I’m pretty rough on all the Internet and info-tech policy books that I review. There are two reasons for that. First, the vast majority of tech policy books being written today should never have been books in the first place. Most of them would have worked just fine as long-form (magazine-length) essays. Too many authors stretch a promising thesis into a long-winded, highly repetitive narrative just to say they’ve written an entire book about a subject. Second, many info-tech policy books are poorly written or poorly argued. I’m not going to name names, but I am frequently unimpressed by the quality of many books being published today about digital technology and online policy issues.

The books of Harvard University cyberlaw scholars John Palfrey and Urs Gasser offer a welcome break from this mold. Their recent books, Born Digital: Understanding the First Generation of Digital Natives, and Interop: The Promise and Perils of Highly Interconnected Systems, are engaging and extremely well-written books that deserve to be books. There’s no wasted space or mindless filler. It’s all substantive and it’s all interesting. I encourage aspiring tech policy authors to examine their works for a model of how a book should be done.

In a 2008 review, I heaped praise on Born Digital and declared that this “fine early history of this generation serves as a starting point for any conversation about how to mentor the children of the Web.” I still recommend highly to others today. I’m going to be a bit more critical of their new book, Interop, but I assure you that it is a text you absolutely must have on your shelf if you follow digital policy debates. It’s a supremely balanced treatment of a complicated and sometimes quite contentious set of information policy issues.

In the end, however, I am concerned about the open-ended nature of the standard that Palfrey and Gasser develop to determine when government should intervene to manage or mandate interoperability between or among information systems. I’ll push back against their amorphous theory of “optimal interoperability” and offer an alternative framework that suggests patience, humility, and openness to ongoing marketplace experimentation as the primary public policy virtues that lawmakers should instead embrace.

Interop is Important, but Often Difficult & Filled with Trade-Offs

Palfrey and Gasser begin by noting that “there is no single, agreed-upon definition of interoperability” and that “there are even many views about what interop is and how it should be achieved” (p. 5). They set out to change that by developing “a normative theory identifying what we want out of all this interconnectivity” that the information age has brought us (p. 3).

Generally speaking, Palfrey and Gasser believe increased interoperability — especially among information networks and systems — is a good thing because it “provides consumers greater choice and autonomy” (p. 57), “is generally good for competition and innovation” (p. 90), and “can lead to systemic efficiencies” (p. 129).

But they wisely acknowledge that there are trade-offs, too, noting that “this growing level of interconnectedness comes at an increasingly high price” (p. 2). Whether we are talking about privacy, security, consumer choice, the state of competition, or anything else, Palfrey and Gasser argue that “the problems of too much interconnectivity present enormous challenges both for organizations and for society at large” (p. 2). Their chapter and privacy and security offers many examples, but one need only look around at their own digital existence to realize the truth of this paradox. The more interconnected our information systems become, and the more intertwined our social and economic lives become with those systems, the greater the possibility of spam, viruses, data breaches, and various types of privacy or reputational problems. Interoperability giveth and it taketh away.

When Does “the Public Interest” Demand Interoperability Regulation?

So, how do we know when increased interoperability is good for us or society? How do we strike a reasonable balance? And, most controversially, when should government intervene to tip the balance in one direction or another?

Palfrey and Gasser return to these questions repeatedly throughout the book but admit that their answers will be dissatisfying since “there is no single form or optimal amount of interoperability that will suit every circumstance” (p. 76). Thus, “most of the specifics of how to bring interop about [must] be determined on a case-by-case basis (p. 17). They elaborate:

That can feel unsatisfying. But it is an essential truth: the most interesting interop problems relate to society’s most complex and most fundamental systems. Their answers are never simple to come by, nor are they easy to implement. This characteristic of interop theory is a feature, not a bug. … The price to be paid for striving for a universal principle at the level of theory is that such a theory is full of nuances when it comes to application and practice (p. 17-18).

Fair enough. Yet, Palfrey and Gasser also make it clear they want government(s) to play an active role in ensuring optimal interoperability. They say they favor “blended approaches that draw upon the comparative advantages of the private and public sector” (p. 161), but they argue that government should feel free to tip or nudge interoperability determinations in superior directions. “If deployed with skill,” they argue, “the law can play a central role in ensuring that we get as close as possible to optimal levels of interoperability in complex systems” (p. 88).

That phrase — “optimal level of interoperability” — pops up repeatedly throughout the book. So, too, does the phrase “the public interest.” Palfrey and Gasser argue that governments must look out for “the public interest” and “optimal interoperability” since “market forces do not automatically lead to appropriate standards or to the adoption of the best available technology” (p. 167). Here they introduce two additional amorphous values that complicate the debate: “appropriate standards” and “best available technology.”

The fundamental problem this “public interest” approach to interoperability regulation is that it is no better than the “I-know-it-when-I-see-it” standard we sometimes at work in the realm of speech regulation. It’s an empty vessel, and if it is the lodestar by which policymakers make determinations about the optimal level of interoperability, then it leaves markets, innovators, and consumers subject to the arbitrary whims of what a handful of politicians or regulators think constitutes “optimal interoperability,” “appropriate standards,” and “best available technology.”

On the Limits of Knowledge

Palfrey and Gasser’s framework feels more than just “unsatisfying” in this regard; it feels downright insufficient. That’s because it is missing a major variable: the extent to which state actors are able to adequately define those terms or accurately forecast the future needs of markets or citizen-consumers.

Surprisingly, Palfrey and Gasser don’t really spend much time discussing the specific remedies the state might impose to achieve optimal interoperability. I would have liked to have seen them develop a matrix of interop options and then outline the strengths and weaknesses of each. But even absent a more detailed discussion of possible regulatory remedies, I would have settled for more concrete answers to the following questions: Why are we to assume that regulators possess the requisite knowledge needed to know when it makes sense to foreclose ongoing marketplace experimentation? And why should we trust that, by substituting their own will for that of countless other actors in the information technology marketplace, we will be left better off?

The closest Palfrey and Gasser get to defining a firm standard for when and why such state intervention is warranted comes on page 173 when they are discussing the need for the state to establish sound reasons for intervention. They argue:

The objective should not be interoperability per se but, rather, one or more public policy goal to which interoperability can lead. The goals that usually make sense are innovation and competition, but other objectives might include consumer choice, ease of use of a technology or system, diversity, and so forth (p. 173).

This is a bit better, but it still doesn’t fully grapple with the cost side of the cost-benefit calculus for intervention. Palfrey and Gasser are willing to at least acknowledge some of those problems when they remark that “the state is rarely in a position to call a winner among competing technologies” (p. 174). Moreover,

Lawmakers need to keep in view the limits of their own effectiveness when it comes to accomplishing optimal levels of interoperability. Case studies of government intervention, especially where complex information technologies are involved, show that states tend to be ill suited to determine on their own what specific technology will be the best option for the future (p. 175)

Quite right! Yet, that insight does not seem to influence their calls elsewhere in the book for regulatory activism. That’s a shame since the admonition about policymakers recognizing the “limits of their own effectiveness” should be able to help us devise some limiting principles regarding the state’s role.

Toward an Alternative Theory: Experimental, Evolutionary Interoperability

Allow me to offer a different theory of optimal interoperability that flows from these previous insights. It’s based on a more dynamic view of markets and the central importance of experimentation in the face of uncertainty. Let me just go ahead and articulate the core principles of what I will refer to as  “experimental, evolutionary interoperability theory.” Then I’ll explain it in more detail

• Experimental, evolutionary interoperability : The theory that ongoing marketplace experimentation with technical standards, modes of information production and dissemination, and interoperable information systems, is almost always preferable to the artificial foreclosure of this dynamic process through state action. The former allows for better learning and coping mechanisms to develop while also incentivizing the spontaneous, natural evolution of the market and market responses. The latter (regulatory foreclosure of experimentation) limits that potential.

Palfrey and Gasser would label this a “laissez-faire” theory of interoperability and oppose it since they believe “a pure laissez-faire approach to interop rarely works out well” (p. 160). But they are wrong, at least to the extent they include the sweeping modifier “rarely” to describe this model’s effectiveness. In reality, the vast majority of interoperability that occurs into today’s information economy happens in a completely natural, evolutionary fashion without any significant state intervention whatsoever. In countless small and big ways alike, interconnection and interoperability happens every day throughout society. Yes, it is true that interoperability often happens against the backdrop of a legal system that allows court action to enforce certain rights or address perceived harms, but I would not classify that as a significant direct state intervention to tip or nudge interconnection decisions in one direction or another. And when interoperability doesn’t happen naturally, there are often good reasons it doesn’t and, even if there aren’t, non-interop spawns beneficial marketplace reactions and innovations.

Experimental, evolutionary interoperability theory flows out of Schumpeterian competition theory and the related field of evolutionary economics, but it is also heavily influenced by public choice theory (which stresses the limitations of romanticized theories of politics, planning, and “public interest” regulation). This alternative theory begins by accepting the simple fact that, as Austrian economist F.A. Hayek taught us, “progress by its very nature cannot be planned.” The wiser man, Hayek noted, “is very much aware that we do not know all the answers and that he is not sure that the answers he has are certainly the right ones or even that we can find all the answers.”

Ongoing experimentation with varying business models and modalities of social and economic production allows us to see what consumer choice and trial and error experimentation yields naturally over time. Ongoing experiments with flexible, voluntary interop standards and negotiations also allows us to determine which technological standards seem to benefit consumers in the short-term while also encouraging innovators to leap-frog existing standards and platforms when they become locked-in for too long or seem sub-optimal.

In the short-term, it is entirely possible that such voluntary, evolutionary interop experiments “fail” in various ways. That is often a good thing. Failures are how individuals and a society learn to cope with change and devise systems and solutions to accommodate technological change. As Samuel Beckett once counseled: “Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better.” Progress depends upon an embrace of this uncertainty and acceptance of a world of constant upheaval if we are to learn how to cope, adapt, and move forward.

In this model, technological innovation often springs from the quest for the prize of market power.  Palfrey and Gasser generally reject this Schumpeterian vision of dynamic competition, but they at least do a nice job of describing it:

firms may have a stronger incentive to be innovative when low levels of interoperability promise higher or even monopoly profits. This sort of competition… creates incentives for firms to come up with entirely new generations of technologies or business methods that are proprietary (p. 121).

They reject this approach based on (1) the mistaken notion that the quest of the prize of market power ends in the attainment and preservation of that market power; and (2) the belief that policymakers possess the ability to set us on a better course through wise interventions.

In a moment, I’ll prove why that is misguided by examining a few real-world cases studies. For now, however, let’s return to Palfrey & Gasser’s central operating principle and contrast it with the vision I’ve articulated here. Recall that they argue “it is important to maintain and facilitate diversity in the marketplace. We simply want systems to work together when we want them to and to not work together when we do not.” Again, there is no standard here if one is suggesting this as the principle by which to determine when state intervention is desirable . But if one is looking at that aspirational statement as a description of the natural order of things — namely, that we do indeed “want systems to work together when we want them to and to not work together when we do not” — then that is a perfectly sound principle for understanding why state intervention should be disfavored in all but the most extreme circumstances. To reiterate: We should not allow the state to foreclose interoperability experiments because (a) those experiments have value in and of themselves, and (b) state action is likely to have myriad unintended consequences and unforeseen costs that are not easily remedied or reversed.

There are moments in the book when Palfrey and Gasser appear somewhat sympathetic to the sort of alternative “evolutionary interop” theory I have articulated here. For example, they note that:

The web is a great equalizer for technology firms. As consumers, we have come to expect that everything will work together without incident or interruption. We think it bizarre when something in the digitally networked world does not mesh with something else, perceiving whatever it is to be broken, in need of repair. This high degree of expectation is a powerful driver of interoperability. Market players are increasingly responding to this consumer demand and making these invisible links work for their customers without any government intervention” (p. 28) [italics added]

You won’t be surprised to hear that I agree wholeheartedly! Moreover, what it really proves is that ongoing marketplace experimentation and the evolution of norms and standards generally solve interoperability problems as they develop. That doesn’t mean markets are perfectly competitive or always produce perfect interoperability. But, again, why should we believe state intervention will do a better job? And isn’t it possible that intervention could negatively counter those natural instincts that Palfrey and Gasser describe about how consumers and market actors interact to make those “invisible links” work out as nicely as they do today?

Interop, Competition & Innovation: Some Cases Studies of Evolutionary Interoperability in Action

To better explain experimental, evolutionary interop theory and how it plays out in the real-world, let’s examine the complex relationship between interoperability, competition, and innovation in the information economy through the prism of three case studies: AOL and instant messaging, video game consoles, and smartphones.

AOL

America Online’s (AOL) case study is probably the most profound example of Schumpeterian creative destruction rapidly eroding the market power of a once “dominant” digital giant. Not long ago, AOL was cast as the great villain of online openness and interoperability. In fact, when Lawrence Lessig penned his acclaimed book Code in the late 1990s, AOL was supposedly set to become the corporate enslaver of cyberspace.

For a time, it was easy to see why Lessig and others were worried. Twenty five million subscribers were willing to pay $20 per month to get a guided tour of AOL’s walled garden version of the Internet. Then AOL and media titan Time Warner announced a historic mega-merger that had some predicting the rise of “new totalitarianisms” and corporate “Big Brother.”

Fearing the worst, several conditions were placed on approval of the merger by both the Federal Trade Commission and the Federal Communication Commission. These included “open access” provisions that forced Time Warner to offer the competing ISP service from the second largest ISP at that time (Earthlink) before it made AOL’s service available across its largest cable divisions.  Another provision imposed by the FCC mandated interoperability of instant messaging systems based on the fear that AOL was poised to monopolize that emerging technology.

Palfrey and Gasser suggest this was a necessary and effective intervention. “The AOL IM case is another instance in which the role of government was key in establishing a more interoperable ecosystem” and they credit the FCC’s action with cutting AOL’s share of the IM (p. 68-9). That’s a huge stretch. The reality is that markets and technologies evolved around AOL’s walled garden and decimated whatever advantage the firm had in either the web portal business or instant messaging market.

First, despite all the hand-wringing and regulatory worry, AOL’s merger with Time Warner quickly went off the rails and AOL’s online “dominance” quickly evaporated. Looking back at the deal with TW, Fortune magazine senior editor Allan Sloan called it the “turkey of the decade” since it cost shareholders hundreds of billions. Second, AOL’s attempt to construct the largest walled garden ever also failed miserably as organic search and social networking flourished. Consumers showed they demanded more than the hand-held tour of cyberspace.

Finally, the hysteria about AOL’s threat to monopolize instant messaging and deny interoperability proved particularly unwarranted and also serves as a cautionary tale for those who argue regulation is needed to solve interoperability problems. At the time, well-heeled major competitors like Yahoo and Microsoft already had significant competing IM platforms, and others were rapidly developing. Interoperability among those systems was also spontaneously developing as consumers demanded greater flexibility among and within their communications systems. The development of Trillian, which allowed IM users to see all their various IM feeds at once, was an early precursor of what was to come. Today, anyone can download a free chat client like Digsby or Adium to manage multiple IM and email services from Yahoo!, Google, Facebook and just about anyone else, all within a single interface, essentially making it irrelevant which chat service friends use.

In a truly Schumpetrian sense, innovators came in and disrupted AOL’s plans to dominate instant messaging with innovative offerings that few critics or regulators would have believed possible just a decade ago. Progress happened, and nobody planned it from above. The FCC’s IM interoperability provision was quietly sunset less than three years after its inception since the evolution of technology and markets had rapidly eliminated the perceived problem. That mandate, as it turned out, wasn’t needed at all, and all it probably accomplished during its short life span was to hobble AOL’s ability to find a way to remain relevant in the increasingly competitive Web. 2.0 world.

Video game consoles

At first blush, the video game console wars might seem like the ideal case study for those who favor greater interoperability regulation. After all, in a static sense, why do we really need several competing video game platforms that prevent consumers from playing their games on more than one system? The lack of console interoperability also drives up development costs for game makers. Many of those developers would prefer to just code games for a single, universal gaming platform. Therefore, isn’t this the perfect excuse for state intervention to ensure “optimal interoperability”?

To the contrary, this is another example of why government should generally avoid intervening to try to achieve some sort of artificial optimal interoperability. This market has undergone continuous, turbulent change and witnessed remarkable pro-consumer innovation despite a lack of interoperability.

The video game console wars have raged since the late 1970s. The first generation of consoles was dominated Atari (2600), Mattel (Intellivision), and Coleco (ColecoVision). By the mid-1980s, the industry saw a new cast of characters displace the old players. Nintendo (NES), and Sega (Genesis) took the lead. Atari attempted a rebirth with its “Jaguar” console but failed miserably.

The demise of Atari’s 2600 console was particularly notable. When it debuted in 1977, the system revolutionized the home game market on its way to selling more than 30 million units.  For a few years, it utterly dominated the console market and the company “rushed out games, assuming that its customers would play whatever it released,” notes New York Times reporters Sam Grobart and Ian Austen. But demand rapidly dried up as other consoles and personal computers took the lead with more powerful, flexible platforms and games. In the end, “millions of unsold games and consoles were buried in a New Mexico landfill in 1983. Warner Communications, which bought Atari in 1976 for $28 million, sold it in 1984 for no cash.”

The next generation of machines was dominated by Nintendo and Sega. But by the turn of the century, more new faces appeared and disrupted the second generation of market leaders. Sony (PlayStation) and Microsoft (Xbox) introduced powerful new consoles that continue to evolve to this day. Both consoles have already cycled through three iterations, each increasingly powerful and more functional. Sega dropped out of the console business and refocused on game development. Nintendo managed to survive with its innovative “Wii” system, but has fallen from its perch as king of the console market. Many also forget Apple’s failed run at the console business with its “Pippin” system in the late 1990s. Steve Jobs killed off the console when he returned to once again lead Apple in 1997. Ironically, just a decade later, with the rise of the iPhone and the Apple App Store, the company would emerge as a major player in the gaming market as smartphone gaming exploded.

Of course, PC gaming existed across these generations and handheld gaming devices and now smartphones are also providing competition to traditional consoles. Arcade games also existed both then and now. Thus, the video game market has always been broader than just home gaming consoles.

Nonetheless, at no time during the turbulent history of this sector have major consoles interoperated. The result has been a constant effort by major console developers to leap-frog the competition with increasingly innovative and powerful consoles and peripherals. Would Microsoft have developed the Kinect motion-sensing device if Nintendo had not previously developed their game-changing Wii motion controllers? It’s impossible to know but it would seem that non-interoperability had something to do with that beneficial development. Microsoft needed a game-changing peripheral of its own to meet the Nintendo challenge since Nintendo was not about to share its innovations with the competition. Meanwhile, Sony has developed its own motion-based “Move” system to compete Microsoft and Nintendo.

This is a highly dynamic marketplace at work. Could policymakers have determined that 3 major non-interoperable home consoles would have produced so much innovation? Would they have judged that to be too much or too little competition?  Would they have been able to foresee or help bring about the disruptive competition from portable gaming devices or smartphones? What sort of interop regulation would have made that happen?

As Palfrey and Gasser suggest in their book, there really “is no single form or optimal amount of interoperability that will suit every circumstance.” The video game case study seems to prove that. Yet, their framework leaves the door open a bit wider for state meddling to determine “optimal interop.” I have little faith that state planners could have given us a more innovative video game marketplace through interop nudging. And I also worry that if the door had been open for regulators at the FCC or elsewhere to influence interoperability decisions, it might have also opened to the door to content regulation since many lawmakers have long had an appetite for video game censorship.

Smartphones

The mobile phone handset and operating system marketplace has undergone continuous change over the past 15 years and is still evolving rapidly. There are some interoperable elements, such as the ability to make connecting calls and send texts and IMs. But other parts of the smartphone ecosystem are not interoperable, such as underlying operating systems or apps and app stores.

In the midst of this mixed system of interoperable and non-interoperable elements, innovation and cut-throat competition have flourished.

When cellular telephone service first started taking off in the mid-1990s, handsets and mobile operating systems were essentially one in the same, and Nokia and Motorola dominated the sector with fairly rudimentary devices. The era of personal digital assistants (PDAs) dawned during this period, but mostly saw a series of overhyped devices, including Apple’s “Newton,” that failed to catch on. In the early 2000s, however, a host of new players and devices entered the market, many of which are still on the scene today, including LG, Sony, Samsung, Siemens, and HTC. Importantly, the sector began splitting into handsets versus operating systems (OS). Leading mobile OS makers have included: Microsoft, Palm, Symbian, BlackBerry (RIM), Apple, and Android (Google).

The sector continues to undergo rapid change and interoperability norms have evolved at the same time. Looking back, it’s hard to know whether increased interoperability would have helped or hurt the state of competition and innovation.

Consider Palm, Blackberry, and Microsoft which all limited interoperability with other systems in various ways. Palm smartphones were wildly popular for a brief time and brought many innovations to the marketplace, for example. Palm underwent many ownership and management changes, however, and rapidly faded from the scene.  After buying Palm in 2010, HP announced it would use its webOS platform in a variety of new products.  That effort failed, however, and HP instead announced it would transition webOS to an open source software development mode.

Similarly, RIM’s BlackBerry was thought to be the dominant smartphone device for a time, but it has recently been decimated. BlackBerry’s rollercoaster ride has left it “trying to avoid the hall of fallen giants” in the words of an early 2012 New York Times headline.  The company once commanded more than half of the American smartphone market but now has under 10 percent, and that number continues to fall.

Microsoft also had a huge lead in licensing its Windows Mobile OS to high-end smartphone handset makers until Apple and Android disrupted its business. It’s hard to believe now, but just a few years ago the idea of Apple or Google being serious contenders in the smartphone business was greeted with suspicion, even scorn by popular handset makers such as Nokia and Motorola. This serves as another classic example of those with a static snapshot mentality disregarding the potential for new entry and technological disruption. Just a few years later, Nokia’s profits and market share have plummeted and a struggling Motorola was purchased by Google. Meanwhile, again, Palm seems dead, BlackBerry is dying, and Microsoft is struggling to win back market share it has lost to Apple and Google in this arena.

It would seem logical to conclude that the ebbs and flows of interoperable and non-interoperable elements of the smartphone world have created a turbulent but vibrantly innovative sector. Has the lack of interoperable operating systems or apps and apps stores hurt smartphone consumers? It’s hard to see how. Mandating interoperability at either level could lead to an OS or app store monopoly, most likely for Apple if such a policy were pursued today.

While Apple has had great success and earned endless kudos for their slick, user-friendly innovations from consumers and tech wonks alike, some critics decry their proprietary business model and more “controlled” user experience. Apple tightly controls almost every level of production of its iPhone smartphone and iPad tablet. Interoperability with competing systems, standards, or technologies is limited in many ways. Is that bad? Some critics think so, suggesting that greater “openness” — presumably in the form of greater device or program interoperability — is needed. But so what? Consumers seem extremely happy with Apple devices. Moreover, well-heeled rivals like Google (Android) and Microsoft continue to innovate at a healthy clip and offer consumers a decidedly different user experience. As with video games consoles, non-interop has had some important dynamic effects and advantages for consumers. It’s hard to know what “optimal interoperability” would even look like in the modern smartphone marketplace and how it would be achieved, but it’s equally hard to believe that consumers would be significantly better off if regulators were trying to achieve it through top-down mandates on such a dynamic, fast-moving market.  [For more on this topic, see my 2011 book chapter, “The Case for Internet Optimism, Part 2 – Saving the Net From Its Supporters,” from the book, The Next Digital Decade.]

Case Study Summary & Analysis

These case studies suggest that defining “optimal interoperability” is a pipe dream. In some cases, consumers demanded a certain amount interoperability and they got it. But it seems equally obvious that they did not demand perfect interoperability in every case. Few consumers are tripping over their own feet in a mad rush to toss out their XBoxs or iPhones just because they are not perfectly interoperable. On the other hand, since the days of the old “walled garden” hell of AOL, CompuServe, Prodigy, and so on, it would seem that information technology markets are growing more “open” in other ways. You can’t completely lock-down a user’s online experience and expect to win their business over the long haul.

Palfrey and Gasser make that point quite nicely in the book:

Increasingly, though, businesses are seeing the merits of strategies based on openness. A growing number of businesses are pursuing models that incorporate interoperability as a core principle. More and more firms, especially in the information business, are shedding their proprietary approaches in favor of interoperability at multiple levels. The goal is not to be charitable to competitors or customers, of course, but to maximize returns over time by building an ecosystem with others that holds greater promise than the go-it-alone approach (p. 149).

Quite right, but let’s not pretend that any mass market information platforms or systems will ever be perfectly “open” or interoperable. There will always be some limitations on how such systems are used or shared. And that’s just fine once you embrace a more flexible theory of evolutionary interoperability.  Ongoing experiments will get us to a better place.

Conclusion: Let Interop Experiments Continue!

So, let me wrap up by restating my alternative theory of optimal interoperability as succinctly as possible: When in doubt, ongoing, bottom-up, dynamic experimentation will almost always yield better answers than arbitrary intervention and top-down planning. Again, that is not to say that all interoperability experiments will leave society better off in the short-term. Some interoperability experiments and resulting market norms or outcomes can create challenging dilemmas for individuals and institutions. There may be short-term spells of “market power,” for example, and some standards may get locked in longer than some of us think makes sense. If, however, we have faith in humans to solve problems with information and technology, then still more experimentation — not state intervention — is the answer. And that is especially true once you accept the fact that those seeking to intervene have very limited knowledge of all the relevant facts needed to even make wise decisions about the future course of technology markets or information systems.

Some will find my alternative theory of optimal interoperability no more satisfying than Palfrey and Gasser’s since they may find the experimental interop framework too inflexible when it comes to state action. Whereas the frustration with Palfrey and Gasser’s theory will likely flow from their failure to define a coherent standard for when intervention is warranted, my approach solves that problem by suggesting we should largely abandon the endeavor and instead let ongoing market experiments solve interop problems over time. For me, we would need to find ourselves in a veritable whole-world-is-about-to-go-to-hell sort of moment before I could go along with state intervention to tip the interop scales in one direction or another. And, generally speaking, this is exactly the sort of thing that antitrust laws are supposed to address after a clear showing of harm to consumer welfare. Stated differently, to the extent any state intervention to address interoperability can be justified, ex post antitrust remedies should almost always trump ex ante regulatory meddling.

This alternative vision of evolutionary, experimental interoperability will be rejected by those who believe the state has the ability to wisely intervene and nudge markets to achieve “optimal interoperability” through some sort of Goldilocks principle that can supposedly get it just right. For those of us who have doubts about the likelihood of such sagacious state action — especially for fast-paced information sectors — the benefits of ongoing marketplace experimentation far outweigh the costs of letting those experiments run their course.

Regardless, we should be thankful that John Palfrey and Urs Gasser have provided us with a book that so perfectly frames what should be a very interesting ongoing debate over these issues. I encourage everyone to pick up a copy of Interop so you can join us in this important discussion.

Additional Reading:

• the official book site
• buy the book on Amazon or Barnes & Noble
• Follow the authors on Twitter: @JPalfrey & @UGasser
• a video of their Harvard book launch follows:

Ars Technica has just posted the transcript of a friendly debate I recently engaged in with Harvard University law professor John Palfrey about the future of Section 230 of the Communications Decency Act and online liability more generally.  Our debate got started last fall, shortly after I penned a favorable review of John’s excellent new book (with Urs Gasser), Born Digital: Understanding the First Generation of Digital Natives.  [Listen to my podcast with John about it here.]  Although I enjoyed John’s book, I also raised some concerns about his call in the book to reopen and revise Section 230, specifically to address child safety concerns.  At the time, John and I were working together on the Berkman Center’s “Internet Safety Technical Task Force” and we decided to begin an e-mail exchange about the future of 230 and online liability norms more generally.  The result was the debate that Ars has just published.

In our exchange, I begin by asking John to more fully develop some statements and proposals he sets forth in Born Digital.  Specifically, he and co-author Urs Gasser argue that: “The scope of the immunity the CDA provides for online service providers is too broad” and that the law “should not preclude parents from bringing a claim of negligence against [a social networking site] for failing to protect the safety of its users.” They also suggest that “There is no reason why a social network should be protected from liability related to the safety of young people simply because its business operates online.” Specifically, the call for “strengthening private causes of action by clarifying that tort claims may be brought against online service providers when safety is at stake,” although they do not define those instances.

Using those proposals as a launching point for our discussion, I challenge John as follows:

I’m troubled by your proposals because I believe Section 230 has been crucial to the success of the Internet and the robust marketplace of online freedom of speech and expression. In many ways — whether intentional or not — Section 230 was the legal cornerstone that gave rise to many of the online freedoms we enjoy today. I fear that the proposal you have set forth could reverse that. It could lead to crushing liability for many online operators-and not just giants like MySpace or Facebook-that might not be able to absorb the litigation costs. Could you elaborate a bit more about your proposal and explain why you think the time has come to alter Section 230 and online liability norms?

And John does and then we go back-and-forth from there.  Again, you can read the whole exchange over at Ars.

It was a great pleasure to engage in this exchange with Prof. Palfrey and I look forward to what others have to say in response to our debate.  I am working on a longer paper looking broadly at the rising threats to Sec. 230 and the increasing calls for expanded online liability and middleman deputization.  I will use whatever feedback I get from this exchange to refine my paper and proposals.

On this episode of “Tech Policy Weekly,” we’re launching a new format called “Tech Book Corner” that will feature occasional conversations with the authors of important new books about technology policy and the other issues that we debate frequently at the Tech Liberation Front blog.

On this debut episode of Book Corner, we are joined by John Palfrey, a professor of law at Harvard University and the co-director of the Berkman Center for Internet & Society at Harvard. Along with his Berkman Center colleague Urs Gasser, Prof. Palfrey has recently co-authored Born Digital: Understanding the First Generation of Digital Natives, which was published last summer by Basic Books and which you can find out more information about at www.borndigitalbook.com. [Incidentally, I reviewed Born Digital here last October and I also named it one of the most important technology policy books of 2008.]

In our discussion, Prof. Palfrey explains who exactly counts as a “digital native” and tells us why he decided to write a book about them. He discusses why he believes that there has been some overreaction by older generations to fears about this Digital Generation and he argues that we need “to separate what we need to worry about from what’s not so scary” and “what we ought to resist from what we ought to embrace.” He then outlines how we should think about these issues and concerns going forward, and he stresses the importance of “balancing caution with encouragement” as we do so. Finally, he then applies that framework to three specific issues: privacy, child safety, and copyright.

It’s an interesting conversation and you can begin listening to it immediately by downloading the MP3 file here or by just clicking the play button below!

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It’s been a big year for tech policy books. Several important titles were released in 2008 that offer interesting perspectives about the future of the Internet and the impact digital technologies are having on our lives, culture, and economy. Back in September, I compared some of the most popular technology policy books of the past five years and tried to group them into two camps: “Internet optimists” vs. “Internet pessimists.” That post generated a great deal of discussion and I plan on expanding it into a longer article soon. In this post, however, I will merely list what I regard as the most important technology policy books of the past year.

What qualifies as an “important” tech policy book? Basically, it’s a title that many people in this field are currently discussing and that we will likely be talking about for many years to come. I want to make it clear, however, that merely because a book appears on this list it does not necessarily mean I agree with everything said in it. In fact, I found much with which to disagree in my picks for the two most important books of 2008, as well as many of the other books on the list. [Moreover, after reading all these books, I am more convinced than ever that libertarians are badly losing the intellectual battle of ideas over Internet issues and digital technology policy. There’s just very few people defending a “Hands-Off-the-Net” approach anymore. But that’s a subject for another day!]

Another caveat: Narrowly focused titles lose a few points on my list. For example, as was the case in past years, a number of important IP-related books have come out this year. If a book deals exclusively with copyright or patent issues, it does not exactly qualify as the same sort of “tech policy book” as other titles found on this list since it is a narrow exploration of just one set of issues that have a bearing on digital technology policy. The same could be said of a book that deals exclusively with privacy policy, like Solove’s Understanding Privacy. It’s an important book with implications for the future of tech policy, but I demoted it a bit because of its narrow focus.

With those caveats in mind, here are my Top 10 Most Important Tech Policy Books of 2008 (and please let me know about your picks for book of the year):

(1) Jonathan Zittrain ­– The Future of the Internet, and How to Stop It

Zittrain’s book is the most important of 2008 because it’s the one we will still be talking the most about a decade from now. However, I think we’ll be talking about how wrong his thesis was that the “generative” Internet and general purpose PCs are dying.  Indeed, I’ve been quite critical of the thesis that Jonathan sets forth in his book, and I have discussed my reservations in a lengthy book review and a series of follow-up essays here and elsewhere. (Part 1, 2, 3, 4, 5).  We’ve also debated his book on the an NPR-Boston [audio is here] and we debated in person at New America Foundation in early November [video is here].

Despite my serious reservations, Jonathan’s book is important, well-written, and absolutely deserves your attention if you care about the future of technology policy.

(2) Nick Carr – The Big Switch: Rewiring the World, From Edison to Google

Part 1 of Nick Carr’s book is an eloquent early history of cloud computing, nicely comparing it to previous technological revolutions. It’s beautifully done. In Part 2 of the book, however, Carr turns sour and argues that the impact of cloud computing will be quite miserable for our economy, culture, and society. The Big Switch probably makes the best case than any Net pessimist has been penned thus far, and for that reason alone it deserves your attention. Ultimately, however, I found his case unconvincing.

You can find my complete review of Carr’s book here.

(3) John Palfrey and Urs Gasser – Born Digital: Understanding the First Generation of Digital Natives

Palfrey and Gasser’s fine early history of this generation of “Digital Natives” serves as a starting point for any conversation about how to mentor and interact with the children of the Web. It’s a comprehensive and very even-handed discussion about a variety of concerns or Internet pathologies, including: online safety, personal privacy, copyright piracy, offensive content, classroom learning, and much more. Despite a few nitpicks, I really enjoyed this book and highly recommend it. Importantly, it is a very accessible book that even the non-tech layman can pick up and appreciate. [Note: Don Tapscott’s Grown Up Digital: How the Net Generation is Changing Your World, shares a lot in common with Born Digital, but Tapscott doesn’t spend much time on policy issues and that’s why his book isn’t on my list.]

My review of Palfrey and Gasser’s Born Digital is here. [Update Feb 2009: I also hosted a podcast about the book featuring Prof. Palfrey.]

(4) Clay Shirky – Here Comes Everybody: The Power of Organizing without Organizations

While Nick Carr [see #2 above] and Lee Siegel [see #5 below] are leading the “techno-pessimist” parade this year, Clay Shirky is this year’s leading cheerleader for “cyber-optimism.” Shirky argues that the falling costs and growing ease of digital distribution are making it increasingly easy for individuals to engage in group-forming and collective action endeavors. The resulting rise of “mass amateurization” poses a significant challenge to old media operations and traditional business models and practices. In this sense, Shirky is building on many of the themes and arguments previously set forth in books like The Wealth of Networks (Benkler), Wikinomics (Tapscott and Williams), and Convergence Culture (Jenkins). If you’ve already read those titles, you’ll find a great deal of familiar thinking here.

I never got around to putting together a full review of Here Comes Everybody, but Tim Lee had a nice write-up over at Ars earlier this year.

(5) Lee Siegel – Against the Machine: Being Human in the Age of the Electronic Mob

Siegal is this year’s Andrew Keen; a cyber-sourpuss who thinks the whole world is going to hell and that the Internet is to blame. Like Keen’s Cult of the Amateur, Siegel’s Against the Machine is an anti-Web 2.0 screed that finds no redeeming qualities about the Internet or user-generated content.  In particular, Wikipedia and amateur production are blasted as being detrimental to professional media.

Both Siegel and Keen are essentially channeling the ghost of the late Neil Postman, whose 1992 book Technopoly remains the classic statement of techno-pessimism. They prove worthy disciples as they preach the Gospel According to Chicken Little and push for a neo-Luddite revival. But Siegel’s techno-pessimism is boundless and his hatred for all things digital is truly breathtaking. For that reason, however, his book deserves attention.

My lengthy critique of Siegel’s book can be found here.

(6) Ronald J. Deibert, John G. Palfrey, Rafal Rohozinski, and Jonathan Zittrain (eds.) – Access Denied: The Practice and Policy of Global Internet Filtering

This is essential reading for anyone studying the methods governments are using to stifle online expression. The contributors provide a regional and country-by-country overview of the global state of online speech controls and discuss the long-term ramifications of increasing government filtering of online networks. Even if you don’t read the whole thing, this is a must-have title for your bookshelf since there is no other resource out there like this. And it should be required reading in every cyberlaw class in America. [Note: It also contains a very helpful chapter on the mechanics of Net filtering.]  Very highly recommended.

(7) Hal Abelson, Ken Ledeen, and Harry Lewis – Blown to Bits: Your Life, Liberty, and Happiness After the Digital Explosion

Think of this book as “Internet Policy for the Educated Layman.” Abelson, Ledeen, and Lewis survey a broad swath of tech policy territory — privacy, search, encryption, free speech, copyright, spectrum policy — and provide the reader with a nice history and technology primer on each topic. Like Palfrey and Gasser’s Born Digital [see #3 above], Blown to Bits is very accessible and each chapter contains a great deal of useful information to bring you up to speed on the hottest tech policy debates under the sun. Recommended.

My review of Blown to Bits can be found here.

(8) Lawrence Lessig – Remix: Making Art and Commerce Thrive in the Hybrid Economy

Remix treads a lot of ground already covered in Lessig’s other books and essays (perhaps it should have been called “Rehash”), but it more fully develops his thinking on the legal treatment of derivative works. Actually, in some ways (especially in the second half of the book), it’s more of a restatement of much of what is found in Benkler’s Wealth of Networks, albeit in a far less verbose fashion. Regardless, Prof. Lessig has attained rock-star status in tech policy circles and the release of each of his new books or papers becomes a bit of an event. Remix has been no different. It has already attracted a great deal of attention and deserves to be on this list for that reason alone. But if you have read his previous work, you’ll already be familiar with much of what you find in Remix.

Generally speaking, I thought Prof. Lessig made a good case regarding the benefits of remix culture and why copyright law should leave breathing room for the various derivative works of amateur creators. But he too often blurs remix culture with “ripoff culture” (i.e., those who aren’t out to create anything new but instead just take something without paying a penny for it). To solve that latter problem, he endorses a “simple” blanket licensing scheme for the Internet. In this essay, I addressed why blanket online licensing would be anything but simple.

(9) James Bessen and Michael J. Meurer – Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk

Bessen and Meurer argue that America’s patent system is in trouble because “it fail[s] to provide clear and efficient notice of the boundaries of the rights granted.” Patent litigation has exploded, they say, and the costs of the system now outweigh the benefits. Generally speaking, with the exception of the chemical and pharmaceutical industries, Bessen and Meurer don’t feel the patent system does a lot of good.”[I]t seems unlikely that patents today are an effective policy instrument to encourage innovation overall,” they conclude. They detail several reforms to help improve notice and to “make patents work as property” again the way they claim they once did.

Although the authors deal with patents broadly, the book has great relevance to digital technology policy because of their discussion of business method patents and software patents. (Incidentally, that chapter from the book is available online). They argue that software technology is especially prone to problems of “abstraction” and obviousness. As a result, software patenting has been a major contributor to the litigation explosion we have seen in recent years.

Although I agree with their case against software patents, I remain unconvinced that the patent system is failing as badly as Bessen and Meurer claim. Nonetheless, they present a powerful case that deserves to be taken seriously. Patent Failure will have an enormous impact on these debates going forward.

For more opinions on the book… Tim Lee posted a favorable review of Patent Failure over at Ars this summer. And, back in March, there was a lively discussion about the book over at Patently-O. Finally, at last year’s PFF “Aspen Summit,” Michael Meurer debated these issues with some of America’s leading patent law experts. Bronwyn H. Hall, Professor of Economics at Cal-Berkeley, challenges his findings. The video of that panel is here.

(10) Daniel Solove – Understanding Privacy

Daniel Solove’s book — and his approach to classifying and dealing with privacy problems — will have a profound impact on all future privacy debates. In that sense, it is a vital text; a must read for all who follow, or engage in, privacy debates.  On the other hand, Solove’s claim that he can construct a new paradigm based strictly on a pragmatic, utilitarian, “?problem-solving” approach, is ultimately a failure. There is just no getting around the fact that, at some point, you are going to have to provide a more robust theory of rights or justice to explain why one right trumps another. I elaborate in this lengthy critique of Solove’s Understanding Privacy.

Honorable Mentions: Here are a couple of titles that I couldn’t fit on my list but that you might want to also consider reading: Neil Netanel – Copyright’s Paradox; Matt Mason – The Pirate’s Dilemma: How Youth Culture Is Reinventing Capitalism; David Friedman – Future Imperfect: Technology and Freedom in an Uncertain World; Cory Doctorow — Content; and Don Tapscott — Grown Up Digital: How the Net Generation is Changing Your World.

Please let me know if there are other titles I have overlooked, and let me know your opinion about the best technology policy book(s) of 2008 by voting in our poll and commenting more down below.

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Earlier this year, I mentioned an outstanding book that John Palfrey of the Berkman Center for Internet & Society at Harvard Law School co-edited entitled Access Denied: The Practice and Policy of Global Internet Filtering.  It’s an excellent resource for anyone studying the methods governments are (unfortunately) using to stifle online expression across the globe.  It’s one of the most important technology policy books of the year.

Well, it looks like John Palfrey will have a second title on this year’s “Best Tech Books” list.  I’ve just finished his new book with his Berkman Center colleague Urs Gasser, Born Digital: Understanding the First Generation of Digital Natives, and it is definitely worthy of your attention. In my book review posted today on the City Journal’s website, I argue that “Palfrey and Gasser’s fine early history of this generation serves as a starting point for any conversation about how to mentor the children of the Web.”  It’s a comprehensive and very even-handed discussion about a variety of concerns or Internet pathologies, including: online safety, personal privacy, copyright piracy, offensive content, classroom learning, and much more.

My City Journal review is down below, but in coming weeks I will be posting some additional thoughts about some specific things in the book worthy of more attention (including a few things I disagreed with).  Overall, I’d say Born Digital is a close runner-up in the race for “Tech Book of the Year,” closely trailing Jonathan Zittrain’s Future of the Internet and How to Stop It (which I have reviewed multiple times) and Nick Carr’s The Big Switch.  But I found far more to agree with in Born Digital than I did in those two books.  Highly recommended.

Understanding Our Digital Kids A new book offers a guide for mentoring the children of the Web.

a book review by Adam D. Thierer of

Born Digital: Understanding the First Generation of Digital Natives, by John Palfrey and Urs Gasser (Basic Books, 288 pp., $25.95)

City Journal 10 October 2008

You can’t blame parents today if they think that their children have been assimilated into the Borg or are living in the Matrix. Members of the “always on, always connected” generation have surrounded themselves with digital devices and networks and colonized cyberspace in the process. Meanwhile, back in “meatspace,” many Analog Era parents scratch their heads, trying to make sense of these momentous changes and what they mean for their kids and society.

Answers are available in Born Digital: Understanding the First Generation of Digital Natives, by John Palfrey and Urs Gasser, both of the Berkman Center for Internet & Society at Harvard Law School. Each chapter in the book addresses a different parental concern or Internet pathology: online safety, personal privacy, copyright piracy, offensive content, classroom learning, and more. Palfrey and Gasser aim “to separate what we need to worry about from what’s not so scary, (and) what we ought to resist from what we ought to embrace.”

The authors offer a balanced treatment of these issues—almost to a fault, in that they occasionally fail to develop fully their own positions. Of course, as they repeatedly—and correctly—note, often these thorny questions have no easy answers. “The hard problem,” they point out, “is how to balance caution with encouragement: How do we take effective steps to protect our children, as well as the interests of others, while allowing those same kids enough room to figure things out on their own?”

If there is a single solution, they argue, it’s education. The authors want parents, educators, and lawmakers to do more to engage the digital generation in a dialogue, instead of leaving it to fend for itself. “The traditional values and common sense that have served us well in the past will be relevant in this new world, too,” they maintain. But Palfrey and Gasser don’t rule out additional tools and methods, including technical controls, industry self-regulation, social norms, and even government action.

Consider online privacy concerns. “Never before has so much information about average citizens been so easily accessible to so many,” they note—and particularly when it comes to our kids. Despite the growing amount of online information about our kids (“digital dossiers”) and other potential threats to privacy, Palfrey and Gasser counsel prudence: “The answer . . . is not to avoid the networked publics in which so many people—especially Digital Natives—are leading their lives. Instead, we need to develop more nuanced ways to navigate these new publics.” Though “there is no single, simple answer,” they argue that “parents, peers, teachers, and mentors [all] have a role to play” to encourage youngsters to protect their information and identities. Most importantly, the digital natives must learn to use common sense when sharing information online.

The authors advocate the same reasoned approach when it comes to online child safety. The safety risks have often been greatly overstated—or at least largely misunderstood—by parents and policymakers. “The data do not suggest that the world is a more dangerous place for young people” because of the Internet, the authors contend. Most of the problems we see online today—cyber-bullying, for example—are really just old problems playing out on new platforms. “Involved parenting” and “open and honest conversations” are the most sensible responses, but intervention strategies by others—including kids’ peers—may be another part of the solution. Parental empowerment tools and industry self-regulation can help, too.

Palfrey and Gasser are open to government playing a role in some cases. They believe “governments should restrict the production and dissemination of certain types of violent content in combination with instituting mandatory, government-based ratings of these materials.” They also call for greater liability for online service providers and social networking sites to encourage them to crack down on potential dangers to children. Given their vagueness, however, both proposals would likely smash into serious First Amendment roadblocks that the authors fail to explore fully.

Palfrey and Gasser view government action less favorably when it comes to combating copyright piracy. “Creativity is the upside of this brave new world of digital media,” they suggest, but “the downside is law-breaking. The vast majority of Digital Natives are currently breaking copyright laws on a regular basis.” But what should we do about piracy? Palfrey and Gasser sidestep some of the underlying ethical issues and bluntly declare that “the goal should be for copyright holders, technologists, and their customers to exchange royalty checks with one another instead of legal complaints.” Yes, but what happens when many refuse to pay even one penny for copyrighted content, as often happens today? Education can encourage youngsters to obey the law, but difficult questions remain about how to deal with those who won’t play by the rules.

In chapters debating the Internet’s impact on learning and culture, the authors worry about shortening attention spans and the rise of a “cut-and-paste culture,” due to the immediate gratification provided by Google searches, Wikipedia, blogs, and instant messaging. On the other hand, they rightly underscore how “Digital Natives are quite sophisticated in the ways that they gather information” and are learning “sophisticated information-gathering and information-processing skills,” while also creating content and sharing information with peers in ways unimaginable just a generation ago.

It will be fascinating to see what impact these changes have on digital natives as they get older and become parents themselves. Regardless, Palfrey and Gasser’s fine early history of this generation serves as a starting point for any conversation about how to mentor the children of the Web.

Update Feb. 2009: I hosted a TLF podcast featuring Prof. Palfrey and discussed this book with him. Listen here.