Streaming has challenged downloading as the content consumption mode of choice, and entertainment lobbyists are scrambling to keep pace with the sea of change. The
media industry mainly takes issue with “rogue sites,” (which are often hosted outside of the U.S. and unresponsive to DMCA Takedown Notices), that provide access to streaming copies of infringed works. The industry’s latest failed effort, the PROTECT IP Act (PIPA), would have once again attacked the entire streaming ecosystem:

• suspected infringing sites;
• a broad array of online actors (ISPs, domain name registries, search engines, advertising and payment networks) that point Internet users in their direction;
• users who stream content from sites in question.

The bill was a bipartisan effort that resumed the aims of earlier bills that had stalled after opponents, including Sen. Rob Wyden (D-OR), denounced the bills’ potential to “muzzle free speech, stifle innovation, and economic growth.”

With regards to copyright infringement, Protect IP in its original embodiment would have provided that:

1. Private IP rights holders or the U.S. Attorney General may take action against the registered owner and operators of a site “dedicated to theft of U.S. property,” pursuing a court-ordered preliminary injunction or temporary restraining order under FRCP 65.
2. Within five days of getting notice of a court order, ISPs and search engines must take “technically feasible and reasonable measures” to block access to the site (including DNS blocking). Ad and payment networks would also be required to block financial transactions to and from the site.
3. Online providers are granted immunity from suit if they voluntarily undertake measures to block offshore sites if they have a “reasonable belief” that the site’s main purpose is infringement.
4. Anyone who willfully streams infringing content would be subject to criminal sanctions under 18 U.S.C. § 2319.

The DNS blocking measure was removed after public outcry, but the continuing existence of search blocking and other onerous provisions only sparked more outrage from a growing contingent of concerned Web denizens. Many acknowledged the need to protect valuable intellectual property, but took issue with the ham-fisted solutions put forth by PROTECT IP. The Electronic Frontier Foundation and other critics denounced the bills’ one-sided legislation process, as well as their broad remedies that would have enabled claimants to shut down sites without affording due process to opponents. Protests mounted, culminating on January 18 in a daylong Internet blackout by Reddit, Wikipedia, and more than 7,000 other information providers. Afterwards, one-time supporters of PROTECT IP announced a change of heart – including the bills’ co-sponsors, Sen. Marco Rubio and Rep. Ben Quayle. The protests staved off a preliminary Senate vote on PIPA that had been scheduled for January 24 of this year, and the bills have since been tabled.

Despite the faltering of PROTECT IP, there is no ebb in proposed measures to curb piracy. International debate is churning over a new measure, the Anti-Counterfeiting Trade Agreement (ACTA). The U.S. has already signed onto the treaty, and the treaty will take worldwide effect after six ACTA countries have ratified it. The main ambit of the bill is to bring other countries into alignment with strict anti-counterfeiting provisions already in place in the US and the UK. As secretive negotiations continue, however, potential persists for overbroad remedies and more draconian interpretations. Countries are allowed to construe treaty provisions in accordance with their current rules of law; less permissive countries, such as Morocco, would be expected to have harsher penalties for infringement.  The ACTA is supposed to target “widespread [unlawful] distribution,” but this aim could fall prey to looser interpretations. Looser interpretations would, for example, punish hobby bloggers who make vaguely transformative uses of copywritten expressions (e.g.,LOLcats), or squash low-level file sharers who send a few file bits up into the cloud.

ACTA aside, current methods of IP enforcement have left their Internet imprint. Following the shutdown and indictment of Megaupload, other online file storage sites have curbed their services in fear of similar retribution. As a result, those who seek to reaffirm DMCA safe harbors, maintain the online status quo, or even push for additional freedoms, will need to remain vigilant for the foreseeable future.

Facebook seeks to raise $5 Billion in its initial public stock offering, making it the largest Internet IPO on record.  It is believed that its stock offering will value the company $75 and $100 billion.  Mark Zuckerberg, however, will maintain his control over Facebook with voting power of almost 60 percent of total shares.  Meanwhile, Facebook is coming under a siege of patent lawsuits.  In 2011, Facebook was named as a defendant in 22 patent infringement suits.

Google announced its new privacy policy, which is set to become effective on March 1.  The new policy will allow it to track users’ activities across YouTube, Gmail, its search engine, and nearly all of its other sites.  Users will not be able to opt out, which may trigger more scrutiny from federal regulators.

On January 23, the Supreme Court held that attaching a GPS device to track a vehicle constitutes a search under the Fourth Amendment and requires a warrant.  The ruling is considered a victory for privacy rights in the age of advanced technology, but some argue it was too narrowly reasoned on the basis of the physical intrusion of attaching the device.

Congress indefinitely shelved the controversial antipiracy bills SOPA and PIPA after over 7,000 websites, including Wikipedia and Google protested the bills, handing a crushing blow to the traditional media industry.

Following the shutdown of file-sharing site Megaupload last month and arrest of 7 company employees, Federal prosecutors announced that Megaupload user data would be deleted as early as Thursday (Feb. 2).  However, a nonprofit group stepped in at the last minute, announcing on Wednesday that it would work with data-storage providers to create a website that will allow legitimate Megaupload users retrieve their data.

Among the companies targeted for criticism are Google, Amazon, McAfee, Yahoo, eBay, Microsoft, Apple and Verizon. These hearings may mark the beginnings of legal changes that could require information and communications technology companies to protect users’ rights overseas. The potential legal ramifications of these changes are unclear at present, though they are the subject of heated debates, as we will see below.

The Senate Hearings

U.S. Senator Dick Durbin of Illinois chaired a hearing before the Judiciary Subcommittee on Human Rights and the Law on Tuesday March 2^nd to review the practices of information technology companies in countries that restrict free access to the internet.

Senator Durbin sent letters to thirty companies requesting information on their business practices in China and other countries that censor the internet. The senator also encouraged companies to join the Global Network Initiative (GNI), a group of corporations, academics, human rights groups, investors and others committed to protecting internet users’ rights to freedom and privacy according to a specific code of conduct. (As of now, only the original three member corporations have joined the GNI, which is discussed further in the section below. ) The GNI submitted a written statement for the hearing, available here, which stresses the need for more communication between companies in the information and communications technology sector in order to identify important human rights issues. The GNI also affirmed its view that there is a strong need for more corporations to join the GNI and commit to its principles.

Testifying at the hearing were Michael Posner (Assistant Secretary of Human Rights, Democracy and Labor at the State Department), Daniel Weitzner (with the National Telecommunications and Information Administration of the Department of Commerce), Nicole Wong (Google’s Vice President and Deputy General Counsel), Rebecca MacKinnon (Visiting Fellow at Princeton University’s Center for Information Technology Policy and a drafter of the Global Network Initiative), and Omid Memarian (an Iranian blogger living in the U.S. since his release from detention by the Iranian security services in 2004).

Mr. Memarian testified about how his website was shut down—not by the Iranian government, but by his American domain and host provider, because of restrictions on transactions with Iran. He discussed how such restrictions and sanctions prevent Iranian dissidents from downloading software (including, for example, Google Chrome) and publishing their opinions. He also made several suggestions about how the U.S. government and American corporations could provide technologies that would help promote internet freedom in Iran, and further argued that a freer Iran would greatly help the security of the region.

Nicole Wong’s testimony reviewed Google’s recent problems with China and affirmed Google’s unwillingness to keep censoring search results for Chinese users. She stated that Google would “reconsider [their] approach” in China if the situation worsened after more monitoring. Beyond restating Google’s decision to stop censoring search results in China, she did not commit to any concrete action. However, she discussed various strategies that governments could use to combat censorship. She also analyzed the issue from an economic perspective, elaborating on the damaging effects of internet restrictions on both the “host” country and on foreign companies.

Rebecca MacKinnon testified about authoritarian regimes’ exploitation of the internet to cement their power and suppress dissent. Ms. MacKinnon discussed and countered the view, popular in the 1990s, that the internet by its nature would elude and eventually defeat authoritarianism. It was then widely believed that no government could truly stop the spread of information over the internet. The internet, the theory went, would be an invaluable and unstoppable weapon in the hands of dissidents.

Contrary to predictions, as China and Iran in particular have demonstrated, authoritarian governments have adapted to and co-opted the internet. Filtering, deletion of content by internet companies, cyber-attacks, politically motivated law enforcement, and device-level controls are the major techniques a government may use to control the spread of potentially threatening information over the internet.

Mr. Posner and Mr. Weitzner made general comments in support of internet users’ liberties and of using business regulation to promote free exchange.

The Corporations’ Response

The point of the hearings, as suggested by Senator Durbin’s letters to the various companies, was to highlight the role corporations can play in either reinforcing or undermining government surveillance and control of the internet. Senator Durbin’s opening remarks discussed how pressure from U.S. companies and the government influenced the Chinese government to back down from its decision to require all computers sold in China to include filtering and information-gathering software. Ms. Mackinnon also discussed ways in which corporations could fight internet censorship, from locating servers outside the territories of authoritarian countries to refusing to comply with informal demands from governments to creating surveillance-circumvention technologies.

However, only three corporations in the sector have committed to the GNI code of conduct: Google, Microsoft, and Yahoo. Whether these companies will adhere to the code of conduct is uncertain, as the New York Times points out.

Additionally, AT&T, Skype, and McAfee have committed to discuss joining GNI.  Facebook and Twitter were invited to send representatives to the hearings but declined. Senator Durbin expressed his disappointment in this unenthusiastic but probably inevitable response.  Without legal pressure, it is unlikely that corporations will take actions against their own self-interest by defying laws in countries where they do business.

Possible Legal Consequences

At this time, enactment of any new legislation is far off. The bulk of lawmakers’ attention is focused on exhorting companies to voluntarily comply with GNI standards.

However, many have made legislative proposals and suggestions. For instance, Rebecca MacKinnon has argued for legal changes allowing targets of state repression to sue U.S. companies who turned over information on them. Additionally, Senator Durbin is working on legislation to compel companies to either defy censorship overseas or face civil or criminal penalties at home, the St. Louis Post-Dispatch and PC Magazine report. He has not stated what actions would trigger these penalties under the hypothetical bill. However, this is not a new idea: some activists have been proposing the Global Online Freedom Act (GOFA) for years, as the Guardian reports, which would make it illegal for a U.S. company to provide information or technology aiding restriction of internet services. Brendan Ballou, who blogs on Harvard Law Professor Jonathan Zittrain’s website, analyzes some aspects and limitations of the GOFA here.

Criminal or civil penalties in the U.S. may simply present U.S. companies with the following calculation: will defying the U.S. law cost them more or less than circumventing internet restrictions in China or Iran? The efficacy of such a bill is questionable. It may present some companies with a difficult choice: they must either violate the law at home, or abroad. Furthermore, many of the technologies that make internet-restriction possible were developed in U.S. and European countries at the behest of their governments, to aid in lawful surveillance in those countries. Nokia Siemens made this point in response to a European Parliament resolution condemning its technological aid to the Iranian government and calling for a ban on surveillance technology exports to certain countries, as Ars Technica reports.  This suggests that the scope of the bill will have to be very clearly defined if it is to differentiate between surveillance carried out in the most repressive countries and surveillance in western democracies.