I gave the Committee some suggestions on how this law should work – if we have to have it at all. They are all in my submission to the Committee.

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!

That’s what makes it strange that the film industry apparently hasn’t released the film to Australia. There are a *lot* of New Zealanders living there. And it’s not surprising, after all the promotion, that people there want to see the film however they can get it. According to a press release yesterday from the industry, they are indeed getting it, via infringing downloads on the Internet. The film apparently got to the Internet via a member of the industry itself, since the copy uploaded is a “pre-screener” available only within the industry.

What I find odd about this story is that anyone is surprised. Why would they expect New Zealanders and other folk to wait months for a well-promoted hit film? It’s not as though the technology for them to release it in other countries as a paid, legal download doesn’t exist. Why, then, leave a big market like unsatisfied with a legal product when they have alternatives?

The same industry has just claimed that unlawful downloads in New Zealand are costing it $70million. They say things like this all the time, but the truth is that no-one knows and there’s no way to calculate it. The US Government Accounting Office recently published a report saying that all such claims were totally overblown and were no basis for policy.

It’s no accident, of course, that this story blows just as Parliament is considering a Bill to fine people heavily or cut off their Internet for file sharing. The industry has obviously made a calculation about how late in the hype cycle for “Boy” it could go and still get close to the Select Committee hearings, likely to be next month.

This sort of thing has been going on for so long that I’m wondering if it is deliberate. Is it actually cheaper for the film industry to promote a film then not release it in a market, then to go after people who download it and try to seek large fines? Perhaps this is far-fetched, but I’m struggling to see any other reason.

In the meantime, congratulations to Taika Waititi. Let’s hope he gets the chance to get the film distribution industry to see some sense.

Update: Miraz Jordan has written an excellent piece on the same subject – well worth reading as well.

Several themes came out from the seminar. The biggest one for me, which was mainly expounded by Nat Torkington, was that there is not a problem that needs to be solved here. Revenues for all the industries that claim to be affected by unlawful downloads are going up very healthily. They claim that their industries are being devastated by the huge volume of copyright infringements, but you would have to say that these claims are not backed up by the evidence. Even so, the so-called content industries are an order of magnitude smaller than the Internet industries they seek to control.

Another theme was the sheer inappropriateness of Internet termination as a penalty for anything. To the government’s credit, it has made termination a last resort which has to be enacted by a court, but even so it’s just not a useful thing to do. You don’t get your Internet connection cut off for far more serious offences. Why should copyright infringement be so special? We don’t cut the road to someone’s house if they have used it to move stolen goods. Just like road access, the Internet is used by everyone in a building, and by others to deliver services to the building.

The Bill sets out a regime of notices that get passed to and fro between a copyright holder and someone accused of copyright infringement, through the ISP concerned. This is mostly aimed at educating the downloader, many of whom don’t realise that they are doing something or illegal, or that they can be caught. This has always been the approach promoted by InternetNZ and it has a lot to commend it, although it was clear at the seminar that there’s still some detail to be worked out in the way it’s set out in the Bill.

Persisting in illegal downloading would lead to the Copyright Tribunal levying a fine. There was a lot of discussion on how much was reasonable. My view is that it should be set at a multiple of what it would cost to get the files legally, say three times the cost on iTunes. We would also need to figure out what to do if the file isn’t available legally in New Zealand but it is elsewhere – I’d probably suggest setting it at the cost in other markets, to provide an incentive for copyright holders to bring things to New Zealand at the same time as everywhere else. As Clare Curran pointed out in her speech in the House on this Bill, the oscar-winning movie Hurt Locker wasn’t made available in this country for months after it was released elsewhere, and not until after it had won its oscar.

The MED officials present were writing furiously for the most part. I’m hopeful that they took a lot of the very sensible points made back to the drafting process. They will probably be advising the Commerce Select Committee which is considering the Bill at the moment.

Talking of which, that committee has called for submissions by 17th June. It’s a really good idea to send them a submission. The process is straightforward – just write down clearly your arguments and what you want the committee to do with the Bill. You can look at this post for ideas. Probably the biggest point to ask the Select Committee for is to remove Internet account termination as any kind of option, because it’s disproportionate and unworkable.

I’m delighted with the decision. I’ve written before about the iniquities of software patents. Here are five reasons not to allow them:

1. Patents are private monopolies permitted because they are supposed to encourage innovation. Yet there is no shortage of innovation in software in countries that don’t allow software patents.
2. There is serious harm in software patents because their existence threatens software innovators who can’t tell if some idea is patented and have no way to evaluate a threat from someone who claims a patent over their work.
3. Allowing software patents lead to unintended bad consequences such as the existence of patent trolls – companies which appear to exist just to threaten developers with patent suits.
4. Patents cause a large deadweight cost in legal fees. That’s money which simply disappears from the software economy to the enrichment of patent lawyers.
5. Software patents can’t be awarded fairly. Patents offices and courts seem incapable of making sane decisions about what is and is not an original “invention” in software.

There has been a chorus of approval of the Committee’s decision. But there have also been some people arguing against. Two come to mind:

Patent lawyers AJ Park say:

[Open source promoters] believe that software patents are inconsistent with the open source model. However, this is only relevant if the model is proven to be best and that all software developers should use it. There is no such evidence. Developers who use the proprietary model should be free to do so unless there is proven economic harm.

Say what? Whether or not open source proponents believe that closed source is a valid business model – and there’s a range of opinion on that point – is irrelevant to whether the law should permit the existence of small software developers. The existence of software patents effectively works against small and lightly-funded software writers, some of whom use open source. AJ Park are either confused or disingenuous here.
Software has protection from copyright. That’s as it should be. It permits the author of a piece of software control over who uses it and what for. Open source and closed source software all rely on copyright for their licences. That’s what’s used to pay the developers if they wish to be paid. So, by denying the ability to patent software we do not prevent people from making a living producing software for sale. Rather, we inject some certainty into software development by freeing developers from worrying about whether someone else has invented – or just holds a patent over – some technique they are using in their code. We also allow small companies and even bedroom coders to create software without a large suit of patents they can cross-license with the big software companies. That’s how software patents suppress innovation, a point which AJ Park claims not to understand.
The comment that I want to highlight comes from NZICT. This is an industry body representing mostly large multinational software companies. Despite its claims, it certainly does not speak for the ICT industry in New Zealand. There are many, many large and small IT companies operating who are not affiliated to it. In its latest newsletter, which I can’t find online, NZICT says:

We regard patents as a fundamental property right for those software developers that choose to pursue this path.

A fundamental property right? I don’t think so. A patent is a limited right to exploit a monopoly over an idea for a period of time. There’s nothing fundamental about that – it’s a legal consensus created, supposedly, to encourage innovation. In as much as software patents are a right at all, they are a right open to definition by legally-constituted authority. That’s Parliament in New Zealand. But the real issue I have with this remark is the same as AJ Park’s above: allowing software patents greatly advantages a few large companies at the cost of everyone else in the industry and has a chilling effect on small developers.
I’ve already explained why I think software patents are a bad idea. They don’t deliver the benefits of encouraging innovation that patents are intended to do and many are actively harmful for various reasons. It’s no surprise that some people think software patents should be extended rather than reduced. It’s no surprise that they talk about “fundamental property rights”. But, then, turkeys don’t vote for Christmas, do they?

ACTA has the potential to change the way we use the Internet and to prevent future innovation on it. It’s hard to say for certain, because the draft texts are secret, To be fair to the New Zealand negotiators, they have (if the leaks are to be believed) argued to reduce ACTA’s impact – its collateral damage – on everyday use of the Internet. And they have asked some specific questions about what they should be trying to negotiate.

I’d like to suggest that as many people as possible send in a submission, even if it’s just “do not on any account agree to anything which would make ISPs liable for something they can’t control”. But ideally, take 20 minutes, review this page, then send your arguments and views to trademarks@med.govt.nz by close of business tomorrow.

The value of information depends on several things, including its scarcity and its usefulness to the potential end-user. I’m left wondering if there is information that is inherently valueless. I can think of examples of obscure trivia, but someone, somewhere, always seems to care. It can be argued (and Oliver presumably is arguing this) that search engines monetize obscure information by using it to sell eyeballs to advertisers.

Of course, search engines don’t sell the information itself. They sell a way of discovering it. The information itself has generally already been published for free. The information has value based on the network effect, i.e. that its a published in a standard form using the World Wide Web. The search engines are very much part of this system that imputes value to freely-published information.

So, then, the monetary value of freely-published information derives as much from the great mass of other web sites, from the search engines and from the Internet itself as it does from the information.

However, I’m interested as much in what we can do with information in bulk as I am in in assigning a numerical value to individual chunks. If I write a piece of software, say, is its optimal value realized if I sell licenses to use it or if I simply publish it for others to use as they see fit without monetary recompense? The answer to that question depends partly on who recognizes the monetary value. If we look at value to the community of computer users as a whole, allowing anyone to use the software will have the greatest value. If I look at it in terms of personal revenue-maximization for that piece of software, I would presumably retain the source code as a secret and sell licences to use it on the basis of my perception of each user’s ability to pay. This applies to any information goods, i.e. things that can be copied without using up physical resources.

There are two components to value of information in the Internet age – value derived from maintaining its scarcity and value derived from making it available. Both are highly dependent on usefulness. The former is usually captured by the publisher, the latter accrues to the community.

There may, as Oliver suggests, one day be a market for all kinds of personal information. The individual worth of each piece is likely to be very low. The worth to the community as a whole of pooling its information is likely to represent the major part of its technology and its culture.

To the ACTA negotiators: I bid you welcome. I hope you enjoy our lovely city (hilarious video), and that you take a few days or weeks to explore some more of our beautiful country. You will find most New Zealanders to be warm and friendly people who love to show New Zealand to visitors.

I’ve railed against many aspects of ACTA before – especially the secrecy around it – but that doesn’t change my desire as a proud New Zealander to welcome guests to our country. I’m sure all New Zealanders involved in the wider ACTA debate will agree with me.

I’ll be on air after the 11am news. You can listen live, or soon afterwards you will be able to pull the podcast or download the audio as ogg or mp3.

There’s no doubt in my mind that the Internet is the greatest engine of prosperity since since, say, the telephone or even since mass transportation. It allows us all to interact with people and business around the world without using up fossil fuels and personal resources in travel. It provides businesses with a customer communications channel connected directly to their back-end systems. On the Internet, life is good. And, as I have said on numerous occasions, it only got that way because the Internet is an open conduit for anything people can think of.

It has been recognized by lawmakers for years that openness is the key to the Internet’s usefulness. But, increasingly, that is coming to an end. The Chinese government routinely censors its domestic Internet and forces all Internet traffic entering and leaving the country through a giant gateway it controls. The US allows private companies to remove material placed on the Internet by third parties on accusation of copyright infringement. Australia looks likely to implement a national Internet filter in the name of pornography suppression. The UK is considering a “Digital Economy Bill” which would force Internet disconnections and filter access to websites. Even the New Zealand government is looking at a limited filtering system to combat child pornography.

All this brings me to my point: Can we, humankind, actually stand an open communications medium? One that lets all of us talk to all of us? Along with the huge list of economic and social benefits that brings? Observing the actions of government world wide, I’d have to answer “no”.

It appears that the Internet is just too open and too useful for humanity to come to terms with. Since the Internet is just a communications tool, this means that we, as a species, can’t tolerate open communications between all our members. That’s why I question whether the Internet is just too good for us, whether we deserve it at all.

But then, what can you expect from a species that can’t organize itself to operate in an environment of finite resources? There is no functioning mechanism for us to deal with global environment destruction or fossil fuel exhaustion, for instance. You don’t have to accept anthropogenic climate change to agree that we don’t have a way of dealing with it.

So, then, we are a deeply flawed race careering off a cliff of our own making. Does that mean we shouldn’t fight – that we should just eat, drink and be merry for tomorrow we die? I don’t think so. For me, each of us who recognizes the problems should act as best we can to hold a mirror to human activities. That means calling governments and industries when they try to hold progress to ransom. It means arguing for cooperative approaches to dealing issues that face us. It means not hiding our heads in the sand about limited resources.

I certainly don’t have all the answers. But until we at least accept the questions, neither will any of us.

How we deal with the Internet and its ability for us all to communicate will the question I posed in the title: is the Internet too good for us?