Silicon Valley faces tough use and piracy issues

March 22, 2013

Silicon Valley is finally starting to pay more attention to Washington. In recent years, proposals for new anti-piracy laws and Internet privacy and open-access policies have caused many companies to fatten their lobbying budgets and seek a greater voice at the Federal Trade Commission, Federal Communications Commission and Capitol Hill.

That will continue, even as a new set of regulators comes in for President Obama’s second term. Internet attorney Markham Erickson was one of the handful of people the FCC chairman pulled together in marathon negotiations in 2010 over net neutrality rules. Those rules created a framework for how Internet service providers host content and services on their networks. Erickson, a partner at the law firm of Steptoe & Johnson, also rallied tech titans to protest a now-defeated bill known as the Stop Online Piracy Act (SOPA). He represents Web giants Google and Netflix and media firms that include Bloomberg and start-ups such as Aereo.

He talked with The Washington Post about the big issues he anticipates in Web and communications over the next year. The conversation was edited for length and clarity:

Q.What are the biggest tech policy trends to watch for in 2013?

Silicon Valley is not a monolithic entity, but you will see different business models coming from there that will disrupt different parts of the economy. That disruption will create activity in Washington and in courts.

Yes, seems like there is a lot of activity in the courts. Verizon’s suit against the FCC’s net neutrality rules will likely pick up this summer. The broadcast industry’s suit against Aereo, the TV streaming service, has drawn a lot of attention. Why are these suits significant?

You will continue to see legacy businesses look to Washington for protectionist legislation. Like with Aereo, broadcasters are fighting that in court, but you may also see them look to Congress to amend copyright laws.

Can’t you see the argument of broadcasters? They seem to be saying that Aereo is taking their content without paying fees and making money off it without sharing profits.

What Aereo is about is allowing consumers to send lawful content to themselves on different devices at different times. This is what cloud computing is about.

What do you expect from the FCC?

The next FCC will have to look at what rules apply to the pathways. They will look at data caps on Internet service, [telecom] interconnection obligations and, depending on what happens in the courts, its open Internet rules [net neutrality]. I see those as very important issues.

How about the FTC?

The implementation of the Children’s Online Privacy Protection Act will be very closely watched. There is some ambiguity on final regulations, and the industry will have to work with the FTC on how the rules apply to third-party plug-ins like social media and whether that really applies.

Will SOPA, the controversial anti-piracy bill from January 2012, come back in some form?

I don’t see another SOPA coming up in the near term, but there will always be tensions when you have the scale of the Internet and people doing unlawful things. There will be questions on the roles and responsibilities of conduits [Internet sites, for example] and what the responsibilities of those conduits should be.

In Silicon Valley’s view, current law, the Digital Millennium Copyright Act, is doing its job. But content and media firms don’t feel that way and would like to reopen the debate. But I don’t see another frontal assault like we saw with SOPA.

How do you think companies and government leaders should deal with the problem of illegal piracy of Internet content?

There is no one rifle-shot solution. Business models have to adapt and partnerships need to form between tech and content companies. That helps the whole ecosystem.

There will be interesting issues around Internet television, and Aereo’s case in the 2nd Circuit Court in New York illustrates big questions that remain on this issue. I can see this case or similar cases going to the Supreme Court. It is a big issue because it impacts the roles and responsibilities of cloud computing for the storage of content.

What are the Internet TV trends Washington policymakers will watch?

There is a tremendous shift in viewing habits underway. Users are increasingly not satisfied with linear television. They want to be able to watch content at any time and place of their choosing. You’re seeing businesses try to challenge some traditional marketplace arrangements. The moves by Cablevision and Verizon to challenge programmers are very interesting.

But there is not a massive amount of [cable] cord-cutting yet — it’s more like cord-shaving. Users aren’t satisfied with multiple tiers of content but are more satisfied with basic TV tiers and supplementing that with Netflix, Hulu or Apple.

What is happening outside the U.S. that has Silicon Valley worried?

There is a challenge for these companies to operate in a borderless medium that is the Internet. They want to facilitate communications around the globe and put servers around the globe. But from a legal standpoint, the laws of other countries aren’t as friendly as those in the U.S.

Europe is considering data protection laws that will affect Internet companies and their ability to put servers in those countries. If you have wildly inconsistent laws in different countries, it becomes in­cred­ibly hard for Internet companies to operate globally.

Is Europe of particular concern?

The developing world is behind Europe. As those developing nations look to creating their own rules and regulations, they will not only look to the U.S. but to Europe, too.

Part of what needs to happen is a discussion that involves respect for legal traditions. For example, we have the First Amendment in the U.S., but the rest of the world doesn’t. In the U.S. we have Fair Use [in copyright law]; the rest of the world doesn’t. I believe we have to educate those people in respecting our traditions, and we are just at the beginning.

And you are seeing increasing examples of other jurisdictions, other nations, using cybersecurity and privacy as a stalking horse to propose local protectionism regulations.

What do you hear most often from Silicon Valley about Washington?

Every general counsel I meet with in Silicon Valley is hugely focused on software patent trolls. They will look to Washington to address that problem, maybe through legislation that stops frivolous lawsuits.

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Cecilia Kang is a national technology reporter, writing about tech and Internet policies at the Federal Communications Commission and Federal Trade Commission and how regulations affect businesses and consumers.
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