Last week I responded to some questions from Rafael Cabral, journalist at O Estado de Sao Paulo, who was writing about the Obama visit to Brazil and the wider politics of copyright and enforcement. With Secretary of Commerce Gary Locke along for the ride, IP and enforcement measures were on the menu. Since only a little of this exchange ended up in the paper, I’ve reproduced the longer Q&A here, with permission.

First of all, could you provide a summary of the intentions and results of the research in developing countries.  How do you see the tension between law enforcement and the modernization of laws in the digital realm in the countries researched?

There are several questions here.  First, the report is framed by an argument about the relationship between piracy and high media prices.  Obviously everyone knows that prices for CDs and DVDs are high.  It’s the first thing people know about media markets.  But there hasn’t been a good explanation of why they’re high.  We think we’ve provided that answer, and it’s basically that the big multinational companies set prices to protect high income markets, rather than expand in low-income markets.  The Brazilian market (or the Mexican or South African or Russian market, for that matter) just doesn’t count compared to the US and European markets.  So prices stay high.  In India, where there is a lot of domestic competition in the media market, prices are much lower.

Re our intentions: our primary goal has been to shift the debate about piracy and enforcement from a predominantly criminal framework to a development or media access framework.  Hopefully, the availability of a different kind of account will change the way developing countries approach these issues.  The hard line on enforcement is really not in their interests.  In contrast, I have no expectations that the report will affect US policy.  That is a project for the longer term.

Re law enforcement and the modernization of laws: existing laws are generally adequate for dealing with large-scale commercial infringement (e.g., pirate DVD factories), and I have no problem exercising the full power of the law in these contexts.  But this is also the old modality of piracy.  It’s less and less relevant.  The future of enforcement is about consumer liability and the restriction or surveillance of basic features of the Internet that facilitate consumer infringement–copying files, transmitting files, linking.  This becomes much more problematic as a policy matter because it touches on many other rights, including freedom of expression and privacy.

What do you think about the new team heading the Ministry of Culture here in Brazil. Unlike Gilberto Gil and Juca Ferreira, the two ministers that started the relationship with Creative Commons and that tried to make our copyright laws more flexible, Ana de Hollanda started her administration taking off the CC (Creative Commons) stamp off the Ministry website. In addition, she has relationships with ECAD (entity that collects music copyright and the main institution against the current copyright reform proposal) and threatens not to take the reform forward. What do you think of this change in Brazilian politics? Who do you think is pushing us?

Obviously there has been a lot of pressure on Brazil over the years to adopt a more US friendly line on these issues, both with respect to domestic and foreign policy.  The selection of Ana de Hollanda and her early actions with respect to the copyright bill probably reflect that at some level. But how, precisely, or what it means for the future I don’t know.  I think a lot of people are wondering about this.  Gilberto Gil’s (and later, Juca Ferreira’s) policies in this area were a major achievement, both domestically and internationally, and it would be a blow to see them reversed.

In the same week that the report of the Social Science Research Council went live, another study by the IIPA (representing the MPAA, among others), showed very different perspectives to piracy and copyright laws in developing countries. The report pushes for Brazil to pay more attention to the problem of physical and digital piracy. Also, the study shows concern with the direction the country is taking if the reform of copyright law and Marco Civil, our legislation for the web, are approved. Why do you believe the studies’ results are so different? Do you believe that entities such as the IIPA, the MPAA and other governments may be pressing for Brazil to become more conservative?

I haven’t seen the new study.  But IIPA, MPA, BSA and others have been pushing for stronger enforcement and higher IP protections for 20 years.  It’s their business.  And they’ll do it no matter what the Brazilian government does or how high or low the piracy rates are. There is no end game. We document this in South Africa, which has the lowest rate of software piracy in the developing world (35% according to BSA).  Yet, every year, there are BSA stories about how disastrous software piracy is for South Africa, and more stories if the number goes up or down a little.  And yes, the complaining about Brazil is also certainly linked to its independent positions at WIPO and other international bodies.  Backing out of the WIPO Development Agenda, for example, which Brazil sponsored, might earn Brazil a little praise from the IIPA and USTR, but probably not much else.

But beyond the IIPA and MPAA, President Obama himself is coming to Brazil soon, reportedly to push the US (effectively, IIPA/MPAA) agenda on internet policy.  I think Brazil should greet these requests with caution.  Perhaps some reporter can ask him if he has read the report 🙂

The Social Science Research Council study showed that the high price of culture in developing countries is the main reason for people to become pirates. Is it true to both physical and digital piracy?

Yes, true of both.  Online generally just widens the gap between the legal and illegal good.  But on that point: a lot of the press coverage of the report suggests that lower prices will end piracy.  This gets at the main issue, but it isn’t exactly our point.  What we say is that lower prices are a positive policy goal in and of themselves and that the media business will transition to lower prices if there is competition.   Lower prices will diminish piracy but ultimately businesses will find a balance point: close enough in price to the informal market to cannibalize it, but sufficiently above it to allow for a viable (if also less lucrative) commercial media market.  From a legal perspective, in this context, you enforce against anyone trying to make money by disrupting the legal market, but you basically leave the rest of consumer sharing alone.  That’s probably the future for recorded media. In other areas, there are different issues.  The real pressure on software profits isn’t piracy (which, we argue, is part of the business model), but the disruptive pricing of companies like Apple, which are creating expectations that software should cost $2 dollars.  The Brazilian market still hasn’t seen much of this pricing pressure, for reasons related to lack of competition, though some of Overmundo/CTS’s other work points to the emergence of related business models around local music.

Can you explain the Consumer’s Dilemma license? Is it an alternative to Creative Commons?

It’s a way of dramatizing the pricing problems we discuss in the report by reversing them (a little).  So the report is free for non-commercial use for anyone outside the US, Europe, and a handful of other high-income countries but costs $8 for anyone within them.  Plus, we’ve created a $2000 ‘commercial reader’s’ license for media companies and enforcement organizations.  The Consumer’s Dilemma is the choice between buying it at the legal price, pirating it (which we make very easy), or ignoring it.  It’s the choice people always have in contemporary media markets, which is the point.  There is no connection with Creative Commons.  It’s a bit of theater, not a model.


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