MEDIA ADVISORY: Congress Passes Copyright Reforms on Streaming Piracy and Small Claims

The following statement may be attributed to Free State Foundation Senior Fellow Seth Cooper regarding the passage of   the Protect Lawful Streaming Act and the Copyright Alternative in Small-Claims Enforcement Act (CASE Act) – both of which were included in the omnibus spending bill for 2021.

The Senate and House deserve thanks for passing these needed reforms and strengthening copyright protections against online infringements that cost copyright owners hundreds of millions of dollars each year.  The Protect Lawful Streaming Act targets illicit commercial streaming operations with tougher criminal penalties. As I recently stated in a blog post, operators of illegal movie and music streaming services faced less severe penalties than operators of online piracy sites for downloading copyrighted content. There obviously was no reason for that disparity in the law. By increasing criminal infringement penalties for streaming piracy, Congress has helped make it worthwhile for prosecutors to go after illegal commercial streaming operations. 

By passing the CASE Act, Congress has provided many copyright owners with access to justice through a less expensive and voluntary small claims venue for hearing infringement claims. The six-figure costs of hiring attorneys as well as fees and legal costs of going to federal court make civil copyright enforcement beyond the reach of copyright owners of modest means. Now copyright owners will soon have a less expensive and simpler process for resolving copyright infringement claims, including certain types of online infringement claims.

Congress Should Pass the "Protect Lawful Streaming Act"

Pandemic-related lockdowns have heightened the importance of copyright protections against online piracy. Yet copyright law has failed to keep pace with the precipitous rise of illicit video and music streaming services. Under existing law, piracy of online content that is streamed is only a misdemeanor, whereas other forms of piracy are felonies. Bipartisan legislation called the "Protecting Lawful Streaming Act of 2020," which has just been introduced, would reform the law by targeting illicit commercial streaming operations with tougher criminal penalties.

Online streaming services have overtaken downloads as the most popular way that consumers enjoy video and music content. Streaming also has become the predominant means for online piracy of copyrighted works. So-called "stream-ripping" websites and apps provide Internet users unauthorized access to copyrighted movies, TV shows, and sound recordings. Meanwhile, illegal Internet Protocol Television (IPTV) services offer paying subscribers unauthorized access to vast collections of copyrighted content, including live sports.

 

An August 2020 report by the Digital Citizens Alliance estimated that illegal IPTV services annually generate $1 billion in U.S. subscription revenues, with 9 million fixed broadband subscribers. Moreover, there is evidence that these online piracy streaming services have increased in popularity since the beginning of the 2020 lockdowns. For example, the piracy tracking firm Muso found a 43% surge in American visits to movie pirating sites during the last week of March 2020 compared to a month earlier.

 

Federal copyright law criminalizes intentional or willful infringement of protected works. Criminal prosecutions are not numerous, and they are directed against traffickers in pirated works, not individual Internet users. Such prosecutions are necessary to address bad actors who inflict harm on a mass scale on copyright owners and evade the civil justice system. 

 

But as Free State Foundation President Randolph May and I point out in our book, Modernizing Copyright Law – Constitutional Foundations for Reform, federal copyright law predates the precipitous rise of illicit video and music streaming services. Under existing law, criminals who operate illegal IPTV streaming services can only be charged with misdemeanor infringement, not felony infringement. As a result, operators of these illegal streaming services face less severe penalties than operators of online piracy sites for downloading copyrighted movies and music. There obviously is no reason for this disparity in the law. Also, prosecutors generally are reluctant to direct substantial resources towards misdemeanors. Streaming piracy deserves stronger sanctions, and stiffer penalties are needed to ensure future prosecutions against illegal streaming piracy. 

 

By increasing enforcement against sophisticated illicit streaming copyright criminals, the Protecting Lawful Streaming Act of 2020 will modernize the law. The legislation was introduced by Sen. Thom Tillis with bipartisan backing. The legislation provides that it is a felony for persons to "willfully, and for purposes of commercial advantage or private financial gain" offer digital transmission services to the public. It is narrowly targeted to digital transmission services that are primarily designed for unauthorized streaming (or public performances) of copyrighted works, have no commercially significant purpose other than unauthorized streaming of copyrighted works, or are intentionally marketed to promote their unauthorized streams. Notably, the terms of the Protecting Lawful Streaming Act are not directed toward individual Internet users or subscribers of IPTV services. 

 

As of this writing, the Protecting Lawful Streaming Act is attached to the omnibus spending bill being considered by Congress. Budgetary issues aside, the Protecting Lawful Streaming Act is strong on its own merits. In whatever legislative vehicle proves most practical, Congress should pass the bill and the President should sign it. 

Senate Committee Passes Bill Requiring Mid-Band Spectrum for 5G

On November 18, the Senate Committee on Commerce, Science, and Transportation passed S. 4803 – the "Beat CHINA for 5G Act" – by a voice vote. If signed into law, the Act would require the FCC to begin a competitive bidding auction for commercially-licensed use of the 3.45-3.55 GHz band before the end of 2021. As Free State Foundation scholars have emphasized repeatedly, there is an urgent need for more mid-band spectrum for 5G. The 100 MHz of mid-band spectrum identified in S.4803 would help expand 5G network services in the U.S. The FCC has already commenced a proceeding on the 3.45-3.55 GHz band, and the Act would ensure that the auction takes place. A companion bill – H.R. 8548 – has been introduced in the House of Representatives.

House Passes Bill to Modernize Federal Spectrum IT

On November 17, the U.S. House of Representatives passed H.R. 7310 – the Spectrum IT Modernization Act of 2020 – by a voice vote. The Act would require NTIA to submit a plan for modernizing its spectrum information technology systems and also require federal agencies that use federally-assigned spectrum to submit to plans for modernizing as well as increasing the effectiveness their own infrastructure.  

Under the bill, the NTIA would report to the Congress on its own management of spectrum infrastructure. Additionally, each agency that uses federally assigned spectrum would submit a plan to the NTIA describing its plans to modernize its infrastructure to use it more effectively. Additionally, the Act would require the Comptroller General of the United States to conduct oversight of NTIA's spectrum IT modernization and report to Congress annually on the implementation of NTIA's plan.

In House floor remarks on the Act, H.R. 7310's sponsor and House Energy and Commerce Committee Chairman Frank Pallone stated that the bill would ensure that systems for using federal spectrum are compatible and interoperable between federal agencies. Ranking Committee member Greg Walden, in his floor remarks, called the Act "a good government bill."

 

By all accounts, H.R. 7310 is a reasonable and worthwhile measure that would bring about improvements in federal agencies' use and coordination of spectrum. The Senate version of the Act, S.  3717, has been favorably reported by the Senate Committee on Commerce, Science, and Transportation. 

China Task Force Recommends U.S. Strengthen its 5G Competitiveness and Security

On September 30, the House Republicans' China Task Force (CTF) released its report on the multi-faceted generational threat to the U.S. posed by the Chinese Communist Party (CCP). Included in the CTF report is the following key finding:

The U.S. and the CCP are in a global race for deployment of 5G wireless technology. The CCP seeks to increase its global power by building 5G infrastructure domestically and abroad to dominate standard-setting, technological development, and the global supply chain. The U.S. must promote private and public cooperation on rapid 5G deployment by private industry for consumer services and innovation, economic growth, and national security. 

The CTF rightly emphasizes that "U.S. 5G deployment is driven entirely by the private sector" – as opposed to being government-driven as in communist China. The CTF report further emphasizes that "[s]ecuring U.S. networks and ensuring our allies take similar action are crucial components to maintain U.S. leadership in technology and protect the privacy of all Americans." 

Several recommendations for addressing these concerns are included in the CTF report, along with lists of bills that have been introduced in Congress and that would implement those recommendations. (Although the CTF is comprised of only Republican House members, two-thirds of the legislative bills cited in the CTF report have bipartisan support.) One such recommendation is that Congress "pass legislation to streamline fixed and wireless communications network permitting processes at the federal, state, and local level to ensure all Americans are connected." As the CTF report explains: "[r]educing U.S. regulatory barriers will speed up deployment of broadband and 5G communications infrastructure, and that will promote a market for secure solutions not made in China." 

 

Additionally, the CTF report includes this key finding:

U.S. leadership in advanced manufacturing across industrial sectors is imperative to put the U.S. on the leading edge of new products, processes, and services, as the CCP seeks to move up the value chain away from its traditional reliance on mass production of low-end goods to more high-tech manufacturing.

The CTF report recommends that the U.S. work with the United Kingdom as well as other nations to form a D-10 group of leading democratic nations that will focus on "developing and deploying 5G and subsequent generations, addressing 5G mobile communications and vulnerable supply chains, and leveraging technical expertise" in emerging technologies for the benefit of democratic nations. 

 

The CTF report is available online here.

FCC Reluctantly Initiates T-Band Reallocation Process; Will Congress Intervene?

Newton's first law of motion states that "[a]n object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force."

The mandate set forth in the "Middle Class Tax Relief and Job Creation Act of 2012" that the FCC reallocate and auction the T-band? An object in motion. Congressional action to prevent that from happening? A much-needed unbalanced force.

Whatever motivated adoption of the T-band auction mandate eight years ago is of little concern today. What matters in 2020 is that first responders in a number of large metropolitan areas, including New York, Los Angeles, Chicago, Philadelphia, and Boston, depend upon the T-band (470-512 MHz) for mission-critical communications.

Also significant: the U.S. General Accountability Office (GAO) reports that, in many of these locations, there may not be alternative spectrum available to which first responders might relocate. And multiple agencies, including the FCC and the National Public Safety Telecommunications Council, have concluded that relocation costs, which could be as high as $6 billion, likely would far outweigh auction revenues.

That is why FCC Chairman Ajit Pai, when he recently renewed his call for federal legislation to repeal the T-band auction mandate, labeled it a "bad idea." Democratic Commissioner Jessica Rosenworcel said the same, "any way you cut it."

Nevertheless, the Commission's hands are tied, and so on July 6 it adopted a Notice of Proposed Rulemaking (NPRM) in order to initiate the process with sufficient time to meet the statutory deadline of February 22, 2021.

As the NPRM hopefully notes, however, "[b]ipartisan Congressional opposition ... has increased" and "[m]ultiple bills have been introduced that would repeal the T-Band Mandate."

One such piece of proposed legislation, the "Don't Break Up the T-Band Act of 2019" (H.R. 451), was approved by the House Energy & Commerce Committee earlier this week.

A companion bill (S.2748) was introduced in the Senate late last year.

The T-band auction mandate is a threat to public safety and a waste of limited agency resources. It is time for Congress to apply an equal and opposite force to stop its forward motion.

MEDIA ADVISORY: Today's Senate Armed Services Hearing on Ligado

The following is a compilation of a Twitter thread by Free State Foundation President Randolph J. May regarding today's hearing before the Senate Armed Services Committee on the FCC's grant of Ligado's application of L-Band spectrum for its mixed satellite-terrestrial network:

Senate Armed Services Comm. has every right to hold a hearing on @FCC grant of @LigadoNetworks long-pending license application to use L-Band spectrum. But it's disappointing the hearing is so one-sided. FCC based its decision on its technical expertise, and it should be heard. Because grant of @LigadoNetworks will further #5G deployment, it furthers a national security interest. There is widespread agreement US doesn't want to lose #5G race to China or others. I have confidence in the engineering expertise of @FCC re interference determination. To be constructive, focus of the hearing shouldn't be on reversing the FCC decision, but looking towards how FCC should implement mitigation actions IF needed after Ligado net is operational. I have confidence that @FCC has the requisite authority, and would exercise it, IF it turned out that adjustments to @LigadoNetworks license were needed as a matter of national security once Ligado's network is operational.

Senate Passes the USMCA

On January 16, the U.S. Senate passed H.R. 5430, the United States-Mexico-Canada Agreement Implementation Act. The Senate deserves credit for promptly approving the USMCA following its passage in the House of Representatives in December 2019. The USMCA includes several provisions that will help strengthen Americans' copyrights in those neighboring nations. H.R. 5430 has been transmitted to President Trump for signature. 

Free State Foundation President Randolph May and I described the pro-copyright provisions contained in the USMCA and recommended its passage. My April 2019 Perspectives from FSF Scholarspaper, "Trade Agreements Should Include Stronger Online Copyright Protections" and my similarly-titled October 2019 Perspectivespaper, "Trade Agreements Should Strengthen Copyright Protections Against Piracy" also discussed the USMCA's pro-copyright features.

Bipartisan Efforts Toward Resolution on Net Neutrality Deserves Support

The debate over net neutrality regulation is certain to continue this year, and it's also certain to be a topic for discussion at the Free State Foundation's Twelfth Annual Telecom Policy Conference – Broadband Beyond 2020: Competition, Freedom, and Privacy. (Register here for the conference, to be held March 10 in Washington DC.) 

As last year drew to a close, Senators Roger Wicker and Krysten Sinema co-authored a December 23, 2019 op-ed in the USA Today highlighting their continuing efforts to seek a congressional compromise that will protect consumers and provide clear rules regarding broadband Internet service providers' (ISPs) network management practices. The Senators' op-ed contains the practical title: "We need to prepare for internet of the future. Here's how Congress can help." Senators Wicker and Sinema offer a reasonable outlook and hope for a legislative resolution on net neutrality and Internet freedom. Many of their basic points were anticipated by former Congressman Rick Boucher back in 2015, when he addressed the need for a legislative compromise on net neutrality and Internet freedom at FSF's Seventh Annual Conference. 

Right now, congressional resolution of this matter in 2020 may appear to be a long shot. But there is nothing to lose by engaging in discussions, and persistence may even lead to a breakthrough. Congress, industry, public interest groups, activists, consumers, and others ought to recommit to forging a new framework for addressing ISP network management practices.  

Consumers Receive High Volumes of Spam Calls, Low Volumes of Spam Texts

Americans are inundated with high numbers of unwanted robocalls, but they receive much lower numbers of unwanted text messages. A survey released in December by Zipwhip, a leading provider of text messaging solutions for businesses, shows that whereas 51% of respondents "often" receive spam over the phone, only 18% "often" receive spam texts. 

The survey findings reaffirm the importance of the Commission's Title I non-regulatory policy for texting. Given the freedom and flexibility to implement solutions, text messaging service providers – not Title II public utility-like restrictions – have successfully curbed unwanted messages. Those providers should remain free to pursue innovative solutions to maintain quality of service. 

According Zipwhip's survey, about 51% responded that they receive spam "often" over the phone and 83% receive spam at least "somewhat often" over the phone. Furthermore, 70% receive spam "often" over email and 92% receive email spam at least "somewhat often." However: "Only 18% of respondents said they get text spam 'often' and only 17% said they receive scam attempts 'often.' Most said they 'rarely' receive these types of messages (41% and 40% for spam and scam, respectively)." Illegal scam rates also are notably higher for voice calls and emails than for texts.

Importantly, the Zipwhip survey figures regarding low rates of unwanted texts vindicates the FCC's determination in its Wireless Messaging Service Order (2018) that text messaging services are lightly- or non-regulated "information services" under Title I of the Communications Act. That determination was amply supported, first and foremost, by the fact that wireless text messaging service capabilities fit the statutory definition of "information services." But the Commission also justified its Title I classification of wireless text messaging services with the compelling policy rationale that entrepreneurial innovation protects subscribers from spam and unwanted texts better than the strictures of public utility regulation. The 2018 Order stated: "In the absence of a Commission assertion of Title II regulation, wireless providers have employed effective methods to protect consumers from unwanted messages and thereby make wireless messaging a trusted and reliable form of communication for millions of Americans." Survey findings of markedly lower rates of unwanted communications via text messaging compared to other media platforms indicate that, a year after the 2018 Order, the policy for non-regulation of texting is succeeding in protecting consumers.

Zipwhip survey figures regarding the high rates of robocalls and emails are consistent with other reports. According to YouMail's Robocall Index, about 58.5 billion robocalls were sent nationwide in 2019. A YouMail analysis found that while about 27% of robocalls provided consumers with important alerts or reminders for things such as a school closure or doctor's appointment, the remaining 73% of robocalls are unwanted or spam. And about 25% of robocalls are illegal scams. It is elsewhere estimated that spam constituted around 55% of global email traffic in 2019. 

The problem of unwanted robocalls and the closely related problem of caller ID spoofing prompted Congress to pass the TRACED Act, which President Trump signed into law on December 31, 2019. Under the TRACED Act, voice service providers are required to make available to consumers – free of charge – technologies to authenticate calls and block robocalls. The Act extends the statute of limitation and increases fines for making unwanted robocalls. Additionally, the Act directs the FCC to undertake rulemakings to further ensure subscribers are protected from one-ring scams as well as other unwanted calls or texts. 

In its implementation of the TRACED Act, the Commission should rightly take aim at the sky-high number of scam calls as well as other unwanted robocalls. And it should exercise its oversight authority over voice service providers to ensure consumers are protected. At the same time, it is imperative that the Commission adhere to its Title I policy for text messaging, which has an established track record in protecting consumers. 

President Trump Signed the TRACED Act

On December 30, 2019, President Donald Trump signed the TRACED Act into law. As highlighted in my post from December 13, the TRACED Act directs a number of federal agency actions toward combatting unwanted robocalls as well as ID spoofing. The President and the 116th Congress deserve credit for addressing those important consumer protection issues. Now it's up to the FCC and other agencies to begin implementing the law and hopefully help reduce substantially the illegal scams and other unwanted being calls made to American consumers. 

House of Representatives Passes the USMCA

On December 19, the House of Representatives passed H.R. 5430, the United States-Mexico-Canada Agreement Implementation Act. The House should be commended for its approval of the USMCA, which contains many provisions that will help strengthen Americans' copyrights in those neighboring nations. 

Free State Foundation President Randolph May and I have previously described the pro-copyright merits of the USMCA and called on Congress to pass it. As I explained in my April 2019 Perspectives from FSF Scholars paper, "Trade Agreements Should Include Stronger Online Copyright Protections":

By negotiating for stronger copyright protections and enforcement in international trade agreements, the U.S. can help curb the significant economic losses sustained by American copyright owners. The proposed USMCA, signed by President Trump in October 2018, and likely to be voted on by Congress this year, includes many provisions that would modernize and strengthen protections for Americans' copyrighted works in Canada and Mexico. For instance, under the USMCA, each member nation would be required to secure copyright owners' full enjoyment of exclusive rights in sound recordings and public performances. Each nation would guarantee contractual liberty so that copyright owners can transfer their rights for full value. Also, each nation would make available stronger remedies in civil copyright infringement cases, including injunctive relief as well as statutory damages. And each nation would authorize their border officials to pursue, seize, and destroy pirated goods. 

For more, see my similarly-titled October 2019 Perspectives paper, "Trade Agreements Should Strengthen Copyright Protections Against Piracy," which touches on the importance of the USMCA and other pro-copyright trade agreements in the context of the current problem of online piracy of movies and TV content. 

Hopefully, the Senate will promptly take up and pass the USMCA in early 2020. 

Legislation to Combat Robocalls Advances in Congress

On December 4, the U.S. House of Representatives passed the TRACED Act (S. 151) by a 417-3 vote. The House version mergers provisions of S. 151 passed by the Senate in May with the Stop Bad Robocalls Act (H.R. 3375). H.R. 3375 was passed by the House in July. Among its provisions the Engrossed House bill for S. 151 would do the following:

• Require carriers to implement call-authentication technology consumers and small businesses free of charge;
• Require carriers to provide opt-in or opt-out robocall-blocking to consumers free of charge;
• Authorize the FCC to assess penalties of up to $10,000 for each unwanted robocall for those intentionally violating telemarketing restrictions;
• Extend to four years the statute of limitations for Commission enforcement actions against illegal robocalls; 
• Require the Commission to make annual reports to Congress on anti-robocall enforcement;
• Require the Commission to conduct a rulemaking to protect subscribers from unwanted calls or texts from unauthenticated numbers by using new authentication methods; 
• Require the Commission to conduct a rulemaking on combatting one-ring scams meant to impose charges on unsuspecting consumers that call them back; and
• Require the Commission to establish a process for certifying when carriers have or have not participated in private initiatives to trace unlawful robocalls to their source, and also to report on such participation as well as follow through with necessary enforcement actions.

According to reports, the similarity of the House's bill to the Senate bill makes it likely that the Senate will concur in the changes or otherwise reach consensus with the House and that the TRACED Act or "Pallone-Thune bill" will go to President Donald Trump for signature.

Additionally, on December 11, the Senate Commerce, Science, and Transportation Committee passed a substitute version of the Data Analytics Robocall Technology Act of 2019 or "DART Act" (S. 2204). The DART Act would require the FCC to issue a rulemaking on maintaining a list of numbers that are not eligible to be blocked by carriers, such as emergency- or weather-related numbers. The bill also would require the Commission to report to Congress on implementation of call-blocking and caller-ID authentication.

Congress Should Take Up the AM-FM Act to Better Protect Music Copyrights

The owners of copyrighted music should be protected in their rights. But a glaring void in the law allows AM and FM radio stations to play copyrighted sound recordings without obtaining permission or paying the owners. Legislation introduced in Congress on November 21 called the "Ask Musicians for Music Act" (AM-FM Act) would, if passed, fill that void and secure to sound recording owners the legal protections they deserve. 

The U.S. Constitution's Copyright Clause gives Congress the responsibility to secure exclusive rights in the creative works of musical and other artists. Yet existing law gives terrestrial AM and FM radio broadcasters an unfair privilege by allowing them to retransmit copyrighted sound recordings without having to pay any royalties to the owners of those recordings. No matter how many stations play their music, no matter how many plays their music receives, and no matter how much money those stations make, sound recording owners receive no royalties from AM and FM broadcasters.

According to the FCC's Communications Marketplace Report (2018), total broadcast radio revenue exceeded $16.5 billion in 2016. (This figure excludes digital/online revenue received by broadcast stations.) SoundExchange has estimated that American copyright owners of sound recordings are denied about $200 million in annual royalties that would have been paid to them for radio broadcasts in other nations. The law also confers an unfair advantage on terrestrial AM/FM broadcasters, since competing satellite radio broadcasters and non-interactive online services (or webcasters) do have to pay royalties for transmissions of copyright sound recordings. 

Congress should better secure copyright protections in sound recordings. Promising legislation introduced soon in the Senate by Senator Marsha Blackburn and in the House by Representative Jerry Nadler would serve that constitutional purpose. 

The AM-FM Act would amend the Copyright Act by requiring AM and FM stations to get the consent of copyright owners before broadcasting their sound recordings. In other words, the AMFM Act would finally give sound recording owners the say over whether their own sound recordings may be used by terrestrial radio broadcasters. And it would allow them to seek payment for such usage. Also, creative artists and other sound recording owners who prefer letting stations to play their music over the air for free may let them to do so. 

Additionally, the AM-FM Act would protect small broadcasters as well as public and education stations by capping the compensation that sound recording owners may annually receive from those stations. The focus of the AM-FM Act is on large commercial broadcasters.

Interestingly, many broadcasters have called for reforms that would better respect their own copyrights by allowing them to negotiate with cable operators over retransmission rights for broadcast TV programming. Existing law provides cable operators a compulsory license to retransmit to their subscribers copyrighted broadcast TV programming by paying royalties to the programming owners at government-prescribed rates. Broadcasters have claimed that the compulsory license unfairly restricts their exclusive rights in their TV programming and that it results in royalty payments below what they could negotiate in a free market setting. So, it's a bit odd – indeed, inconsistent – for broadcasters to steadfastly oppose payments for radio broadcasts of copyrighted sound recordings. 

The AM-FM Act constitutes an important step in respecting exclusive rights in creative works in all circumstances, regardless of medium or commercial industries involved. By passing the AM-FM Act, Congress can better secure copyrights in sound recordings and meet its obligation under the Constitution's Copyright Clause. 

The Case for Federal Preemption of California's Misguided Privacy Law

On October 28, the Free State Foundation published "California's Heavy-Handed Approach to Protecting Consumer Privacy: Exhibit A in the Case for Federal Preemption," a Perspectives from FSF Scholars paper by Adjunct Senior Fellow Andrew Long. His paper examines many troublesome aspects of that state's broad and onerous privacy law. And it emphasizes the importance of Congress passing a preemptive new data privacy law as well as the Federal Trade Commission taking action to secure a consistent federal standard for data privacy protection that is based on sound principles and provides for flexibile case-by-case enforcement. 

Mr. Long's Perspectives paper is worth a close reading. Its publication comes close on the heels of the release of the edited transcript of FSF's Seminar "Privacy Regulation: Why, What and When?"

Transcript Released! FSF Seminar - "Privacy Regulation: Why, What, and When?"

The Free State Foundation has released the edited transcript the expert panel discussion held at FSF's June 2019 seminar - "Privacy Regulation: Why, What, and When?" 

The panel addressed potential new privacy regulation, whether by Congress, the FTC or other federal agencies, or the states. The panel featured Kelly Cole, Senior Vice President of Government Affairs at CTIA; Lynn Follansbee, Vice President, Policy & Advocacy at USTelecom; Loretta Polk, Vice President & Deputy General Counsel at NCTA - The Internet & Television Association; and Michelle Richardson, Director of the Privacy & Data Project at the Center for Democracy and Technology (CDT). The edited panel transcript is available here at FSF's website. Video of FSF's Privacy Regulation Seminar, including keynote addresses by Sen. Marsha Blackburn and FTC Commissioner Noah Phillips, is available here. 

House of Representatives Passes Small Copyright Claims Bill

October 22, the U.S. House passed H.R. 2426, the Copyright Alternative in Small-Claims Enforcement Act of 2019. Also known as the "CASE Act," the bill would provide copyright owners of modest means a less expensive, voluntary venue to bring infringement claims. My September 22 blog post discussed the merits of the CASE Act. It is important access to justice legislation. Bravo to the House for giving the bill a 410-6 passing vote. Hopefully, the Senate will promptly approve the CASE Act. 

Congress Should Pass Bill for Small Copyright Claims

When copyrighted works are infringed on user-upload websites, many copyright owners are deterred from seeking civil justice by potential attorneys' fees and court costs. Legislation pending in both chambers of Congress, if passed, would provide copyright owners of modest means a less expensive venue to bring infringement claims. The House of Representatives and the Senate should promptly vote to approve the Copyright Alternative in Small-Claims Enforcement Act or “CASE Act” (H.R. 2426 and S. 1273). 

Infringements of copyrighted works deprive the owners of their exclusive rights to the proceeds of their property and labors, jeopardizing their livelihoods. Yet existing law make it burdensome for songwriters, recording artists, filmmakers, and other creative artists with limited resources to protect their copyrights and seek damages for infringement of their works. For starters, copyright owners face time-consuming burdens of patrolling user-upload sites for unauthorized uses of their works and issuing and re-issuing numerous notices to online platform services. Additional obstacles are posed by provisions in the Digital Millennium Copyright Act of 1998 (DMCA) regarding counter-notices and disputed takedown requests.

Under the DMCA, if a copyright owner submits a takedown notice to an online platform provider, the provider must make the takedown notice available to the user who posted the alleged infringing content. A user who objects to the takedown can file a counter-notice, requiring the online provider to repost the allegedly infringing content. And if a counter-notice is filed, a copyright holder still seeking to vindicate his or her rights must hire a lawyer and file a lawsuit in federal court within ten days. 

There is ample hardship in retaining an attorney to bring a copyright infringement lawsuit within ten days. Moreover, the federal court litigation is too costly for many copyright owners. As of 2019, filing and administrative fees to bring a civil case total $400. Attorneys’ fees and other litigation costs run much higher. The American Intellectual Property Law Association’s 2015 “Report of the Economic Survey” found that the median litigation costs of a copyright infringement lawsuit valued at less than $1 million was $150,000 at the time discovery was concluded. 

Not surprisingly, the U.S. Copyright Office has recognized that “federal court is effectively inaccessible to copyright owners seeking redress for claims of relatively low economic value, especially individual creators who are of limited resources.” In its September 2013 “Copyright Small Claims” report, the Office concluded that “the most promising option to address small copyright claims would be a streamlined adjudication process in which parties would participate by consent.” The Office's legislative proposal for a small copyright claims court provided the basis for the CASE Act.

H.R. 2426 and S. 1273 would establish a Copyright Claims Board as a voluntary, alternative forum to federal courts for alleged copyright infringements where total recovery is for $30,000 or less, exclusive of attorneys' fees and costs. The Board would consist of three appointed Copyright Claims Officers serving six-year terms. Under the CASE Act, copyright owners could initiate small claims proceedings before the Board by providing notice to respondents, who would have 30-days to consent or opt-out. Failure to timely respond could result in a default against the respondent. Importantly, the Copyright Claims Board would provide a venue for copyright owners to seek relief for DMCA-related claims for online infringement on user-upload websites. 

The CASE Act provides that both parties before the proposed Copyright Claims Board would make written submissions. Hearings would be conducted remotely. Similar to a typical small claims court, the Copyright Claims Board would have simplified procedures with limited discovery. The Board could dismiss without prejudice any claim that it believes to be unsuitable for the small claims process. Decisions by the Board would be binding only on the parties before it. And Board decisions would be subject to limited review by the Register of Copyrights for “abuse of discretion.” Such decisions could later be filed in federal court for enforcement, but they also could be challenged in federal district court for fraud, misconduct, or other improprieties. 

Both H.R. 2426 and S. 1273 have been reported out of their respective committees, with overwhelming bipartisan support. Passing the CASE Act would be an important achievement in copyright reform for the 116th Congress. The legislation wouldprovide a less expensive and simpler process for addressing many copyright infringement claims, including some DMCA-related claims. The House and Senate should soon vote on the CASE Act and provide copyright owners of modest means greater access to justice.

Roundup on Latest Actions to Combat Unwanted Robocalls

A lot is happening on multiple fronts to reduce the high volumes of unwanted and scam robocalls. Here's a sample:

Congress: On May 23, 2019, the Senate passed the TRACED Act, which would enhance the FCC's authority to stop caller ID spoofing and unwanted robocalls. I discussed the legislation in a prior blog post. And on July 24, 2019, the House passed similar legislation, the Stopping Unwanted Robocalls Act (H.R. 3375). 

FCC: On August 5, 2019, the FCC released an order that adopts new rules for combatting caller ID spoofing and unwanted robocalls that originate overseas. 

Industry: On August 14, 2019, T-Mobile and AT&T announced a partnership for implementing cross-network caller ID verification based on SHAKEN/STIR standards in order to tackle caller ID spoofing. In a prior post, I described a similar cross-network agreement between T-Mobile and Comcast. And in July 2019, AT&T announced it would make automatic robocall-blocking technology available to its subscribers as a free feature of AT&T's Call Protect program. 

Modern TV Act Would Remove Old Rules, Bring Video Policy Up to Date

The Modern Television Act of 2019 is promising new legislation that would bring federal video policy into greater alignment with 21st century market realities. Introduced in the U.S. House of Representatives on July 25 by Reps. Steve Scalise and Anna Eshoo, the Modern TV Act would repeal or at least reduce a number of old legacy broadcast TV and cable regulations that were based on a now-obsolete picture of the video market. The Modern TV Act is a bipartisan compromise measure that the 116th Congress ought to take up in earnest this year.

Among its provisions, the Modern TV Act would eliminate distant signal importation prohibitions, syndicated exclusivity rules, network non-duplication rules, authority to regulate local cable rates under Section 623, and cable leased access rules. Most of those rules involve dealings between market participants that own video programming and video service providers that distribute programming to retail subscribers. Once those rules are eliminated, video programmers and video service providers can, in most instances, simply negotiate contracts to address which programming receives carriage in which local TV markets. The Modern TV Act also would eliminate, or at least largely eliminate, cable and satellite compulsory licenses for carrying copyrighted video programming, thereby allowing parties to negotiate copyright royalties.

The Modern TV Act moves firmly in the direction of establishing a federal video policy that matches the competitive conditions of today's innovative video marketplace. For several years, Free State Foundation scholars have called attention to the fact that legacy regulations of broadcast, cable, and direct broadcast satellite (DBS) TV services are based largely on early 1990s, or even earlier, assumptions about the analog and VCR-era video market. But those regulations are now hopelessly out of touch with today's marketplace. 

The days are long gone when the video service choices of most Americans were largely limited to over-the-air (OTA) broadcast TV or a single cable operator. Today, most Americans can choose between a cable provider and two DBS providers, while many also have access to a former "telco" video services provider. Unlike the days when cable operators had a 91% market share among pay-TV services, at year's-end 2017, cable served 55.2% of multi-channel video programming distributor (MVPD) subscribers, DBS served nearly 33.5%, and "telco MVPDs" serviced 11.3%. Meanwhile, in 2018 antenna use for OTA broadcast TV reached its highest level since 2005, with 31% of U.S. households having an antenna on at least one TV. Online video distributor (OVD) services have also dramatically transformed the video market. In early 2019, Netflix had over 60 million U.S. subscribers to its streaming video service, while Amazon Prime and Hulu had 101 million and 28 million. Widespread adoption of OVD services has been recognized as an important cause of annual MVPD subscriber losses going back to 2013. Total MVPD subscriptions were down to 94 million at year's-end 2017, and sharp declines have been reported for 2018 and 2019.

Legacy regulations geared toward last century's outdated technologies and less competitive, pre-Internet market conditions confer no benefit on consumers today. Instead, their continuation saddles broadcast, cable, and DBS TV service providers with burdensome compliance costs as well as restrictions that can inhibit their ability to compete with each other and with online competitors. 

Furthermore, as Free State Foundation President Randolph May and I have explained in numerous writings, many legacy video regulations, including leased access rules, amount to forced access mandates. Requiring video service providers to carry video programming not of their own choosing violates their First Amendment free speech rights. The Modern TV Act's proposed repeal of leased access rules would better respect the free speech rights of cable providers. 

To help bring federal video policy up to date, the 116th Congress should give prompt consideration to the Modern TV Act.