October 14, 2005

Don't get me wrong...

I don’t want anyone to think I’m about to become a crypto-socialist, so a quick clarification of my previous post. The correlation between “network freedom” and the right to bear arms is only a partial one.

Taking up arms is something that can be done unilaterally. A network is by its definition a collective effort, even if an emergent rather than centrally co-ordinated one. So it cannot be purely a personal “freedom”.

The right to bear arms is equally re-stated as a right not to have your arms taken away from you. It doesn’t mean anyone has to provide you with a gun. Network access is a positive outcome of economic activity over which there are rivalrous claims to finite resources, like network engineers. But you don’t (yet) own the network, so there’s no corresponding right not to be deprived of the use of your possessions. Bearing arms is really a negative freedom (something bad that won’t be done to you), whereas Net access is a positive freedom. Freedom doesn’t do free lunches.

As I have said before, price discrimination in competitive markets is your friend. Filtering can be used for price discrimination. Filtering is a symptom of how well the system is performing. In a mature telecommunications sector, such as wireline, it is a symptom of ill-health. In a nascent one, such as cellular access in the developing world, being only able to access closed phone and SMS service is a vital part of the pricing regime that makes the network possible. The existence of network filtering is an output, not an input; a symptom, not a cause.

You do not automatically make your society freer and healthier by outlawing all network filtering. Indeed, you might achieve the exact opposite result.

Guns don’t come with enforceable end user license agreements that say “For shooting small furry animals only”. But we do distinguish between bunny-hunting guns and machine guns. We discriminate based on lethality. We don’t expect unlimited freedom to bear arms. A farmer wanting to blow some cute crop-nibblers to kingdom come is given carte blanche to blast away. Walk into a bank carring the same hardware, and expect trouble. We might likewise expect some boundaries to our communications freedom.

So I would caution people from taking the analogy too literally. The right to bear arms is also a means to an end — a populace willing and able to resist attempts to capture the machinery of state to perpetuate undemocratic activity. Unfettered and affordable network access is correspondingly essential to the operation of a free and dynamic post-industrial society.

So I’ll say it again, differently. Rules against network filtering are one way of dealing with significant market power in a vertically integrated part of the market where someone has significant market power in the access layer. It isn’t necessarily the best way of doing it, but it’s one way. In all other cases, it’s likely to be harmful. You should use the existence of such activities as a yardstick for the development and maturity of the industry. Expect new technologies and markets to be full of filtering, which slowly recedes over time as competition heats up. Meanwhile, municipal networks and other co-operative of user-owned connectivity systems should aim for more opennness that simple economics suggests, because the benefits are hidden in the political layer.

I alluded to the special privileges and protections that exist in telecom. I guess I ought to enumerate a few to back up such a claim in what is becoming sometimes a suicidally competitive environment.

The US is the easiest example of how barriers to entry are built via co-option of the regulatory infrastructure, but examples about all over. Tariff sheets and their attendant cost of lawyers to issue, public utility comissions stuffed with friendly faces, exclusionary numbering schemes, sweetheart deals on rights of way, spectrum auctions that have singularly failed to recover the maximum public benefit, suspicious tax rebates, opaque pricing schemes that fail to come under scrutiny, faux taxes; the list goes on and on. Mostly it’s just a matter of not having to comply with normal competition and cross-subsidy rules and establishing your own parallel (and captive) regulatory environment, plus special deals on costs on inputs and prices of outputs. Check out the usual places for more data.

UPDATE: Susan Crawford has some thoughts along similar lines, with the money quote being:

I’m trying to create a normative map that will help reveal the assumptions at the heart of the network providers’ arguments. The key issue should be: is access to the internet a public goods problem, for which incentives are necessary to ensure buildout and maintenance? or — Is access to the internet a monopoly problem, for which you have to find ways to ensure frictionless competition?

Right now, we can’t tell what the right answer is.

My hunch is that we’ve not found ways for the invisible hand to operate that also allows collective action by users, groups of users, communities and regional government. It’s an “economics technology” problem, not a “technology technology” problem.

David Weinberger documents Tim Wu’s similar analysis of how the world is divinding into “openists” and “deregulationists”, where a confused cross-purposes of terminology, worldviews and methods collide.

Posted by Martin Geddes at 04:39 PM
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