Closing the Loophole on Illegal Streaming
Author:  Howard Gantman
Date:  06/01/2011

A House subcommittee took a closer look today at a loophole in federal law that makes it more difficult to prosecute theft of films, TV shows, and other creative works. 

Here’s the problem: although criminals use both illegal downloading and streaming to distribute stolen online content, current federal law makes only one of those methods – downloading – a felony. 

When rogue websites steal and stream a motion picture, a TV program, or a live sports broadcast, the creators of that content are just as badly harmed, if not more, but the penalty to the thief might be substantially weaker because the lack of clarity in the law leaves prosecutors reluctant to pursue felony charges. 

Today, the House Judiciary Subcommittee on Intellectual Property, Competition, and the Internet heard testimony from Register of Copyrights Maria Pallante, Copyright Alliance Executive Director Sandra Aistars, and our own Michael O’Leary on the serious threat illegal streaming poses to content creators and the need for Congress to take action. 

Some highlights from their prepared testimony:

Ms. Pallante said:

“Although streaming can implicate various exclusive rights, our current law could potentially apply vastly different penalties to this conduct simply based on the unique technology involved and regardless of the ultimate result – the illegal and unauthorized dissemination of copyrighted works. The Copyright Office believes that this disparity deserves consideration as Congress considers whether to amend the criminal copyright statutes to address streaming that causes serious harm to the legitimate market for performances of works of authorship.

“… Copyright policy is never finished. As technology makes it possible for authors to deliver their creative works in new formats and through new platforms, nefarious actors devise new ways to play the spoiler, sometimes seeking to divert profits and amass wealth illegally, other times merely to bask in the glory of interfering with and doing great harm to the investments of others. Congress has repeatedly legislated to confine these bad actors and hold them accountable, including giving prosecutors the tools necessary to do their jobs. By updating the law, Congress ensures the constitutional bargain that promotes the progress of our culture by giving authors the exclusive rights to their works for limited times.”

Ms. Aistars said:

“At a narrow level, the issue of making illegal streaming a felony crime is simply a technical clarification. Illegally disseminating other people's works without their permission should be punished the same way under law regardless of the technology used to accomplish such dissemination.

“On a grander scale, this issue is another phase in the battle between creators and lawful distributors of copyrighted works on one hand, and on the other parasitic websites that expropriate their property, diminish the compensation and pension and health benefits of creators and workers, and harm communities across the United States by depriving them of jobs and diminishing their tax revenues.”

Michael said:

“In addressing the subject of illegal streaming, it is important to note what this debate is not about. It is not a debate between technology and innovation and the creation of content. That is a false choice raised by too many people. This issue is really about favoring legitimacy over theft – about promoting and preserving creativity and production and punishing people who seek to profit through stealing the hard work of others. … The activity that is the subject of today’s hearing is not innovation, it is theft.”

Read the rest of Michael's prepared testimony here.

The Commercial Felony and Streaming Act (S. 978), introduced last month by Senators Amy Klobuchar (D-MN) and John Cornyn (R-TX), would classify the illegal streaming of copyrighted works as a felony, thereby standardizing its criminal classification with that of illegal P2P downloading.  Visit our Rogue Websites page at http://www.mpaa.org/roguewebsites for more information on this bill and the PROTECT IP Act, which would deter, prevent and root out websites that profit from trafficking in stolen content.