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Don’t trade away our digital future

I read an article in the Herald the other day – High-quality Pacific trade deal vital, says Key – that gave me cause for concern. I read it somewhere en route from Wellington to Dallas for the 12th round of Trans Pacific Partnership agreement (TPP) negotiations.

The reason why I am here, in Dallas, is to advocate for an open Internet under the TPP.

The reason why the article bothered me was because of the trade-off it outlined: if NZ gets better access to US dairy and meat markets, the US gets to change NZ’s intellectual property (IP) laws to suit, namely, the film and music industries. NZ is then effectively stripped of its sovereignty when it comes to shaping aspects of its own IP policy.

(For more on Trade Minister Tim Groser's pro-agriculture, ambivalent-about-technology stance, read Paul Matthews' Groser trades away tech to save agriculture - Editor.)

There are aspects of IP policy – namely digital copyright policy – that are inextricably intertwined with Internet policy, and the film and music industries have considerable influence on digital copyright policy. Plainly speaking, these industries have traditionally enjoyed significant power in shaping Internet policy around the globe.

For example, the laws they lobby for at home and abroad dictate when websites are taken down, or when someone’s Internet is shut off without full due process. Without getting into why these industries have had such power, or even why their power appears to be on the wane (take for example the resistance to SOPA and ACTA), I’d like to touch on what the real repercussions could be for New Zealand if it accepts the US copyright proposals in the TPP that are inspired by these industries (and not other industries - say search engine industries).

In the above article, the US Ambassador to New Zealand was quoted as saying that “guaranteed commercial exclusivity of appropriate duration is what seeds innovation”. With all due respect to the Ambassador, let’s unpack that statement a bit. While I can agree with him in principle, I don’t agree with what the US believes is “appropriate duration”. A lot of economists don’t either.

The US wants New Zealand to extend copyright terms beyond the international standard by 20 years – from the life of the creator plus 50 to the life of the creator plus 70. In other cases, for example sound recordings or films, the US would practically double the duration of protection. Note that Australia agreed to the same copyright extension in its free trade agreement with the US and pays for it dearly. One scholar estimated that the copyright extension has resulted in Australians sending an extra $88 million per year in royalties overseas.*

And another facet of exclusivity – the US wants New Zealand to limit parallel importing, giving copyright owners greater power to segment their markets. New Zealanders are already all too familiar with this idea – try to find a way to purchase Game of Thrones online. You can't, because it's not available for purchase in New Zealand. If I am correct, most TV shows are unavailable for purchase. These types of restrictions could manifest in offline markets as well, or raise the prices of books and DVDs when they are already over-priced. (On a related note, I just visited the Walmart near my hotel and was tempted to buy DVDs to bring back to Wellington. Note that under the US proposals, if I circumvented the region coding to watch my DVDs at home, I could be committing a criminal offence!).

Is a period of exclusivity that lasts two generations an “appropriate duration”? Did Walt Disney create Mickey Mouse based on the expectation that his character would be lucrative for the company long after his death? How many books are sold more than 10 years after first being published? Do we really think that innovation depends on making copyright longer? I’m not convinced. Ironically, these copyright demands could stifle innovation by further restricting access to cultural artifacts that people can use in creating new works. Extending copyright terms and restricting parallel importation is not seeding innovation, it’s extracting rent.

As for the open Internet, the true threat comes in a suite of proposals dealing with Internet intermediaries. New Zealand would be constrained considerably in how it makes law in this area, and constraint in an ever-evolving digital landscape is anathema to innovation. For example, we would be prohibited from creating new and different “safe harbours” for intermediaries, even if future circumstances necessitated it. The US seeks affirmation from all parties that they will adopt the DMCA-style safe harbour scheme that New Zealand has already partially implemented. The US scheme would lock us into only four safe harbours. But what if cloud providers require certain practical exceptions and limitations that will only become apparent to us in a few years time? We won’t be able to legislate for that, nor will we be able to legislate to give New Zealanders a fair use defence that people in the US enjoy. Hardly a level playing field.

Finally, another innovation-killing US proposal worth mentioning eludes the understanding of some of the brightest people I have ever met – people who have a rigorous knowledge of the Internet and how it works. This is the proposal that would give copyright owners an exclusive right over temporary electronic copies.

But the Internet fundamentally depends on making temporary copies.

My heart doesn’t ask why it has to pump blood, or whether it should pump one blood cell and not the other. It just pumps blood. Similarly, as Internet traffic flows around the globe, intermediaries may make temporary copies of data packets in order to distribute them efficiently. The intermediary doesn’t ask what’s in the packet, it just transmits it. If the TPP requires us to give copyright owners exclusive rights over temporary copies, how would intermediaries be able to say that they comply with the law? What would be the cost and other impacts (privacy, for one) of looking at every bit of cached, streamed or buffered data to know if it is authorised? It's unimaginable, just like having your heart vet every blood cell before it sends it on its way.

The article indicates that the Prime Minister believes that the TPP should be negotiated well, not just quickly. The terms of the agreement must make sense for New Zealand before we sign on. I concur, but I also believe that it is crucial that New Zealand’s TPP goals aren’t simply reduced to meat and dairy. These industries are obviously very dear to New Zealand, but the country's burgeoning weightless economies - software companies, IT services, those that depend on the Internet to reach their markets - shouldn’t be marginalised. New Zealand is geographically remote, and the Internet is today's refrigerated shipping. It should be promoted under the TPP, not hobbled by overbearing IP policy.

 Susan Chalmers is policy lead with InternetNZ

*Dr Philippa Dee The Australia-US Free Trade Agreement: An Assessment (Australian National University, 2004)

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Comments and questions
12

An interesting - but hard to fully appreciate - article. Two acronyms were explained, two I knew (the abbreviations for United States and Digital Video Disk), but what, please, are SOPA, ACTA & DMCA?

However, I fear the chances of a fair T.P.P. being negotiated under this National government are unlikely - benefit the minority at the expense of the majority, situation normal for the last 4 years.

Actually DVD is Digital Versatile Disc...

DMCA is Digital Millennium Copyright Act - the American copyright law that tries to deal with all things "digital". SOPA is the failed Stop Online Piracy Act and ACTA is the Anti-Counterfeiting Trade Agreement.

Very interesting article and right on the button.
The IP sector can become our biggest export if allowed to play on the mythical level playing field. The established music industry has been out played by Apple, having spent far to much resource trying to sue its own customers (Napster ) etc.
Lets ensure that our negotiators understand the vital importance of your articles promoted stance. The tyranny of distance is alleviated by the net. Lets keep it that way by not allowing the US and others to heavy "us".

I put 75% chance the US doesn't follow through with dairy market access anyway. Look at their history with Canadian softwood lumber.

This is very true Eric. The US will protect large agribusiness interests at any cost (including undermining small and independent farmers both in the US and abroad).

Sign this petition if you are concerned about the impact of the TPP on farmers and local food economies:
https://www.change.org/petitions/defend-food-sovereignty-and-trade-justice-stop-the-tpp-free-trade-agreement

Susan Chalmers can write. InternetNZ is very lucky.

NZ owes the mega film and recording industries nothing, absolutely zero. They are basically just a bunch of racket-protecting lawyers-parasites, milking their cash-cow copyrights to death. New artists will stop signing with them, en masse, in the near future. They are hoping to make a living, for free, off the creativity of dead artists, it is that sick.

Kim Dotcom and his band of merry technologists are the future. Dump the parasites like a bad case of fleas and head for the future NZ.

Re WalMart DVDs. Much stuff can't be bought through Amazom.com because the shippers won't ship to NZ. And, a lot of movie/TV content that's available to the North Anerican market, isn't avail from here.

Copyright protection is OK, but not when it isn't uniformly applied amongst countries.

In the Steve Jobs book, he was quotes as saying :

“From the earliest days at Apple, I realized that we thrived when we created Intellectual Property. If people copied or stole our software, we’d be out of business. If we weren’t protected, there’d be no incentive for us to make new software or product designs.

If protection of intellectual property begins to disappear, creative companies will disappear or never get started. But there’s a simpler reason: It’s wrong to steal. It hurts other people. And it hurts your own character.”

Seems to have worked well.....

Intellectual property has certainly incentivized technological innovation. The open source model has done that too. There are different forms of "carrot" and the IP carrot worked for Mr. Jobs.

My article (originally a blog post, actually) was not an argument against copyright per se, but against the new copyright provisions that New Zealand will be asked to accept as part of the Trans Pacific Partnership agreement. Most of these provisions are from a US law that was passed in 1998. Google had just incorporated as a private company. Mainstream file-sharing hadn't even come about. Society was not as "connected" then as it is now. Things have changed dramatically since then.

The practical answer(s) to how we can efficiently and responsibly promote innovation and creation in the modern environment, and reward those who innovate and create, should be novel, contemporary. The law should provide the framework for that. It becomes very difficult to do this if you are locked into technology-centric law that is 14 years old.

Steve Jobs also had a poster for the Apple Macintosh crew: "Real Artists Steal" and "It's Better To Be A Pirate Than Join The Navy"

Some compelling points are made in this article which is a really useful contribution to an informed debate. The TPP is an incredibly complex negotiation, covering as it does nine countries and at present contained in over 24 chapters of text.

IP protection is also an incredibly complex issue - what makes sense for one sector of the economy, say digital content, is unlikely to make sense for the protection of life sciences innovations. Susan rightly refers to the need to balance interests and this applies across the negotiation.

Our primary sector still makes an enormous contribution to NZ's wealth, and I think we can be reassured that it increasingly also has an interest in appropriate IP protection as the value of this sector becomes less about what can be "dropped on your foot" and more about smart technology which has its genesis in milk but is now reflected in digital, life sciences, nutraceuticals, software programmes and nano technology.