Legislation introduced in Congress last month (the “Combating Online Infringement and Counterfeits Act”) would take an aggressive and needed stand against online piracy, a growing problem that hurts American consumers and costs Americans jobs. Critics of the legislation argue that this bill would hurt free speech, encourage censorship in foreign countries, and cripple the technological infrastructure on which the Internet runs. Not only is this criticism unfounded, but more robust enforcement of digital copyrights would likely lead to a stronger Internet ecosystem and more innovative content and services for consumers.
The Good, the Bad, and the Ugly of Innovation Policy
Innovation has become the central driver of economic growth and thus a key focal point of countries’ economic development strategies as they seek to gain competitive advantage. Accordingly, countries are increasingly designing national innovation strategies that seek to coordinate their policies toward skills, scientific research, information and communications technologies (ICTs), tax, trade, intellectual property, government procurement, standards, and regulations in an integrated approach designed to drive economic growth through innovation. While a focus on innovation is positive, countries can implement policies that are either,
- “Good,” benefiting the country and the world simultaneously;
- “Ugly,” benefiting the country at the expense of other nations;
- “Bad” failing to benefit either the country or the world; or
- “Self-destructive,” actually hurting the country while benefiting others.
Notwithstanding the fact that countries can readily implement a range of “Good” innovation policies, there remain far too “Ugly” and “Bad” (and occasionally “Self-destructive”) mercantilist strategies that are neither sustainable nor productive. Moreover, these Ugly, Bad, and Self-destructive mercantilist strategies suffer from three other failures. They: 1) undermine confidence in the international trading system, while reducing global GDP growth; 2) fail to recognize that neither the United States nor Europe—nor even both combined—can indefinitely absorb imports if Brazil, China, India, Japan, Russia, and others continue to promote exports while limiting imports as their primary path to prosperity; and 3) ignore that raising the productivity across-the-board of all sectors, traded and non-traded, is the surer path to lasting economic growth.
The world must move beyond perceiving the pursuit of economic growth through innovation among nations as a zero-sum game to embracing a perspective that views mutual global prosperity as the goal. The report also provides policymakers a concrete guide to promoting constructive innovation policies while avoiding the ruinous ones. Among those steps are the following:
- Urging institutions such as the World Bank, the IMF, U.S. AID and others to steer nations away from export-led growth strategies and other mercantilist policies.
- National leaders should promote win-win innovation policies and avoid zero-sum strategies.
- The World Trade Organization should publish annually all new trade barriers (including non-tariff barriers), whether they are allowed by the rules or not.
- Establish trade zones of nations that exclude nations that persist in pursuing mercantilist policies that violate the principle of free and fair trade.
- Educate policy makers that export-led growth, often abetted by mercantilist practices, is unnecessary, counterproductive, and unsustainable. It misses the far greater opportunity to achieve economic growth through raising domestic productivity levels.
Who's Who in Internet Politics: A Taxonomy of Information Technology Policy
The debate about the future of the Internet is more politically charged than ever. Internet policy issues are becoming more central. All groups involved in Internet policy share a goal of a robust Internet ecosystem but have sometimes vastly different definitions of robust and different views on how to achieve that goal. In this report we identify nine distinct groups shaping Internet policy and how these groups view key Internet policy issues, including net neutrality, copyright, and privacy.
Network Policy and Economic Doctrines
Disagreements over how to craft Internet policy have become more and more contentious and political. Beyond the technical and engineering aspects are economic questions. The points of view of various stakeholders and participants on such matters as privacy, net neutrality, copyright and other issues stem from four major economic philosophies: conservative neo-classical, liberal neo-classical, neo-Keynesian and innovation economics.
In this paper presented at the 2010 Telecommunications Policy Research Conference, ITIF President Robert D. Atkinson analyzes how prevailing economic philosophies drive approaches to network policy in four key areas: broadband competition, net neutrality, copyright and privacy.
This article was published in the June 2011 issue of Telecommunications Policy.
ACTA Critics Oppose Strict IP Enforcement, Not Just Text of Agreement
As the ninth round of negotiations on the Anti-Counterfeiting Trade Agreement (ACTA) comes to a conclusion and the White House has made clear its support for ACTA as part of its Joint Strategic Plan on Intellectual Property Enforcement, opponents of the initiative have become increasingly vocal. The critics range from those who fundamentally reject the idea of intellectual property rights, to those who worry about empowering private sector actors to enforce digital IP rights, to those who feel that their civil liberties and privacy are under attack. Most notably an international coalition of critics, led by vociferous anti-IP rights groups, has signed on to a public letter condemning ACTA as “hostile to the public interest.” While the most recent draft of ACTA may still need refinement, the overall results of the agreement would be greater protection for intellectual property rights, a direct benefit for American companies, American jobs, and American consumers.
ACTA traces its roots back to 2007 when various countries came together to begin negotiations on a plurilateral treaty to improve “global standards for the enforcement of intellectual property rights” and “to more effectively combat trade in counterfeit and pirated goods.” Current participants in the negotiations include Australia, Canada, the European Union, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the United States. The goal of ACTA is to better protect intellectual property rights by increasing international cooperation, establishing best practices for enforcement and ensuring a strong international legal framework to combat piracy.
One of the major objections to ACTA up to now has been about process rather than substance. Critics contend its negotiations have been conducted primarily behind closed doors. For example, critics recently labeled ACTA “the predictably deficient product of a deeply flawed process.” However, in their defense, the participants have reacted to calls for more transparency, albeit slowly. In April 2010 negotiators released draft text for public comment. More recently, during the most recent round of negotiations the Swiss government hosted meetings for outside participants to share their views on the initiative. Moreover, while the negotiations were conducted privately, many of the negotiating partners have provided opportunities for public comment. In the United States, for example, the USTR has provided opportunities for public comment and has provided updates about the ongoing negotiations. Similarly, the European Commission has organized at least one meeting this year to provide a forum for stakeholders to voice their views and concerns about ACTA.
To be fair, without absolute transparency or finalized text it is difficult for supporters or detractors to argue meaningfully about the finer points of the negotiation. However, what we have seen is a general assault on even reasonable efforts to protect IP and improve IP rights enforcement. For example, Public Knowledge has criticized ACTA as a backroom deal for content owners at the expense of innovation even though they acknowledge that substantive concerns about ACTA “are more speculative since they regard its content.” These groups see Big Media as the enemy out to destroy civil liberties and fair use, especially on the Internet.
Not surprisingly many of the groups opposing ACTA have generally been resistant if not “hostile” to any effort to improve IP enforcement online, such as prohibiting unauthorized circumvention of digital rights management controls. Similarly, these groups have opposed ideas such as content filtering or “three strikes” legislation to penalize repeat illegal file-sharers. Given that online service providers are often best placed to protect digital IP, policymakers are wise to pursue an agreement that incentivizes these service providers to combat piracy. Yet many of these groups oppose DMCA-like provisions which provide service providers with limited liability if they enact anti-piracy controls. These include groups like the Pirate Parties International which represents political parties created specifically to reduce or eliminate existing intellectual property rights. Similarly, groups such as the Electronic Frontier Foundation (EFF), which generally rejects most technology and policy-based measures to limit IP infringement, have actively opposed ACTA. For example, EFF argues that ACTA will “cut people off of the Internet, turn ISPs into copyright cops, and create a global framework that puts severe restrictions on innovation.” These are often the same critics that even object to statements, like the one from Vice-President Joe Biden, that “piracy is theft” and “piracy hurts our economy.”
The real opposition of these groups appears to be not to ACTA specifically, but to meaningful IP rights enforcement generally. Notably, many of the opponents of ACTA are not concerned that the initiative will be ineffective, but instead complain that the agreement will force countries to adopt stricter enforcement regimes for IP. Attempts to impose harsher penalties on copyright infringers are labeled as anti-innovation, and attempts to impose criminal sanctions on non-commercial infringement are deemed anti-consumer.
These points of view ignore the modern reality that what people create with their minds has value just as a piece of furniture or a painting or anything created with one’s hands does. As ITIF has argued repeatedly IP infringement costs the U.S. billions of dollars annually and the U.S. government needs to step up enforcement of individuals, organizations and nations that systematically steal, extort or otherwise gain U.S. IP without paying for it. More can and should be done to protect intellectual property, such as embracing anti-piracy measures online. There is no better way to stifle innovation than to devalue its worth and deny just compensation to creative and ingenious people.