a favorite source of music for many, but there are relatively few big players in the medium.That’s because success in this space depends the ability to navigate through an obscure, rough-and-tumble neighborhood of copyright-land known as digital performance royalties. Thus far, that’s been a tough challenge: Internet radio services like Pandora pay about 50% of their revenues to record labels and artists, while satellite radio pays only about 10% and traditional AM/FM stations pay nothing.
Streaming digital music is one of very few types of creative work for which the price of a license isn't set in private by buyers and sellers. Instead, it's set by a panel of three judges in the Library of Congress called the Copyright Royalty Board, once every five years via a trial-like process. Music labels and musicians are represented by a company called SoundExchange, a spinoff of the RIAA. On the other side of the aisle are digital radio services like Pandora, satellite radio (Sirius XM), and cable radio companies like Muzak. As part of the process, parties present witnesses and evidence about the value of recorded music and the technology for delivering it to people's ears. The three judges then decide what royalties each kind of music service will have to pay for the next five years.
Music services aren't all treated the same, though - Congress gave older, more established companies a leg up. For satellite and cable radio, the judges set prices to give the labels and artists a "fair return" and the music service a "fair income." In practice, the judges tell these services to pay about 10% of their revenues to the artists and labels. For Internet radio, though, the judges are supposed to set rates based on what a "willing buyer and a willing seller" would do in an open market.1 This sounds pretty good, except that there is no open market, so there’s no consistent benchmark. As a result, judges have set Internet radio royalty rates at cripplingly high levels. Internet stations went to Congress twice, in 2008 and 2009, to get temporary relief from rates that would have put them out of business. Today they pay about 50% of their revenues to SoundExchange.
Some of the same Congressmembers who helped lead the fight against the SOPA and PIPA bills this year want to level the playing field so that Internet radio can thrive. Congressmen Jason Chaffetz (R-Utah) and Jared Polis (D-Colorado), and Senator Ron Wyden (D-Oregon) introduced a bill called the Internet Radio Fairness Act, which will give Internet radio stations a fairer process for setting the price of their music - and probably much lower prices for that music.
The legislation would put all digital music streaming companies on the same legal footing - Internet radio would get the same "fair return" standard that cable and satellite get, which will probably reduce the royalties Internet stations have to pay. The bill will also make sure that Internet radio stations can keep digital libraries of music to broadcast without facing copyright lawsuits. And it will help make sure that the Royalty Judges are qualified and can make decisions based on the best information.
As with all things copyright, the bill is polarizing. MusicFIRST, a coalition of record labels, artists' representatives, and unions, proposed another bill to standardize the digital radio rules - but their bill would apply the expensive "willing buyer/willing seller" standard to everyone. Other proposals would bring traditional AM/FM radio into the mix, requiring them to pay recording artists and labels for the music they play.
What's the right answer? It's tempting to say that the government shouldn't be setting the price of digital streaming any more than the price of milk, metal, or microchips. Downloadable music stores like iTunes and interactive streaming services like Spotify have to stand or fall in the free market. But Congress recognized that the market wasn't working for digital radio - negotiating licenses was too expensive and bargaining power was too out of balance to let these new technologies thrive, which is why it authorized the Royalty Board to step in. As long as the government is setting these rates, they should be using the best, fairest process possible. The Internet Radio Fairness Act will help make that happen.
11/2/2012 - This post was updated to reflect that MusicFIRST is a coalition of record labels, artists' representatives, and unions.
1. These standards are in Sections 114 and 801 of the Copyright Act, which are as complex and opaque as the federal tax code.
In an interview with viEUws, the European Commissioner for Trade, Karel De Gucht, affirms that Europe wants to close the Canadian-European Trade Agreement (CETA) by the end of this year—which would have been today, since the European calendar year ends on October 31.1CETA is a trade agreement designed to strengthen economic ties between Canada and the EU through “free” trade and increased investment. However, hidden within this treaty are intellectual property provisions that were essentially taken word-for-word from ACTA. And just like its close cousins, ACTA, KORUS, and TPP—and other trade agreements that are applauded by the entertainment industry for carrying expansive intellectual property provisions—CETA is being negotiated in secret.
In addition to this announcement, the Commissioner has also tried to reassure the public that the IP language of CETA has moved away from mirroring that of ACTA. When asked about the similarities between the agreements, De Gucht affirmed that the initial text was drafted when Europe had agreed on ACTA at the level of the Council of Ministers.2 Since the European Parliament rejected ACTA in July, De Gucht affirmed that they have “obviously” made changes to the CETA language on IP enforcement. While he continues to affirm that the language contained in ACTA was good, CETA was modified due to political and social pressure.
Commissioner De Gucht recognizes this won’t be an easy task, saying "We should have no illusions, there are still a number of difficult issues to tackle." Of course, EFF’s concern is that in hastily rushing to conclude this agreement, negotiators may still leave in many of the problematic provisions that existed in ACTA to appease the strong influence of private interests that are behind both agreements. EFF will keep a close eye on any announcements on CETA’s conclusion, and determine whether it ends up carrying ACTA’s shadow in its finalized language.
You can watch the 4 minute video of the interview with the Commissioner here.
EFF believes open networks are crucial in hurricane-affected areas
Update: In response to the impact of Hurricane Sandy, Comcast is opening its XFINITY WiFi hotspots to non-Comcast subscribers in PA, NJ, DE, MD, DC, VA, WV, MA, NH and ME until Nov. 7. Users should search for the network "xfinitywifi" and click on "Not a Comcast subscriber?" at the bottom of the sign-in page. Users should select the "Complimentary Trial Session" option from the drop down list. The Open Wireless Movement thanks Comcast for helping out!
In troubled times, it's important to help each other out. Right now, we're witnessing an unprecedented hurricane hitting the Eastern Seaboard of the United States, and the ensuing damage and power outages are crippling rescue efforts, businesses large and small, and personal communications.
Communication is critical in time of crisis, and the Internet allows for the most effective way of getting information in and out. With readily available networks, government officials could use tools like Twitter to quickly spread information, citizen reports could help focus assistance where it is needed most, and social media updates could help reassure friends and loved ones—keeping mobile phone lines open for emergencies.
To take advantage of the Internet, people should not have to attempt to skirt restrictive Terms of Service to attempt to tether their smartphones. And tethering would not be necessary if there were ubiquitous open wireless, so that anyone with a connection and power can share their network with the neigborhood.
Last year, we wrote a post titled "Why We Need An Open Wireless Movement." Today, EFF is proud to announce the launch of the Open Wireless Movement—located at openwireless.org—a coalition effort put forth in conjunction with nine other organizations: Fight for the Future, Free Press, Internet Archive, NYCwireless, the Open Garden Foundation, OpenITP, the Open Spectrum Alliance, the Open Technology Institute, and the Personal Telco Project.
Aimed at residences, businesses, Internet service providers (ISPs), and developers, the Open Wireless Movement helps foster a world where the dozens of wireless networks that criss-cross any urban area are now open for us and our devices to use.
New Yorkers using a closed Starbucks' wireless network in the wake of Hurricane Sandy. photo courtesy of NowThis News
Imagine a future with ubiquitous open Internet
The Open Wireless Movement envisions a world where people readily have access to open wireless Internet connections—a world where sharing one's network in a way that ensures security yet preserves quality is the norm. Much of this vision is attainable now. In fact, many people have routers that already feature "guest networking" capabilities. To make this even easier, we are working with a coalition of volunteer engineers to build technologies that would make it simple for Internet subscribers to portion off their wireless networks for guests and the public while maintaining security, protecting privacy, and preserving quality of access. And we're working with advocates to help change the way people and businesses think about Internet service.
We're also teaching the world about the many benefits of open wireless in order to help society move away from closed networks and to a world in which open access is the default. We are working to debunk myths (and confront truths) about open wireless while creating technologies and legal precedent to ensure it is safe, private, and legal to open your network.
The benefits of open wireless
We believe there are many benefits to having a world of open wireless. Two of the big ones for us have to do with privacy and innovation.
Open wireless protects privacy. By using multiple IP addresses as one shifts from wireless network to wireless network, you can make it more difficult for advertisers and marketing companies to track you without cookies. Activists can better protect their anonymous communication by using open wireless (though Tor is still recommended).
Innovations would also thrive: Smarter tablets, watches, clothing, cars—the possibilities are endless. In a future with ubiquitous open Internet, smartphones can take advantage of persistent, higher quality connections to run apps more efficiently without reporting your whereabouts or communications. Inventors and creators would not have to ask permission of cell phone companies to utilize their networks, both freeing up radio spectrum and reducing unnecessary barriers to entry.
Join the movement
This movement is just beginning, but in a sense it has always been around. People, businesses, and communities have already been opening up their wireless networks, sharing with their neighbors, and providing an important public good. We want this movement to grow without unnecessary legal fears or technical restraints.
Join the Open Wireless Movement. Whether you're a household or small business, a technologist or a student, we need your support. Check out openwireless.org for more information, and spread the word.
In July, EFF called for the immediate release of open source developer and Creative Commons volunteer Bassel Khartabil, who had been detained in Syria since March 12, 2012 as part of a wave of arrests made in the Mazzeh district of Damascus. We felt that the situation was especially urgent in light of a recent Human Rights Watch report documenting the use of torture in 27 detention facilities run by Syrian intelligence agencies. Now it appears that our concerns were well-founded. According to a new Amnesty International report, a released detainee has informed Bassel Khartabil’s family that he is being held at the Military Intelligence Branch in Kafr Sousseh and had been tortured and otherwise ill-treated.
In response to this alarming news, Bassel's friends and supporters around the world have launched a letter-writing campaign, hoping to flood Syrian officials and diplomats with physical mail demanding that Khartabil be formally charged and given access to a lawyer or released immediately. Participants are encouraged to send photographs of their letters to firstname.lastname@example.org.
EFF has sent the following letter to Syrian officials:
I am writing to you on behalf of the Electronic Frontier Foundation (EFF) to express my concern over Bassel Khartabil, a Palestinian man born and raised in Syria, who has been detained incommunicado since his arrest in Damascus, Syria, on March 15. One week after his arrest, Khartabil was briefly brought to his home by some members of security forces who confiscated his computers and files. The Electronic Frontier Foundation does not have information about the reasons for his arrest, but we fear it may be connected to the ongoing unrest and armed conflict in Syria.
A few weeks later when relatives inquired about him, security officials at the Kafr Sousseh Military Intelligence branch confirmed that Khartabil was detained, without revealing his whereabouts, his state of health, or if charges had officially been brought against him. International human rights standards require that detainees’ families are notified promptly after their arrest, and are allowed to communicate with detainees. Khartabil has also not been granted access to a lawyer, although international human rights standards require that detainees have access to a lawyer of their choice.
A few weeks later, a released detainee informed Bassel Khartabil’s family that he was being held at the Military Intelligence Branch in Kafr Sousseh and had been tortured and otherwise ill-treated, heightening our concern for his safety. Khartabil is also diabetic. It is not known if he has access to the medication he needs, if he has been provided with a diet that takes into account his diabetes, or if he has been granted a proper medical assessment.
EFF urges the people detaining Kartabil to grant him immediate access to his family, a lawyer of his choice, and all necessary medical treatment. We urge you to protect him from torture and other ill-treatment. Additionally, we call on you to release Khartabil, unless he is promptly charged with an internationally recognizable criminal offence and tried in proceedings that respect international fair trial standards.
EFF stands with Amnesty International, Creative Commons, Mozilla, and others in demanding Bassel Khartabil's safe return. We will continue to follow this case as it develops.
It’s been almost a year since Kyle Goodwin lost access to the lawful property that he stored on Megaupload. EFF, on his behalf, has asked the Court to order his data returned, and, more recently, has also asked the Court to unseal the confidential search warrants surrounding the third-party data at issue. And it appears Mr. Goodwin is making some headway: the Court is at least contemplating holding a hearing to get to the bottom of what really happened when the government shut down Megaupload, seized its assets, and deprived millions of customers of their property.
Today, Mr. Goodwin filed a brief outlining what that hearing should cover, and how, so that the court can get what it needs to help ensure Megaupload’s customers finally get their stuff back. For one thing, we think the court needs to hear from government employees, including members of the FBI, who were involved in the January searches and seizures that left Mr. Goodwin without his data, and from an independent expert who can discuss what the government could have done to avoid this scenario and what it can do now to make up for the damage it caused.
In the past, courts have required the government, when executing digital searches and seizures, to be mindful of and segregate third-party data to protect privacy concerns. We think the same principles should apply to protect property concerns as well. More and more people use the cloud to store their digital property everyday. This is good news for innovation and for the economy. To help ensure intellectual property enforcement doesn’t undermine that growth, the government should implement commonsense procedures to protect cloud storage users who may get caught in the crossfire. The government failed to do so in this case. The court should require it to do better, now and in the future.
We’ve seen some absurd trademark threats in recent years, but this one sets the bar at a new low: The Village Voice is suing Yelp for trademark infringement based on Yelp’s creation of various “Best of” lists. Yes, that's correct, the publisher behind the paper (as well as several other weeklies around the U.S.) has managed to register trademarks in the term “Best of ” in connection with several cities, including San Francisco, Miami, St. Louis and Phoenix. And it now claims that Yelp’s use of those terms infringes those trademarks and deceives consumers.
First, a practical question: deceives consumers about what? Trademark law is supposed to ensure that consumers can trust that the goods and services they buy come from the sources they expect, e.g., that the Pepsi you just bought really was manufactured by Pepsi. That helps consumers, because it gives mark-owners an incentive to maintain the expected level of quality. And it helps mark-owners, because they can build customer loyalty and good will. But you don’t need a survey or even a lawyer to figure out that no one actually thinks the Village Voice is associated with Yelp because both publish “best of” lists – not least because no one associates the term “Best of” with any particular news source.
Second, the more important question: What is going on at the Patent and Trademark Office? For decades, folks have been complaining (with good reason) that the patent examiners need to do a better job of screening out bogus patent applications. It’s clear that the problem extends to the trademark side as well. The PTO has allowed companies and individuals to register marks in any number of obviously generic and/or descriptive terms, such as “urban homestead” (to refer to urban farms), “gaymer” (to refer to gay gamers), and “B-24” (to refer to model B-24 bombers).
Once a mark is registered, it is all too easy for the owner to become a trademark bully. And while companies like Yelp have the resources to fight back (as we expect it will), small companies and individuals may not. Just as dangerous, the trademark owner may go upstream, to intermediaries like Facebook who have little incentive to do anything other than take down an account or site that’s accused of infringement.
"Good enough for government work" isn't good enough for free speech. It’s time the PTO did its part to stop trademark bullies and tightened up the trademark application process. Fewer bogus registrations means fewer bogus threats, and more online creativity and competition. That's a win for everyone.
On Monday, the Supreme Court heard oral arguments in Clapper v. Amnesty, an important case that will decide if the ACLU’s challenge to the FISA Amendments Act—the law passed in the wake of the NSA warrantless wiretapping scandal—can go forward. The Court will essentially determine whether any court, short of a government admission, can rule on whether the NSA’s targeted warrantless surveillance of Americans' international communications violates the Constitution.1
In Clapper, the plaintiffs — journalists, human rights workers, and lawyers — filed the lawsuit because the statute prevents them from doing their job without taking substantial measures when communicating to overseas witnesses, sources and clients. EFF has previouslyexplained how the FISA Amendments Act gives the government an unconstitutional license to read any emails or other electronic communications coming into and out of the United States. So let’s hear the Supreme Court Justices, in their own words, explain how invasive the law really is.
Here is how Justice Ginsburg, with an assist from ACLU deputy director Jameel Jaffer, explained how the FISA Amendments Act (FAA) gutted the traditional warrant requirements in FISA, along with the Fourth Amendment:
JUSTICE GINSBURG: Mr. Jaffer, could you be clear on the expanded authority under the FAA? As I understood it, it's not like in [FISA], where a target was identified and…the court decided whether there was probable cause. Under this new statute, the Government doesn't say who is the particular person or the particular location. So, there isn't that check. There isn't that check.
MR. JAFFER: That's absolutely right, Justice Ginsburg…The whole point of the statute was to remove those tests, to remove the probable cause requirement, and to remove the facilities requirement, the requirement that the Government identify to the court the facilities to be monitored. So those are gone.
That's why we use the phrase "dragnet surveillance." I know the Government doesn't accept that label, but it concedes that the statute allows what it calls categorical surveillance, which…is essentially the surveillance that the plaintiffs here are concerned about.
As Justice Kagan stated succinctly, “this statute greatly expands the government's surveillance power. Nobody denies that.”
Justice Breyer confirmed the scope of the program goes far beyond wiretapping alleged terrorists or foreign agents, and affects any coversation touching on "foreign intelligence" information: “the definition of foreign intelligence information...defines it to include information with respect to a foreign power or foreign territory that relates to the conduct of foreign affairs. It's very general.”
Justice Breyer added that even this broad reach didn't limit the Attorney General under the statute: “And then, the Attorney General can, if he decides there are exigent circumstances, wiretap for a year, anyway, without going to any court, something that isn't true of the ordinary wiretapping.”
Justice Kennedy explained the extreme difficulties the FAA causes for lawyers, who have a duty to protect client confidentiality: “I think the lawyer would engage in malpractice if he talked on the telephone with some of these clients, given this statute,” which he said gave the government an “extraordinarily wide-reaching power.”
The case at hand, however, isn’t yet even about whether the surveillance is legal; it’s just about whether the ACLU’s clients have the right to challenge the statute. The government says the case should be dismissed before being heard because the plaintiffs don’t have ‘standing.’ They argue that since the plaintiffs can’t prove with a certainty that surveillance is occurring—something the government says nobody can prove without the government actually admitting it—they cannot sue.
A mere ten seconds into the government’s argument, however, Justice Sotomayor interrupted the Solicitor General Donald Verrelli, asking “General, is there anybody who has standing?” (emphasis added). Justice Sotomayor was referring to the fact that the government has kept secret all the evidence that would prove or disprove the plaintiffs’ claims, while simultaneously arguing the suit must be dismissed for lack of evidence. In addition, since the government has gone out of its way to make sure warrantless wiretapping evidence isn’t used by a prosecutor (only for investigations), no defendant can challenge it either.
Of course, these are only a few of the justices and it’s always dangerous to predict the outcome of Supreme Court cases based on oral arguments. We were pleased that these justices seem to see what damage the FAA did to the checks and balances of FISA and we’re hopeful that a majority will see past the government’s Catch-22 standing arguments and allow the statute’s constitutionality to be decided.
That case is back in court on December 14th. EFF, along with the ACLU, is determined to stand up for every American’s privacy rights and end this unconstitutional domestic spying program once and for all.
1.Clapper v. Amnesty has been described as about a “dragnet” but we think it’s best described as about targeted warrantless surveillance — involving lawyers, journalists and others who talk to those who are targeted — as opposed to the untargeted surveillance of ordinary Americans that EFF is suing about in our case, Jewel v. NSA.
Last week, the 34th Annual Data Protection and Privacy Commissioners’ Conference was held in Punta del Este, Uruguay. The event brings together international regulators whose mandate is to uphold individuals’ rights to privacy. Preceding the official gathering of data protection authorities was The Public Voice, a daylong event hosted by an international coalition of civil organizations, with the Electronic Privacy Information Center taking the lead on organizing events this year. EFF, a part of this coalition, delivered a presentation during a panel discussion about global developments in privacy standards.
In a digital age marked by ever-increasing advancements in biometric identification, online surveillance, behavioral targeting, geolocation and other emerging technology and practices, there is a new urgency for strong standards that give individuals control over their personal information, particularly since it can be collected, aggregated, and used without their knowledge in the digital realm.
The privacy events featured discussions on the ongoing development of international standards as well as the growing threats to the fundamental right to privacy in the digital age. Below are some highlights from the civil society event and the data protection commissioners’ conference.
Strengthening EU Data Protection Regulation
At the Public Voice Conference, Article 29 Working Party Chair Jacob Kohnstamm, chairman of the Dutch Data Protection Authority, said the draft European Union Data Protection Regulation now under consideration should be strengthened. In particular, he said it was important to ensure that the concept of “explicit consent” – when data collectors get permission from individuals to collect personal information, rather than just assuming that consent is implied – is not weakened. He also said the Article 29 Working Party would issue an opinion early next year regarding a provision on “purpose limitation,” which governs how entities may use the information they collect. Kohnstamm said the draft regulation currently appears to contain a loophole that is too permissive and should be addressed.
Safeguarding Privacy in Countries with Weak Rule of Law
Speaking at the Public Voice event, attorney and human rights advocate Renata Avila, a Global Voices contributor, said the need for data protection regulations is both more acute and more difficult to obtain in Guatemala. With a fragile government that cannot even be counted on to enforce the law effectively in cases of murder, there is a particular need in Guatemala for individuals to have assurance that their personal information is not being misused or collected without their consent, especially by private security companies.
Security measures such as surveillance cameras and collection of biometric information are increasing in response to violence. All of this is occurring in a context where no specific law for the protection of personal data exists, and the dominant mindset is that any move to protect individuals’ personal rights to privacy is contrary to the goals of security.
Yes, Consumers Really Do Care About Privacy
Do consumers really care about privacy? Two speakers, Frank Torres and Brad Smith from Microsoft, addressed this question and concluded that the answer is yes, even if consumers also like the personalization that can be a product of practices like online behavioral advertising. According to a Pew research study referenced by Torres during the Public Voice Conference, 54 percent of consumers decided not to install phone apps because of concerns about sharing of information, while 30 percent uninstalled mobile apps due to privacy concerns. Smith, who spoke at the privacy commissioners’ conference, said Microsoft conducted its own research, too. “We thought it would make sense to go back & learn what consumers want,” he said. “What we found in the United States, the United Kingdom, France and Germany is that most people believe tracking goes too far.”
Surveillance Technology is Big in Africa
During the Public Voice conference, Gus Hosein of Privacy International described how shocked he and colleagues were when they started going to surveillance technology trade shows as part of the Big Brother, Inc. project to learn which governmental agencies were interested in shopping for software that has the capability to be used for repression. One notable attendee was a representative from the government of South Sudan, which became an independent state a mere six months ago. Notably, it was mostly British and German firms that were peddling the surveillance kits, he added. At the privacy commissioners conference, Hosein shared some of his research on vendors of biometric technology, which is increasingly being used in refugee camps. He noted that the UN Democracy Fund had bankrolled biometric voter registration in Benin, Cape Verde, Comoros Islands, The Democratic Republic of the Congo (DRC), and Sierra Leone. In the DRC, $40 million was spent on biometric kits while $101 million was spent for voter registration – but a leaked report revealed that inaccuracy was a glaring issue, with 700,000 double registrations.
Privacy Implications of Big Data
Security expert and author Bruce Schneier, who spoke at the Public Voice Event, said he thought more attention should be devoted to the privacy implications of big data, which makes it possible for data collectors to identify and classify individuals based on their habits. “As soon as we involve a computer, data is generated,” Schneier explained. “Data is a byproduct of socialization.” He added that the low cost of data storage has helped give rise to big data. It’s cheaper to save everything just in case it might be valuable, he said, than to figure out how to sort and cull valuable information. “That’s why we have big data.”
In all, both The Public Voice and the 34th Annual Data Protection and Privacy Commissioners’ Conference presented a rare and important opportunity for advocates working on privacy issues to convene, share information about developments in privacy standards throughout the world, and get their message across to world governments. At the Public Voice Event, EFF delivered a presentation on U.S. developments on the protection of privacy in the form of the Obama Administration’s proposed Consumer Privacy Bill of Rights framework. As we noted, there is still a long way to go before adequate standards are in place to safeguard individual’s personal information in the digital realm. But with a global coalition of privacy advocates on the case, the voice of the public interest will not go unheard.