Thursday 19 September 2013

Duh! Cameron's War on Porn Reaches New Heights of Stupidity

When I was a lad in the late 1970s there was a story in the papers about the entertainer Bob Monkhouse being charged with trying to defraud British film companies. The charges related to his rather quaint and charming habit of importing reels of classic films from other countries which he could not buy in the U.K. This was not pornography but most likley old Buster Keaton films or similar. In the days before video cassettes  and DVDs you had to watch films om actual reels of film- not something that most people in the U.K. could afford to do so importing your own movies was not something that most people could do.
Of course that case is laughable in todays age when you can buy almost anything from anywhere in the world and apart from the occasional V.A.T. charges you are free to use your credit card anywhere and have anything from decorative tea cosies to autographed baseball cards delivered to your home- AT LEAST AT THE MOMENT.
However, Camerons latest wheeze to stop internet porn threatens a return to internet feudalism.
When David Cameron announced his porn filtering plans a few months ago it was evident to most people that he knew very little about how the internet works. His latest whiz shows that he doesn't understand anything about banking either. 
His current plan is that banks and card companies will be asked to decline offering merchant services for U.K. Customers to companies which allow people in the U.K. to access explicit content free on their sites. This is because children may be able to view this material- which they ought not to be able to do of course if his porn filters gambit actually works.
The problem comes when you start to look at the detail. Firstly, much internet content of all types is free. It relies on citizens sharing their videos with others and the sites are supported by advertising. As a quick plug if you visit my Youtube channel you can see some fun vidoes from my recent holiday in Greece. Clearly, the sites where people are most likely to get free access to explicit material will not be using credit cards anyway. 
The article in the Telegraph makes reference to sites operated outside the E.U. This suggests that there may be some legal impediment to him enforcing this on EU sites. This raises the difficult issue that much of the international trade in pornography is based in countries like Germany, Holland and Scandinavia whom are all in the E.U. - Double Duh!
However, the glaring issue here is that web operators based in foreign countries will have their merchant services provided by the foreign banks who use the Visa, MasterCard  etc payment networks. When a payment to such a site finally arrives in the account of a U.K. Citizen it will show up as a foreign transaction. Your bank will not know whether it is a restaurant bill, a payment for a bus ticket or anything else. If its a site in a country like Greece or Japan the original text of the company name may just look like a line of letters. How will your bank know what type of transaction this is. 
Furthermore, credit card companies have probably hundreds of thousands of merchants on their books. They will not know what kind of business half of them actually are and if they do realise it is a porn site then all the company has to do is set up another merchant account with an innocent sounding name.
Then there is the issue of perfectly legitimate companies and transactions being refused on incorrect grounds. The in international credit card business relies on huge numbers of transactions being processed rapidly and efficiently. If credit card companies  are going to have to start policing what U.K. card holders spend their money on then this will involve additional costs and probably tens of  thousands of disputed transactions. The costs of this will have to be passed on either to customers- through extra charges on all foreign transactions or charges to merchants when they sell to U.K. customers. Some foreign banks and traders may decide it is too costly to trade with U.K. customers and you may find your card being declined by foreign internet traders or when you try to use your card in a hotel or restaurant outside the E.U.
There will of course be a huge potential business opportunity for internet businesses which launder money to launder transactions for U.K. customers who want to pay money to foreign sites which are either correctly or innocently blocked to U.K. customers. This is a huge business opportunity for international criminals who will get access to bank accounts of ordinary U.K. citizens and potentially lead to more expensive fraudulent and disputed transactions. 
Cameron's latest plan is yet another exhibition of extreme naivety. 
More concerning is the fact that this latest plan is yet another intrusion into the day to day lives of people and businesses. Cameron has threatened banks with legislation if they don't co-operate. Once the precedent of telling banks who they can take payments from is established - it could be used for other purposes. For example, persuading banks to refuse payments from radical or alternative bookshops, people who sell drug paraphernalia and other categories of merchant who are not technically doing anything illegal.
 Interestingly, this latest wheeze comnes at a time when ATVOD is flexing its muscles. For those who don't know ATVOD is a 'self regulatory body support sand encouragement from Government'. It was originally set up to regulate TV on demand and to ensure that  customers were not ripped off. However, it is now starting to act as a censorship body and is trying to control what U.K. households can access on the net. As I have pointed out in my previous postings there are huge industry interests behind current plans to censor the internet. Film and media companies want to severely restrict  the number of channels through which U.K. citizens can access content to allow them to charge differential prices in different territories. Bob Monkhouse's predicament might not seem so quaint or unusual if we move towards a balkanised internet with a huge cyber firewall around the U.K.
Cameron's latest plan is doomed to failure for its stated intent but is also a dangerous invasion in free trade and commerce.

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