Think Tank: Congress Should Make Streaming Piracy a Felony

The Free State Foundation, a think tank founded in 2006 which receives regular donations from the MPAA, is calling on Congress to tackle the threat from streaming piracy. In a new paper, FSF notes that those streaming unlicensed content to the public are currently guilty of a misdemeanor, an offense that should be upgraded to a felony if piracy is to be brought under control.

Soon after the turn of the century, P2P consumption of unlicensed media quickly dominated the file-sharing landscape.

The BitTorrent protocol emerged as the unchallenged kind of peer-to-peer transfers and for many years no rival could get anywhere near its level of market saturation.

Then, soon after the turn of the decade, the tide began to turn. With cheaper, faster bandwidth becoming increasingly available to a broader user base, opportunities to stream content directly from websites gathered unprecedented momentum. What began several years earlier as a relatively niche activity, soon turned into a content monster.

This critical shift in consumption habits was interesting on several fronts, not least since it made piracy accessible to relative novices via the growing Internet-enabled set-top box market.

As a result, illegal streaming is now considered one of the major threats, but various pro-copyright groups are concerned that current legislation doesn’t go far enough to tackle those involved in supply.

The problem was summed up in April 2015 testimony before the House Judiciary Committee by then-Register of Copyrights Maria Pallante.

“Currently, criminals who engage in unlawful internet streaming can only be charged with a misdemeanor, even though those who unlawfully reproduce and distribute copyrighted material can be charged with a felony,” Pallante said.

“This distinction makes no sense. As streaming becomes a dominant method of obtaining content online, unlawful streaming has no less of an adverse impact on the rights of copyright owners than unlawful distribution.”

In a new paper published by the Free State Foundation (FSF), a think tank founded in 2006 which receives regular donations from the MPAA, streaming is again described as a misdemeanor offense and one that should be taken more seriously to protect copyright holders.

In its report ‘Modernizing Criminal Copyright Law to Combat Online Piracy’, FSF notes that copyright holders face difficulties prosecuting mass-scale willful infringement via civil lawsuits. So, to give them the assistance they require, Congress should upgrade piracy via streaming to a felony offense.

“Congress should update criminal copyright law to better address growing copyright piracy taking place through online streaming sites and enabled by illicit streaming devices,” FSF writes.

“Currently, willful copyright infringement via online streaming is only a misdemeanor, whereas willful infringement via digital downloading is a felony when statutory minimums are satisfied.

“This disparate treatment of streaming and downloading has no principled basis. Consumers increasingly access copyrighted video and music through streaming.”

FSF states that punishments for misdemeanor copyright infringement (willful infringements of exclusive rights other than reproduction and distribution) include up to a year of prison and a fine of up to $100,000, or both.

Punishments for felony copyright infringement usually include up to five years in prison or a $250,000 fine, or both. Due to its scope, the latter option for serious offenses is viewed by FSF as a more significant deterrent that can better protect copyright holders.

“By making willful infringement of multiple or high value copyrighted works via online streaming a felony, Congress would empower law enforcement to better combat black market online traffickers in copyrighted content,” FSF adds.

In addition to the more severe sentencing of those who stream to the public, FSF would like to see law enforcement given more tools to catch them in the act in the first instance. In some quarters, its suggestions are likely to be viewed as extremely controversial.

“Additionally, Congress should consider providing federal law enforcement with more tools, including the authority to seek wiretaps to obtain evidence of suspected criminal copyright activities, to combat online piracy. Similar wiretap authority already exists in the case of theft of trade secrets and economic espionage,” FSF writes.

The report isn’t specific as to which players should be disrupted via such legislation, but repeated references to piracy-enabled set-top boxes, addon-enabled software, hosting services and others in the streaming ecosystem indicates a tendency towards plugging loopholes across the board in a largely untested and still-developing market.

What also seems clear is a desire to shift enforcement costs onto the state, rather than them being carried entirely by copyright holders who would otherwise have to engage in difficult and expensive civil litigation.

“Despite suffering substantial harm on account of online piracy, copyright owners are often ill-equipped and financially unable to combat such piracy through civil lawsuits,” FSF reports.

“Pirates of copyrighted content are not often amenable to service of process and to civil litigation. Unsurprisingly, many technically sophisticated online piracy operations are designed to avoid accountability to copyright holders and to the civil justice system.

“Thus, circumstances clearly exist in which the civil justice system is inadequate or unable to address or combat online piracy operations.”

While the terminology used in the FSF report can at times suggest a tightening of the law against those who stream to the public and those who consume streaming content, it eventually makes clear that such legislation should be directed “to online traffickers in copyrighted content, not individual Internet users.”

It also states that “reasonable safe harbor provisions” should exist for online service providers to receive immunity from criminal and civil liability, providing they remove or disable access to infringing content when advised by a rightsholder.

Considering the donations FSF receives from the MPAA, it’s probably safe to assume that the report’s recommendations are broadly aligned with those of the Hollywood group. In that respect, it’s interesting that the studios feel that current law exposes them in some way.

Thus far, tools to tackle administrators of pirate streaming sites in the US don’t appear to have been lacking but perhaps there is currently a little too much room for maneuver.

The full report can be downloaded here (pdf)

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