The latest offensive in the content industry's never-ending war on copyright infringement is the Stop Online Piracy Act, which was introduced in the House two weeks ago. It incorporates key provisions of the Senate's Protect IP Act as well as another Senate bill that makes unauthorized streaming a felony. But it also includes new provisions that go beyond the language in either of those bills. If passed, it would be the most sweeping overhaul of copyright law in at least a decade.

Ars discussed the proposal with Ryan Radia of the Competitive Enterprise Institute, a libertarian think tank. He's been actively engaged in this year's copyright debates on Capitol Hill, and he argued that the sweeping language of SOPA was specifically designed to undermine the safe harbor provisions of the Digital Millennium Copyright Act.

A content industry wishlist

Supporters of the legislation say it's needed to combat "rogue" websites hosted overseas. Such rogue sites deliver infringing content to American consumers while remaining out of reach of American law enforcement. A series of bills, starting with last year's COICA legislation, have tried to shut down these sites by going after intermediaries, including DNS servers, payment processors, search engines, and ad networks.

These bills have gotten more and more ambitious. For example, critics pointed out that the DNS blacklist in earlier bills would be easy to circumvent. So not only does SOPA force DNS servers to blacklist websites, but it also allows the government to obtain injunctions against anti-censorship software like MAFIAAFire that circumvents the government's DNS-blocking efforts. Radia points out that this could make the US government look hypocritical if Congress passed such an anti-circumvention law at the same time the Obama administration has pledged to support the creation of similar technology to resist the censorship of repressive foreign regimes.

The legislation also incorporates a Senate proposal to make unauthorized streaming of copyrighted works a felony. "The problem is that there's no commercial gain requirement in the House version," Radia told Ars. And he argued that the dollar-value thresholds in SOPA are too low, creating a risk that minor offenders—maybe even Justin Bieber—will wind up in jail.

"This is intentional"

Probably the most ambitious new provision in SOPA is the creation of a new DMCA-style notice and takedown system. The DMCA's provides a safe harbor from copyright liability for sites that comply with takedown requests for individual items. In contrast, the SOPA notice-and-takedown regime allows copyright holders to attack entire websites by cutting off their access to payment and ad networks.

The major content industries have made no effort to hide their disdain for the DMCA safe harbor. Recording Industry Association of America lawyer Jennifer Pariser recently argued that "the courts are interpreting Congress' statute in a manner that is entirely too restrictive of content owners' rights and too open to [Internet] service providers."

The DMCA's safe harbor doesn't protect websites that encourage infringement or ignore "red flag" evidence of infringement. But Pariser argued that the courts have been letting sites off the hook too easily.

She claimed that the RIAA hasn't started lobbying for changes to the DMCA, but Radia believes that content companies have been pushing for SOPA for precisely this reason. "The bill is written in a way that covers a far broader category of sites" than ordinary "rogue" websites, he told Ars. "I think this is intentional."

"Many of the companies that have long wished that the DMCA imposed a greater obligation on online intermediaries to act against infringement see this bill as an effective means of accomplishing their end goals without opening the can of worms of revisiting the DMCA safe harbor," he said.

Radia pointed out that "it's entirely possible that an intermediary that is protected by the DMCA safe harbor could also fit within the category of sites dedicated to infringement." So companies that build websites based on the rules of the DMCA might suddenly find themselves on shaky legal ground.

Spooking investors?

The courts have been interpreting the DMCA's safe harbor for 13 years, and we now have a pretty clear idea of what sites must do to qualify for it. But SOPA's "dedicated to theft of US property" standard is much less clear, and it will take years for the courts to sort out what it means. In the meantime, the uncertainty could discourage investment in Internet technology and cause real and irreparable harm.

Radia said this kind of concern has inspired venture capitalists to strongly oppose the legislation. For example, he pointed out that Fred Wilson of Union Square Ventures spent time in DC last week lobbying against the SOPA. As we've reported, Wilson and other investors have been fighting SOPA and its predecessors for months. "Given the importance of VC to overall economy and job growth, I suspect the members will take these concerns seriously," Radia predicted.

SOPA also includes a section on "denying US capital to notorious foreign infringers." The term "notorious foreign infringers" is never defined, but the bill instructs the intellectual property enforcement coordinator to prepare a report to Congress—with input from "members of the public, including holders of intellectual property rights in the United States"—on "the significant harm inflicted by notorious foreign infringers on consumers, businesses, and intellectual property industries." The IPEC is also asked to examine whether government should have the power to blacklist designated "notorious foreign infringers" from raising capital in the United States.

Thankfully, this part of the bill doesn't actually give the government the power to create an investment blacklist. But the language suggests the industry is already laying the groundwork for its next legislative initiative.

"We are not looking to re-open the DMCA"

RIAA spokeswoman Cara Duckworth denied her industry is trying to revise the DMCA. "We are pursuing marketplace solutions and working voluntarily with third parties to discourage online content theft," she said.

What does she mean by "marketplace solutions?" This is evidently a reference to the SOPA provisions giving copyright holders the right to seek legal injunctions that force payment processors and ad networks to cut off infringing websites. SOPA itself labels these takedown requirements a "market based system" to "prevent US funding of sites dedicated to theft of US property."

The RIAA also stands behind Pariser's comments, which Duckworth says are "simply a reflection of the well-documented and general frustration content owners feel when faced with the incredible burden of 24/7 monitoring and sending notices regarding unauthorized content that gets re-posted immediately upon takedown."

Of course, "24/7 monitoring and sending notices" is the system Congress set up when it passed the DMCA. Enforcing copyrights is expensive, and the DMCA properly puts most of the costs of enforcement where they belong: on the copyright holders who benefit from copyright protection. Unsurprisingly, the RIAA would like to shift those costs onto third parties such as payment processors, ad networks, and DNS providers.

We think Congress struck the right balance in 1998. Radia, however, is more sympathetic to the RIAA's plight. He favors compromise legislation that would narrowly focus on true rogue websites. He would eliminate the DNS blacklist, which he sees as ineffective and ripe for abuse. But he would leave in place the rules related to payment processors and ad networks. He would also tighten up the definition of rogue sites by making it clear that anyone who qualified for the DMCA safe harbor was not a rogue site. And he said that he would explicitly exempt US sites from the reach of the bill, since those sites can be dealt with under existing US copyright law.

Update: Duckworth contacted us to clarify that the "market-based solutions" she had in mind are "voluntary agreements with third parties, such as our recent agreement with ISPs to discourage content theft on their networks." Of course, given the rumors of White House arm-twisting, we have our doubts about how voluntary that agreement was.