Internet Piracy, for as long as it has been an issue, has been regarded as subversive to established methods of media distribution. A study done by the Institute for Policy Innovation (which the Recording Industry Association of America's anti-piracy Website makes sure to point out is credible ) places annual damages done by piracy at $12.5 billion, in addition to the loss of 70,000 jobs and $2 billion in lost wages to American workers.
The Stop Online Piracy Act (commonly known as SOPA), which was introduced in the House of Representatives by Lamar Smith (R-TX) in October, is just the latest in a series of legislation aimed at curtailing the prevalence of piracy.
If enacted, SOPA would legally allow the US government to prosecute so-called "rogue sites," which are file-sharing Websites based in countries with more lenient copyright infringement laws. Further, the bill would authorize court orders requiring Internet providers to monitor their customers' Internet activity and redirect users away from copyright-infringing sites.
The bill, however, has not been well received, eliciting the anger of not only the the Internet using population, but Google (Nasdaq: GOOG), Facebook (Nasdaq: FB), Twitter Inc. , LinkedIn Corp. , Zynga Inc. (Nasdaq: ZNGA), eBay Inc. (Nasdaq: EBAY), Mozilla , AOL Inc. (NYSE: AOL), and Yahoo Inc. (Nasdaq: YHOO) as well. On November 16, Websites, including Tumblr, Reddit, and Techdirt, displayed banners reading "Stop Censorship" to protest SOPA and raise awareness of the bill's effects.
Further opposition to the bill has been offered by the ACLU, the American Library Association (ALA), and former vice president Al Gore. The European Parliament has also come out in opposition to SOPA, recently resolving to stress "the need to protect the integrity of the global Internet and freedom of communication by refraining from unilateral measures to revoke IP addresses or domain names." (You can see a full list of opponents here.)
Opponents of the act believe it will cause significant collateral damage. They warn it will have a drastic negative impact on the functionality of the Internet, as well as prevent innovation by third-party and open-source developers, authorize invasion of privacy by Internet providers, and adversely affect numerous innocent Websites for petty instances of copyright infringement.
The act is also believed to pose a threat to Internet security in general, as the provision that allows for the investigation of a user's Internet activity is seen as incompatible with Domain Name System Security Extensions (DNSSEC).
The DNSSEC, which is a set of security improvements made by the Internet Engineering Task Force (IETF) , aims to prevent the redirection of Internet users to harmful Websites by using end-to-end encryption, requiring Websites to digitally sign their domain name entries. Think of it as a chain, where each link is verified and secured.
Representative Dan Lungren (R-CA), head of the Homeland Security Subcommittee on Cybersecurity, states that SOPA would effectively "undercut the real effort that would practically help us secure the Internet." Requiring Internet providers to redirect users away from Websites (or portions of Websites) that are alleged to be pirates comes into direct conflict with DNSSEC.
The House Judiciary Committee, which held hearings on the controversial bill on November 16 and December 15, is expected to continue debating the bill when it reconvenes from winter recess. In the meantime, I'll follow this post with another one on piracy and take a look at something investors want to know: What effect does piracy have on profit?