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SOPA-PIPA impact on Small Business


Later today I'm planning on publishing the following article in the newsletter I sent for my day job, editor of Private Duty Today, an online business journal serving CEOs of home health agencies.

Here is the article in its entirety...
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I'm usually hesitant to express my personal political views. Private Duty Home Care owners cover the gamut from extremely conservative to extremely liberal, and everywhere in between.

Because of that, our official policy is to inform readers about the impact of legislation and its lawmakers on our businesses, but not spout opinion. We try to provide insight, but not influence.

However, I'm going to make an exception today. There are two bills about to go to legislative debate, one in the House and one in the Senate. While these two bills have broad bipartisan support, they have virtually no support in the eyes of the American public. OpenCongress.org which tracks users opinions on upcoming and past legislation, shows the bill at 98% opposed.

The bills are House bill HR 3261, Stop Online Piracy Act (SOPA) and Senate Bill S. 968, Protect IP Act (PIPA). I believe these bills are dangerous, and a legitimate threat to our businesses.

The bills are nearly identical. Here is a quick bullet list of the provisions.


  • It gives the ability of content creators (i.e. music industry, film industry, television industry, book publishers, etc.) to request a court order against foreign websites that pirate and republish their content.
  • It gives the federal government the ability to do the same for websites that are criminal or pose a threat to homeland security.
  • It gives courts the ability to shut down these websites at the DNS level or IP level, essentially shutting them down within the framework of the Internet.
  • Additionally, it gives courts the ability to do the same to any website providing support links or services to these illegal sites.


Okay, so now you're saying to yourself, "But Jason, this has nothing to do with me or my business."

I wish that were the case. In fact, it impacts every American. Here's how, and why.

First, a little history.

Prior to our last election, organizations such as Comcast, Verizon, and other telecommunications providers, in cooperation with the entertainment industry pressed for a bill that would allow them to choose what websites travel over their wires. This would allow companies to charge websites for access to their subscribers. It would essentially create a cable TV version of the Internet. A movement called Net Neutrality grew and the bills were shut down. The American people wanted the ability to access the entire Internet regardless of which service provider wired their homes.

In this election cycle the content providers funded election campaigns on both sides of the aisle heavily. They spent a total of $94 million on congressional campaigns for currently sitting members of Congress. This number doesn't include money spent on Senate campaigns. This also doesn't include the money poured into campaign coffers of candidates who failed to get elected. The real money spent could be double.

The SOPA and PIPA bills are how the entertainment industry expects to recoup those "donations".

There are three major problems with these bills that are significant. The third one will directly influence your business.

First, the laws won't work. Unfortunately, piracy is a multibillion-dollar industry, and electronic pirates understand the Internet better than any other group.


  • Shutting down websites is roughly the equivalent of plugging a hole in a dam with chewing gum. A typical pirate website survives 24 to 96 hours. There is a relatively good system in place for shutting them down, unfortunately, it's easy to rebuild them and hard to prosecute the actual criminals.
  • The federal government has no interest in shutting down sites that threaten homeland security. These websites give valuable information to the intelligence community. Additionally, the Patriot Act already gives them this power.
  • Most criminal activity conducted online is done through a collection of computers, not individual websites. Viruses identify computers that are unprotected and left connected. Bits of information are stored on tens of thousands of computers. When you download a pirated movie, that movie is not streamed from servers (which would cost the hackers money) but from individual computers known as zombies. Shutting down these individual PCs has absolutely no effect. This technology is used by hackers, spammers, and fishers. It's also, however used by many online games, by many universities, and even by companies such as Netflix that need to transmit huge amounts of data in a short period of time. The technology is legal and has legitimate uses, so they can't simply ban the software.



Second, potential for abuse is high. There are lots of scenarios where content creators would desire to shut down a website. Here are a couple potential examples of abuse.


  • A blogger creates a movie review video blog. He/she gives the film a bad review, using a snippet of the film in the example. This is known as sampling, and it's legal under the freedom of the press. However, if the copyright holder of the film sees it, a court order could have the entire blog shut down.  This would inhibit reviews of any content except by the organizations that the entertainment industry permits to use their content.
  • An individual author publishes a biography on a hot topic. The author spends several weeks researching and writing, and publishes it at no cost directly to e-book readers at Amazon and Barnes & Noble. This is a perfectly legal endeavor. However, a major publishing house, publishing a book on the same topic is able to convince a judge that this book may contain stolen information. The judge then sign a court order shutting down both Amazon and Barnes & Noble. These major websites will immediately remove the content to prevent the shutdown. Months later after a long court battle, the author has proven that his/her book is original and legal. Unfortunately, the major publisher has already developed their own work on the subject. After a long and expensive court battle, the author has missed opportunity for success.
  • The following example actually happened! Sen. Lamar Smith, the sponsor of this bill, used a photo on his website they downloaded from Flickr. The original photographer allowed free use with the stipulation that he received appropriate credit. Sen. Smith's website did not give him credit. Under the current law, the photographer would have been able to contact the website. The webmaster would either give the photographer credit, or remove the content. If this wasn't done the photographer could pursue civil action. However, with the new bill, SOPA, this photographer could have gone to a judge and received a court order. The court order could have shut down Sen. Smith's website for the duration of a legal battle. An individual photographer probably wouldn't bother, but someone competing for Sen. Smith's congressional seat would have certainly benefited.


This bill contains no provisions whatsoever for due process. Any organization that has persuasive powers with a single judge wields great power over the Internet. The real threat for abuse lies with the entertainment industry who is ensconced in politics.

Let's assume the law does work. Let's even say that the good people of America choose never to abuse the law. There is a third reason, and this is most important to you, why this is a bad piece of legislation.

Responsibility is placed at the domain level. Additionally, the law applies not only to the originators of pirated content, but additionally to support websites such as blog platforms, PayPal and other commerce venues, social networks and social bookmarks. Because of this responsibility, most major websites will have to make significant policy changes to prevent violating the US law. It's these policy changes that will affect your business. Here are some examples.


  • You produce a video commercial for your agency. You upload it to YouTube, and embed it on your website for free. Under the new law you either need to file copyright notices verifying that you own the content, which takes time and costs money, or you need to purchase hosting services and pay for bandwidth and technical support.
  • Under the law, you are unlikely to be able to post links on Facebook, Linked In or other social networks. These networks will have to much at stake to allow random links. You will end up using their services to create pages, and these pages will have to be screened for intellectual content prior to publishing. The process of using social networks will slow dramatically. Additionally, as this happens fewer and fewer users will rely on these networks.
  • You build a great website and have excellent search engine rank. However, Google's policy on linking will have to change. You will have to verify ownership of your content to get listed. Search Engine Optimization as we know it will cease to exist.
  • Your blog, currently hosted for free on Blogger or WordPress will now be screened to be certain that you own 100% of the content. Blogging platforms will become expensive to use.
  • Services such as Twitter and social bookmarking sites such as Reddit or Digg will no longer be able to allow user generated links, virtually eliminating usefulness.

It will become more difficult and more expensive to market any services or products online!

I've created a long list of very specific examples of how your favorite websites will be directly effected by this law. You can read it on my personal blog.

The entertainment industry including all major television networks, major film studios, record labels, book publishers and sports leagues all support this bill. They've made claims of losing money to piracy for more than three decades, starting in the days of recordable cassette tapes.

Here are the facts:


  • Every one of these industries benefit from piracy. People who steal movies and music tend to brag about it, generating hype. People who steal movies and music won't pay for it, they will simply steal something else if the content they want isn't available.
  • CD and book sales have dropped, however, devices for reading and listening are generating tremendous revenues. People are still spending money on entertainment, however, they have many more choices of content.
  • Today individuals and small companies can produce quality entertainment at a fraction of the cost, and published these products virtually for free. Advertising supports the vast majority of these platforms.
  • The banking industry also supports this bill because it will eliminate small businesses from using cheap online credit card processing such as PayPal. PayPal will be forced to verify that every product offered is not counterfeit or pirated.
  • Publishing platforms such as Kindle will only be open to people with verified copyrights. This means a long copyright process, or using a traditional publishing house.
  • Revenues from film are up substantially. Box office records have been set in spite of piracy. Online companies such as Netflix and pay-per-view paid huge dollars to content providers for streaming video. The DVD platform will be extinct within five years. Profitability for content is increasing dramatically because it no longer relies on first-time viewership in the theater nor first run on television. Small cable networks are realizing huge profits from original content.
  • Two of the top 20 shows watched on the Internet were never on television. The big four television networks are uncomfortable at the thought of legitimate competition online.


I urge you to please contact the two senators in your state and your local representative in Congress. Tell them three things:


  • SOPA and PIPA do not provide adequate due process.
  • Both bills will hinder all small businesses in marketing and increase expenses for small content providers.
  • Both bills will require significant policy change at every major website. These policies will inhibit freedom of speech, freedom of protest, and freedom to assemble. In this way they circumvent the Constitution.


Finally, make sure to tell your Senators and members of Congress that you are a voter. Tell them your party affiliation, because they need to recognize that members of their own party are against this bill. Tell them that you will vote against any member of Congress or the Senate that votes in favor of either bill.

There are catchphrases being thrown around by legislators. Here's what they may say, and the facts.


  • Stopping piracy and counterfeit goods is important. -- We agree. Piracy and counterfeiting are wrong, however neither bill will be effective in this war. Existing copyright, patent and licensing laws currently allow for civil action in many cases.
  • It only applies to foreign websites. -- Untrue. Because of policy changes required, it will affect every major website. Facebook last month surpassed 1 billion users. Facebook is nearly 3 times the size of the United States, and it's not even available in China, yet. Facebook, YouTube, Twitter, Google, eBay are American companies that have global reach. Any law affecting foreign websites directly affects Americans.
  • Homeland security depends on it. -- Untrue! A free and open Internet has been proven to enhance homeland security, not vice versa. In fact, in the countries where the Internet is censored, (China, Saudi Arabia, North Korea, Egypt, Libya, Iran and others) there have been more uprisings and civil unrest than in any previous time in our world history.
  • Jobs depend on it. -- Untrue! Yesterday Lamar Smith threw the word "jobs" into the mix for the first time. He recognizes that job creation is the single most important issue on Americans' minds. It is a ruse. The bill was not created to increase jobs. In fact, many jobs will be lost if some of our major websites are no longer able to earn revenue or suffer a reduction in revenues. Today the fastest-growing job sectors are in the technology industries. This bill actually hampered job growth.


Members of Congress and the Senate need to realize that lobbyists and donors certainly have influence in legislation, however Americans are not willing to stand for violations of basic freedoms.

Today you may have noticed Google, Wikipedia, WordPress, OpenCongress and many other websites have staged additional protests.

These bills have a significant chance of being passed because of bipartisan support. Additionally, most Americans are unenlightened when it comes to the impact. The only way we will be able to convince our legislature to do the right thing is to make it clear that their jobs depend on supporting their constituency, not their donors.

Obviously, I have strong opinions about the subject. I invite you to do your own research, and formulate your own opinions. If anything above doesn't make sense, or is inaccurate, I invite you to place your comments below, completely uncensored! I am in favor of healthy debate.

Sincerely,

Jason Tweed
Editor, Private Duty Today



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