After reviewing the commentary on Judge Stanton's summary judgment ruling in Viacom v. YouTube, I note the lack of substantive defenses of its legal merits. See Viacom Int'l, Inc. v. YouTube, Inc., 2010 U.S. Dist. LEXIS 62829 (S.D.N.Y. 2010) (the "Viacom Opinion"). This Opinion held that because the original founders of YouTube had responded to takedown notices, they were protected from civil liability for copyright infringement by § 512(c) of the Digital Millennium Copyright Act (the "DMCA")—even if they were also intentionally inducing mass copyright piracy like the Defendants in MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005).

But this Opinion will be reversed on appeal for at least two reasons. First, no judge can legally find something so daft as a civil safe-harbor for criminal racketeering lurking in the unspoken implications of the "tenor" of excerpts of legislative history. Second, no judge can legally hold that the DMCA adopted terms that judges used to convey the lack of any knowledge requirement in order to tell judges to impose an "item-specific" knowledge requirement. As singer Katy Perry might put it, unless the DMCA was "a [law] bipolar," it did not use "in" to mean "out" or "up" to mean "down...."

Consequently, the Viacom Opinion is not really a huge win for those who want foreign corporations to be able profit by intentionally inducing mass piracy. Indeed, apart from the usual applause from the usual suspect—and a switch-of-sides at Slate—no one seems to be praising or even defending the substance of Judge' Stanton's legal analysis. And with good reason—it is indefensible.

The Digital Millenium Copyright Act makes it a crime to circumvent digital rights management technologies but allows the Librarian of Congress to exempt certain classes of works from this prohibition.

The Copyright Office just released a new rulemaking on this issue in which it allows people to "unlock" their cell phones so they can be used on other networks and "jailbreak" closed mobile phone operating systems like the iOS operating system on Apple's iPhones so that they will run unapproved third-party software.

This is arguably good news for consumers: Those willing to void their warranties so they can teach their phone some new tricks no longer have to fear having their phone confiscated, being sued, or being imprisoned. (The civil and criminal penalties are described in 17 USC 1203 and 17 USC 1204.) Although the new exemption does not protect those who distribute unlocking and/or jailbreaking software (which would be classified under 17 USC 1201(b), and thus outside the exemption of 17 USC 1201(a)), the cases discussed below could mean that jailbreaking phones simply falls outside of the scope of all of the DMCA's anti-circumvention provisions.

Apple opposed this idea when it was initially proposed by the Electronic Frontier Foundation, arguing that legalizing jailbreaking constituted a forced restructuring of its business model that would result in "significant functional problems" for consumers that could include "security holes and malware, as well as possible physical damage." But who beyond a small number of geeks brave enough to give up their warranties and risk bricking their devices, is really going to attempt jailbreaking? One survey found that only 10% of iPhone users have jailbroken their phones, and the majority are in China, where the iPhone was not available legally until recently. Is it really likely that giving the tinkering minority the legal right to void their product warranties would cause any harm to the non-tinkering majority that will likely choose to instead remain within a manufacturer's "walled garden"? I don't think so. If, as a result of this ruling, large numbers of consumers jailbreak their phones and install pirated software, the Copyright Office can easily reconsider the exemption in its next Triennial Rulemaking.

The Senate Commerce Committee will hold yet another hearing today (7/27/10) at 2pm Eastern with two panels:

• Witness Panel 1
  
  
  
  • FTC Chairman Jon Leibowitz
  
  
  • FCC Chairman Julius Genachowski
  
  
  
  


• Witness Panel 2
  
  
  
  • Guy "Bud" Tribble, Apple's VP for Software Technology
  
  
  • Bret Taylor, Facebook CTO
  
  
  • Alma Whitten, Google's Privacy Engineering Lead
  
  
  • Jim Harper, Cato Institute
  
  
  • Dorothy Atwood, AT&T's Senior Vice President, Public Policy & Chief Privacy Officer
  
  
  • Prof. Joe Turow, University of Pennsylvania
  
  
  
  

Join me to watch the livecast. I'll be livetweeting on the #Privacy hashtag.

I summed up most of my thoughts on the online privacy issue in my written testimony to the FTC's privacy roundtable last fall. Also check out my paper Privacy Polls v. Real-World Trade-Offs, which explains why Prof. Turow's polls can't really show us what choices consumers would make if actually presented with the trade-off between locking down on the use of their data and the content and services supported by advertising that relies on that data for its value.

On July 9th, Judge Nancy Gertner issued an Order holding that the $22,500/song jury verdict assessed against file-sharing, oath-violating, evidence-concealing, family-framing willful mass pirate Joel Tenenbaum was unconstitutionally excessive. Judge Gertner then reduced the award by 90% to $2,250/per song—the maximum award that her Constitution would permit. See Sony BMG Music Ent. v. Tenenbaum, 2010 U.S. Dist. LEXIS 68642 (D. Mass.).

But those who get their copyright news from the Internet might be shocked that the record labels have just dared to appeal Judge Gertner's allegedly brilliant legal analysis. After all, Public Knowledge hailed Judge Gertner's reasoning as a triumph of common sense. And at the blog TechDirt, Mike Masnick gushed, "Gertner knows this is going to be appealed, and she put a lot of effort into making the case for why this ruling was excessive, in hopes of having her reasoning help carry the later appeals."

Such fawning is silly. Judge Gertner's reasoning is far too profoundly flawed to have much chance of surviving appellate review. I will thus note three defects in Judge Gertner's analysis that should prove fatal. None is merely technical; all involve basic disregard for settled law, the facts, or reality itself.

Despite recent setbacks, now that BP's efforts to contain the Gulf oil spill have become more successful, focus is shifting to clean-up efforts. The best way to generate innovative, effective clean-up methods is to offer an X Prize for developing such a solution.

The X Prize Foundation awards X Prizes of $10 million or greater for specific technological breakthroughs intended to benefit humanity. The organization is considering a competition "to incentivize the development of rapidly-deployable methods for the clean-up of crude oil along our coastlines and within our oceans."

While not finalized yet, this idea is far more likely to yield working results than the 112,000 ideas sent to BP through its own submission process. In BP's case, there is neither an incentive nor a well-framed challenge to interest researchers.

An incentivized competition is, on the other hand, often far superior to traditional research grants and after-the-fact prizes. Breakthroughs in navigation, chemical engineering, aviation and autonomous vehicle navigation have been driven by and, in turn, inspired by competitions like the X Prize.

Interesting article in the New York Times today about how the radical media activist group Free Press is now working with an organization called The Harmony Institute toward the goal of "Adding Punch to Influence Public Opinion." The way they want to "add punch" is through entertainment propaganda. The Times article notes that Harmony's mission is "aimed at getting filmmakers and others to use the insights and techniques of behavioral psychology in delivering social and political messages through their work." And now they want to use such "behavioral psychology" and "political messaging" (read: propaganda) techniques in pursuit of Net neutrality regulation.

More on that agenda in a second. First, I just have to note the irony of Harmony's founder John S. Johnson citing "The Day After Tomorrow" as a model for the sort of thing he wants to accomplish. According to the Times interview with him, he says the movie's "global warming message [and] rip-roaring story, appeared to alter attitudes among young and undereducated audiences who would never see a preachy documentary." I love this because "The Day After Tomorrow" was such a shameless piece of globe warming doomsday propaganda that it must have even made the people at Greenpeace blush in embarrassment. After all, here is a movie that claims global warming will result in an instantaneous global freeze (how's that work again?) and leave kids scurrying for the safety of New York City libraries until a quick thaw comes a couple of weeks later. (Seriously, have you seen that movie? That's the plot!) So apparently we can expect some pretty sensational, fear-mongering info-tainment from Harmony and Free Press.

But here's what's better: Do you know who produced "The Day After Tomorrow"? Oh, that's right... Rupert Murdoch's News Corporation financed and distributed that movie!! The man that Free Press casts as the nefarious media overlord set to take over all media and program our brains gave us the greatest piece of radical environmental propaganda of modern times. Now, which does that prove: (A) Rupert Murdoch is hell-bent on programming our minds to embrace a sweeping global warming regulatory agenda, or (B) Rupert Murdoch is out to entertain people and make money? If you answered B, congratulations for being a sensible person. If you answered A, then click here now to start giving money to the Free Press!

OK, so let's get back to Free Press and what they are up to with the Harmony Institute (which I originally thought was an online dating site). Free Press apparently hired Harmony to research public attitudes about Net neutrality and how to influence them. Harmony's Johnson tells the Times they got interested in the Net neutrality because Free Press and the Pacific Foundation paid them handsomely to do so. And it appears Free Press got their money's worth.

The always-excellent Wall Street Journal "Information Age" columnist L. Gordon Crovitz has another editorial worth reading today, which builds on the Second Circuit's recent decision to reverse FCC content regulation for broadcasting. In "The Technology of Decency," Crovitz explains "parents don't need the FCC to protect their children." "Technology makes it easier to block seven or any number of dirty words," he notes. "Taking the FCC out of regulating indecency might just lead to more decency by refocusing responsibility where it belongs: on broadcasters and parents."

That's a point I've hammered on her in the past and in all my work on parental empowerment solutions, including my book, "Parental Controls and Online Child Protection: A Survey of Tools and Methods." Indeed, there has never been a time in our nation's history when parents have had more tools and methods at their disposal to help them decide what is acceptable in their homes and in the lives of their children. And, luckily, poll after poll shows that parents are stepping up to the plate and taking on that responsibility (contrary to what some policymakers in Washington imply).

Moreover, legally speaking, Crovitz shows why the old rationales for regulating broadcasting differently no longer work. "No medium is likely ever to be as pervasive as broadcasting once was," he notes. He goes on to note that:

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." Thus did Ronald Reagan capture the essence of big government. The two biggest challenges facing defenders of free markets in technology policy lie in Reagan's second point:

• Telling the "Good News Story" about how "it" (human ingenuity--what the great economist Julian Simon called our "Ultimate Resource") keeps "moving" (by inventing new hardware, software, services, etc.)


• Holding the line against efforts to extend the regulatory regimes of the past over new technologies, and chipping away at those regimes as best we can

So one might think that believers in limited government would celebrate a company like Google as a great American success story: A university research program launched by two smart kids (one of whom fled Communist oppression) that grew from a garage start-up into a global tech titan whose wide-ranging innovations are revolutionizing more and more of the economy. Surely free marketeers would rally to the defense of such a company when, say, the New York Times--that if-it-moves-regulate-it bastion--calls for bringing "into the regulatory fold," right?

Unfortunately, all too many free marketeers seem willing to hang Google out to dry, or at least stay silent because they resent the pro-regulatory policy positions taken by the company or the political leanings of its employees and leadership. The company has hardly been a champion of digital capitalism in Washington, allying itself with a number tax/regulate/subsidize groups, pushing for net neutrality regulation, and using antitrust as a sword against its rivals (some of whom seem willing to return the favor). But the principles at stake are too important for free marketeers to gloat, as Adam Thierer argued in an op/ed for National Review Online earlier this week: Government vs. Google: Why Free Marketeers Should Rally Against "Search Neutrality."

I'm in the Valley today livetweeting the Space Frontier Foundation's NewSpace 2010 conference. Check out the exciting agenda or join the discussion on Twitter (#NewSpace2010).

The conference runs all weekend, 8:30-5:30 Pacific time. As readers may know, I've been involved with the Foundation since 2005, was chairman 2008-2009 and was just re-elected to its Board of Directors. Here's the Foundation's credo:

The Space Frontier Foundation is an organization of people dedicated to opening the Space Frontier to human settlement as rapidly as possible.

Our goals include protecting the Earth's fragile biosphere and creating a freer and more prosperous life for each generation by using the unlimited energy and material resources of space.

Our purpose is to unleash the power of free enterprise and lead a united humanity permanently into the Solar System.

The livecast video follows below:

Over at MediaFreedom.org, a new site devoted to fighting the fanaticism of radical anti-media freedom groups like Free Press and other "media reformistas," I've started rolling out a 5-part series of essays about "The Battle for Media Freedom." In Part 1 of the series, I defined what real media freedom is all about, and in Part 2 I discussed the rising "cyber-collectivist" threat to media freedom. In my latest installment, I offer an analytical framework that better explains the major differences between the antagonists in the battle over media freedom.

Understanding the Origins of Political Struggles

In his many enlightening books, Thomas Sowell, a great economist and an even better political scientist, often warns of the triumph of good intentions over good economics. It's a theme that F.A. Hayek and Milton Friedman both developed extensively before him. But Sowell has taken this analysis to an entirely differently level in books like A Conflict of Visions: Ideological Origins of Political Struggles, and The Vision of the Anointed: Self-Congratulation as a Basis for Social Policy. Sowell teaches us that no matter how noble one's intentions might be, it does not mean that those ideas will translate into sound public policy. Nonetheless, since "the anointed" believe their own intentions are pure and their methods are sound, they see nothing wrong with substituting their will for the will of millions of individuals interacting spontaneously and voluntarily in the marketplace. The result is an expansion of the scope of public decision-making and a contraction of the scope of private, voluntary action. As a result, mandates replace markets, and freedom gives way central planning.

Sowell developed two useful paradigms to help us better understand "the origins of political struggles." He refers to the "constrained" versus "unconstrained" vision and separates these two camps according to how they view the nature of man, society, economy, and politics:

"Constrained Vision"	"Unconstrained Vision"
Man is inherently constrained; highly fallible and imperfect	Man is inherently unconstrained; just a matter of trying hard enough; man & society are perfectible
Social and economic order develops in bottom-up, spontaneous fashion. Top down planning is hard because planners aren't omnipotent.	Order derives from smart planning, often from top-down. Elites can be trusted to make smart social & economic interventions.
Trade-offs & incentives matter most; wary of unintended consequences	Solutions & intentions matter most; less concern about costs or consequences of action
Opportunities count more than end results; procedural fairness is key; Liberty trumps	Outcomes matter most; distributive or "patterned" justice is key; Equality trumps liberty
Prudence and patience are virtues. There are limits to human reason.	Passion for, and pursuit of, high ideals trumps all. Human reason has boundless potential.
Law evolves and is based on the experience of ages.	Law is made by trusted elites.
Markets offer benefit of experience & experimentation and help develop knowledge over time.	Markets cannot ensure desired results; must be superseded by planning & patterned justice
Exponents: Aristotle, Adam Smith, Edmund Burke, James Madison, Lord Acton, F.A. Hayek, Ludwig von Mises, Milton Friedman, James Buchanan, Robert Nozick	Exponents: Plato, Rousseau, William Godwin, Voltaire, Robert Owen, John Kenneth Galbraith, John Dewey, Earl Warren, Bertrand Russell, John Rawls