Over the past week, Silicon Valley's internet powerhouses out-communicated Hollywood, stopped internet piracy bills pushed by the big studios and even prodded the Republican presidential candidates and President Barack Obama to agree on something -- that Hollywood's internet piracy bills threatened the innovation of the web.
Traditionally, Silicon Valley has been reluctant to play by Washington's rules. Microsoft did not build a major Washington presence until the late 1990s when it faced a big anti-trust suit. But last week, the industry demonstrated its power through a concerted campaign of shutting down some sites and posting notices on others about the industry's opposition to the internet piracy bills.
Just about everyone agrees that foreign internet sites are pirating U.S. movies and TV shows. The industry puts big dollar signs on the problem, claiming that it costs 373,000 jobs a year and $16 billion in revenue. To solve the problem, Hollywood helped draft the Stop Online Piracy Act in the House and the Protect Intellectual Property Act in the Senate.
Both bills were moving along smartly through the fall and early winter. Media critics questioned whether TV news organizations had avoided critical coverage because parent organizations of such companies as Fox favored passage of the legislation.
Supporters of the bills maintained that they merely target foreign criminals and websites created with no purpose other than to pirate U.S. media content.
Critics say that the bills threaten to upend the architecture of the web and the legal rules that have fostered it.
Under current law, internet companies generally are not legally responsible for third-party content posted on their sites by users. The Digital Millennium Copyright Act provides that if the owner of intellectual property thinks that it has been posted on an internet site, the owner can file a take-down notice demanding that the content be removed from the site. If the website does not respond to a valid request, it opens itself to legal liability.
Because of this legal regimen, internet companies don't have to screen user-generated content before it is posted. This is crucial, they say, to the internet's explosive growth. There is no way that a company like Craigslist or Google's YouTube or Facebook could review all third-party content before it was posted.
But under SOPA and PIPA, the attorney general or private companies could obtain court orders against foreign content pirates to require U.S. internet sites to block access to the foreign websites. The bills also would force the cut off electronic payments and advertising to the sites.
One difficulty with this procedure is that the court orders mostly would be issued in non-adversarial court hearings. All that would be required to establish jurisdiction in a U.S. court would be the existence of a web address. As a result, most firms against whom court orders would be issued would not be represented in court.
This could run afoul of the First Amendment law because the U.S. Supreme Court has not allowed expression, such as movies, to be blocked without full judicial proceedings.
Internet companies also claim that the requirement that certain internet addresses be blocked would imperil the infrastructure of the internet including the domain name system.
Internet firms argue that the current laws are working well. Google testified that it received 5 million take-down notices, mostly for YouTube, in 2011 and took down 75 percent of the material. They also point to the growth of paid sites for movies and music such as iTunes, Netflix and Amazon.
Studios, they argue, should spend less time hunting down copyright violators and more time innovating new ways of selling content for small payments like those on iTunes.
One alternative approach, backed by U.S. Sen. Ron Wyden, D-Ore., and U.S. Rep. Darrell Issa, R-Calif., is to use the U.S. International Trade Commission to investigate intellectual property complaints and to use federal tariff laws for enforcement.