Two articles of interest in today’s Wall Street Journal with indirect impact on the debate over the future of Internet policy. First, there’s a front-page story (“Facing Budget Gaps, Cities Sell Parking, Airports, Zoo“) documenting how many cities are privatizing various services — including some considered “public utilities” — in order to help balance budgets.  The article worries about “fire-sale” prices and the loss of long-term revenue because of the privatizations.  But the author correctly notes that the more important rationale for privatization is that, “In many cases, the private takeover of government-controlled industry or services can result in more efficient and profitable operations.”  Moreover, any concern about “fire-sale” prices and long-term revenue losses have to be stacked again the massive inefficiencies / costs associated with ongoing government management of resources /networks.

Of course, what’s so ironic about this latest privatization wave is that it comes at a time when some regulatory activists are clamoring for more regulation of the Internet and calling for broadband to be converted into a plain-vanilla public utility. For example, Free Press founder Robert McChesney has argued that “What we want to have in the U.S. and in every society is an Internet that is not private property, but a public utility.”  That certainly doesn’t seem wise in light of the track record of past experiments with government-owned or regulated utilities.  And the fact that we are talking about something as complex and fast-moving as the Internet and digital networks makes the task even more daunting.

Government mismanagement of complex technology projects was on display in a second article in today’s Journal (“U.S. Reviews Tech Spending.”)  Amy Schatz notes that “Obama administration officials are considering overhauling 26 troubled federal technology projects valued at as much as $30 billion as part of a broader effort by White House budget officials to cut spending. Projects on the list are either over budget, haven’t worked as expected or both, say Office of Management and Budget officials.”  I’m pleased to hear that the Administration is taking steps to rectify such waste and mismanagement, but let’s not lose sight of the fact that this is the same government that the Free Press folks want to run the Internet.  Not smart.

My Romanian space lawyer (and improbably-named) friend Virgiliu Pop has made the front page of Space.com today in a great interview with leading space journalist Leonard David about his new book Who Owns the Moon?: Extraterrestrial Aspects of Land and Mineral Resources Ownership.  Virgil slams the “Common Heritage of Mankind” socialism behind the 1979 Moon Treaty, which was killed in the U.S. Senate by the free-market space movement, which later gave birth to the Space Frontier Foundation (which I chair).

Virgil once famously claimed ownership of the sun to demonstrate the absurdity of serious assertions made by a number of charlatans to ownership of lunar territory (Dennis Hope) or the entire Eros asteroid (Greg Nemitz).  Virgil’s point was “to show how ridiculous a property rights system in outer space would be if it were to be based solely on claim unsubstantiated by any actual possession.”

I’m looking forward to reading Virgil’s book–and to writing a proper review.  For now, I’ll just say that I think Virgil and I see eye-to-eye on three key premises (something of a rarity among space lawyers on the ultra-contentious issue of property rights):

1. The Outer Space Treaty of 1967 prohibits nations from appropriating territory in space and also prohibits individuals from asserting any territorial claims (generally accepted) except to a narrowly-limited area under actual use (not accepted by all space lawyers).
2. The Outer Space Treaty, properly understood, does not bar claims to ownership of movable objects such as extracted resources or even (if they can be moved in a meaningful way) entire asteroids or comets.
3. Securing such property rights is essential to the economic development of space.

Here are a few choice excerpts from Virgil’s new book on the big picture of property rights in space:

Outer space needs to be spared the painful experience of the former Eastern Block. Despite the noble ideals of equity and care for the have-nots, the CHM paradigm has more faults than merits. A refutation of the Common Heritage principle does not mean, however, that the developing world will, or should, be left behind in the space era. China, India and Brazil are living proofs that a developing country can, through its own effort, join the spacefaring club. Instead of freeloading on the efforts of the older spacefarers, the have-nots should pool their meagre financial resources into a common space agency or into regional ones, and proceed at exploiting the riches of outer space for themselves. The rallying cry of Marxism – “Proletarians of all countries, unite; you have nothing to lose but your chains” should evolve into “Countries of the world unite – you have nothing to lose but the chains of gravity”. The skies are open. “

…

The frontier paradigm has proven its worth on our planet, and it most likely will do so in the extraterrestrial realms. Homesteading is likely to transform the lunar desert in the same manner as it transformed the 19th Century United States. Space is indeed a new frontier calling for individualism rather than collectivism, and its challenges need to be addressed with a legal regime favourable to property rights. Such a regime is seen by many authors as not only useful, but also as the only means of opening the extraterrestrial realms to settlement, given the reluctance of most industrialists to invest money in an endeavour without having the security that they will enjoy the benefits. It may also occur that a minority of investors, with a bigger tolerance to risk, would adopt an anarcho-capitalist approach and “cross the Alleghenies” without backing from a sovereign State.

Given the abundance of extraterrestrial resources, it would be nonsensical to forbid their private appropriation. Securing property rights would be a small price to pay, and more beneficial to humankind, compared to the alternative of keeping the extraterrestrial realms undeveloped. The practical arguments against the Frontier paradigm may have merit, but the issues raised can be tackled. The ideological arguments, nonetheless, are emotional rather than rational.

Whereas the frontier paradigm is outlawed in the current incarnation of the international law of outer space, law is a dynamic phenomenon and it may evolve towards a regime supportive of property rights in outer space. A shift from the res publica approach may be in the cards, given the official support of the Aldridge commission for property rights. Until this shift happens, the non-appropriation principle remains nonetheless the lex lata in the extraterrestrial realms.