Fred Wilson on the E-Parasites Bill

Fred Wilson, pictured above, is a NY VC at Union Square Ventures. He was a ground-floor investor in Twitter and Zynga.  You all should be reading his blog AVC.COM. When I heard that Fred was heading to DC to discuss the E-Parasites bill, I asked him if I could re-post anything he wrote on E-Parasites. Here it is:

Protecting The Safe Harbors Of The DMCA And Protecting Jobs

My partner Brad and I spent Thursday in DC along with a bunch of entrepreneurs and VCs. We talked to dozens of our elected officials about an issue that is very concerning to us, protecting the safe harbors of the DMCA.

The DMCA is the Digital Millennium Copyright Act. It received unanimous support in the Senate and was signed into law by President Clinton in 1998. It is a complex piece of legislation but it contains four “safe harbors” for “network service providers. The four safe harbors are explained here. “Network service providers” is shorthand for web services. Companies like Google, YouTube, Facebook, and Twitter are “network service providers.”

The DMCA took a long time to become law. There were many legislative stops and starts on the way to its passage. Ultimately, congress and the administration forced the content industry to negotiate with the technology industry. That negotiation produced the compromises that are contained in the DMCA and that is what allowed it to get unanimous support in the Senate.

Fast forward to today. The content industry’s lobbyists have forged two new bills, one in the Senate called Protect IP and one in the House called E-Parasites. These bills were written by the content industry without any input from the technology industry. And they are trying to fast track them through congress and into law without any negotiation with the technology industry.

These bills are positioned as necessary actions to prevent “online piracy” particularly from rogue sites outside of the US. The technology industry is certainly concerned about online piracy. It has developed both protectitive technologies like DRM and alternative distribution services like premium streaming audio and video services such as Netflix, Spotify, and many others. These protective technologies and alternative distribution services have significantly cut the amount of online piracy in the past decade. An executive from Viacom testified recently in Congress that the vast majority of piracy is limited to “about twenty websites.” So the technology industry has done a lot to help the content industry get a handle on online piracy in the past decade.

If another negotiation is in order to amend the DMCA, then let’s have it. The last negotiation produced an excellent compromise that has stood the test of time and allowed important new services like Google, Facebook, YouTube, and Twitter to be created and become large companies and massive job creators.

It is this last point that is critical. The content indusrtry is not creating new jobs right now. The tech industry, led by startups, have created all the net new jobs in the past five years. Companies like Apple, Google, Facebook, and startups like Dropbox, Kickstarter, and Twilio are the leading exporters and job creators of this time. They are the golden goose of the economy and we cannot kill the golden goose to protect industries in decline.

Big companies like Google and Apple can afford to defend themselves from litigious content companies. But three person startups cannot. And Facebook, Twitter, and YouTube were three person startups not so long ago. If they had not had the protection of the safe harbors of the DMCA, they could have been litigated out of business before they even had a chance to grow and develop into the powerhouses they have become. And venture capitalists will think more than twice about putting $3mm of early stage capital into startups if they know that the vast majority of the funds will go to pay lawyers to defend the companies instead of to hire engineers to create and build product.

The bottom line is that DMCA works. Its safe harbors have allowed the Internet to become the US’s most important new industry in a century and a critical job creator. If we need to amend the DMCA, let’s do it with a negotiation between the interested parties, not with a bill written by the content industry’s lobbyists and jammed through congress on a fast track.

Now we are going to try an experiment using Disqus as an easy way to do something about this. If you want to write Congress on this issue, then simply write your letter in the comments below as if you were writing Congress directly and tag it with ‘@votizen’ followed by your residence zipcode (see my test comment as an example). The Votizen guys will get a copy of your letter through Disqus, and will automatically deliver the message to your specific Congressional representative. Votizen will follow up with you in case you want to track the message and get a response, but that is optional. Mostly, this is just a test to see if more people get involved when we make it easier and transparent. If it works and you like it the Disqus and Votizen guys might invest a bit more time on seeing how blog commenting could be used as a new form of civic engagement.

Comments on Fred’s blog are here.

2 responses to “Fred Wilson on the E-Parasites Bill”

  1. Anonymous says:

    @votizen:disqus Dear Representative, the E-PARASITE Act and the PROTECT-IP Act, collectively known as the Internet Destruction Acts, represent yet another attempt by Big Content to impose their aging business models onto the Internet. Big Content has seen fit to fashion legislation in their own image, for their own benefit, without regard to the public. In recent years, Big Content has made steady encroachments onto the Public Domain (http://www.thepublicdomain.org/) through legislation and through misappropriation. They seem to think that consumers have no rights with regard to content, such is the attitude expressed in these Internet Destruction Acts.

    These acts set aside due process rights in favor of the rights of Big Content. They set aside First Amendment rights in favor of Big Content. And they seek to create a captured audience, unable to choose which media they wish to view and where they’d like to view it.  Though Big Content benefits from and even capitalizes on copyright laws, they seem to have forgotten who the copyright laws are intended to benefit:

    “The sole interest of the United States and the primary object in conferring the [copyright] monopoly lie in the general benefits derived by the public from the labors of authors.” — Fox Film Corp. v. Doyal, 286 US 123, 1932We the People, in the end, are the sole beneficiaries of the copyright laws. Not the multinational Big Content corporations who impose region codes on the DVDs they wish to sell, who issue DMCA takedown notices even in cases where their rights are not even proven, who have imposed DRM – a failed technology that fails immediately when the authenticating servers are shut down, who have created secret agreements with Internet Service Providers to create a defacto 3-strikes law without the consent of the People and who have disregarded the will of the People at every opportunity to do so.Big Content, and you, my representative, hear this: the only reason we still have copyright laws today is because it is the will of the People. As one of the People in this country, I urge you to vote no on these Internet Destruction Acts and others like it. They have no place in a free society. Remember, a free idea will create more jobs than an encumbered idea.

    Scott Dunn

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