Does the entertainment industry have too much power?

In America a congressional staffer gets fired, and in Britain an indie music website gets blocked, all in the name of rent-seeking.

Vested interests have too much say in most areas of public policy, but only in some do they actually have direct control. Two stories today highlight the ridiculous amount of authority which governments all over the world have ceded to entertainment industries when it comes to creating and enforcing intellectual property law.

In the USA, a Republican congressional staffer called Derek Khanna wrote a memo titled "Three Myths About Copyright Law and Where To Start To Fix It" (mirrored here). It was a strong piece, arguing that it was untrue to claim that:

  1. The purpose of copyright is to compensate the creator of content;
  2. Copyright is free market capitalism at work; or
  3. The current copyright legal regime leads to the greatest innovation and productivity.

(The first is certainly mythical, at least in the US context, where the explicit reason for copyright is "to promote the progress of science and useful arts"; arguing against the second, he attempts to appeal to his fellow Republicans by repositioning copyright protection as a big-government-bestowed monopoly; and against the third – really, where the meat lies – he points out that current US copyright law is far more concerned with rent-seeking than encouraging creation of new works.)

Khanna's paper, while no more anti-copyright than a thousand silicon valley opinion columns, was retracted less than a day later, with the executive director of the Republican Study Committee – the organisation which published it – claiming it was:

Was published without adequate review [and failed to approach the topic] with all facts and viewpoints in hand.

That's not what the insider story is, though. Techdirt's Mike Masnick wrote:

The report had been fully vetted and reviewed by the RSC before it was released. However, as soon as it was published, the MPAA and RIAA apparently went ballistic and hit the phones hard, demanding that the RSC take down the report. They succeeded.

Yesterday, Khanna was fired. The Washington Examiner's Timothy P. Carney [explains]:

The reason, according to two Republicans within the RSC: angry objections from Rep. Marsha Blackburn, whose district abuts Nashville, Tenn. In winning a fifth term earlier in the month, Blackburn received more money from the music industry than any other Republican congressional candidate, according to the Center for Responsive Politics. Blackburn's office did not return calls seeking comment.

Again, it's worth pointing out that nothing Khanna said was new, or outrageous, and his paper was picked up approvingly by other liberatarian-minded conservatives like Virginia Postrel and Alex Tabarrok. His only mistake was writing it while working in a position where the complaints of the entertainment industry could get him fired.

Meanwhile, in the UK, our music industry has been taking an even more active role in the law, hand-picking which websites are allowed to publish. Music website the Promo Bay is a side project of file-sharing website the Pirate Bay which allows independent artists to upload their own songs to be shared freely. Not only is there no copyright infringement going on, there is actually a queue to be featured.

Nonetheless, the BPI – industry body of the British record industry – obtained a court order to block the Promo Bay, listing it as a domain:

Whose sole or predominant purpose is to enable or facilitate access to The Pirate Bay website.

That block which was only rescinded after a petition and complaint from the Open Rights Group.

It is clear that the Promo Bay was wrongly blocked – possibly by accident, possibly due to an overzealous claim by the BPI. What's less clear is why we should accept a situation where a single mistaken claim by an industry group can censor, without warning or appeal, a popular, useful, and legal site. After all, the New Statesman has linked to file-sharing sites – in an effort to get round the "Great Firewall of China". Should we be fearing a court order?

The Promo Bay logo.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR