Case in point: Less than 15 percent of U.S.-based online video viewers use file sharing for their movies and TV show fix, according to Ericsson’s TV & Video Consumer Trend Report 2012 (PDF). Netflix on the other hand is used by around 55 percent. Hulu, websites of TV networks, iTunes and Amazon’s VOD offering are also more popular than piracy.

Compare that to Spain, where legal services are still in their infancy: Spanish online video users primarily access their shows and movies through “other means,” which likely stands for unlicensed streaming sites. File sharing is also hugely popular, and being used by more than 30 percent of all users. Licensed services on the other hand are far less popular, with none of them attracting more than 15 percent of all users.

So what should Hollywood do to fight piracy? One easy fix would be to license more content to Netflix and its competitors, and put up fewer restrictions on accessing this type of content.

However, in the U.S., the industry is actually moving into the opposite direction: Last fall, Fox began delaying access to its TV shows on Fox.com and Hulu.com for people who can’t authenticate themselves as subscribers of affiliated pay TV providers or Hulu Plus. It’s difficult to draw conclusions about the effect of these measures from Ericsson’s numbers, but it’s notable that both Hulu’s numbers and the use of TV networks’ websites went down when compared to 2011. Piracy and “other” means to access content on the other hand grew slightly.

It’s too early to tell whether the industry’s love affair with TV Everywhere is driving viewers back to piracy – but on a global level, the message seems clear: Instead of forcing countries to adopt ever stricter copyright laws, Hollywood would be well-advised to help services like Netflix and Hulu with their international expansion.

Photo courtesy of (CC-BY-SA) Flickr user Richard Masoner / Cyclelicious.

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MegaUpload founder Kim Dotcom may fit the larger-than-life image most people have of an internet pirate — after all, he is huge and wears black, and drives cars with license plates that say “Guilty” on them. Richard O’Dwyer is the polar opposite: he is a soft-spoken 24-year-old who started a website based in Britain called TV Shack that consisted only of links. Despite their differences, however, the U.S. government is trying to extradite O’Dwyer to the United States to face charges of criminal copyright infringement. While Dotcom hosted terabytes worth of infringing files, O’Dwyer simply linked to them — but in the eyes of the U.S. Justice Department, these two things are virtually equivalent. If the case proceeds, it could force us to change the way we think about some of the fundamental underpinnings of the web.

There are several elements that make the O’Dwyer case particularly important, factors that have led some prominent technology players to mount a protest over his potential extradition, including a petition started by Wikipedia founder Jimmy Wales (which my colleague Bobbie Johnson wrote about) that now has more than 200,000 signatures. In an opinion piece he wrote recently for The Guardian‘s comment section, Wales — who is now also an advisor to the British government — said that while he is in favor of strong copyright protection for content creators of all kinds, that commitment only goes so far. As he put it:

It does not mean that we should abandon time-honoured moral and legal principles to allow endless encroachments on our civil liberties in the interests of the moguls of Hollywood.

The U.S. wants O’Dwyer extradited for linking

By way of background, O’Dwyer started the TVShack.net website in 2007 as a resource for those who were looking for either live-streaming video versions of television shows or for downloads. A disclaimer on the site at the time it launched said: “TV Shack is a simple resource site. All content visible on this site is located at 3rd party websites. TV Shack is not responsible for any content linked to or referred from these pages.” The U.S. government disagreed, however: in 2010, officials with the U.S. Immigration and Customs Enforcement Department (ICE) seized O’Dwyer’s domain and shut the site down. O’Dwyer then moved to a different domain and that was seized as well.

The British government considered mounting a case against O’Dwyer for linking to copyright-infringing material, but decided not to — in part because an earlier case against a similar website that also linked to streams and downloads of TV shows was thrown out, after the judge decided that linking to copyright infringing videos is not a crime. There have been similar cases in other jurisdictions, including a recent ruling by the Federal Court of Canada that said linking to a photo was not considered copyright infringement for the purposes of that country’s criminal code.

The U.S. wasn’t willing to give up so easily, however: the government started an extradition case against O’Dwyer, arguing that he should be sent to the United States to face a trial that could put him in prison for up to 10 years. In March, the Home Secretary ruled that the extradition could proceed — despite the fact that extradition to the U.S. is only supposed to occur when the acts involved are considered to be a crime in both Britain and the United States. O’Dwyer is now appealing that ruling (a news story on Tuesday said the Home Office had decided to back the extradition despite the protests and petitions in his favor, but Wales said on Twitter that this isn’t true).

@MadBennett HO has not responded. I expect them to respond positively soon to meeting with me. Low-level spokesman wrong.

—
Jimmy Wales (@jimmy_wales) July 03, 2012

The O’Dwyer case has no connection to the U.S.

As Wales notes in his Guardian op-ed, the O’Dwyer case is just another example of the impulses that drove U.S. legislators to push forward both SOPA and PIPA — the anti-piracy laws that sparked a massive outcry online last year and led to both of the proposed bills ultimately being shelved. In both of those pieces of legislation, websites could be removed from the internet and subjected to prosecution if their “primary purpose” was judged to be piracy or copyright infringement. In a similar way, the U.S. is likely to argue that since O’Dwyer linked primarily to illegal copies of TV shows, he should be guilty of secondary infringement for “inducing” others to post copyrighted content.

The concept of “inducing” infringement by others is also a centerpiece of the MegaUpload case, but at least that involves files being uploaded to servers owned by Dotcom’s company — O’Dwyer simply linked to things, just as Google or any other search engine does, and he also took down links whenever a rights-holder asked him to, which is one of the tests for when a company should be entitled to “safe harbor” under U.S. copyright laws. Not only that, but the only connection to the United States is that U.S. citizens presumably accessed the website, just as anyone can access a website anywhere, regardless of where they live.

Those two factors — the nature of the website as a collecter of links, and the lack of any connection to the United States that would justify an extradition — are what make the O’Dwyer case particularly troubling. With the case, the U.S. government appears to be asserting that linking to copyright infringing files under any circumstances should not only be an offence but an extraditable offence, and that the U.S. government is fully prepared to reach into other countries and extradite their citizens when there is virtually no connection whatsoever between that person’s acts and U.S. law or jurisdiction.

As media and entertainment conglomerates continue to put pressure on the U.S. government to enact or agree to legislation like SOPA and PIPA, or their international equivalents such as ACTA, cases like O’Dwyer’s should raise some troubling questions about how far the authorities are prepared to go, and what the ultimate impact will be on the web as we know it. If you’re interested in more of my thoughts on the case, I recently spoke about these issues on a CBC Radio program in which Jimmy Wales also appeared.

Post and thumbnail images courtesy of Flickr users Mark Strozier and Keith Allison

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Even as Internet-control bills like SOPA and PIPA were making their way through the Senate and House of Representatives earlier this year (only to be short-circuited by public opinion), there was another potential firestorm brewing just beneath the surface — one that is expected to erupt in a matter of months in Dubai. That’s because the International Telecommunications Union, an arm of the United Nations, wants very much to take over management of the Internet, a plan that will be debated by member nations in Dubai. On Thursday, a bipartisan group of U.S. congressional officials said they will resist this attempt with everything they have. But will it be enough?

A resolution released on Thursday by the members of the Commerce, Manufacturing and Trade Subcommittee called on the government (PDF) to implement a position on Internet governance that “clearly articulates the consistent and unequivocal policy of the United States to promote a global Internet free from government control and preserve and advance the successful multi-stakeholder model that governs the Internet today.” One member of the bipartisan committee, Rep. Fred Upton (R-Mich.), said in a statement before the hearing that:

The Internet has become this economic and social juggernaut not because governmental actors willed it to be so, but because the government took a step back and let the private sector drive its evolution. International regulatory intrusion into the Internet would have disastrous results not just for the United States, but for people around the world.

More than one observer, however, has noted the irony of Congress’ becoming so concerned about control of the Internet when that’s exactly what certain members of the House and Senate were trying to implement by promoting SOPA and PIPA — bills that would have imposed a wide range of responsibilities on Internet service providers and others in the name of copyright protection and were widely criticized for infringing on freedom of speech and the open Internet.

If it’s global, the UN says it should control it

The rationale for the move by the ITU seems to be that because the Internet is a global entity, it should be managed according to global standards. At the moment, control over the fundamental levers and gears that underlie the Internet — including the domain-name system — lies with ICANN (the Internet Corporation for Assigned Names and Numbers), which is a private, U.S.-based nonprofit organization. The secretary-general of the ITU, Hamadoun Toure, told Vanity Fair that “When an invention becomes used by billions across the world, it no longer remains the sole property of one nation, however powerful that nation might be.”

Although ICANN says it operates on a multistakeholder model that involves groups like the Internet Engineering Task Force and the World Wide Web Consortium, there has been a lot of criticism of the organization over the years, from allegations of conflicts of interest to moves such as the recent expansion of the top-level domain system — an expansion that could lead to hundreds of new domains such as .lol and .youtube. Some believe this was an unnecessary landgrab by domain registrars and could actually make the Internet more confusing rather than less.

Whatever the flaws of the current system, however, critics of the ITU’s plans — including one of the “fathers of the Internet,” TCP/IP developer Vinton Cerf, who testified before the congressional subcommittee on Thursday — say putting control of the Net under the UN body would subject the Internet to the whims of many nations whose commitment to democracy and free speech is questionable at best, including China and Russia. Cerf, who is currently the chief Internet evangelist at Google, said the move would threaten the free and open nature of the Internet:

Such a move holds profound — and I believe potentially hazardous — implications for the future of the Internet and all of its users. If all of us do not pay attention to what is going on, users worldwide will be at risk of losing the open and free Internet that has brought so much to so many.

A revenue grab and a tool for dictators?

The group could not only be forced to consider a host of issues such as blocking access to specific websites or services based on regional laws — such as Germany’s ban on Nazi references or Turkey’s ban against criticism of the country’s founder, Mustafa Kemal Ataturk — but critics have warned that the ITU could also start meddling with the system of payments that international telecommunications companies have put in place for handing off Web traffic as it moves around the globe. They are afraid ITU members will try to siphon off some of those payments to fill the pockets of their ailing state-owned phone and Internet companies.

In an op-ed in the Wall Street Journal earlier this year, Federal Communications Commission member Robert McDowell also warned that some of the countries who belong to the ITU — each of whom gets a single vote — are interested in restraining the essential freedom of the Internet because it causes problems for dictatorships and autocracies:

[L]et’s face it, strong-arm regimes are threatened by popular outcries for political freedom that are empowered by unfettered Internet connectivity. They have formed impressive coalitions, and their efforts have progressed significantly.

In addition to the resolution passed by the congressional subcommittee and statements against the ITU move by groups such as the Internet Society and the Center for Democracy and Technology, there are several petitions circulating on the Internet aimed at raising awareness about the UN’s plan. One urges the ITU to “release your preparatory documents; recognize the role of the user, and reject any proposals that might centralize control of the internet.”

Activism by concerned citizens helped derail SOPA and PIPA, but these were bills being promoted through the U.S. Senate and House of Representatives, not the United Nations. And at the UN and within the ITU, there are some very powerful states whose interests lie in controlling the Internet in a much more fundamental way than either SOPA or PIPA did. Whether criticism from the U.S. or anywhere else is enough to stop that effort is an open question, one that will be answered once and for all in December in Dubai.

Post and thumbnail images courtesy of Flickr users Jason Parks and Ryan Franklin

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However, as my colleague Stacey Higginbotham has been tirelessly reporting, the first battle might be over, but the war still rages on. SOPA, for instance was reborn as ACTA. Today, Google announced a new project – Take Action – that asks you to tell your story about the Internet and share it with the social web. Its whole motive: build grassroots momentum and keep the politicians on their proverbial back-foot.

Here is what Google says on the take action website:

What is the power of the Internet to you? This is just the first step in building a conversation around the future of the Internet. We hope you’ll join in by sharing your own story. Complete the sentence, “The Internet is the power to…” and share it using the tag #OurWeb.

While the push and pull of business and politics will continue, the lasting and most forceful power on the Internet is you. So stand up and be heard – start a conversation about how the web empowers you, makes you more productive, or just makes you laugh.

This tree reflects a small piece of the value of the web, and how together the Internet has grown into an incredibly powerful force for good in the world. To say that the web has created jobs is an understatement; it’s spurred the development of an entirely new sector and completely remade every industry that came before it.

Thanks to the Internet, we’ve changed the way the world communicates, how we work, and the way we share with one another. Take a look, appreciate what it means, and share your own story.

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In an interview with John Garrett, the publisher of Community Impact, Smith had this to say when asked if he still supports SOPA:

Well, SOPA is not going to rise again in its current form. I do think we have to address the current concerns. I still feel there is a serious problem with online piracy. And a lot of folks in Austin will agree, whether they are musicians who see their recordings stolen and downloaded for free … there are a lot of individuals who are hurt by online piracy. But there was also a lot of misinformation about this particular piece of legislation. The language of the bill clearly limited our concerns to foreign websites primarily engaged in illegal activity. When we would get calls at the office about, ‘You’re getting ready to shut down Facebook,’ or ‘you’re getting ready to stop Google,’ … no one had made a clear distinction between domestic websites and foreign websites primarily engaged in illegal activity. And we were simply overwhelmed by that misinformation.”

Hmmm, it seems as if Smith is a bit misinformed himself. The language in the bill may have been aimed at taking on foreign piracy, but the definitions of foreign and domestic web sites in the original bill meant that it could be used to target a U.S. web site as well, if that U.S. web site was registered with a foreign domain name registrar. Read the law here.

So, be warned. Smith isn’t done yet protecting the content industry from the business disruptions caused by the digitization of content and the Internet. And clearly when people protested, instead of hearing the voice of concerned citizens worried about the fragmentation of the Internet, he heard a bunch of people who didn’t know what they were talking about.

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By now, most of us have grown pretty used to hearing the word “theft” used to describe what happens when someone downloads a movie or a song that isn’t theirs, and certainly media and entertainment lobby groups make heavy use of such terms — as do people like News Corp. founder Rupert Murdoch when talking about what Google News does with his newspaper content. But as Rutgers law professor Stuart Green describes in a New York Times opinion piece, this terminology is fundamentally flawed, since copyright infringement is a very different thing from theft of physical property.

Why does this matter? Because seeing it as theft makes it easier to accept ridiculous court decisions and/or unreasonable government legislation that vastly over-reaches what copyright is supposed to cover.

Green notes that the Justice Department is busy prosecuting a massive legal case against MegaUpload, the file-hosting and sharing site run by the colorful German hacker Kim Dotcom. But while the documents filed by the FBI and others for the indictment included enormous estimates of the amount of digital property allegedly “stolen” by the company — just as the record industry has in cases against Napster and other sites — it isn’t clear that MegaUpload has done anything different from what YouTube and others do. And whatever other things the company might be guilty of, theft isn’t among them.

Intellectual property is unlike any other kind of property

As with the Napster and Grokster and other similar cases, the argument made by the movie and music and software industries is that all of the files that are shared on such sites represent a theft of their property — their “intellectual property,” to use another term that is filled with contradictions and actually muddies the debate even further. Obviously, all of the people who downloaded movies and software from MegaUpload did so instead of buying a physical copy, and therefore it represents theft — just like walking into a movie store and taking a DVD. Except that it doesn’t represent anything of the kind, as Green notes:

If Cyber Bob illegally downloads Digital Joe’s song from the Internet, it’s crucial to recognize that, in most cases, Joe hasn’t lost anything. Yes, one might try to argue that people who use intellectual property without paying for it steal the money they would have owed had they bought it lawfully.

But there are two basic problems with this contention. First, we ordinarily can’t know whether the downloader would have paid the purchase price had he not misappropriated the property. Second, the argument assumes the conclusion that is being argued for — that it is theft.

As Green and others too numerous to mention have pointed out, downloading or copying something doesn’t represent the loss of anything tangible at all, which is what makes “intellectual property” such a misnomer. If I take your car or your coat, you no longer have them — that represents real theft. And even the argument that the content industries fall back on, which is that downloading or copying represents the loss of a potential sale, doesn’t hold water. As Tim O’Reilly of O’Reilly Media has noted, many of those who copy his books likely would never have paid money for them in the first place.

This is about more than just legal terminology or semantics

But this is all just semantics, right? Not really. For one thing, seeing it as theft makes it easier to steamroll right over issues like “fair use,” which is an incredibly important principle and one that is unique to copyright law (there are distinctions around public use of land in property law, but that’s a topic for another day). In a nutshell, the principle of fair use allows both individuals and corporations to take copyright content and use it in various ways without being guilty of infringement — it’s like a get-out-of-jail-free card, and it was included in copyright law to make creative use of content legally defensible.

One of the problems with fair use, however, is that it is incredibly complicated and filled with grey areas: as I described in a recent GigaOM Pro report on Pinterest (sub. req.) it is a four-factor test in which judges try to assess the original intention of the work, the nature of the infringing use, the amount of the original that is used, and the effect on the market for the original. In some cases the courts have decided that Google should be allowed to use images in search, because thumbnails are seen as a “transformative use.” Exceptions are also often made for journalistic or educational purposes.

But seeing any form of copying or unauthorized use as theft makes it virtually impossible to justify any of these actions, and makes it easier to see them as a crime.

And so we have the Authors’ Guild fighting for years to prevent Google from copying books so that they can be easily found, because the group argues that the simple act of copying them — even if only small portions of those books ever see the light of day — amounts to theft. And YouTube gets a takedown notice when a user’s video happens to have a song playing faintly on a radio in the background while her son dances. And laws like SOPA and PIPA and too many others to mention are drafted to prevent the widespread “theft” that is allegedly stealing billions from intellectual property holders.

And all the while, content industries deliberately ignore the fact that the intended purpose of copyright law is to promote innovation and creativity, not to smother it. Are there real issues around how creators get compensated for their work, and how we can accomplish that most effectively in an era of unlimited copying? Sure there are. But using terms like “theft” and “piracy” doesn’t get us any closer to solving those very real issues in any meaningful sense — it pushes us further away.

Post and thumbnail images courtesy of Flickr users David Goehring and Seth Anderson

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The threat of rampant piracy — the downloading and re-distribution of what the content industries claim are billions of dollars worth of intellectual property — is continually raised to justify ever-more-draconian laws such as the recently proposed SOPA and PIPA bills. While they have been shelved (at least for now), the pressure on legislators to come up with new variations continues, as does the pressure to launch federal cases against service providers like Megaupload or Hotfile. Y Combinator founder Paul Graham argues that this phenomenon isn’t the natural order of things, but stems from the failure of those content industries to adapt to the new realities of the internet. He is right — as long as they continue to resist, the battle will go on.

Graham compares what the movie studios and record labels and other entertainment and media conglomerates are trying to do with someone trying to charge money for the air — a reference to an old folk tale about a student who was sued by a restaurant owner for stealing the smell of his food (according to the story, the judge ordered the student to repay the man with the sound of some jingling coins). Their control over the packaging and distribution platforms that we used to take for granted gave them the ability to do that, Graham says, but that is no longer the case:

The record labels and movie studios used to distribute what they made like air shipped through tubes on a moon base. But with the arrival of networks, it’s as if we’ve moved to a planet with a breathable atmosphere. Data moves like smells now. And through a combination of wishful thinking and short-term greed, the labels and studios have put themselves in the position of the food shop owner…

This metaphor may not be exact, but Graham’s point is well taken: The environment in which content-owning companies of all kinds are operating now has irrevocably changed, and so the business models and processes must change as well — and the points at which we see friction are when these industries try to apply the old model to the new reality. So geo-blocking of sporting events and time -windowing and other tools that used to define markets for video run headlong into the desire of someone like Union Square Ventures partner Fred Wilson to watch a Knicks basketball game, and “piracy” is the result. But piracy is just a symptom of a broader problem.

The game has changed, and playing the old game is not working

So should these industries just give their content away for free? Of course not. But Graham argues that there needs to be a realization that the game has changed, and therefore different rules are required, instead of just repeated attempts to get the courts and governments to reinforce the old rules. As he puts it:

Should people not be able to charge for content? There’s not a single yes or no answer to that question. People should be able to charge for content when it works to charge for content. But by “works” I mean something more subtle than “when they can get away with it.” I mean when people can charge for content without warping society in order to do it.

As a number of observers have pointed out, including author Matt Mason in his book The Pirate’s Dilemma, piracy in virtually any industry is a sign that there is something wrong with the fundamentals of that market — in effect, it means that potential customers are finding it more worth their while to pirate something than to pay for it. And if examples like comedian Louis CK’s recent download experiment have shown anything, it’s that people will pay for something if they value it highly enough, and if you make it as easy as possible — even if the option exists to get the same content for nothing.

Musician Jonathan Coulton has shown that it is possible to make a good living from music even if you give it all away under a Creative Commons license, as Techdirt has noted a number of times (fellow musician Neil Young recently said that “piracy is the new radio”). And Coulton had some fascinating comments to make in a recent interview about the value of the internet vs. the value of the content industries:

[I]f as a consequence of letting [the internet] do what it wants, we destroy a number of industries, including the record business, and maybe even including the rock star business, I think that humanity will be better off. I, for one, think that the internet is one of the greatest human achievements, ever. It’s an amazing tool and we have only just begun to explore the possibilities. To me, it feels like it’s a part of our evolution as a species. I value it as much as I value the Bill of Rights.

That’s probably not a common viewpoint, but it is a far more optimistic one than the doom-and-gloom message from the content industries, or the repetition of absurd claims about how much value is theoretically being destroyed by piracy (for more on that, see Rhapsody founder Rob Reid’s recent TED talk about the “$8-billion iPod”). In the end, as Brad Burnham of Union Square argued during the SOPA and PIPA battle, the internet isn’t just a tool, it’s actually a belief system — and the central principle is that the kind of behavior the internet empowers is fundamentally good for society.

The ironic thing is that content companies would probably create even more lasting value if they tried to adapt to those principles instead of fighting them.

Post and thumbnail images courtesy of Flickr users Paul Sapiano and http://www.flickr.com/photos/yanrf/1408711192/“>Refracted Moments

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Crowdsourcing has proven to be a pretty good way to accomplish things that require a lot of input from different people, including the creation of encyclopedias and the financing of personal projects such as movies and comic books. But could it be used to create legislation as well? A couple of groups are hoping that it can: the online community Reddit, which was instrumental in raising awareness about the anti-piracy bills SOPA and PIPA, is trying to create a “Free Internet Act” that anyone can contribute to, and the nonprofit group Public Knowledge has just launched what it calls the “Internet Blueprint” to do something similar. But is crowdsourcing a solution to Washington bureaucracy, or will it just add to the chaos?

Reddit’s venture has been underway since just after the community — along with Wikipedia and dozens of other sites — went dark as a way of protesting the government’s support of SOPA and PIPA in both the House of Representatives and the Senate. Those bills were both sidelined by their supporters in the legislature after the wave of popular outrage that Reddit was a part of, and the user who created the discussion thread that gave birth to the Free Internet Act (an Austrian user who goes by the name RoyalwithCheese22) said he was hoping to build on that momentum, and get the community to craft an alternative to SOPA and PIPA and other similar legislation aimed at the internet.

Could a realistic alternative to SOPA emerge from a Google Doc?

After a draft of the bill took shape on the Reddit thread, it was moved to a Google Docs file that is open for anyone to edit — on a recent visit, there were 30 other viewers, and several were editing the document simultaneously. Among the first notes in the document was one warning users not to deface or ruin the effort, a note that referred to “4chan trolls” (the online community that gave birth to LOLcats and the activist group Anonymous). Among a number of proposed edits was a note from a user going by the name “Downing Street Cat” that took issue with unnecessary capitalization of terms in the bill.

The rest of the bill includes sections on censorship, culpability, content removal, appropriate punishment for those who infringe on the law and the rights of the user. The section on culpability says: “If the content under considerations is a work that was partially or fully derived from another content under copyright, it is required that the derived should contain a minimum of 40% of the original content [and] be wholly comprised of sections of the original [and] not be a subtitled parody.” In the notes, however, someone else has written that this “isn’t very clear in what it intends, and realistically needs a full rewrite.”

The bills proposed by the Public Knowledge project, meanwhile, look and read much more like existing legislation and are an attempt by the nonprofit group to promote alternatives to SOPA and PIPA that have a chance of actually becoming law. The Internet Blueprint site has copies of the bills — such as one entitled “The Strengthening and Improving DMCA Safe Harbors Act,” which would penalize companies for issuing false takedown notices — and users can vote for the ones they like and even click a button to recommend them to their representative. The group is also looking for ideas for other bills, but says it will write them rather than letting anyone contribute the way Reddit does.

Some see crowdsourcing of legislation as a real alternative

It’s one thing to bring a community like the technology industry together via web campaigns to protest an existing or proposed law — but can those same impulses be used to actually create new ones? Union Square Ventures partner Fred Wilson wrote recently about the Reddit initiative, and how he and his partner Albert Wenger mentioned to a senator the idea of writing legislation in full public view as an alternative to the secretive process that came up with SOPA and PIPA. The senator’s response was that “such radical transparency wasn’t likely to develop in Washington any time soon,” and Wilson said that made him even more interested in pursuing efforts like the Reddit project.

Crowdsourced legislation does exist: the Icelandic parliament, for example, created a new constitution last year based in part on crowdsourced input, and an alternative to SOPA called OPEN was also developed using input from contributors via a website. But the laborious process of putting together a comprehensive piece of legislation — which would require hundreds of pages, legal footnotes and cross-checking with existing laws if it is to succeed in any real way — may simply not be compatible with existing crowdsourcing methods. Even Wikipedia has repeatedly had issues over the years with in-fighting and vandalism, and most of its entries are less than a page long. RoyalwithCheese22 has admitted that the process behind the Reddit bill has been slow and frustrating.

In addition to the difficulties associated with herding cats on the Internet, there’s also the risk that laws like the Free Internet Act will cater only to the technologically savvy — and therefore will become just special-interest bills like the ones that already get circulated in Washington by various groups. To its supporters, however, that would at least put Silicon Valley on equal footing with other interests, and the openness of the process could make the result even more palatable than the alternative. Whether the bill ever gets from Google Docs to Washington, however, remains to be seen.

Post and thumbnail photos courtesy of Flickr user Christian Scholz

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Marc Andreessen

There’s no question that Andreessen Horowitz, the venture capital firm headed up by Marc Andreessen and Ben Horowitz, has become a major force since it was founded back in 2009. The young VC firm has funded some of the best and brightest companies in the tech industry: Facebook, Twitter, Zynga, Groupon, Airbnb, Box, Fab.com and Pinterest, to name just a few. And this is just the beginning — Andreessen Horowitz just announced it has raised $1.5 billion in fresh funding to invest in even more startups.

I talked to Marc Andreessen this week to get his thoughts on Silicon Valley, the startup ecosystem, and where the larger tech world is headed in 2012. Here’s what he had to say:

Silicon Valley is still tech’s ground zero

“Our firm is very Silicon Valley focused. Now, we’re not religious about it. We’ll go far and wide to find the best companies and fund them. But there is a magic to Silicon Valley. It’s a lot like Los Angeles with film, New York City with finance or fashion, and Washington D.C. with politics. A lot of people want to work where there’s a critical mass of other people in their field; it’s like a natural force of gravity.

Because the best people in technology keep coming to the Valley, there tends to be a self-renewing property to it. It’s become a place where great technology franchises have been built repeatedly. I would love for there to be a dozen Silicon Valleys around the world. But it’s a very hard thing to replicate.”

When running a VC fund, it pays to walk the walk

“Closing this latest [$1.5 billion] round from our investors was a pretty straightforward process. The key thing is, we’re really focused on the alignment of our interests with the people who invest in us. Each of us at Andreessen Horowitz has a significant personal investment in the firm ourselves. We each pay full management fees and carried interest, so we’re exactly side-by-side with our investors.

We also have a hard commitment that none of our partners will make private technology investments outside of Andreessen Horowitz — you won’t see me investing in a startup as an individual. Our investors really like that, it makes them feel that we’re real partners.”

Tech should learn the language of Washington

“Ever since I arrived in the Valley, there’s been a debate about how the tech industry should approach government and legislation. There’s one school of thought that says we should just ignore Washington and build the future on our own, the idea that we’re going to invent our way out of any problem that comes up. Then there’s the other school of thought, that it’s very important to engage with Washington on their terms, because the industries that are threatened by technology are very good at lobbying. I’ve always been more in the second camp.

Technology is very important and it has a big impact on the world. Politicians are naturally going to want to be involved in something that is that important, and they’re going to try to make laws about it. For every exciting advance we make, there’s someone on the other side that is threatened by it. The oldest and most entrenched industries are lobbying like crazy, so for the tech industry to not participate is just handing the ground to them.

On top of the traditional methods, we can also do new stuff like the SOPA/PIPA blackout, which was a whole new form of engagement and protest. I know that a lot of people in Hollywood were absolutely shocked at the effectiveness of that.”

A startup shakeout is coming, but that’s OK

“There has been a lot more seed funding in the past two to three years. In terms of our own self interest as a VC firm, we want as much seed funding as possible — it presents us with a lot of great opportunities to evaluate for a venture round.

There is going to be a shakeout at the seed stage. A lot of companies will come up for Series A funding at some point, and there are just too many of them to really raise what they’ll need. But that’s not a bad thing. It’s a very small amount of funding they’ve taken on so far, and nowadays a lot of them will have the opportunity to sell as a talent acquisition. It’ll work out fine for them. In the long run, imagination tends to be rewarded, not penalized.”

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