David Richard and all, Lets look at this a piece at a time here. (See more below) 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. All agreed here Dave and Richard, but can the enforce those regulations? I doubt t it. History has shown that governments have been poor enforcers of their own regulations over all. We only need to look at our own banking regulations over the past 10 years to see this quite clearly. Therefore I agree that governments will ATTEMPT to regulate the internet to some extent or another, but it is unlikely that these same governments can or are willing to equally enforce those same regulations or can for that matter. > 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). How very true. > > > 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. But the internet has proven that not only governments can coin value. And this is very disturbing to many and an opportunity for those the understand that without the public or in the case of the internet, the stakeholders playing a direct role, there is likely to be more and better value coined from many different sources. > 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. And to this day the railroads are still having trouble as is the Airline industry when it come to certain elements of those industries. The same pattern, although played out a bit differently is and will continue to occur with the internet. > > > 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? Regards, -- Jeffrey A. Williams Spokesman INEGroup (Over 95k members strong!) CEO/DIR. Internet Network Eng/SR. Java/CORBA Development Eng. Information Network Eng. Group. INEG. INC. E-Mail [EMAIL PROTECTED] Contact Number: 972-447-1894 Address: 5 East Kirkwood Blvd. Grapevine Texas 75208
