Big Media: Inside The Propaganda Machine

You know something's hokey when the Financial Times, a leading paywall operator, devotes a whole page to the war on content sharing 'online piracy battle' just days after the big set back for SOPA/PIPA. Here's the lead article, snuggled between two stories from the 'front line' ("Parameters shift in online piracy battle" and "Upload websites bar file sharing"):

"Digital revenues set to offset CD fall"

It's then you realise you're inside the propaganda machine for the Big Media faithful:

"Keep sluggin' it out, people! 

Less content sharin' means more money for us!"

Think about that.

Because these are the same institutions who were leeching public money out of New Labour in 2009 for help with copyright enforcement, with tales of 'losing £1bn in music sales in the next 5 years'. Whereas only 3 years later, the FT reports they have this to say:

[Rob Wells, of Universal Music] "Some of those big global subscription players are only playing on a small playing field... As they mature, they are more likely to be bundled with internet service provider or operator subscriptions which is where we start to see real anti-trust investigations scale. The future is looking extremely bright."

"We are going from headwind to tailwind," said Edgar Berger, chief executive at Sony Music International. "There is no question the music industry is going to be in great shape shortly, it will become a growing business again. The internet is a blessing for the music industry."

Big Media is not in the business of solving consumer problems. It's a cabal of institutions out to solve their own problem of how to return to rampant profitability at the captive consumer's expense. And they won't give up trying to stop you sharing content 'til your MP3 player looks like this:

The Great Aussie Firewall - The Game

The Guardian reports on the latest response to the Australian government's efforts to control the internet.

Web Filters To Block All Australian Content

The United Nations Safe Internet Committee (UNSIC) announced on Thursday that its web filters would no longer accept any Australian content. A spokesman explained: "The Australian government warned us that it has lost control of Internet content, and we should not accept any further Internet content from its servers until the problem is resolved."

When asked for the Australian government's response to those who believed in an open, neutral Internet, the UNSIC spokesman added, "Talk to the hand".

Posted via email from Pragmatist's Posterous

Is This Entertainment?

"The entertainment industry scored a rare victory on Friday," says the FT, reporting the prison sentences and fines handed out in Sweden to the four promoters of Pirate Bay.

Really?

As has been shown in the UK, there is no economic justification for spending public money on special life-support for the so-called "entertainment" industry's antiquated set of business models, let alone on imposing criminal sanctions. And doing so in the case of file-sharing only encourages these laggards to persist in their efforts to slow the development of an open internet to their snail's pace.

When lobbied for more public resources to tighten the entertainment industry's failing grip on consumers' wallets, Ministers should demand instead that the industry delight people to the point where they don't need or want to use the likes of Pirate Bay.

Now that would be a victory for the entertainment industry - and entertaining to boot.

Beware Pleas Based on Moral Panic

William Patry made this excellent point in tonight's SCL Annual Lecture, specifically in connection with proposals to extend further the term of copyright: political appeals based on  moral panic are most often made where there is asymmetry in the information available: criminal law and copyright law being key examples. There is no evidence from the other side - the alleged perpetrator - unlike in cases where two sets of industry players are pitted against one another, which usually produces hard evidence pointing in each direction (e.g. competition law disputes). So the way is clear for, say, the security agencies or copyright owners to appeal for protection merely because it is "right and just" rather than to protect against any proven harm.

Such pleas may ultimately be futile, of course. Attempts by the music industry to deny access to music downloads neither prevented the rise of Napster and iTunes, nor prevented the steady demise of EMI. As I've also mentioned before, the root cause of music industry disruption is consumer dissatisfaction, not copyright violation.

William Patry's suggestion is to insist on an empirical approach to the issue of whether or not the copyright regime works, rather than a continued assumption that it's a property right that deserves protection at any cost. Only then will a proportionate response emerge. I share the view that in all regulatory matters - like business process issues - one must first define the problem and ascertain its scale before deciding whether or not to devote precious state resources to resolving it. At that point, legislators should insist on finding the root causes and implementing the best solutions to tackle them.

Attempts at providing empirical evidence on these issues in the file-sharing context, for example, have been pathetic. Claims that music providers will lose £1bn in CD sales over the next 5 years are disingenuous when their digital sales are increasing at the rate of 28% a year. And where is the evidence that extending the term of copyright will result in more copyright works that will yield satisfactory incomes for creators? Is it not possible that shortening the copyright term would result in a far greater volume of sales for more artists at lower prices to consumers?

The people should be told before any further extension to copyright is granted.

Taxpayers' Bung to Music Majors: Doom For Net Neutrality

Another bail out, another Quango. This time New Labour wants the taxpayer to pay for the failure of the jaded business models of the music moguls via a new rights agency to combat internet piracy, and will regulate to give them special rights to collect internet users' data.

There is no justification for this, and it is no melodramatic exaggeration to say that the direct consequence is the end of a neutral internet. Claims by content providers that they'll lose £1bn in the next 5 years are disingenuous - and it's a paltry sum given what's at stake. In its consultation on proposals to combat illicit file-sharing, BERR was told that, in spite of these "losses", online music sales are growing at 28% pa. So the industry is doing just fine, and it's no surprise that BERR received little support for its proposals. Accordingly, this focus on piracy can only be an excuse for content providers and internet service providers to lobby for a statutory right to monitor, and in due course charge for, everything we do online - whether we're "pirates" or not. BERR couldn't deliver, so now Lord Carter is to give it a try.

Apart from being another example of this government's entrenched commitment to public sector largesse, is this also some kind of parting favour to New Labour luvvies? Or is it, like the approval of Heathrow's third runway, perhaps an attempt to leave the Tories in a position where to unwind such travesties they must oppose Big Business?

Who knows, but sooner or later this particular cheque has got to bounce.

Thanks to Chris for the alert.

How to Disable Phorm

I looked at Phorm in February and again in June, but not really wearing my consumer hat. Now I have an unwelcome opportunity to do just that.

You see, I'm a BT broadband subscriber with multiple users at home, some of whom may not be all that, ahem, technologically inclined. So I'm a bit paranoid that, while I'm not aware of having been asked or consented to using Phorm (branded "WebWise"), other users may have inadvertently switched it on in the course of a BT trial.

Why I am paranoid? Well the service is basically designed to track the browsing habits of all users of the broadband-connected PC or laptop and use this to send more targeted advertising, so that BT and Phorm can make money out of you. But I don't just "browse", I research stuff, work and look after my financial affairs. Other users in the house from time to time will do the same. I don't want this stuff tracked, scanned or whatever else Phorm or BT plan to do with it. And I don't want to be pestered by ads, especially ones that may have nothing do with my real interests. I don't consider that I have a relationship with BT when I use my broadband to access the internet. I permission or de-permission cookies or accept marketing bumph from each of the site I'm happy to deal with. And so on.

I've now done what any good consumer should do. I've looked at the BT WebWise site and even the audit report from Ernst & Young (the mere fact that an audit report is felt necessary chills me to the bone). While these purport to tell me what Phorm is or isn't doing, it doesn't explain BT's role or the data it has access to and retains, or what BT is getting out of using Phorm. The BT terms and conditions (clause 18) aren't exactly encouraging on this point. In fact they are so lacking in material information that they deserve further consideration in light of the Consumer Protection from Unfair Trading Regulations 2008 (which I perhaps rather hastily lampooned - but hey, if they're there, use them). The killer is that the mere presence of this unwelcome "service" casts on me an obligation to constantly police my own computer and all its users to ensure that we're opted-out and remain opted-out. It would be too much to hope that the anti-virus software providers will create a Phorm-killer.

Let's be clear. BT needs to persuade me, as its customer, to opt-in to taking this additional "service". It's not for BT to use my broadband connection to build relationships with people who aren't the accountholder, and get me to police their opt-in/opt-out. It must be BT's problem to ensure that if I don't opt-in (or if I do, but opt-out later) that the effective opt-out works for everybody on my connection all the time.

And to have any chance of persuading me to opt-in, BT must specify in more detail the nature of the data that will be obtained, all the proposed uses of that data, what I am going to receive in return (and don't say targeted ads - show me the reduction in the price of broadband to reflect your opportunity to gain ad revenue), and how I can opt-out and have that data deleted. From a personal standpoint, the "WebWise" service doesn't go far enough in this regard for me to trust it. Nor should the current level of disclosure be enought for BT to be able to claim they have my consent to thing under the Data Protection Act - I simply don't consent, anyway.

So, not trusting BT on the particular issue of how to stay opted out, I did a quick Google search hoping to learn how you would really know that you were not signed up, and how to switch it off completely. No luck.

The Register, which has done a lot of digging on Phorm in the past, and got a very concerning post from Chris Williams on 3 October. According to Chris' discussions with BT, they seem to track your usage whether you're opted in or out... so they can record whether you have opted in or out. You then simply have to trust that they won't sell or otherwise use your data to get extra ad revenue, fall victim to organised criminals, or allow the authorities to mash it with the Communications Database (you'll recall that the UK government has been particularly supportive of Phorm).

All the technical detail is in Richard Clayton's excellent piece on Phorm. His research suggests that you can add the Fraud Act, Computer Misuse Act and the Regulation of Investigatory Powers Act to your reading list before deciding whether or not to sign up to WebWise. And even intellectual property rights owners have a serious set of bones to pick, as Nicholas Bohm and Joel Harrison have fulsomely discussed in their excellent September article for the Society for Computers and Law. But none of that is going to occur to the average consumer, so why is the government not taking their corner instead of Phorm's..?

Who knows. For my money, it's time to switch broadband providers.

Speaking of which, I see that Orange is attempting to make a virtue out of not using Phorm.

War on File-Sharers Spells D-o-o-m for Net Neutrality

The UK government is planning to promote "attractively packaged content" on the internet, bowing to pressure from copyright owners to prevent online piracy.

Only figures for the music industry are cited in the consultation paper, yet various regulatory and co-regulatory solutions are proposed that will affect all copyright content online.

The paper claims that about 6.5m people in the UK (25% of UK internet users), engaged in illicit P2P file sharing in 2007. This is estimated to "cost" the "music industry" £1bn over the next 5 years, against revenues of about £1bn per annum.

So, where's the problem? The "music industry's" digital music sales increased by 28% in 2007. Sure, declining CD sales resulted in a loss, but that's like saying Ford made a loss because no one wants to by the Model T anymore. It is also conceded that the decline in CD sales wasn't due to piracy alone - supermarket discounting and the shift to digital purchases were chiefly responsible. In other words, the "music industry's" woes are born of consumer dissatisfaction.

Consumers are used to getting content for free online, knowing that providers are making money out of advertising. So it's no surprise that 91% of survey respondents file-share because the content is free. More telling is that 42% say it's because they could find everything they were looking for. In other words, constraining supply by "attractively packaging content" doesn't work, and the music industry needs to get with the programme.

Of course, file sharing isn't actually not free. File-sharers spend time and pay for wireless technology, proxy servers, encryption and communications to download the material. No figures are given for how much revenue this generates, but at 6.5m UK consumers, it seems to be a sizeable market. I wonder who's making money out of that?

The chief cause of music industry misery actually seems to be the cost of enforcing copyright via the clunky legal system. They say it can cost £10,000 for each court order to obtain the IP address for each file sharer. I'm prepared to believe that, and I'm all for reducing the cost of enforcement. But that problem shouldn't need a "memorandum of understanding" among the rights owners' associations, network service providers and goverment, paragraph 3 of which says this:

"Many legal online content services already exist as an alternative to unlawful copying and sharing but signatories agree on the importance of competing to make available to consumers commercially available and attractively packaged content in a wide range of user-friendly formats as an alternative to unlawful file-sharing, for example subscription, on demand, or sharing services."

One shudders to think what is meant by "attractively packaged content". But it's implicit that any such packaging will be done by, and must suit, the few industry players who signed the MOU.

And that implies we'll be forced to pay for premium content bundled with rubbish, like "albums" on CDs. A sort of packaged internet, chosen for us by cosy institutions.

The neutral, open internet appears to be doomed.

PS: The Society for Computers and Law response to the consultation can be viewed here, and the SCL's response to proposals to increase the penalties for criminal infringement of intellectual property rights can be viewed here.

Bad Phorm?

Back in February, I commented on the Open Internet Exchange initiative being planned by Phorm, whereby and major ISP partners BT, Virgin Media and Talk Talk will be paid for allowing all the web browsing by their customers to be trawled for advertising purposes.

Not a lot was known about the initiative at the time, but negative news has been snowballing since, and opponents are taking to the streets. The Register is maintaining a dossier, known as "The Phorm files", and a "No Deep Packet Inspection" street demonstration is timed for BT's AGM on 16 July 2008. See also the Facebook Group "Save UK internet privace - reject ISPs that use Phorm".

Incidentally, you might wish to be more wary than usual of the Wikipedia entry on this subject.

The concerns raised are similar to those related to Facebook's "Beacon" initiative that led FB to significantly alter the functionality (though you might wish to be somewhat sceptical of that Wikipedia entry too!). The chief one being that there seems no reliable way to ensure that you are really opted-out. However, the Phorm scenario is worse than with Beacon, because the inspection, storage and use of data is at the ISP layer, making it much harder in practical terms to avoid the service than if it was operated, say, on a site-by-site basis. In other words, you can't decide simply not to visit certain sites if you doubt that the opt-out would actually prevent the abuse of your personal data. Instead, you would need to switch ISPs. However, you may not actually be able to avoid using one of the "problem" ISPs (e.g. at a friend's place, work, or via an internet cafe). And what if all the ISPs join the initiative?

Further, as the Guardian has noted, the challenge for Phorm is to reconcile two apparently contradictory statements:

"Advertisers are told that it will be able to profile the surfers, based on where they have visited, and target them through that uniquely numbered cookie. But users are told they will not be identifiable. It's the apparent contradiction in those statements that has infuriated so many."

If you are remotely concerned, now is the time to make your feelings known to your ISP, your MP, and participating advertisers.