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Yesterday I saw two popular quotes being disproved: the old saw about a committee having many stomachs and no brain, and the one about law being like sausage because you wouldn’t want to watch either being made.

I went to observe the Commerce Select Committee hearing submissions on the Copyright Amendment (Infringing Filesharing) Bill, which is the law designed to replace the failed S92A of the Copyright Act. I saw the first three submissions, and I’ll write a little about them below.

But first I want to say that the select committee process really does seem to work. It’s a really important part of New Zealand democracy that bills (that is, draft acts of Parliament) get looked at by small teams of MPs who call for public submissions. Anyone can have their say. And the committees generally listen and do their best to balance the interests and concerns of the people submitting. As a nation, we are blessed by having such an open government process.

This isn’t the first time that I’ve been involved in select committee hearings. Last year I made a submission to this same Committee on software patents, and I wrote about it at the time. Before that I presented on the (at the time) perceived broadband monopoly of Telecom. And, quite a few years ago now, I was an official advising a select committee as it deliberated over a bill that was never implemented.

Back to my experience yesterday. I went to Bowen House at 9am. There were quite a few people gathering in the lobby outside the meeting room. (That’s why they are called lobbyists!) We were called in after half an hour or so, and sat in rows of seats facing the committee members who were seated around a U-shaped table. There was a table for people to address the committee which was across the mouth of the U. There was a screen for them to present on if they wished, but the audience couldn’t see it, I assume just because of the limitations of room design rather than a desire for secrecy.

There were 9 members of the committee present. The chair was the Hon Liane Dalziel, a former Minister of Commerce. Others who spoke included Clare Curran, Gareth Hughes and Jonathan Young. Overall, committee members appeared engaged and interested in the submitters and their points.

The first group to submit was RIANZ. They brought their barrister along – Andrew Brown QC – and he did almost all the talking for them. Brown started by saying that government had broken the contract it made with ISPs by not implementing the original S92A, which would have allowed RIANZ and others to get people’s Internet accounts terminated on the basis of allegations that they had infringed copyright. Brown said that government had given ISPs legal protections in that Act without balancing them with obligations to cut people off.

From listening to Brown it became clear to me that RIANZ and probably the other rights holder organisations see the ISPs as a major part of the problem. Rights holders see ISPs as making money off them by charging their customers for bandwidth which those customers use for unlawful downloads, which rights holders see as reducing their revenues. It’s a clear case of zero sum thinking – there’s only so much revenue to go around and ISPs are managing to take it away from the rights holders.

It hardly needs to be said that this view of ISPs is not widely held outside the “content” industries. Most people see ISPs akin to TransitNZ which provides highways that can be used to carry people and goods around the country. That’s how the Internet is designed and that’s what makes it useful. In practice, ISPs are generally fairly low margin operations in a competitive market. They are not very engaged in this debate.

Brown said that the notice regime on the Bill is flawed because it requires subsequent notices to be from the same copyright holder. He said that all allegations of infringements should count towards the “three strikes”, so that penalties could be considered after three infringements even if they weren’t agains the same rights holder.

On Internet termination for serious offenders – Brown said they wanted suspension, i.e. a cut off for a period of time. He said this was essential for the law to have teeth. (This position ignores the stiff financial penalties in the Bill.)

There were questions from the Committee members about whether such a “graduated response” scheme had been shown to reduce unlawful downloads overseas. RIANZ said it was too early to say because they hadn’t been implemented for long enough anywhere.

The next submitter was NZFACT and the Motion Picture Association of America (MPAA). This was led by the MPAA’s managing director for Asia Pacific, Michael Ellis. He made much of the fact that he had flown from Singapore to New Zealand to talk to the Committee. Ellis tried to show a video to the Committee to explain how easy it was to download the movie “Boy”. The submission came dangerously close to farce as he repeatedly failed to make his laptop display the video. These attempts took up most of his allotted time. Eventually he managed to start the video without sound.

Ellis produced figures purporting to show that New Zealand was 2nd in unlawful downloads per capita among a group of Asia-Pacific countries. He said that they got these from watching P2P filesharing systems, although exactly how the figures were derived was not clear.

MP Clare Curran asked whether these unlawful downloads were affecting movie going. Ellis said that movie companies needed the revenues from all the releases of a film – theatres, DVD and TV – to make a profit. She then asked why movie companies don’t use the iTunes model of distribution. (Recently in the House Clare pointed out that movies are often released a lot later in NZ than elsewhere, e.g. the oscar-winning Hurt Locker came out here after it had won.) Ellis replied that the film industry needed legislation to protect while it invested in new distribution models.

The final submission of the day was from Lance Wiggs, a serial entrepreneur who is now involved with the Pacific Fibre project to bring a second transpacific cable to New Zealand. Lance expressed his frustration at the poor state of the Internet in New Zealand. He drew a parallel with Finland, which has recognised the Internet as a human right. Disconnecting someone’s Internet, he said, is disconnecting them from society and can never be acceptable. His position was that people who have done really bad things deserve to be incarcerated and taken out of society for a while, but lesser offences do not justify cutting off someone’s Internet account. He gave some examples of how cutting off the Internet might be dangerous – many people no longer have fixed telephones, using Internet-based services instead. His view was that only those illegally downloading for profit should be prosecuted.

Lance talked about how backward content distribution is in New Zealand. Overseas countries receive programmes months or years before New Zealand. There is no legal way to obtain material, he said, that the rest of the world is already talking about on the Internet. He thinks its unsurprising that many New Zealanders choose to download unlawfully rather than wait to see if the official channels decide to publish here.

In conclusion, I have to say that I found Lance a breath of fresh air compared to the other two. It’s noticeable that the big rights-holder organisations chose to bring a QC and a honcho from overseas. The average New Zealand Internet user can’t afford to do that, even if they knew what was going on. And the MPs’ questions showed to me that they know that the industry has a history of making dubious claims about the hurt they say they suffer through unlawful downloads. The US Government Accounting Office recently rubbished most of those claims, declaring then to be no basis for making public policy.

I’ll be presenting to the committee next week. Should be fun!