TPP and Telecom News

(NOTE: Originally published June 20, 2013, this post was re-edited for public display, Sept. 20, 2013.  The IAG is no longer my interest group at the NYC chapter of the Graphic Artists Guild, and I am no longer an officer, volunteer, or member of the Graphic Artists Guild.)

If you’re interested in the big picture of copyright and IP policy, and wish to know a little bit about the political sausage-grinding that will likely have an impact on the graphic arts industry, not to mention the U.S. economy and citizen’s rights, here are a few items you might want to dig into:

Why Should I Care About the TPP? (Video by PublicKnowledge.org)

There’s additional background information on Public Knowledge’s TPP page.  If you watched the video or are already aware of MPAA’s and RIAA’s support for SOPA/PIPA and now TPP, then you’re probably not very comfortable with the Graphic Artists Guild’s support for them through their front group, the Copyright Alliance.  While the Guild is very quiet about its membership in the Alliance, please note how the Guild’s logo is prominently displayed on the Copyright Alliance Members’ page.

In addition to the TPP continuing to roll along, there have been two noteworthy events in the past several days;

Michael Froman is Confirmed by Senate as the New USTR (U.S. Trade Representative)

(Huffington Post, June 20, 2013.)  Michael Froman, President Obama’s pick for USTR, will be overseeing negotiations on TPP and upcoming trade deals between the U.S. and Europe.  He was overwhelmingly confirmed by the Senate, with all Republican senators voting yes, and only 4 Democrats voting no.  However, the dissenters Bernie Sanders (I-VT), Carl Levin (D-MI) Joe Manchin (D-WV) and Elizabeth Warren (D-MA), have some serious concerns about the current lack of transparency in trade negotiations and Froman’s lack of support for more public disclosure.

Confirmation Hearings for Thomas Wheeler, Nominee for FCC Chairman

I spent a couple hours watching C-SPAN’s coverage of the Senate confirmation hearing for nominee Thomas Wheeler on Tuesday. (C-SPAN Videos- Part IPart II)  While he appeared thoughtful and sympathetic to concerns across a wide spectrum of political viewpoints, (something all nominees have a tendency to do) I have more homework to do on him, since there will be some very large questions concerning copyright, net neutrality, corporate mergers, and god-knows what else coming before him as chair of the FCC.  His background as a lobbyist, investor, and corporate telecom executive has raised some eyebrows; see the New York Times editorial of May 08, 2013-  An Industry Man for the FCC.

Copyright Alliance News (3)

(NOTE: Originally published June 12, 2013, this post was re-edited for public display, Sept. 20, 2013.  The IAG is no longer my interest group at the NYC chapter of the Graphic Artists Guild, and I am no longer an officer, volunteer, or member of the Graphic Artists Guild.)

It’s obvious that most Guild members are far more concerned about those things that provide a direct benefit to their careers, such as creative and business skills training, than about a lot of stuff that falls under the broad heading of “advocacy.”  It’s entirely understandable; putting out better promotions brings in more work; enlarging skill sets lands better jobs; sharpening business practices really, really matters to your bottom line.  What’s happening in the Copyright law, Trade negotiation, and Tax Policy Jungles of Washington, D.C. is both extraordinarily complex and of indirect and uncertain consequence to your daily survival as a creative professional.  Who the heck can spare the time to make sense of it?  Particularly time that’s already stretched thin just trying to keep up on all the stuff having a direct impact?

Whether or not it matters all depends on what you think the Guild’s mission should be.  If you think the Guild should be your voice and advocate, dealing with what’s happening in the jungle so that you can concentrate on your daily critical tasks, then it does matter.

That brings us to current news and events involving the Copyright Alliance, an organization that the Guild supports both financially and by tacit endorsement as a member of the Alliance.   If you can find a few minutes, please read about what the lobbyists for the Copyright Alliance (a.k.a., the Nickles Group, LLC) have been up to.

AT&T’s Deregulation Campaign

As the company moves to Internet-based telephone service, it’s looking to shed regulatory obligations that benefit low-income Americans.
Leticia Miranda, June 10, 2013. The Nation Magazine.

“Since 2010, AT&T has been waging a deregulation campaign in several states across the country while aiming to move its traditional, wired telephone services to Internet Protocol (IP)-based services, which transmit voice communications digitally. With the help of corporate “bill mill” the American Legislative Exchange Council (ALEC), and support from companies like AT&T, state legislators have introduced a series of “model” bills aimed at preventing regulation of IP-based services in more than thirty states across the country, from Idaho to Georgia, Texas to New Hampshire.”

How are the regulatory changes that AT&T seeks bad for professional creators?  It takes sorting out and understanding a good-sized chunk of the economics and the history of telecommunications regulations. (Sure, like you have a whole lot of time to dedicate to that.)  Essentially what’s happening is that AT&T and the other major players in the communications game are questing for that ultimate goal in our not-quite free market system; the one really big principle that you were never taught in Economics 101, and that’s never, ever uttered by the serious people in discussions about economics: Providing the Least Amount of Goods and Services, While Charging the Most Possible.

As creators of content, our interests are served by having a broad and vibrant market in which to sell our products and services.  Unfortunately, the major telecom corporations are whittling away at regulations that preserve competition and keep costs under control, harming our base of potential clients and customers.  The terms we’ll need to agree to and the rates we’ll receive for our services are going to suffer in a market controlled by only a handful of corporations, who are working hard at maximizing their profits at the expense of service.  This is the reason SOPA was such a bad deal for creators; it would have placed legal weapons into the hands of the largest telecoms, enabling them to suppress their competition.  Reducing or eliminating net neutrality policies would likewise suppress competition, cut down on the number of our  potential clients, and raise costs for the mere transmission of content.  Dollars wasted on excessive transmission and access fees to phone and internet service are dollars not going to content creators.  Powerful telecoms using their lobbying muscle to rake in bigger profits while being allowed to provide service of lesser quality is not in our interest.

The Nation article points to one element of AT&T’s strategy, which is to shut out many consumers that are in rural or poor regions that are harder to provide service to, and are therefore less profitable.   From our standpoint, though, these are potential content consumers that are left out of the marketplace.   If you find the AT&T article too indirect and tiresome, however, or you need more background first, I highly recommend that you view the video available online of Bill Moyers’ interview of Susan Crawford, to get a clearer view of what’s going on.

Susan Crawford on Why U.S. Internet Access is Slow, Costly and Unfair.

Moyers&Company. February 8, 2013.

The lobbyists that represent the Copyright Alliance, who are supposedly looking out for the interests of “creative individuals,” are all from the Nickles Group LLC with only one small exception.  Simultaneously while representing the Alliance, the Nickles people are also representing: AT&T, COMCAST, and the MPAA, Motion Picture Association of America.  Yup, the same interests that are frequently doing bad things to the marketplace you depend upon.

In case you are not familiar with the Nickles Group, LLC, mentioned in other posts, they are a lobbying firm that Sourcewatch.org lists as a supporter of ALEC.

Reprographic Royalties

(NOTE: Originally published March 13, 2013, this post was re-edited for public display, Sept. 20, 2013.  The IAG is no longer my interest group at the NYC chapter of the Graphic Artists Guild, and I am no longer an officer, volunteer, or member of the Graphic Artists Guild.)

If you’re the insatiably curious type and actually took time to browse through the Guild’s 2011 LM-2 financial report to the Department of Labor, you might have been puzzled to learn that most of the Guild’s revenue did not actually come from member dues.  Not by a long shot; far and away the largest chunk of change the Guild received in 2011 is listed on page 4 of the report as simply “Other Receipts”:

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Statement-B_v02_370x

So what the heck is that $593,275 all about?  The “14” circled in red refers to Schedule 14:

sch14_v03_625x

Schedule 14 reveals that the real golden egg in the Guild’s fiscal basket is the $541,788 in Reprographic Royalties paid by the Authors Coalition of America (ACA).  Guild members who’ve been around a while probably have heard of them, but newer members are likely to be completely in the dark.  In my time at the Guild, there’s been very little open discussion about them; so to remedy this, here’s a very brief summary, which I’ll follow with links to more detailed articles that will give you a better picture of this very crucial part of the Guild’s finances.

Reprographic Rights- The Basics

Many countries have Reproduction Rights Organizations (RROs) that are given authority by their nation’s copyright laws to issue licenses and collect fees for the photocopying of copyrighted materials.  RROs collect money in two ways; from “title-specific” fees, generated when copyright owners are identified and can be reimbursed directly for the copying of their works; and from “non-title-specific” fees charged for copying without recording who the individual owners are.  This can happen where laws allow for the issuing of blanket licenses to institutions such as universities that want to photocopy large volumes of works without having to track each and every copyright owner. RROs collect and then redistribute non-title-specific funds to organizations that serve creative communities, so that artists and authors can at least benefit in some general way from the copying of protected works. These are the “reprographic royalties” that the Guild has been receiving.

There are many RROs around the world organized through the International Federation of Reproduction Rights Organizations (IFRRO).  Since copyright law varies from country to country, the collection and redistribution of money is complex; for the most part it’s done through bilateral agreements between RROs of different nations, based on IFRRO guidelines.

In the United States, we do not have an RRO established by the federal government;  however, IFRRO has designated the Copyright Clearance Center (CCC), a nonprofit corporation, to receive funds from other countries and redistribute the money to organizations that support creators in America.  The CCC gives a portion to the Authors Coalition of America, of which the Graphic Artists Guild is a member.

An article written by past Guild president Jonathan Combs is archived on the Guild’s website (no longer available) and gives a reasonable explanation of IFRRO, RROs, and reprographic rights money:

Foreign Reprographic Royalties: What They Are and Why They’re Important
by Jonathan Combs, Guild National President, 1998-2000
November, 2002

Note however, that in the article there’s mention of contractual limitations on the use of this money, making the situation a bit more complicated.  In addition, the following quote speaks to our current managerial issues at the Guild:

“Several important principles guide RROs in their work. One is the concept of transparency — to be as open about business dealings as possible. Rights-holders should have access to budgets, surveys, and other business practices to avoid mismanagement or misuse of RRO funds. Another is accountability. In addition to being represented on RRO boards, rights-holder organizations should be accountable to their members through elective and democratic processes.”

Given the lack of financial information that’s been provided to both the international board of directors and the membership, it’s hard for me to reach the conclusion that the Guild has been living up to these principles, and to have much confidence that we’ve been meeting the contract terms for usage of reprographic royalties.

For additional information, and some very stark and unflattering viewpoints on the Guild’s usage of reprographic royalties, here are a few links of interest.  The articles about the defamation lawsuit that the Guild brought against the IPA and Brad Holland have everything to do with how the Guild does or doesn’t use the royalty money, not to mention that the lawsuit is in its own right another very important subject that hasn’t been discussed much at the Guild.

Articles:

Animation World Network, August 24, 2010
Mind Your Business: Who is Keeping Your Royalties?
Mark Simon is as mad as hell about reprographic royalties.

Print Magazine / Imprint website
Illustration and the Law
Steven Heller, May 10, 2011
Interview with Brad Holland

Graphic Artists Guild Notice of Appeal (pdf)
April 28, 2011

Association of Medical Illustrators / Press Release:
Graphic Artists Guild Lawsuit Dismissed

Access Court Documents / Defamation Lawsuit.
eCourts / main page
(follow ‘WebCivil Supreme’ link; log in, then search for case index number 109149/2008)

Websites:

IFRRO

Copyright Clearance Center

Authors Coalition of America

———–

Let me wrap up by emphasizing one more time that if the Graphic Artists Guild is ever going to be a responsible advocate for artists and designers, and a good steward of the resources it’s entrusted with, there’s going to have to be a lot more sunlight around here, with many more members taking an interest in the governance of the Guild.

-Chris

More Alliance, Nickles, and Patent Troll News

(NOTE: Originally published Feb. 10, 2013, this post was re-edited for public display, Sept. 20, 2013.  The IAG is no longer my interest group at the NYC chapter of the Graphic Artists Guild, and I am no longer an officer, volunteer, or member of the Graphic Artists Guild.)

Geez, I didn’t have to lift a finger this weekend to find fresh news relating to our friends at the Copyright Alliance.  Within 10 minutes of sitting down with my coffee and the New York Times on Saturday morning, I came across Joe Nocera’s op-ed on patent trolls, Innovation Nation at War, a subject which I wrote about in my very recent post Copyright Alliance Update.

A short while later when I checked my e-mail inbox, I was presented with a link to Friday’s “Moyers and Company” program, Susan Crawford on why the U.S. Internet is Slow, Costly, and Unfair.    Bill Moyers interviews Susan Crawford, author of “Captive Audience: The Telecom Industry and Monopoly Power in the Gilded Age” who provides yet another unsettling view of the mischief that the backers of the Copyright Alliance and its parent, the Nickles Group LLC, are into:

Susan Crawford:

“What’s happened is that these enormous telecommunications companies, Comcast and Time Warner on the wired side, Verizon and AT&T on the wireless side, have divided up markets, put themselves in the position where they’re subject to no competition and no oversight from any regulatory authority. And they’re charging us a lot for internet access and giving us second class access.”

Crawford discusses the role these companies have had in actually stifling broadband access across America, and how their efforts to preserve and increase their profits are doing great economic and social harm.  To remind you, these are the same corporations that pushed for SOPA  (Stop Online Piracy Act) that similarly would have done great harm to the internet in the name of corporate profits.  You helped them, by the way; the Guild’s executive membership in their proxy, the Copyright Alliance, gave substance to their claims of “grassroots” support for their pro-SOPA lobbying efforts.

The small amount of digging I did this weekend was to follow up on Susan Crawford’s account of municipalities trying to create their own independent broadband networks being stymied by corporate-sponsored legislation.  Efforts by town and city governments to treat the internet as a vital utility rather than merely a luxury commodity, have been met by state legislatures who’ve passed laws banning them from doing this, which of course might endanger the monopolistic power and profits of the big telecom service providers.  This sounded to me like the work of ALEC (American Legislative Exchange Council), and a quick Google search turned up a number of articles confirming this, such as this one at ars technica, South Carolina Passes Bill Against Municipal Broadband.   If you’ve read my report on the Copyright Alliance, you might recall that its parent organization, the Nickles Group LLC, is a supporter of ALEC, and that ex-senator Don Nickles was a contributor to ALEC while serving in the senate.

A Big Question Mark.

(NOTE: Originally published Feb. 07, 2013, this post was re-edited for public display, Sept. 20, 2013.  The IAG is no longer my interest group at the NYC chapter of the Graphic Artists Guild, and I am no longer an officer, volunteer, or member of the Graphic Artists Guild.)

The following is why I’m of the opinion that a serious independent audit of the Guild’s finances is overdue.  A particularly stunning eye-opener in the LM-2 data is the amount of money listed under “Other Disbursements.”  Our 2011 LM-2 Annual Financial Report details expenses such as rent, employee salaries, copier leasing, newsletter design, printing, and etc.  There are, however, “Other Disbursements” entries found in the General Overhead, Union Administration, and Political Activities schedules, showing that in just 2011 alone, $217,000 was spent with no accompanying information whatsoever on payee or purpose.  That’s over one-quarter of all the money spent by the Guild in 2011.  I’m thinking that’s a lot of paper clips, coffee filters, or similar miscellaneous expenses that you’d expect might be categorized as “Other.”

LM-2_sch16_Political_HiLtLM-2_sch18_GenOverhd_HiLtLM-2_sch19_UnionAdmn_HiLt

My graphic breakdown of the 2011 LM-2  will save you some time in bringing the whole picture into focus.

-Chris

Copyright Alliance Update

(NOTE: Originally published Feb. 05, 2013, this post was re-edited for public display, Sept. 20, 2013.  The IAG is no longer my interest group at the NYC chapter of the Graphic Artists Guild, and I am no longer an officer, volunteer, or member of the Graphic Artists Guild.)

There just doesn’t seem to be an end to the mischief popping up in the news that keeps leading back to the Copyright Alliance and the Nickles Group LLC.  If you paid some attention to the high profile lawsuits involving Apple, Samsung, and other tech giants that made headlines this year, then you’ve likely heard the term “patent troll” which refers to companies that amass large libraries of patents, then proceed to make a tidy profit by suing manufacturers that arguably infringe on those patents.  Poorly defined, ambiguous software patents in particular have allowed trolls to threaten manufacturers with expensive lawsuits unless they agree to license the troll’s patents. In other words, trolls extort “protection money” from manufacturers in exchange for not suing.  NPR / National Public Radio’s “This American Life” has an excellent exposé of trolls in program #441, When Patents Attack.  There’s also a recent article posted by Mark Gibbs in Forbes, A Patent Troll Wants to Charge You for Emailing Your Scans!  that contains a summary of the business of patent trolling.

According to Mark Gibbs:

“From its original start as a rather sleazy extortion racket, patent trolling has evolved into a serious business model of which the biggest may well be Intellectual Ventures, a company founded by Microsoft’s former Chief Technology Officer, Nathan Myhrvold, and backed by a roster of the business who’s who to the tune of more than $5.5 billion.”

Now for the fun part.

Enter the Nickles Group, LLC, and their copyright boutique side-business, the Copyright Alliance.  

It turns out that for 5 years in a row, since 2007, Intellectual Ventures has been the Nickles Group’s #1 client.  And the Nickles Group has been Intellectual Venture’s #1 lobbying firm.  The primary contact listed on the lobbying reports for the Intellectual Ventures account is Cindi Tripodi, a founding partner of the Nickles Group, and the lobbyist who also represents the Copyright Alliance.  Cindi was actually listed as a Copyright Alliance staff member until September 2012, when her bio was removed from the Alliance’s website.  (This happened very shortly after my report ‘An Examination of the Copyright Alliance’ was distributed, which pointed out the connections between the Alliance and Nickles; but of course that’s merely a coincidence, . . )

Nickles Group top clientsBelow is a detail of the report filed by the Nickles Group on its lobbying for Intellectual Ventures; first quarter 2012.

lobby report; Tripodi and IV

Should any of this matter to you? Only if you care about where some of your dues money* to the Guild ends up, and who’s being consulted when Guild officers make decisions on advocacy.  Here is a detail from the Guild’s 2011 LM-2 Annual Financial Report to the Department of Labor.  Note the address, and where we’ve been sending $5000 every year.

Guild LM-2 shows Alliance addr=Nickles

Detail of the Guild’s 2011 LM-2, schedule 16, Political Activities and Lobbying.

 

(*National officers claimed that this statement is untrue, that the Graphic Artists Guild’s annual $5000 payments for membership in the Copyright Alliance have come from reprographic rights royalty money.  However, while I was a member of the Guild’s International Board of Directors, no document was ever produced that separated usage of dues from reprographic royalty funds.  This includes the official budget proposal documents presented to the International Board of Directors for the Guild’s November 2012 Annual Convention.  See my March 13, 2013 post Reprographic Royalties for some background information.)