Ben Shoemate's Notebook

Ars Technica's Julian Sanchez takes a long, investigative look at the entertainment industry's claim that piracy costs the American economy 750,000 jobs and $250 billion and discovers the truth: they made it up and repeated it until they forgot they had made it up.

With Customs a dead end, we dove into press archives, hoping to find the earliest public mention of the elusive 750,000 jobs number. And we found it in—this is not a typo—1986. Yes, back in the days when "Papa Don't Preach" and "You Give Love a Bad Name" topped the charts, The Christian Science Monitor quoted then-Commerce Secretary Malcom Baldridge, trumpeting Ronald Reagan's own precursor to the recently passed PRO-IP bill. Baldridge estimated the number of jobs lost to the counterfeiting of U.S. goods at "anywhere from 130,000 to 750,000."

Where did that preposterously broad range come from? As with the number of licks needed to denude a Tootsie Pop, the world may never know. Ars submitted a Freedom of Information Act request to the Department of Commerce this summer, hoping to uncover the basis of Baldridge's claim—or any other Commerce Department estimates of job losses to piracy—but came up empty. So whatever marvelous proof the late secretary discovered was not to be found in the margins of any document in the government's vaults. But no matter: By 1987, that Brobdignagian statistical span had been reduced, as far as the press were concerned, to "as many as 750,000" jobs. Subsequent reportage dropped the qualifier. The 750,000 figure was still being bandied about this summer in support of the aforementioned PRO-IP bill...

The number the ITC actually came up with, based on a survey of several hundred business selected for their likely reliance on IP for revenue, was $23.8 billion—the estimated losses to their respondents. That number was based on industry estimates that the authors of the study noted "could admittedly be biased and self-serving," since the firms had every incentive to paint the situation in the most dire terms as a means of spurring government action. But the figures at least appeared to be consistent and reasonable, both internally and across sectors.

The $60 billion number comes from a two-page appendix, in which the authors note that it's impossible to extrapolate from a self-selecting group of IP-heavy respondents to the economy as a whole. But taking a wild stab and assuming that firms outside their sample experienced losses totaling a quarter to half those of their respondents, the ITC guessed that the aggregate losses to the economy might be on the order of "$43 billion to $61 billion."

750,000 lost jobs? The dodgy digits behind the war on piracy

Mark sez, "Colin Jackson is a well-known IT consultant in New Zealand and former President of InternetNZ. Colin attended a meeting with the Minister in charge of copyright on Monday to talk about a proposal to kick people off the internet on the basis of three unsubstantiated accusations of copyright infringement, and she lost her temper and yelled at them."

The meeting was set down for 45 minutes from 3:45. When it opened, Judith Tizard spent 30 minutes telling us why the change had to be made. She began by strongly expressing her anger that we had complained to her at this stage in the proceedings. None of us, she said, had been to see her before this on this topic. When we protested that we had worked with the Select Committee, which had removed this provision - and balanced it with one which made licence holders liable for false accusations - she said that this was completely inappropriate of the Select Committee, because Cabinet had already decided this was going ahead. We should not have been surprised, we were told, that this provision was reinserted by the government at the last minute before the bill was passed. (It’s worth noting here that Judith has been to the two New Zealand Foo Camps and was engaged roundly on copyright both times.)

She set forth strong views about how the launch of Sione’s Wedding had been ruined, about how studios in Auckland were running out of work, and about how artists were mortgaging their homes to make films and music and were not making any returns on their investments, all, she said, because of Internet piracy...

When we suggested that natural justice would imply that it was unreasonable to withdraw Internet access based on an accusation, she reiterated her position that something had to be done and that ISPs had to do it. ISPs, she said, need to negotiate with the licence holders to put in a regime to prevent copyright infringements. The licence holders’ associations had assured her that they would not be unreasonable.

In response to being told that it is technically impossible for ISPs to tell what people are doing, Judith said that it had been done for child pornography and that ISPs need to apply the same standards. It was pointed out that the state defines objectionable material, possession of which is a crime, but there’s no equivalent definition for copyright, infringement of which is a civil matter to be determined by courts.

Of all the unreasonable and awful proposals to come out of the entertainment industry, none is so bad as the three-strikes rule, a rule that would leave everyday people vulnerable to having the connection that brings them freedom of speech, of assembly and the press, the link that connects them to family, school, work and government, terminated because someone, somewhere made three accusations of copyright infringement, without having to offer a shred of evidence.

I think there's an easy answer to this: a three-strikes rule that cuts both ways: so yes, we'll cut off anyone who's thrice-accused of copyright infringement, but we should also permanently terminate Internet access for any corporation that makes three improper or incorrect accusations: once Sony or Warners or what-have-you make three bogus accusations, they have to do all their sales, marketing, production and communication by phone and fax. Forever. Ministers: why we changed the Copyright Act (Thanks, Mark!)