It was a disappointing day. In one ruling, the U.S. Supreme Court made it more likely that the Internet could become a more closed, proprietary platform dominated by cable and telco companies that can legally erect barriers against open access. In another ruling, the Court gave content owners new legal tools to fight innovative technologies, in the name of strengthening copyright protection.
In the so-called Brand X ruling handed down this morning, the Supreme Court empowered cable and telephone companies to determine what content they can exclude from their systems. (Internet service providers had sought access to broadband systems.) The ruling means that Comcast and Time Warner (and surely telco DSL service in the future) will be legally able to become gatekeepers controlling how their customers may access the Internet. The ruling jeopardizes the principle of “network neutrality” that has long governed the Internet and empowers the FCC broadly to govern Internet access.
As a result, broadband providers could begin to build “walled gardens” of proprietary content and balkanize the Internet through “tiered service” (fast, high quality access for its premium subscribers, slow, poor quality access for everyone else). Broadband providers will be able to charge content creators for the right to gain access to their customers and even to block access to Internet content that competes with its own (or its partners’) content.
If cable broadband were considered a “telecommunications service,” it would have a legal obligation to provide “common carriage” on a non-discriminatory basis for anyone’s content. This is the principle that has long prevailed in telecommunications. It prevents the anticompetitive abuses that can occur when a company owns both the “pipes” for distribution as well as the content.
But in a little-noticed rule change a few years ago, the FCC reclassified cable broadband as an “information service,” which relieves it of common carriage obligations. The Supreme Court just affirmed the FCC’s ruling as consistent with the Communications Act of 1934.
This is bad news for independent artists who want to reach audiences directly, upstart businesses that want to compete with the big players and users who don’t want to live under the thumb of a cable/DSL duopoly. Now cable and telcos will have the dominant power to dictate the terms of Internet access and use. Over the long term, creativity, diversity of expression and competition are likely to suffer.
The Brand X decision makes the upcoming rewrite of the Telecommunications Act all that more important as a way to ensure an open, fully accessible Internet. As my friend Gigi Sohn, President of Public Knowledge, said today:
The Court’s decision today raises the question of whether Congress, in tackling its next revision of the Telecommunications Act, should act to ensure that communications, content, and applications are allowed to pass freely over the Internet’s broadband pipes. We believe Congress should do so, because “net neutrality” is a worthy goal that not only will promote free speech and creativity on the Internet, but also will benefit those who provide broadband connectivity by making that connectivity more valuable.
For some good blog commentary on Brand X, see Susan Crawford’s blog,
The second Supreme Court ruling today involved Grokster, the file-sharing software. Here, in an astonishingly unanimous decision (Justice Souter apparently worked hard to round up the votes!), the Court extended the scope of “contributory infringement” of copyright law to include inducement to infringe. If a company is found to have affirmatively made and sold a technology that it knows will be used to violate copyright law, it can be held liable. It is still too early to know how broad the new legal standard will in fact be, as a practical matter. But it is likely to have a chilling effect on future tech innovation if only because it opens the door for discovering intent. And there are, after all, a whole host of technologies that can be used to infringe on copyrighted works — iPods, PCs, TiVO, Instant Messager — which their manufacturers surely know can be abused. Apple’s brazen advertising tagline was once “Rip, Mix, Burn.”
There are some things to be grateful for in the Grokster ruling. It upheld the basic principle of the Sony Betamax case of 1984, which allowed new technologies like the VCR so long as they have “substantial non-infringing uses” (and no intent to induce infringement). The ruling also recognizes that there are many legitimate uses for peer-to-peer file sharing technology, especially by universities, government, libraries and others. Finally, the ruling focused on the infringer, not the technology itself, and requires that there be a “clear expression or other affirmative steps taken to foster infringement.” Intent matters.
Still, despite all of these silver linings, the worrisome point is that the Grokster ruling has lowered the legal threshold for suing to stop a new technology. It has also expanded the scope of “secondary liability” for copyright infringement, making for a new beachhead for litigation. The actual implications of the case won’t really be known until the trial court determines whether Grokster intentionally encouraged infringement. For more blog commentary on Grokster, see Electronic Frontier Foundation, Copyfight, Susan Crawford and Picker MobBlog.