Epic clash: Silicon Valley blindsides Hollywood on piracy

Mon Jan 23, 2012 11:54am EST
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By Sarah McBride and Lisa Richwine

(Reuters) - The massive online protest last Wednesday, in which Wikipedia and thousands of other websites closed down or otherwise protested and helped to kill controversial online piracy legislation, was widely heralded as an unprecedented case of a grassroots uprising overcoming backroom lobbying.

Yet a close look at how the debate unfolded suggests that traditional means of influencing policy in Washington had its place too. The technology industry has ramped up its political activities dramatically in recent years, and in fact, has spent more than the entertainment industry -- $1.2 billion between 1998 and 2011, compared with $906.4 million spent by entertainment companies.

The latest chapter in what has become an epic, decades-long battle between the two industries over copyrighted digital content began innocuously enough. Hollywood movie studios, frustrated by online theft that they claim already costs them billions of dollars a year and will only get worse, in 2010 started pushing for a law that would make it possible to block access and cut off payments to foreign websites offering pirated material.

In 2010, longtime industry friend Sen. Patrick Leahy, a Democrat from Vermont, introduced a bill, the Combating Online Infringement and Counterfeits Act, that passed the Senate Judiciary Committee unanimously but never went further.

In May last year, Leahy tried again, introducing his Protect IP (Intellectual Property) Act. In October, Rep. Lamar Smith, a Texas Republican who chairs the House Judiciary Committee, introduced a similar bill. The last major piece of copyright law, the Pro-IP Act of 2008, moved through Congress with little controversy, so the industry felt hopeful.

Through the end of September, Hollywood had outspent the tech industry 2-to-1 in donations to key supporters of measures it was backing. More than $950,000 from the TV, music and movie industries has gone to original sponsors of the House and Senate bills in the 2012 election cycle, compared with about $400,000 from computer and Internet companies, according to the Center for Responsive Politics.

Tech companies preferred backers of a narrower alternative bill. The computer and Internet industries gave more than $291,000 to supporters of that measure vs. about $185,000 from the content makers.

"They're both very powerful. They're all big players. They give a lot of money to politicians. This has to be a tough choice for many members of Congress," said Larry Sabato, a campaign finance expert who teaches at the University of Virginia.   Continued...