Hi Dave,
As much as I liked this article, I don't
believe that it answered Gordon's questions:
"Why do we need ICANN in the first place?"
"What is it going to take before you say: Esther and Mike -
you have failed the process. You and ICANN are outta here."
Also, I'm suprised that it is taking this
long to provide some scenarios about why we
must support *this* ICANN, warts and all.
Haven't these scenarios already been written?
Jay.
At 09:10 PM 9/14/99 , David Farber wrote:
>[Richard J. Solomon is the Chief Scientist of the UPenn Center for
>Communications Technology and Policy and the co-author with Lee
>McKnight and Russell Neuman of The Gordian Knot: Gridlock on the
>Information Highway (MIT Press, 1997)
>
>Would the U.S. Government regulate the Internet? And how will this come about?
>
>"Richard J. Solomon" <[EMAIL PROTECTED]>
>
>I've answered the first question already: it is na�ve to think that
>the Federal Government (not to mention the other 191 world
>governments) won't impose regulations on the Net, and it is na�ve to
>think that any such infrastructure with the threat to completely
>influence society and change power relationships - as advertised by
>the Net's own hypists and promoters - can possibly avoid
>entanglements with the Government. To think that cyberspace doesn't
>follow the rules of political power as demonstrated over centuries of
>human civilization is to exhibit a complete ignorance of history and
>social behavior. The rules are quite simple, though the execution is
>always very complex:
>
>1) as in nature, power abhors a vacuum;
>
>2) all politics is local (sic, Tip O'Neil), especially democratic politics.
>
>That stated, I first offer a disclaimer before addressing the second
>question of how (& when): I do not necessarily think that government
>regulation is always to the good, nor knowing how complex and
>all-embracing web technology is (and will become even more so) do I
>think that regulation will work to achieve either the goals of
>government or the public interest. There will be many cases of
>enacting Laws of Unintended Consequences - indeed with the Telecom
>Act of 1996, we have some good instances of that already. The problem
>as I read history is that you often get what you don't want if you
>ignore the problems (whether you get what you need is moot).
>
>What, then, is the historical evidence for regulatory inevitability?
>And how may these parallels and precedents evolve for something
>admittedly as unique as internetted digital processors? In the United
>States federal influence over infrastructure was anticipated right
>from the beginning, with the Commerce Clause in the Constitution
>reserving certain powers to the central government which affect
>interstate commerce. Control of the currency was one of them, with
>the clear understanding that monetary devices can make or break a
>union. Only the Federal government may coin value - e-currency
>notwithstanding. My best guess is of all the things that can bring
>Federal oversight of the Net, things that have to do with creating
>and capturing intrinsic value will be the straw that breaks - either
>e-money, or gambling, or stock market Ponzi schemes, or the right to
>tax.
>
>But there are more powerful historical scenarios. I will describe in
>brief take four relevant cases, three leading to regulatory
>intervention and one which delayed significant governmental
>intervention, but finally succumbed. All exhibit the two basic
>principles of filling a power vacuum and locality.
>
>The railroads began as small-scale, quasi-governmental/private
>businesses. As scale increased to meet demand these hybrid entities
>ran into financing constraints. The general solution was to privatize
>these nascent firms to raise capital, which as an unforeseen
>consequence created new forms of private monopoly powers, new centers
>for monopoly rents, and led to other more insidious practices. Yet
>these new cartels, with unrestricted ability to hike rates and
>control traffic, still would not risk capital for frontier
>infrastructure - so they lobbied for land-grants and cash handouts
>from the Federal and state governments, leading to further abuses of
>the public purse, bribery, corruption, and a pretty awful
>transportation mess by the late 19th Century. Countervailing powers
>eventually enabled government to rein in the railroads, power
>emanating from a complex "strange bedfellow" matrix of shippers,
>suppliers, farmers (more than 80% of the electorate in the 1880's),
>and even railroad magnates and financiers themselves. A few violent
>railroad wars, with real guns, and real deaths, may have helped
>convince more responsible railroad executives that stability and
>business practice moderation might be a win-win. Yet, attempts at
>self-regulation were an abysmal failure, so finally the national
>government was invited to act, though at first with a very light hand.
>
>But politics does not proceed in isolation -- before the Federal
>Interstate Commerce Act was passed in 1887 (forming a commission that
>initially had no real power except to collect data and publicize
>abuses), something else happened to alter the polity's mindset. A
>crisis was needed to change things. Its nature only indirectly
>concerning transport carries an important historical lesson for the
>evolution of infrastructure regulation, the Web included.
>
>In the late 1870s there were periods of famine in the growing
>metropoli of the Midwest, despite crop surpluses - a systemic
>infrastructural problem. One powerful cartel, the Munn Company,
>hoarded grain in their Chicago warehouses during a particularly bad
>period, setting prices so high that the average city dweller couldn't
>afford to pay. Up to then, the principles behind the Commerce Clause
>allowing rules to regulate commerce for the public welfare had rarely
>been tested in a broad sense. The nice words in the Constitution's
>preamble had become distorted too, with key public rights
>progressively transferred to private control, as in the use of
>eminent domain by railroads to condemn property for rights of way.
>Rate regulation was difficult to achieve; anti-monopoly regulation
>was equally ineffective, save to inhibit state monopolies; and
>service regulation took the form of transferring police powers to
>railroad firms (conductors were - and are - policemen, and were even
>armed in those days to maintain order, enforce fare collection, and
>sometimes to break strikes).
>
>The crisis brought by Munn set one of the major legal turning points
>in our 200-year history: by withholding grain from the market the
>firm brought on violent attacks by hungry citizens; the Governor of
>Illinois called out the militia, and instead of protecting the grain
>elevators, as had been expected from past experience, forced them
>open to feed the populace. The U.S. Supreme Court (Munn vs. Illinois,
>1877), ultimately established the right of government to protect the
>public welfare through due process regulation of any form of commerce
>which crosses state boundaries -- and almost anything (except, it
>seems, local telephone service) affects interstate commerce,
>especially starvation. Munn leads directly to the environmental laws
>of today, to food and drug regulation, to radio and television
>regulation, and indeed, to protect the public weal, to the
>Communication Decency Act, and to just about whatever the Feds might
>want to do with the Internet which is about as interstate as you can
>get. The CDA may be unconstitutional for other reasons (we're all
>awaiting the Court's decision on that), but we should remember that
>even the First Amendment does not sanction false warnings of fire in
>a crowded theater, fake stock manipulations, or practicing medicine
>or law without a license.
>
>Munn clearly fits the pattern of a local disturbance filling a power vacuum.
>
>By 1910, the set of weak Federal commerce and antitrust laws began to
>get real teeth. The politics behind the Mann-Elkins Act of that year
>was again large shippers, small businessmen and bankers who still
>yearned for stability, supported by a Republican President and a pro-
>business Congress. But just when transport technology began its
>inevitable shift to motor trucks and automobiles, instead of
>stability railroads got a high level of meddling from bureaucrats -
>severe regulation down to the shape of wheel profiles and coupling
>devices, maximum speeds, signal design (for safety reasons, of
>course, and eventually several billion (that's "b" as in giga)
>tariffs filed for every conceivable product and variation thereof.
>After some 70 years, and devastating technological and financial
>straightjacketing, regulation was almost completely abandoned (except
>for the safety aspects) because it simply didn't work.
>
>By then, more than half of our railroad mileage was abandoned, and
>employment dropped to a mere fraction of the prewar era. Two
>nationalizations were attempted, first in World War I, and again at
>the end of the regulatory era in the 1970s. There were numerous
>bankruptcies of major firms that were once U.S. leaders.
>
>The railroads have now somewhat recovered, with much
>transcontinental, now intermodal, freight back on the tracks, but the
>nation paid for wreaking vengeance on the ghost of 19th Century
>monopolies. We have virtually no passenger service equivalent to the
>highspeed trains of Europe or Japan, and the expensive Interstate
>Highway netowrk would have been more useful and efficient as a
>complementary rather than a substitute transport system. The
>political process that began with simple, somewhat naive regulatory
>reporting, and the best of motives, went out of control at just the
>wrong time. How was the Congress in 1887 to know that some incipient,
>weird device using Otto cycle technology being tested on German
>streets would having any bearing on their well-lobbied efforts to
>rein in the railroads? Localism called for regulation, and greed bred
>a power vacuum.
>
>The ICC seemed such a good idea to handle the extremes of capitalism,
>that it set the pattern for other regulatory efforts, especially that
>of radio which in the 1920s set a new standard for industry-led chaos
>in their approach to spectrum use. A Republican Secretary of
>Commerce, Herbert Hoover, pushed the Federal Radio Act of 1927 to
>allocate the spectrum and reallocate a set of industrial cartels in
>electronics, separating two-way wireline telephone carriage from
>one-way radio broadcasting.
>
>In the long run this well-meaning but anachronistic law served to
>enforce network monopolies and restrict technological innovation. Yet
>an earlier effort by the Federal Government to manage a different
>radio technology was an immense success: the Navy got into radio
>regulation in 1910 because of safety at sea (before the Titanic
>disaster) and this precedent encouraged the Wilson Administration
>after World War I to appropriate British and German radio assets and
>form the Radio Corporation of America (RCA) as a patent cartel owned
>in part by the U.S. Government, General Electric and United Fruit. A
>complicated story that began before radio broadcasting as we know it
>had even been envisaged (see The Gordian Knot for details). Again,
>the Feds were invited by industry to fill a power vacuum, but
>localism here took a back seat to national security - another lesson
>we should not ignore.
>
>The fourth example of creeping regulation is the exception that
>surely proves the rule: AT&T had managed to use its political muscle,
>and more important, political acumen, to prevent effective ICC
>regulation as authorized by the 1910 Mann-Elkins Act. By making
>critical compromises on their monopoly interests and taking a unique
>tack towards localism - public service (and lots of effective public
>relations) they kept the Feds at bay, but not forever. The vacuum leg
>of their strategy (no pun intended) was constructed by filling
>technological gaps quite effectively.
>
>This strategy worked well for some 70 years, but eventually
>anti-trust actions (which dated back more than 70 years) caught up
>and divestiture came in 1984 (under a Republican president, funny how
>those things are timed). AT&T's smarts had much to do with its
>legendary leader, Theodore Vail, who started his career in the
>railroad business and learned a few things about governments,
>bureaucrats and regulation. He set a business philosophy that was
>able to withstand pressures for nationalization (except for a brief
>period at the end of WW I) and technological meddling, with minimal
>financial scrutiny for decades, but the Federal and State governments
>never let up, and reckoning eventually arrived. Had AT&T pretended
>that the government would never get involved in their business and
>had not adopted an effective defensive posture, the U.S. long ago
>would have had a PTT like most of the world's sovereign states.
>Indeed, AT&T could act like a government - funding risky
>technological research under rate base regulation, enforcing
>interconnection standards, and even representing the government in
>international fora. Such a trick would be difficult to repeat today,
>though there are some that would try.
>
>Which brings us back to the Internet. The Net - or rather, the Web -
>is pretty frightening to power brokers (and lots of other folks), as
>it is fun to the rest of us. Communications, particularly realtime,
>networked communications has this tendency to intrude everywhere in
>civilized life. It is not for nothing that emperors, kings,
>potentates, strongmen of all kinds, and representative governments,
>to boot, are sensitive as to whom disseminates, invents, controls,
>and uses information. We may think the U.S. is immune to such impure
>and fascistic behavior, but we don't have a First Amendment because
>the Founders and state assemblies were ostriches back in 1789. The
>First Amendment exists because our government is very sensitive to
>the uses and abuses of information. The Net is not just wired and
>optical infrastructure; the battle for eyeballs is not whether hybrid
>fiber-coax, copper or radio wins; with interactive hypermedia things
>are already different.
>
>When all this internetting started some two decades ago, some of us
>said that TCP/IP is more than just bits, that this novel way of
>storing-and-forwarding electronic pulses will destabilize not only
>the conventional telecom industry, but virtually everything that
>communicates, which is virtually everything. So I will add one more
>political aphorism to vacuums and locality: "A revolution is not a
>dinner party (Mao Tse Tung)."
>
>The dinner party is over. The Government has guns - the computer
>firms (unlike the railroads) do not. We may not like it and I think
>it will be a tragedy if not a travesty, but governments will
>intervene when crises erupt - their constituents will demand it. And
>as American history shows, constituencies can be quite strange and
>come out of nowhere with little warning. Republicans more often than
>Democrats bring key anti-monopoly actions; Democrats tend to finance
>innovations (and revolutions); either way, strange events and
>bedfellows are hard to predict, or avoid.
>
>Right now, despite the hype and stratospheric IPOs, the Net really
>has very little economic clout. Shopping is miniscule, porn is far
>less visible than what we see on commercial television, it's hard to
>determine what impact the Web will have on elections, and few
>electrons are creating legal monetary tender - so far. So, so far,
>there is a some noise (& bills) calling for regulation, but nothing
>to push it over the edge. That can change, and change fast.
>
>Here, then, is a list, in no particular order, of crises and events
>that may alter the Net's power equation. With the past as our guide,
>whatever happens, it will likely be messy, ineffective, disruptive,
>and sometimes downright silly, but will surely come and we would be
>ahead if we work the scenarios out in advance:
>
>1) money: e-cash, e-shares, e-taxes, and variations thereof.
>Governments must control the money flow. It's their essence.
>
>2) scary content - use your imagination, there's lots to be scared
>of. Take disinformation as a starter.
>
>3) The inability for the chaotic Net to sustain basic operations - IP
>addresses, hostnames, & things that make no sense but make a good
>story to motivate politicians.
>
>4) attempts by lesser entities than the state to move in and take
>control, and then abuse privileges that come with monopoly rents -
>money (again), offensive content (offending the monopoly, for
>example), etc.
>
>5) attempts by extraterritorial entities to gain control (we still
>have strong anti-foreigner laws about content, more ignored than
>enforced, but on the books).
>
>6) something no one has thought of, and therefore most likely to
>creep up on us, like Munn's hoarding of grain during a famine. What
>essence may the Web hoard?
>
