<nettime> The excess of control

[Felix Stalder <felix@openflows.org>]

[Published in Telepolis, January, 8th, 2002
http://www.heise.de/tp/english/inhalt/buch/11504/1.html, republished with
permission.]

"Innovation makes enemies of all those who prospered under the old regime,
and only lukewarm support is forthcoming from those who would prosper under
the new."
Niccolo Machiavelli (1469-1527)

In _The Future of Ideas_ Lawrence Lessig, a professor at the Stanford Law
School, conveys a bleak message: We are destroying the conditions of
freedom and creativity on the Internet. Right at the moment when the
Internet has begun to show its full potential for increasing growth and
innovation globally, a counterrevolution is threatening, if not already
succeeding, to undermine this potential.

There are two reasons for this: one is timeless, already understood by
Machiavelli: radical change threatens those who profit from the status quo
but offers only uncertain prospects to others. The second reason, and the
main focus of the book, is this: A sensible premise - markets and private
ownership can be efficient ways to allocate resources and promote growth -
has hardened into an orthodoxy that postulates that all resources are
always managed best when divided among private owners. This view is
propagated by a lethally effective cohort of organized interests,
politicians subservient to campaign contributors, and ignorant judges.
Together, they are in the process of turning the open and dynamic world of
the Internet into something that might well end-up resembling the
controlled and static world of Television where corporate decision makers
control what the public can see or do.

Lessig makes a passionate argument that we need to preserve the Internet as
an open, creative environment. Even though the orthodoxy has difficulty
seeing it, this openness is socially beneficial and fully consistent with
the our legal and political traditions. In the first part of the book
Lessig analyzes the conditions for openness online and the creativity that
they engender. He then describes how these characteristics are being
destroyed and, finally, proposes alternative approaches to regulation to
preserve the openness of Internet.

The Internet has allowed creativity to burgeon because many of its
resources have been free. As Lessig writes, "free resources have been
crucial to innovation and creativity; without them, creativity is crippled"
(p.14). But what does "free" mean? Richard Stallman, founder of the Free
Software Foundation, famously reminded us to think of "free speech, not
free beer."[1] This approach has led to a great deal of confusion,
particularly outside the US, where free speech is less of a beacon.
Lessig's definition is more pragmatic, and more useful: "a resource is
'free' if (1) one can use it without permission of anyone else; or (2) the
permission one needs is granted neutrally" (p.12). Our roads, for example,
are free in Lessig's sense. This is the case even if a toll charge is
levied because the charge is imposed neutrally. Everyone pays the same
price independent of the purpose of driving on the road. A road would no
longer be free if, say, Coke had sponsored its construction and therefore
could prohibit Pepsi trucks from using it.

Free resources are a "commons". A commons is defined not by ownership but
by access rights. A road can be privately or publicly owned, as long as
everyone has the same access rights, it's part of the commons. The crucial
distinction here is between control and openness. A commons is a resource
open to everyone within a community, whereas private property is controlled
exclusively by the owner. In this context it doesn't matter if the owner is
a private entity, the state, or a co-op.

The openness of the Internet was not the result of its somehow inherent
nature, as many of the early pundits thought, but a consequence of specific
design decisions. Perhaps the most important technical decision was to
follow the "end-to-end" (e2e) principle [2]. The e2e principle says that
the network itself is kept simple and "stupid" while the "intelligence" is
pushed towards the edges, i.e. the individual machines plugged into the
network and the applications running on them. The Internet, in its original
conception, was simple in the sense that it handled all packets equally,
without regard to content or ownership. The early engineers took this
approach deliberately because they had the humility to understand that they
could not foresee the future uses of network. In order not to artificially
limit future innovation, they designed the network to treat all
applications equally. This e2e principle, and the fact that the protocols
were released into the public domain, created a "commons of the wires."
Anyone could run an application on the Internet without being discriminated
against. The network worked the same for everyone: it simply forwarded all
packets without further ado.

This is changing rapidly. "Intelligence" is relocated back into the network
and the edges are dumbed down. The "Internet appliance" reduces the machine
plugged into the network to the status of an enhanced TV set. ISPs,
particularly cable companies, have an increasing arsenal of technologies at
their disposal to differentiate among packets, and, say, slow down access
to certain sites and restrict what users can and cannot to do on the
network.

Regulation plays an important role in this change. As long as much of the
Internet's infrastructure was provided by telecom companies, regulation, at
least in the US, mandated that these companies would not control the
traffic on their wires and, furthermore, that the wires had to open to
third party businesses. This created an enormously competitive ISP market
by regulating the network to be neutral, "free" under Lessig's definition.
As Internet access shifts to broadband, cable companies are becoming the
dominant ISPs. Cable companies, however, are subject to a different
regulatory regime, one that allows them to tightly control the traffic that
runs over their wires. Network equipment manufacturers such as Cisco and
Nortel are only too willing to develop new "intelligent" routers that can
discriminate packages based on content and ownership. In the developed
world, this is used to control the user experience and to structurally
disadvantage competitors and certain types of services. In China [3] and
other countries, however, the same technology can monitor Internet traffic
for political reasons and secure the "great firewall". The effect in both
contexts is the same. Power, i.e. the ability to control the uses of the
network, moves from the users to the owners, from the many to the few.

Lessig's argues against this centralization of control because it stifles
innovation that is likely to be beneficial to the public. Referring to the
"Inventor's Dilemma" [4], Lessig argues that large firms innovate
differently than small firms and or non-commercial entities. Large firms
are best at expanding, improving and controlling large existing markets,
but are structurally handicapped to develop radically new ones. New markets
tend to arise at the margins, while large companies concentrate on the
center, i.e. the place where their large clients operate. Furthermore,
because new markets cannot be analyzed, it is nearly impossible to invest
in them rationally. The availability of venture capital mitigates this
problem, but only to a limited extent. Finally, companies that control an
existing market have no interest in innovations that threaten to make their
markets obsolete.

The music industry is a case in point. It was very successful at managing
the transition from analog vinyl to digital CDs because this innovation did
not change the relationships among the market participants. CDs are what is
called a "sustaining technology" because they sustain the "value chain" of
the existing market. Napster's peer-to-peer distribution, on the other
hand, is a "disruptive technology" because it potentially disrupts the
established market by creating new relationships among its participants and
possibly removing some of them altogether. With billions in investment tied
to the old value chain, record companies have very little to gain, but much
to lose, from such innovation.

Should that give established institutions the right to effectively veto
disruptive technologies? No, Lessig argues, because this would be a great
loss to the dynamism of society. He points out that almost all of the
groundbreaking applications of the Internet - email, the web, instant
messaging, peer-to-peer transfers, to name but a few - were created by
inventors far from the centers of industry. For all of these inventions,
the openness of the Internet was crucial to enable them to grow and expand
to their full potential which often not even their inventors knew. Without
a commons, the Internet might have joined the fate of industry-controlled
projects such as video-on-demand or videotext.

The effect of the dismantling of the e2e principle is exacerbated the
expansion of the copyright and patent law, the other main areas covered in
by Lessig. Together, these developments drive the enclosure of the
Internet, granting the owners of the wires, patents, and copyrights ever
more control over the future development of the Internet. This reduces the
chances of radical innovations from the margins ever reaching mainstream.
If only innovation that suits the interests of a small group of powerful
owners is allowed onto the network, a tremendous potential for socially
beneficial change is lost, without us ever knowing such potential existed.
This does not serve the interest of the public, neither in China or here,
but only those of the old guard.

Lessig is a realist and a pragmatist. He does not argue for a "new economy"
utopia where everything should be free, nor is he "against" the market.
Lessig is very clear that his conception of the commons applies primarily
to resources that are "nonrivalrous" which means that my use does not
affect your use of the resource. To these resources, the "tragedy of the
commons" [5] does not apply. Immaterial products cannot be depleted. All
that is necessary is to assure that such resources are produced. What
Lessig is arguing for is a balance between the rights of the owners to
derive profit from their resources and the rights of the public to use
these resources as raw material for further creation. Copyright and patent
law were conceived with this balance in mind. Now they are being expanded
in favour of control and ownership to such a degree that they no longer
serve the only goal that legitimizes their existence: the promotion
innovation and creativity. Lessig makes several concrete proposals on how
to adapt the law to help restore this balance. These range from reducing
the duration of patents and copyrights to their original length to the
granting of compulsory licenses which allow owners to derive a profit from
their property but not to control it against the public interest.

Lessig's concerns are not really not legal but social. He develops two
scenarios, one in which the tools of innovation are controlled by a few
established interests, or one in which these tool are made accessible to
everyone. He advocates the latter because only the latter is consistent
with core values of a true, enlightened democracy: social welfare through
the empowerment of individuals.

Lessig's argument, though, exhibits a strange internal contradiction. One
the one hand, it is a call to arms, a passionate warning about the loss of
freedom and creativity, on the other hand, he declares the battle already
lost. This contradiction, it seems, stems from the fact that he grounds
what is essentially a (global) social argument in primarily (American)
legal evidence. This leads to a distortion. For Lessig, the story of open
file sharing ended with the defeat of Napster in a Californian court.
However, despite the demise of Napster as a company, the phenomenon of file
sharing is still very significant. It is far from clear that the changes in
the legal landscape will effectively determine user behaviour. One could
make the argument that enforcing some aspects of the law might be so
difficult, or come at such an expense to other rights or interests, that in
practice it will be impossible to do so. If the DMCA limits security
research in the US, but European provisions are not as strict, then
pressure could amount on the US to revise its legislation on the grounds
that it harms the industry's competitiveness. A similar situation led to
the easing of US export restrictions on strong cryptography.

Perhaps Lessig overestimates the ability of US law to determine social
reality globally. He is certainly right to argue that it has become a
powerful weapon of established interests trying to fend off the challenge
of the new.

Lessig, Lawrence: (2001) The Future of Ideas: The Fate of the Commons in a
Connected World. Random House, New York. ISBN 0-375-50578-4


References:
[1] <http://www.gnu.org/philosophy/free-sw.html>
[2]<http://www.reed.com/Papers/EndtoEnd.html>
[3]<http://www.ichrdd.ca/english/commdoc/publications/globalization/goldenShield
Eng.html>
[4] Christensen, Clayton M. (1997). The Inventor's Dilemma. When New
Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business School
Press
[5] <http://www.heise.de/tp/english/inhalt/te/8614/1.html>


--------------------++-----
Les faits sont faits.
http://felix.openflows.org

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