Piracy net could also catch the innocent

Action against internet copying could be far more destructive than its supporters intend. Stefen Chow / Bloomberg

Tough new regulations being considered to tackle internet piracy threaten to do more harm than good, preventing all kinds of legitimate online activity, Tony Glover writes

Regions such as the US and Europe are putting through legislation aimed at protecting copyrighted content.

But the planned new laws could have a devastating effect across the world, hitting regions such as the Middle East by drastically reducing the breadth of entertainment offered on the internet.

With Hollywood alone losing about US$6 billion (Dh22.03bn) as a result of piracy, stamping out illicit file-sharing is now seen as essential in protecting the global entertainment industry. Despite the scale and seriousness of the problem, however, there are growing doubts that a tough regulatory environment will have any appreciable impact on the pirates and a belief that it could cause more harm than good.

In the US, a bill put before the senate has been drafted to deal with the growing problem of internet piracy. It would give the US government "dramatic new copyright enforcement powers, in particular the ability to make entire websites disappear from the internet if infringement, or even links to infringement, are deemed to be 'central' to the purpose of the site".

"The internet serves as the glue of international commerce in today's global economy," says the US senator Orrin Hatch, the bill's sponsor.

"But it's also been turned into a tool for online thieves to sell counterfeit and pirated goods, making hundreds of millions of dollars off of stolen American intellectual property."

But the bill is being blocked by a single senator who is convinced harsh regulations and penalties are not the answer to the global problem of piracy.

"Deploying this statute to combat online copyright infringement seems almost like using a bunker-busting cluster bomb when what you need is a precision-guided missile," says Ron Wyden, the senator trying to block the bill.

"If you don't think this thing through carefully, the collateral damage would be American innovation, American jobs and a secure internet."

Some analysts and industry watchers also believe the legislation could be far more destructive than its supporters intend.

"When you enact these types of regulations that can be perceived by consumers as draconian, there can be unforeseen effects," says Mike McGuire, a research vice president at Gartner. "Rather than relying on the law, content providers should be enabling new business models."

But the trend towards draconian legislation is not confined to the US. European countries have also drafted rigorous new laws designed to deprive consumers who view copyrighted material on the internet illicitly.

"In general, we have already seen tough legislation in countries such as the UK, with its 'three strikes and you're out' ruling as well as in France," says Mr McGuire. "Certain aspects of legislation can be problematic. For example, what happens with the UK's 'three strikes and you're out approach'? Do you just knock someone off the internet for watching a pirate movie? In which case they cannot even apply for a job online.

"When you knock someone off the internet the file traffickers just find ways to evade investigation."

But it may require more than just industry concerns about over-regulation to deter those who are intent on policing the world's internet. International trade bodies and professional associations are already pressuring key industry players to implement tough new rules.

"So-called 'secret' World Intellectual Property Organisation meetings are believed to have happened in June [and] July in South Korea. The aim is to get member companies to adapt some of the new legislation, monitoring networks and identifying individuals involved in copyright infraction," says Mr McGuire.

"Getting internet service providers [ISPs] to become active in tracking internet traffic is like trying to sue the phone company if you receive obscene phone calls."

There are new technologies already in place capable of tracking illicit file-sharing across the internet. Digital watermarking and encryption technologies enable ISPs to track the path of an illicitly copied video or music file.

The chief drawback is that the technology is better at locating consumers and the services they use, rather than identifying the original theft of the copyrighted material.

There are fears that tough online regulations and harsh penalties may only succeed in strangling new services and innovation, stopping consumers across the world viewing copyrighted and non-copyrighted content alike.

Middle East countries may also see their own ISPs being pressured into adopting western-style internet policing of content, restricting the growth of all kinds of entertainment content and services in the region.

"Having ISPs police content is a slippery slope," says Mr McGuire. "For example, we are seeing more and more people creating their own content. The new regulations and encryption technologies could seriously interfere with entertainment distribution in the future. It is not solving the problem and people may object to being snooped on."

Even without the kind of tough regulation now drafted, it could be possible to find alternative business models. Consumers are essentially lazy and most will opt for the simplest and most fashionable way of downloading content.

"In 2003, no one thought people would pay 99 cents to buy a song from iTunes [the Apple internet music and video store]. Today, however, iTunes is the largest pre-recorded music retailer in the word," says Mr McGuire.

Rather than attempting to impose yesterday's western business plans on the rest of the world, content and service providers have the alternative of using the new technology to create new business strategies, such as the increasing ubiquity of high-powered smartphones. Lacking the full functionality and large screen of a PC or laptop, smartphones are suited to delivery of the kind of limited choice offered by companies such as Apple.

Without the huge storage space of larger computers, mobile and pocketable devices will be forced to rely more heavily on content such as games, music and movies being stored on the service providers' computers and downloaded for use to the consumer, a system sometimes referred to as "cloud" computing.

If the industry can be allowed to roll out the new, commercially successful content download services, it may be able to develop new business models without recourse to draconian rules and legislation.