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Cyber Piracy: Can File Sharing Be Regulated Without Impeding the Digital Revolution?

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Cyber Piracy: Can File Sharing Be Regulated Without Impeding the Digital Revolution? CYBER PIRACY: CAN FILE SHARING BE REGULATED WITHOUT IMPEDING THE DIGITAL REVOLUTION? Thesis submitted for the degree of Doctor of Philosophy at the University of Leicester Michael Robert Filby School of Law University of Leicester May 2012 Cyber Piracy: Can File Sharing be Regulated without Impeding the Digital Revolution? Abstract This thesis explores regulatory mechanisms of managing the phenomenon of file sharing in the online environment without impeding key aspects of digital innovation, utilising a modified version of Lessig’s modalities of regulation to demonstrate significant asymmetries in various regulatory approaches. After laying the foundational legal context, the boundaries of future reform are identified as being limited by extra-jurisdictional considerations, and the regulatory direction of legal strategies to which these are related are linked with reliance on design-based regulation. The analysis of the plasticity of this regulatory form reveals fundamental vulnerabilities to the synthesis of hierarchical and architectural constraint, that illustrate the challenges faced by the regulator to date by countervailing forces. Examination of market-based influences suggests that the theoretical justification for the legal regulatory approach is not consistent with academic or policy research analysis, but the extant effect could impede openness and generational waves of innovation. A two-pronged investigation of entertainment industry-based market models indicates that the impact of file sharing could be mitigated through adaptation of the traditional model, or that informational decommodification could be harnessed through a suggested alternative model that embraces the flow of free copies. The latter model demonstrates how the interrelationships between extant network effects and sub-model externalities can be stimulated to maximise capture of revenue without recourse to disruption. The challenges of regulating community- based norms are further highlighted where the analysis submits that the prevalence of countervailing forces or push-back from the regulated act as an anti-constraint to hierarchical and design-based regulation, due to an asymmetry between legal, architectural and traditional market-based approaches, and effective control of the file sharing community. This thesis argues that file sharing can be regulated most efficaciously by addressing this asymmetry through alternative market-based strategies. This can be influenced through extending hierarchical regulation to offer alternative legal and norm-based models that complement, rather than disrupt, the community-based norms of file sharing. Thesis submitted for the degree of Doctor of Philosophy at the University of Leicester Michael Robert Filby May 2012 2 Acknowledgements This thesis is dedicated to my parents, Alan and Patricia Filby, whose unending support has made this endeavour possible. Many thanks go to Barbara Bogusz of the School of Law, University of Leicester for her expertise and assistance in the writing of this thesis in her capacity as project supervisor. 3 Table of Contents Abstract ................................................................................................................ 2 Acknowledgements .............................................................................................. 3 Chapter One: Introduction ................................................................................ 8 Introduction ............................................................................................................................... 8 Methodology ........................................................................................................................... 11 Theoretical Basis ................................................................................................................. 11 Research Techniques ........................................................................................................... 14 Key Terms ............................................................................................................................... 16 Research Overview ................................................................................................................. 18 Hypothesis ........................................................................................................................... 18 Thesis Structure ................................................................................................................... 19 Chapter Two: The Legal Regulation and Hierarchical Control of File Sharing ............................................................................................................... 26 Introduction ............................................................................................................................. 26 The Origins of Statutory Copyright ........................................................................................ 26 The Copyright, Designs and Patents Act 1988: Civil or Criminal? ........................................ 29 Commercial Scale ............................................................................................................... 29 The Threshold of Prejudicial Affect .................................................................................... 32 Applying Legal Regulation to Individual Non-Commercial File Sharers .............................. 42 Site Blocking ....................................................................................................................... 42 Direct Action against Alleged Infringers through Speculative Invoicing ........................... 45 The Digital Economy Act 2010: Increasing the Ease of Enforcement ................................... 51 The International Framework of Intellectual Property Protection .......................................... 58 The Influence of Extra-Jurisdictional Authorities in UK Regulation ..................................... 65 Mapping Legal Regulatory Approaches ................................................................................. 73 Conclusion: Mapping Legal Approaches onto the Regulatory Spectrum ............................... 79 Figure 1: UK and US Legal and Hierarchical Approaches on the Regulatory Spectrum .. 79 Chapter Three: Regulating with Design-Based Code on the Physical and Logical Layers ............................................................................................ 82 Introduction ............................................................................................................................. 82 Regulation Applied to the Institutional Ecology through Layering ........................................ 83 4 Regulating the Logical Protocols and Architecture of the Internet ......................................... 86 Transposing Physical Architecture as Regulation to the Networked Environment ................ 90 Using the Law to Enforce Regulation by Code....................................................................... 92 The First Generation: Napster ............................................................................................ 92 The Second Generation: Gnutella and FastTrack-based Networks .................................... 93 The Third Generation: BitTorrent ...................................................................................... 95 Figure 2: Tracker Querying ................................................................................................ 96 Figure 3: Uploading to and Downloading from the Swarm ............................................... 97 Figure 4: BitTorrent File Distribution ................................................................................ 98 Using Code to Enforce Regulation by the Law..................................................................... 101 Using Code to Circumvent Surveillance and Detection ........................................................ 103 Who is Infringing? ............................................................................................................ 104 What is the Infringement? ................................................................................................. 110 Where is the Infringement Taking Place? ......................................................................... 112 Using Code to Circumvent Enforcement .............................................................................. 113 Site Blocking ..................................................................................................................... 113 Technical Measures: Throttling / Disconnection .............................................................. 117 The Threat of Plasticity to Design-Based Influence ............................................................. 118 Conclusion: Mapping Design-Based Approaches onto the Regulatory Spectrum ................ 125 Figure 5: Design-Based Approaches and Constraint on the Regulatory Spectrum ......... 125 Chapter Four: Market and Competition-Based Approaches to Regulating File Sharing .................................................................................. 128 Introduction ........................................................................................................................... 128 The Decommodification of Informational Property.............................................................. 130 Impeding the Gale of Creative Destruction .........................................................................
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