When Google bought YouTube, the conventional wisdom—expressed in op-eds, newspaper articles, and scary editorial cartoons —was that they'd also bought themselves a whole heap of copyright trouble. The New York Times used the phrase "litigation-laden landmine." Part-time copyright theorist Mark Cuban warned that YouTube would face the same copyright fate as Napster.
There's only one problem with these theories: the copyright law itself. Under the copyright code, YouTube is in much better legal shape than anyone seems to want to accept. The site enjoys a strong legal "safe harbor," a law largely respected by the television and film industries for the choices it gives them.
But the most interesting thing is where all this legal armor protecting YouTube—and most of the Web 2.0 (user-generated content) industry—comes from. It's the product of the Bell lobby—Google's bitter opponent in the ongoing Net Neutrality debates. So, while YouTube may be the creative child of Silicon Valley, it is also, as much, the offspring of Bell lobbying power.
Back in the early 1990s, when the "information highway" was the talk of the town, Hollywood and the recording industry worked hard to make Internet companies responsible for any and all copyright infringement that happened via the Internet. Jack Valenti, Hollywood's chief lobbyist, warned that without congressional action, "the information superhighway … will collapse the great wonder of intellectual property." The recording industry, for its part, dispatched Johnny Cash to rhetorically link Internet piracy and, yes, a "ring of fire."
This summer, Sen. Ted Stevens, R-Alaska, earned the bemused contempt of geeks everywhere when he described the Internet as "a series of tubes." But back in 1995, Hollywood was insisting that the Internet be characterized as "a bookstore." And a bookstore, unlike a series of tubes, breaks the law if it "carries" pirated novels. So too, Hollywood urged, Internet companies should be liable if they carry any illegal materials, whether the companies know it or not.
Had that view prevailed, there would probably be no YouTube today, and also no free blog sites, and maybe not even Google or Web 2.0. What venture capitalist would invest in a company already on the hook for everything its users might do? But, in one of the lesser-known turning points in Internet history, Hollywood never got its law. Its unstoppable lobbyists ran into an unmovable object: the Bell companies, who own those "tubes" over which the Internet runs. In the mid-1990s, fearing a future of liability, the Bells ordered their lobbyists to fight Hollywood's reforms, leading to one of the greatest political struggles in copyright history. (This paper provides a history of this and other struggles.)
Hollywood employs legendary lobbyists, like Jack Valenti, but when they ran into the Bells, it was like Frazier meeting Foreman. The Bells quickly put holds on all the legislation the content industries wanted. Telecom lobbyists like Roy Neel, a close friend of Al Gore (and later Howard Dean's campaign manager), went to Congress and began saying things like, the "copyright law threatens to put a damper on the expression of ideas on the Internet."
Facing stalemate, in 1997 the industries settled on a compromise: something called the Online Copyright Liability Limitation Act, which became Title II of the Digital Millennium Copyright Act of 1998 (§512 of the Copyright Code). It is this law that makes YouTube worth paying more than what you pay for its videos. And its long-term effects have been enormous—you might call §512 the Magna Carta for Web 2.0.
Why? Section 512(c) of the law applies to "Information Residing on Systems or Networks At Direction of Users." In 1998, that meant Geocities and AOL user pages. But in 2006, that means Blogger, Wikipedia, Flickr, Facebook, MySpace, and, yes, YouTube—all the companies whose shtick is "user-generated content."
Thanks to the Bells, all these companies are now protected by a "notice and take down" system when they host user content. That means that if Jon Stewart notices an infringing copy of The Daily Show on YouTube, Comedy Central can write a letter to YouTube and demand it be taken down. Then, so long as YouTube acts "expeditiously" and so long as YouTube wasn't already aware that the material was there, YouTube is in the clear. In legal jargon, YouTube is in a "safe harbor." Earlier this week, when YouTube took down 30,000 files after requests from a Japanese authors' group, that was §512(c) in action.