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Netflix Forms PAC to Lobby for SOPA-Like Bills

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Remember the online outrage over Congress’s proposed Stop Online Piracy Act, or SOPA?
The bill was ostensibly meant to safeguard intellectual property but in effect would have been so sweeping that it would, as noted constitutional lawyer Lawrence H. Tribe wrote, “undermine the openness and free exchange of information at the heart of the Internet. And it would violate the First Amendment.”
Web hosting company Go Daddy initially supported the bill, but later met with so much customer backlash that it swiftly withdrew its support. And after major pressure from the likes of Yahoo (YHOO), Google (GOOG), eBay (EBAY), and LinkedIn (LNKD), the House Judiciary Committee announced in January that it would postpone consideration of the legislation indefinitely, effectively killing the bill.
Of course, that doesn’t mean Congress has abandoned its plan to push through anti-piracy legislation. One new bill that is currently making the rounds in Washington is the Cyber Intelligence and Protection Act, or CISPA, which is supposed to help fight cyber attacks on the US. However, the digital rights advocacy group Electronic Frontier Foundation argues in a statement that the bill is essentially SOPA 2.0.

“It’s a little piece of SOPA wrapped up in a bill that’s supposedly designed to facilitate detection of and defense against cybersecurity threats. The language is so vague that an ISP could use it to monitor communications of subscribers for potential infringement of intellectual property. An ISP could even interpret this bill as allowing them to block accounts believed to be infringing, block access to websites like The Pirate Bay believed to carry infringing content, or take other measures provided they claimed it was motivated by cybersecurity concerns.”

Noting how a furious online campaign helped kill SOPA a few months back, the entertainment industry has recalibrated its strategy to ensure the passage of CISPA and other similar sweeping anti-piracy bills.
Take Netflix (NFLX), for example. reports that the video-streaming company has formed its own political action committee, and it’s called Flixpac.
Flixpac has been approved to dole out as much as $5,000 in campaign contributions per election to federal candidates. Presumably, Netflix will use this tool to lobby strongly for strong intellectual rights protection legislation.
The company has been increasingly aggressive in its lobbying spending in recent years. According to Politico, its 2011 federal lobbying spending was $500,000, a huge increase from the $20,000 it spent in 2009.
As notes, “At the dawn of the SOPA scandal, Netflix was among the entertainment industry titans to support the proposed bill, only to later alter their stance as 'neutral' amid massive public backlash.”
So, clearly, the formation of a political action committee was a nifty way for Netflix to avoid being directly implicated in the effort to get SOPA-like laws passed.
Opponents of SOPA must hope that Netflix’s lobbying efforts will be about as successful as its ill-fated attempt to spin off its DVD-by-mail services into a new company, Qwikster.

(See also: GoDaddy Feels the Wrath of Netizens for Its Pro-SOPA Stance)
POSITION:  No positions in stocks mentioned.