WASHINGTON, October 8 – The “broadband ecosystem” of the future needs strong legal, technological and cultural efforts to protect American intellectual property, a group of entertainment and technology executives said Wednesday at the U.S. Chamber of Commerce’s Fifth Intellectual Property Summit.
Although the panelists also spoke about the importance of preserving users’ right to make “fair use” of copyrighted material, they emphasized the importance of technological protection measures.
“We know the story” on the history of the music industry, said Mark McKinnon of Arts+Labs, a coalition of technology and entertainment companies that develops content delivery and protection systems.
McKinnon compared the music industry’s negative experience with Napster file-sharing service with the success of commercial video sharing site Hulu. McKinnon said Hulu accounts for 90% of commercial television being viewed online. “The models are finally being figured out.” In the future, consumers would respond positively to online content that is affordable, legal, and safe, said McKinnon.
There is “no question” that old business models need to change in a networked world, said Rick Cotton, executive vice president and general counsel for NBC Universal. Embracing digital distribution will “drive the future,” Cotton said. “It’s what consumers want.”
New content protection technology brings the promise of a “mature model” of internet distribution that avoids “the dark side” of peer-to-peer technology, said Cotton. The broadband ecosystem envisioned by Cotton would somehow tell people that they can access programming as they please, but also send a message that stealing is not acceptable. Such an ecosystem must be built cooperatively, balancing ease of access, consumer desires and a choice of ad-based or fee-based models.
Putting content-style restrictions on technology can be an “enormously powerful teacher” that can teach people on a “speed bump basis,” Cotton said. Without such technological measures, Cotton said, young people could grow up believing that “if [downloading pirated content] is easy, it can’t be wrong.”
Referring to the success of Hulu and NBC’s Olympic video streaming, Cotton said that a broadband-based model would be successful if there are clear “rules of the road,” and as long as consumers could easily access legal content.
Content protection has a critical role to play in the future, said Rick Lane, senior vice president of government affairs at News Corporation. Protection mechanisms have to allow some control for content owners, while leaving room for new and innovative business models, he said. Without content protection mechanisms, Lane predicted that online content would be reduced to the model of a DVD purchase.
More consumer education would cut down on “Net Pollution,” McKinnon said, suggesting educational campaigns to link pirated content with malware and viruses.
The ecosystem would have some room for fair use, Cotton said. Content protection is not about facilitating mashups, he emphasized. Rather, technological restrictions must focus on whole episodes, skits, and movies, he said.
“Fair use should not be a code word for doing nothing,” Cotton proclaimed, adding that technology should send cues about what is right.
Lane and McKinnon agreed that consumer convenience is paramount in any content protection scheme and should be “seamless,” Lane said. McKinnon predicted that with the rise of broadband and good content protection, it would not be long before “DVD’s are like 8-tracks.”
Fair use is not incompatible with content protection, Lane said. Content protection technology is a “key component” of the future broadband economy, and mechanisms could be devised to protect fair use as well as copyrights. Lane cited News Corp.’s MySpace Music as an example. He said that MySpace had received “zero complaints” about its content protections restricting fair use.
Lane said the idea that News Corporation is against fair use was “ridiculous.” Cotton said that fair use and privacy are too often used as “scare tactics,” and said people need to “get past the name calling” when it comes to examining content protection mechanisms. “Trying to create fear doesn’t help the dialogue,” he said.
Cotton said later in an interview that improving technology will make piracy more difficult, but consumer rights and fair use will be protected with “reasonable accommodations” built into copy protection technology. The “vast majority of people” will be satisfied by such accommodations, while fulfilling the goal of cleaning up the “wild west” of today’s internet, he said.
In an interview, David Sohn of the Center for Democracy and Technology took issue with Cotton’s characterization of fair use as a “code word” for anything. Content protection systems can’t distinguish fair use from copyright infringement, Sohn said. Instead, he called fair use an “important policy consideration” that is not only enshrined in law, but is also a “safety valve” so that copyright law doesn’t violate the First Amendment.
Sohn said he hoped the future will include a “broad range” of options available to consumers. Such options should be in response to consumer demand for content models that meet their needs. Market pressures simply won’t allow content to be completely locked down, he said.
Broadband Breakfast Club Forum on the Digital Millennium Copyright Act:
Editor’s Note: Don’t miss “10 Years Under the Digital Millennium Copyright Act – Success or Failure?”, on Tuesday, October 14, from 8 a.m. to 10 a.m. at Old Ebbitt Grill, 675 15th Street NW, Washington.
This event, the kick-off event in the monthly “Broadband Breakfast Club” hosted by BroadbandCensus.com, is designed to bring several key stakeholders together to share perspectives on this topic:
- Drew Clark, Executive Director, BroadbandCensus.com (Moderator)
- Mitch Glazier, Senior Vice President, Government Relations, Recording Industry Association of America
- Michael Petricone, Senior Vice President, Government Affairs, Consumer Electronics Association
- Wendy Seltzer, Practitioner in Residence, Glushko-Samuelson Intellectual Property Law Clinic, American University Washington College of Law
- Emery Simon, Counselor, Business Software Alliance
Breakfast for registrants will be available beginning at 8:00 a.m., and the forum itself will begin at around 8:30 a.m., and conclude promptly at 10 a.m. Seated attendance is limited to the first 45 individuals to register for the event. For more information, visit http://broadbandbreakfast.eventbrite.com
Broadband Breakfast on October 27, 2021 — When ‘Greenfield’ Fiber Meets ‘Brownfield’ Multiple Dwelling Units
What options do owners of, operators in, and tenants within MDUs have for better-quality broadband?
Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can watch the October 27, 2021, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.
Wednesday, October 27, 2021, 12 Noon ET — “When Greenfield Fiber Meets Brownfield Multiple Dwelling Units”
Bringing fiber to the premises is sometimes only half the battle. For example, bringing fiber to an MDU may not mean that every tenant will get better-quality broadband. In the case of multiple dwelling units or multi-tenant housing, it isn’t easy to completely rewire an existing building with fiber-to-the-unit. Further, the Biden Administration and the Federal Communications Commission are pushing real estate owners to eliminate or minimize exclusive MDU broadband contacts. What options do the owners of, operators in, and tenants within MDUs have to enjoy both competitive and better-quality broadband?
- Kevin Donnelly, Vice President, Government Affairs, Technology and Strategic Initiatives, National Multifamily Housing Council
- Jenna Leventoff, Senior Policy Counsel, Public Knowledge
- Pierre Trudeau, President and Chief Technology Officer, Positron Access
- Other Guests have been invited
- Drew Clark (moderator), Editor and Publisher of Broadband Breakfast
Kevin Donnelly is Vice President for Government Affairs, Technology and Strategic Initiatives at the National Multifamily Housing Council (NMHC) and represents the interests of the multifamily industry before the federal government focusing on technology, connectivity, risk management and their intersection with housing policy. Kevin is a part of NMHC’s Innovation and Technology team and leads its Intelligent Buildings and Connectivity Committee. Kevin has spent over 15 years in the public policy arena at leading real estate trade associations and on Capitol Hill. Kevin received his BA from Rutgers University and his Masters in Public Management from Johns Hopkins University.
Jenna Leventoff is a Senior Policy Counsel at Public Knowledge, where she focuses on broadband deployment and adoption. Prior to joining Public Knowledge, Jenna served as a Senior Policy Analyst for the Workforce Data Quality Campaign (WDQC) at the National Skills Coalition, where she led WDQC’s state policy advocacy and technical assistance efforts on state data system development and use. She also served as an Associate at Upturn, where she analyzed the civil rights implications of new technologies, and as Manager and Legal Counsel of the International Intellectual Property Institute, where she led the organization’s efforts to utilize intellectual property for international economic development. Jenna received her J.D, cum laude, and B.A from Case Western Reserve University.
Pierre Trudeau is President and Chief Technology Officer, Positron Access.
Drew Clark, Editor and Publisher of Broadband Breakfast, also serves as Of Counsel to The CommLaw Group. He has helped fiber-based and fixed wireless providers negotiate telecom leases and fiber IRUs, litigate to operate in the public right of way, and argue regulatory classifications before federal and state authorities. He has also worked with cities on structuring Public-Private Partnerships for better broadband access for their communities. Drew brings experts and practitioners together to advance the benefits provided by broadband. He is also the President of the Rural Telecommunications Congress.
As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.
National Non-Profit to Launch Joint Initiative to Close Broadband Affordability and Homework Gap
EducationSuperHighway is signing up partners and will launch November 4.
WASHINGTON, October 18, 2021 – National non-profit Education Super Highway is set to launch a campaign next month that will work with internet service providers to identify students without broadband and expand programs that will help connect the unconnected.
On November 4, the No Home Left Offline initiative will launch to close the digital divide for 18 million American households that “have access to the Internet but can’t afford to connect,” according to a Monday press release.
The campaign will publish a detailed report with “crucial data insights into the broadband affordability gap and the opportunities that exist to close it,” use data to identify unconnected households and students, and launch broadband adoption and free apartment Wi-Fi programs in Washington D.C.
The non-profit and ISPs will share information confidentially to identify students without broadband at home and “enable states and school districts to purchase Internet service for families through sponsored service agreements,” the website said.
The initiative will run on five principles: identify student need, have ISPs create sponsored service offerings for school districts or other entities, set eligibility standards, minimize the amount of information necessary to sign up families, and protect privacy.
The non-profit said 82 percent of Washington D.C.’s total unconnected households – a total of just over 100,000 people – have access to the internet but can’t afford to connect.
“This ‘broadband affordability gap’ keeps 47 million Americans offline, is present in every state, and disproportionately impacts low-income, Black, and Latinx communities,” the release said. “Without high-speed Internet access at home, families in Washington DC can’t send their children to school, work remotely, or access healthcare, job training, the social safety net, or critical government services.”
Over 120 regional and national carriers have signed up for the initiative.
The initiative is another in a national effort to close the “homework gap.” The Federal Communications Commission is connected schools, libraries and students using money from the Emergency Connectivity Fund, which is subsidizing devices and connections. It has received $5 billion in requested funds in just round one.
Steve Lacoff: A New Standard for the ‘Cloudification’ of Communications Services
The cloudification of communications services makes it easy to include voice, data, SMS, and video within any existing service.
The line of demarcation between what has traditionally been considered a telecommunications service was once very clear. It was tangible – there were wires, end points, towers, switches, facilities. Essentially, there was infrastructure required to relay voice or data from point A to point B.
Today that line is fuzzy, if not invisible. The legacy infrastructure remains, but an industry of cloud-based services that don’t require the physical connections has exploded. Voice, data, SMS, and video conferencing can now be conveniently delivered OTT. Enabled by simple API integrations, businesses can embed just one of these services or a complete communications platform-as-a-service (CPaaS) into an app, service, or product.
Cloudification is a game changer
This “cloudification” of communications services makes it easy to include voice, data, SMS, and video within any existing application, product, or service. These are essential components for many business models.
Consider these services we have come to rely on in our daily lives: food or grocery delivery, ride services, and business and personal communications. These require multiple methods of communication with shoppers, drivers, co-workers, watch party groups, and external business partners.
The exciting news is there is no end in sight. Use cases will continue to evolve and growth will continue to skyrocket. The scale cloud delivery accommodates is massive. These untethered, easy to embed communications services are a critical differentiator for both business-to-business and business-to-consumer buyers, and the lifeblood of the businesses providing both the end user subscriptions and the APIs.
In fact, one industry juggernaut saw H1 YoY video application service demand grow nearly 600% in 2020.
Not surprisingly, as business demand for these services increases smaller CPaaS players continue to enter the market to quickly snag market share. According to a recent IDC study, “the global market revenue for CPaaS reached $5.9bn in 2020, up from $4.26bn in 2019, and is expected to reach $17.71bn by 2024.”
Merger and acquisition activity is aligned with this hockey stick growth forecast. Large telcos, SaaS providers, and even other CPaaS providers are all on the hunt. Whether they want to add additional features to punch up their products or eliminate the competition in a very tight, nuanced market, the end game is clear – as the market expands, the players will ultimately contract leaving only the most competitive offerings.
Don’t let communications tax take you by surprise
One of the least understood risks when adding cloud-based voice, data, SMS, or video conferencing to an existing product or service is new eligibility for and exposure to the complex world of communications taxation. Making mistakes can get costly very quickly.
Here are some of the key pitfalls to keep an eye on:
- Expanded nexus: Understanding communications tax nexus is different – and exceptionally more complicated – than sales tax. There are approximately 60,000 federal, state, local, and special taxing jurisdictions, each with uniquely complex rules that tend to change at their own pace. Rules are very different for each service.
- More complex calculations: The more communications services you provide via API, the more complicated communications taxes will be. Each feature can be taxed at different rates in each individual jurisdiction, or the whole bundle can be taxed at one rate. It’s critical to monitor monthly to avoid audit issues.
- Maintaining overall compliance: Just as tax rates and rules need to be maintained, so must tax and regulatory filing forms in each jurisdiction. Some of these are very long and require significant detail. They must be filed in a timely, accurate cadence to avoid additional audit risk.
Bottom line: Don’t assume, be prepared! As these communications services become more pervasive a larger swath of technology providers will find themselves liable for communications tax. The more your business falls behind, the more it can cost you.
It pays to be proactive and prepared. Tax and legal advisory experts can help determine your level of risk, and tax and compliance software providers can help you keep up with changing rules and regulations. Don’t underestimate the ongoing value of networking with peers who are either struggling to answer the same questions or have already overcome the hurdles you’re facing today.
Steve Lacoff is General Manager of Avalara for Communications. With a focus on data, VoIP, and video streaming, Steve has spent 15 years in various product and marketing leadership roles in communications and technology industries, including Disney’s streaming services and Comcast technology solutions. Steve now drives business strategy on today’s changing industry landscape and associated tax impacts. This piece is exclusive to Broadband Breakfast.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to email@example.com. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
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