Here’s a presentation I delivered on “The War on Vertical Integration in the Digital Economy” at the latest meeting of the Southern Economic Association this weekend. It outlines concerns about vertical integration in the tech economy and specifically addresses regulatory proposals set forth by Tim Wu (arguing for a “separations principle” for the tech economy) & Jonathan Zittrain (arguing for “API neutrality” for social media and digital platforms). This presentation is based on two papers published by the Mercatus Center at George Mason University: “Uncreative Destruction: The Misguided War on Vertical Integration in the Information Economy” (with Brent Skorup) & “The Perils of Classifying Social Media Platforms as Public Utilities.”

I’ve been hearing more rumblings about “API neutrality” lately. This idea, which originated with Jonathan Zittrain’s book, The Future of the Internet–And How to Stop It, proposes to apply Net neutrality to the code/application layer of the Internet. A blog called “The API Rating Agency,” which appears to be written by Mehdi Medjaoui, posted an essay last week endorsing Zittrain’s proposal and adding some meat to the bones of it. (My thanks to CNet’s Declan McCullagh for bringing it to my attention).

Medjaoui is particularly worried about some of Twitter’s recent moves to crack down on 3rd party API uses. Twitter is trying to figure out how to monetize its platform and, in a digital environment where advertising seems to be the only business model that works, the company has decided to establish more restrictive guidelines for API use. In essence, Twitter believes it can no longer be a perfectly open platform if it hopes to find a way to make money. The company apparently believes that some restrictions will need to be placed on 3rd party uses of its API if the firm hopes to be able to attract and monetize enough eyeballs.

While no one is sure whether that strategy will work, Medjaoui doesn’t even want the experiment to go forward. Building on Zittrain, he proposes the following approach to API neutrality:

• Absolute data to 3rd party non-discrimination : all content, data, and views equally distributed on the third party ecosystem. Even a competitor could use an API in the same conditions than all others, with not restricted re-use of the data.
• Limited discrimination without tiering : If you don’t pay specific fees for quality of service, you cannot have a better quality of service, as rate limit, quotas, SLA than someone else in the API ecosystem.If you pay for a high level Quality of service, so you’ll benefit of this high level quality of service, but in the same condition than an other customer paying the same fee.
• First come first served : No enqueuing API calls from paying third party applications, as the free 3rd-party are in the rate limits.

Before I critique this, let’s go back and recall why Zittrain suggested we might need API neutrality for certain online services or digital platforms. Although Zittrain does not label it as such, API neutrality assumes the platform or device in question is a sort of public utility or common carrier. Zittrain is concerned that the absence of API neutrality could imperil “generativity,” technologies or networks that invite or allow tinkering and all sorts of creative secondary uses. Primary examples include general-purpose personal computers (PCs) and the traditional “best efforts” Internet. By contrast, Zittrain contemptuously refers to “tethered, sterile appliances,” or digital technologies or networks that discourage or disallow tinkering. Zittrain’s primary examples are proprietary devices like Apple’s iPhone or the TiVo, or online walled gardens like the old AOL and current cell phone networks. Such “take it or leave it” devices or platforms earn Zittrain’s wrath. He argues that we run the risk of seeing the glorious days of generative devices and the open Internet give way to those tethered appliances and closed networks. He fears most users will flock to tethered appliances in search of stability or security, and worries because those tethered appliances are less “open” and more “regulable,” thus allowing easier control by either large corporate intermediaries or government officials. In other words, the “future of the Internet” Zittrain is hoping to “stop” is a world dominated by tethered digital appliances and walled gardens, because they are too easily controlled by other actors. He argues:

If there is a present worldwide threat to neutrality in the movement of bits, it comes not from restrictions on traditional Internet access that can be evaded using generative PCs, but from enhancements to traditional and emerging appliancized services that are not open to third-party tinkering.

Because he fears the rise of “walled gardens” and “mediated experiences,” Zittrain goes on to wonder, “Should we consider network neutrality-style mandates for appliancized systems?” He responds to his own question as follows:

The answer lies in that subset of appliancized systems that seeks to gain the benefits of third-party contributions while reserving the right to exclude it later. . . . Those who offer open APIs on the Net in an attempt to harness the generative cycle ought to remain application-neutral after their efforts have succeeded, so all those who built on top of their interface can continue to do so on equal terms. (p. 183-4)

While many would agree that API neutrality represents a fine generic norm for online commerce and interactions, Zittrain implies it should be a legal standard to which online providers are held. He even alludes to the possibility of applying the common law principle of adverse possession more broadly in these contexts. He notes that adverse possession “dictates that people who openly occupy another’s private property without the owner’s explicit objection (or, for that matter, permission) can, after a lengthy period of time, come to legitimately acquire it.” (p. 183) He does not make it clear when that principle would be triggered as it pertains to digital platforms or social media APIs. But it would seem clear that his API neutrality rule would eventually regulate the major information providers and platforms of our day, including: Apple, Google, Twitter, Facebook, and many others.

As I argued in my paper, “The Perils of Classifying Social Media Platforms as Public Utilities,” API neutrality regulation is a dangerous notion. There are many problems with the logic of Zittrain’s API neutrality proposal and with the application of adverse possession to social media platforms or digital applications. What follows below is my critique of the notion that appeared in that paper, and it also explains why Medjaoui’s new formulation and clarification of the principle is equally problematic.

First, most developers who offer open APIs are unlikely to close them later because they do not want to incur the wrath of “those who built on top of their interfaces,” to use Zittrain’s parlance. Social media services make themselves more attractive to users and advertisers by providing platforms with plentiful opportunities for diverse interactions and innovations. The “walled gardens” of the Internet’s first generation are largely things of the past. Thus, a powerful self-correcting mechanism is at work in this space. If social media operators were to lock down their platforms or applications in a highly restrictive fashion, both application developers and average users would likely revolt. Moreover, a move to foreclose or limit generative opportunities could spur more entry and innovation as other application (“app”) developers and users seek out more open, pro-generative alternatives.

Consider an example involving Apple and the iPhone. Shortly after the iPhone’s release, Apple reversed itself and opened its iPhone platform to third-party app developers. The result was an outpouring of innovation. Customers in more than 123 countries had downloaded more than eighteen billion apps from Apple’s App Store at a rate of more than 1 billion apps per month as of late 2011.

But what if Apple decides to suddenly shut its App Store and prohibit all third-party contributions, after initially allowing them? There is no obvious incentive for Apple to do so, and there are plenty of competitive reasons for Apple not to close off third-party development, especially as its application dominance is a key element of Apple’s success in the smartphone and tablet sectors. Under Zittrain’s proposed paradigm, regulators would treat the iPhone as the equivalent of a commoditized common carriage device and force the App Store to operate on regulated, public utility–like terms without editorial or technological (and perhaps interoperability) control by Apple itself. But if Apple were to open the door to developers only to slam it shut a short time later, the company would likely lose those developers and customers to alternative platforms. Google, Amazon, Microsoft, and others would be only too happy to take Apple’s business by offering a wealth of stores and devices that allow users greater freedom. Market choices, not regulatory edicts such as mandatory API neutrality, should determine the future of the Internet.

The same logic indicates the likely counterproductive effects of efforts to impose API neutrality on Twitter. Until recently, Twitter had a voluntary open access policy in that it allowed nearly unlimited third-party reuse and modification of its API. It is now partially abandoning that policy by taking greater control over the uses of its API. This policy reversal will, no doubt, lead to claims that the company is acting like one of Tim Wu’s proverbial “information empires” and that perhaps Zittrain’s API neutrality regime should be put in place as a remedy. Indeed, Zittrain has already referred to Twitter’s move as a “bait-and-switch” and recommended an API neutrality remedy. Zittrain’s actions could foreshadow more pressure from academics and policymakers that will first encourage Twitter to continue open access, but then potentially force the company to grant nondiscriminatory access to its platform on regulated terms. Nondiscriminatory access would represent a step toward the forced commoditization of the Twitter API and the involuntary surrender of the company’s property rights to some collective authority that will manage the platform as a common carrier or essential facility.

Yet again, innovation and competitive entry remain possible in this arena. There is nothing stopping other microblogging or short-messaging services from offering alternatives to Twitter. Some people would decry the potential lack of interoperability among competing services at first, but innovators would quickly find work-arounds. A decade ago, similar angst surrounded AOL’s growing power in the instant-messaging (IM) marketplace. Many feared AOL would monopolize the market and exclude competitors by denying interconnection. Markets evolved quickly, however. Today, anyone can download a free chat client like Digsby or Adium to manage IM services from AOL, Yahoo!, Google, Facebook, and just about any other company, all within a single interface, essentially making it irrelevant which chat service your friends use. These innovations occurred despite a mandate in the conditions of Time Warner’s acquisition of AOL that the post-merger firm provide for IM interoperability. The provision was quietly sunset as irrelevant a short three years later.

A similar market response could follow Twitter’s to exert excessive control over its APIs. In web 2.0 markets—that is, markets built on pure code—the fixed costs of investment are orders of magnitude less than they were with the massive physical networks of pipes and towers from the era of analog broadcasting and communications. Thus, major competition for Twitter is more than possible, and it is likely to come from sources and platforms we cannot currently imagine, just as few of us could have imagined something like Twitter developing.

Even if some social media platform owners did want to abandon previously open APIs and move to a sort of walled garden, there is no reason to classify such a move as anticompetitive foreclosure or leveraging of the platform. Marketplace experimentation in search of a sustainable business model should not be made illegal. Since most social media sites such as Twitter do not charge for the services they provide, some limited steps to lock down their platforms or APIs might help them earn a return on their investments by monetizing traffic on their own platforms. If a social media provider had to live under a strict version of Zittrain’s API neutrality principle, however, it might be extremely difficult to monetize traffic and increase businesses since the company would be forced to share its only valuable intellectual property.

In sum, if the government were to forcibly apply API neutrality or adverse possession principles through utility-like regulation, it would send a signal to social media entrepreneurs that their platforms are theirs in name only and could be coercively commoditized once they are popular enough. Such a move would constitute a serious disincentive to future innovation and investment. “API neutrality” would upend the way much of the modern digital economy operates and cripple many of America’s most innovative companies and sectors. In the long run, such changes could sacrifice America’s current role as a global information technology leader. For these reasons, API neutrality mandates should be rejected.

Additional Reading

• Twitter, the Monopolist? Is this Tim Wu’s “Threat Regime” In Action?
• A Vision of (Regulatory) Things to Come for Twitter?
• review of Zittrain’s “Future of the Internet”

The Mercatus Center at George Mason University has just released my new white paper, “The Perils of Classifying Social Media Platforms as Public Utilities.” [PDF] I first presented a draft of this paper last November at a Michigan State University conference on “The Governance of Social Media.” [Video of my panel here.]

In this paper, I note that to the extent public utility-style regulation has been debated within the Internet policy arena over the past decade, the focus has been almost entirely on the physical layer of the Internet. The question has been whether Internet service providers should be considered “essential facilities” or “natural monopolies” and regulated as public utilities. The debate over “net neutrality” regulation has been animated by such concerns.

While that debate still rages, the rhetoric of public utilities and essential facilities is increasingly creeping into policy discussions about other layers of the Internet, such as the search layer. More recently, there have been rumblings within academic and public policy circles regarding whether social media platforms, especially social networking sites, might also possess public utility characteristics. Presumably, such a classification would entail greater regulation of those sites’ structures and business practices.

Proponents of treating social media platforms as public utilities offer a variety of justifications for regulation. Amorphous “fairness” concerns animate many of these calls, but privacy and reputational concerns are also frequently mentioned as rationales for regulation. Proponents of regulation also sometimes invoke “social utility” or “social commons” arguments in defense of increased government oversight, even though these notions lack clear definition.

Social media platforms do not resemble traditional public utilities, however, and there are good reasons why policymakers should avoid a rush to regulate them as such. Treating these nascent digital services as regulated utilities would harm consumer welfare because public utility regulation has traditionally been the archenemy of innovation and competition. Furthermore, treating today’s leading social media providers as digital essential facilities threatens to convert “natural monopoly” or “essential facility” claims into self-fulfilling prophecies. Related proposals to mandate “API neutrality” or enforce a “Separations Principle” on integrated information platforms would be particularly problematic. Such regulation also threatens innovation and investment. Marketplace experimentation in search of sustainable business models should not be made illegal.

Remedies less onerous than regulation are available. Transparency and data-portability policies would solve many of the problems that concern critics, and numerous private empowerment solutions exist for those users concerned about their privacy on social media sites.

Finally, because social media are fundamentally tied up with the production and dissemination of speech and expression, First Amendment values are at stake, warranting heightened constitutional scrutiny of proposals for regulation. Social media providers should possess the editorial discretion to determine how their platforms are configured and what can appear on them.

This 63-page paper can be found on the Mercatus site here, on SSRN, or on Scribd.  I’ve also embedded it below in a Scribd reader. Eventually, a shorter version of this paper will appear as a chapter in a MIT Press book.

Social Networks as Public Utilities [Adam Thierer]

Twitter could be in for a world of potential pain. Regulatory pain, that is. The company’s announcement on Friday that it would soon be cracking down on the uses of its API by third parties is raising eyebrows in cyberspace and, if recent regulatory history is any indicator, this high-tech innovator could soon face some heat from regulatory advocates and public policy makers. If this thing goes down as I describe it below, it will be one hell of a fight that once again features warring conceptions of “Internet freedom” butting heads over the question of whether Twitter should be forced to share its API with rivals via some sort of “open access” regulatory regime or “API neutrality,” in particular. I’ll explore that possibility in this essay. First, a bit of background.

Understanding Forced Access Regulation

In the field of communications law, the dominant public policy fight of the past 15 years has been the battle over “open access” and “neutrality” regulation. Generally speaking, open access regulations demand that a company share its property (networks, systems, devices, or code) with rivals on terms established by law. Neutrality regulation is a variant of open access regulation, which also requires that systems be used in ways specified by law, but usually without the physical sharing requirements. Both forms of regulation derive from traditional common carriage principles / regulatory regimes. Critics of such regulation, which would most definitely include me, decry the inefficiencies associated with such “forced access” regimes, as we prefer to label them. Forced access regulation also raises certain constitutional issues related to First and Fifth Amendment rights of speech and property.

The Telecommunications Act of 1996 got this ball rolling with its mandated access provisions for local phone service. To make a very long and tortured history much shorter, this was a battle over how far law should go to force local telephone companies to share their phone lines with rivals at regulated rates. (Check this old piece of mine for a flavor of how well that turned out.) The advocates of open access regulation eventually turned their attention to cable systems and tried (but failed) to apply similar sharing / access rules there. Following those fights, which involved many nasty court skirmishes, the Net neutrality wars broke out. Net neutrality is a type of forced access regime for broadband platforms. Although Net neutrality regulation would not necessarily require carriers to share networks with rivals, it would at least require that platform providers play by special access and interconnection rules set by federal regulators.

Forced access provisions have been used in other contexts. We might think of the provisions we saw at work in the Microsoft antitrust case as a form of forced access regulation. Some may also recall the interconnection provisions that governed AOL’s instant messaging service following its merger with Time Warner (discussed more below). There are other examples, but I think you get the point.

New Frontiers for Forced Access Regulation?

All this history is well known to all readers of this blog and followers of communications policy. The reason I repeat it here is because this fight is now spreading to new sectors, platforms, and technologies.

For example, “search neutrality” is one of those new frontiers of the forced access fight. Some academics and regulatory advocates are pushing for rules that would govern how search results are shown or for special requirements on search providers to eliminate supposed “search bias” or to ensure search “fairness” of various sorts. Make sure to read James Grimmelmann’s terrific treatment of the concept from his chapter in TechFreedom’s book, The Next Digital Decade, and then also listen to this podcast featuring Danny Sullivan dissecting the issue.

Some critics also want to treat search engines (and Google in particular) as “essential facilities.” In another essay from The Next Digital Decade, Geoff Manne has done a good job pointing out why that’s such a misguided idea.

Similarly, some folks (such as danah boyd) are already calling for Facebook to be regulated as a public utility or essential facility. I responded in my essay, “Facebook Isn’t a “Utility” & You Certainly Shouldn’t Want it to Be Regulated As Such,” in which I pointed out that Facebook isn’t exactly a “life-essential” service that is gouging customers, who have plenty of other choices in social networking services.

Adverse Possession & API Neutrality for Twitter?

An equally interesting battle is now set to unfold for Twitter following Friday’s announced changes. To get a flavor for what might lie ahead for the company, we might begin by taking a second look at what Harvard University’s Jonathan Zittrain proposed in his 2008 book, The Future of the Internet and How to Stop It. In that book, Zittrain suggested that “API neutrality” might be needed to ensure fair access to certain cyber-services or digital platforms to ensure “generativity” was not imperiled. On pg. 181 of the book, Zittrain argued that:

“If there is a present worldwide threat to neutrality in the movement of bits, it comes not from restrictions on traditional Internet access that can be evaded using generative PCs, but from enhancements to traditional and emerging appliancized services that are not open to third-party tinkering.”

After engaging in some hand-wringing about “walled gardens” and “mediated experiences,” Zittrain went on to ask: “So when should we consider network neutrality-style mandates for appliancized systems?” He responds to his own question as follows:

“The answer lies in that subset of appliancized systems that seeks to gain the benefits of third-party contributions while reserving the right to exclude it later. … Those who offer open APIs on the Net in an attempt to harness the generative cycle ought to remain application-neutral after their efforts have succeeded, so all those who built on top of their interface can continue to do so on equal terms.” (p. 184)

This might be a fine generic principle, but Zittrain implies that this should be a legal standard to which online providers are held. At one point, he even alludes to the possibility of applying the common law principle of adverse possession more broadly in these contexts. He notes that adverse possession “dictates that people who openly occupy another’s private property without the owner’s explicit objection (or, for that matter, permission) can, after a lengthy period of time, come to legitimately acquire it.” But he doesn’t make it clear when it would be triggered as it pertains to digital platforms or APIs.

As I noted in the first of my many reviews of his book, there are many problems with the logic of API neutrality or the application of adverse possession in these contexts. Here’s my critique of the “API neutrality” notion (again, this is from 2008):

First, most developers who offer open APIs aren’t likely to close them later precisely because they don’t want to incur the wrath of “those who built on top of their interface.” But, second, for the sake of argument, let’s say they did want to abandoned previously open APIs and move to some sort of walled garden. So what? Isn’t that called marketplace experimentation? Are we really going to make that illegal? Finally, if they were so foolish as to engage in such games, it might be the best thing that ever happened to the market and consumers since it could encourage more entry and innovation as people seek out more open, pro-generative alternatives. Consider this example: Now that Apple has opened to door to third-party iPhone development a bit with the SDK, does that mean that under Jonathan’s proposed paradigm we should treat the iPhone as the equivalent of commoditized common carriage device? That seems incredibly misguided to me. If Steve Jobs opens the development door just a little bit only to slam it shut a short time later, he will pay dearly for that mistake in the marketplace. For God’s sake, just spend a few minutes over on the Howard Forums or the PPC Geeks forum if you want to get a taste for the insane amount of tinkering going on out there in the mobile world right now on other systems. If Apple tries to roll back the clock, Microsoft and others will be all too happy to take their business by offering a wealth of devices that allow you to tinker to your heart’s content. We should let such experiments continue and let the future of the Internet be determined by market choices, not regulatory choices such as forced API neutrality.

I think the same critique would apply to efforts to impose API neutrality on Twitter. But before going into more detail, we need to first ask another question: Does Twitter possess “market power” such that their actions warrant antitrust or regulatory scrutiny at all?

But Isn’t Twitter a “Monopoly”?

Savvy readers will recall that influential Columbia Law School cyberlaw professor Tim Wu has already labeled Twitter a “monopoly,” although he has not yet bothered telling us what the relevant market is here. As I pointed out in an essay critiquing the way Prof. Wu flippantly assigns the label “monopoly” to just about any big tech provider, it’s very much unclear what to call the market Twitter serves. After all, the service is only a few years old and competes with many other forms of communication and information dissemination. For me, Twitter is a partial substitute for blogging, IMs, email, phone calls, and my RSS feed. Yet, like most others, I continue to use all those other technologies and those technologies continue to pressure Twitter to innovate.

Regardless, Prof. Wu is now in a position to put his ideas into action since he is currently serving a short tenure as special advisor to the Federal Trade Commission (FTC).  Might he act on his instincts, therefore, and advise the agency to take action against Twitter? It is unlikely that Prof Wu will be around the FTC long enough to help them bring any sort of formal action against Twitter, but he could help lay the groundwork for a creative interpretation of our nation’s antitrust laws such that Twitter somehow comes to be labeled a “monopoly” or what he refers to as an “information empire” in his new book The Master Switch. (See my last review of the book here.)

But I think he’d have a very hard time convincing the folks in the FTC’s Economics Bureau that Twitter is really worth worrying about or that it has anything approximating a “monopoly” in this emerging market, whatever that market is. But Wu has the ear of key people in government right now and could be lobbying for more expansive constructions of “information monopoly” since he made it very clear in his book that traditional antitrust analysis was not sufficient for information sectors. “[I]nformation industries… can never be properly understood as ‘normal’ industries,” Wu claimed, and even traditional forms of regulation, including antitrust, “are clearly inadequate for the regulation of information industries,” he says. (p. 303)

The Principle of the Matter

So here’s my take on the issue. Twitter is an amazing innovator. It created the space it now plays in and that market is still so new and unique that we don’t even have a name for it yet. In America, we should – and usually do – celebrate such entrepreneurialism. But sometimes certain Ivory Tower elites, regulatory-minded advocates, paternalistic policymakers, or even disgruntled competitors, claim that such innovators “owe” the rest of us something because they got rich or powerful thanks to that innovation. “Forced access” or “neutrality” mandates becomes a convenient regulatory prescription to achieve that end even though the motivating principle behind such regulation is, essentially, “what’s yours is mine.”

Indeed, from my perspective, the entire notion of forced access to the Twitter API could be dismissed by noting that, technically speaking, Twitter’s API is its private property and they should be free to do as they wish with it. That’s why I’m particularly concerned with Zittrain’s notion that we might consider applying adverse possession principles to any digital platform with enough users; at root, it’s a call to limit or even abolish property rights for digital platforms once they gain popularity or have a large number of users. As noted below, that has extremely dangerous ramifications for digital innovation but, more profoundly in my opinion, it is an unjust and unconstitutional taking of an innovator’s property. Of course, I understand that property rights aren’t exactly in vogue in America anymore and that this isn’t really a satisfying answer from the consumer’s perspective, so let’s continue on and consider a few other reasons why forced access regulation of Twitter via API neutrality would be a mistake.

First, we should not forget that Twitter has yet to find a way to turn its service into a serious revenue-generator. The most obvious reason for that is that Twitter (a) doesn’t charge anything for the service it provides and (b) doesn’t lock down its platform / API such that they might be able to earn a return on their investment by monetizing eyeballs via advertising on their own platform. That’s why Twitter’s announcement on Friday won’t come to a shock to anyone with a whiff of business sense in their heads. At some point, Twitter probably had to do something like this if they wanted to find a way to monetize and grow their business.

I can hear some out there screaming out “but it’s not fair!” as if there was cosmic sense of cyber-justice that has been betrayed because Twitter had the audacity to lock-down their platform. Of course, it is certainly true that some third-party app providers may suffer because of Twitter’s move here.  I’m not going to lie to you; if Twitter’s move to exert greater control over its API somehow destroys the beauty that is the TweetDeck desktop interface, I am going to be screaming mad myself! I do not think there has ever been a slicker, more user-friendly interface for any web service in Internet history than what TweetDeck offers consumers. For my money – which means nothing since TweetDeck is free! – TweetDeck is digital perfection defined. And, incidentally, I’d be happy to pay for it if they asked.

But despite my gushing love for it, let’s be clear about something: TweetDeck has no inherent right to exist. Indeed, TweetDeck owes its very existence to the fact that Twitter offered its API to the world on a completely free, unlicensed, unrestricted basis. The same holds true for all those other third-party platforms that depend upon the Twitter API. What Twitter giveth, Twitter can taketh away.

Stated differently, Twitter has thus far had a voluntary open access policy in place for the first few years of its existence but now wants to partially abandon that policy. This policy reversal will, no doubt, lead to claims that the company is acting like one of Wu’s proverbial “information empires” and that perhaps Zittrain’s API neutrality regime should be put in place as a remedy.  Indeed, Zittrain has already referred to it as a “bait-and-switch” and cited back to the provisions of his book that I outlined above. I believe that foreshadows what’s to come: more pressure from the Ivory Tower and then, potentially, from public policy makers that will first encourage and then push to force Twitter to grant access to its platform on terms set by others.  It’s a potential first step toward the forced commoditization of the Twitter API and the involuntary surrender of its property rights to some collective authority who will manage it as a “collective good,” “common carrier,” or “essential facility.”

But Consider This… (on API Neutrality and Disincentives)

Of course, the people at Twitter certain realize how important all those third-party apps and platforms have been to growing the Twitter information empire. Thus, an overly-zealous move to crush third parities by denying them the API or any incidental use of the Twitter name / branding could backfire in two ways: it could lead to a major consumer backlash which in turn spurs the development of alternative platforms and entirely new types of competing services.

Vertical integration might be one way to partially alleviate those problems. Twitter could start cutting deals with existing third-party platforms that rely upon its API such that they were brought under the Twitter corporate umbrella, where more standardization could occur. But Twitter doesn’t have the money to buy them all out. Moreover, Twitter doesn’t want to see dozens of interfaces under its corporate umbrella. For them, this is about “a consistent user experience.” In other words, they’d obviously prefer a more standardized platform / interface that simply got rid of some of those third-party apps and platforms altogether.

As a result, in the short term, I think we’ll likely end up with a market dominated by Twitter’s proprietary platform(s) but with a couple of other leading existing third-party providers being tolerated by the company so as not to rock the boat too much. And that’s not a bad thing. Here’s the key principle to keep in mind: If we apply API neutrality or adverse possession principles forcibly, it sends a horrible signal to entrepreneurs that basically says their platforms are theirs in name only and will be forcibly commoditized once they are popular enough. That’s a horrible disincentive to future innovation and investment. However, it means we must sometimes tolerate short term spells of “market power” when we allow entrepreneurs to realize the benefits of their past innovations and investments if we hope to get more of them in the future.

Avoiding Static Snapshots

But wait, you say, isn’t this all quite horrible for the consumers and competition? Isn’t this just Wu’s “information empire” fear manifesting itself such that antitrust or API neutrality really is required?

Here’s where those warring conceptions of “Internet freedom” come into play. As I’ve noted here many times before in my work on the “conflict of visions” about Internet freedom today, it is during what some might regard as a market’s darkest hour when some of the most exciting disruptive technologies and innovations develop. People don’t sit still; they respond to incentives, including short spells of apparently excessive private power.

By contrast, the “static snapshot” crowd gets so worked up about short term spells of “market power” – which usually don’t represent serious market power at all – that they call for the reordering of markets to suit their tastes.  Sadly, they sometimes do this under the banner of “Internet freedom,” claiming that we can “free” consumers from the supposed tyranny of the marketplace. In reality, that vision wraps markets in chains and ultimately leaves consumers worse off by stifling innovation and inviting in ham-handed regulatory edits and bureaucracies to plan this fast-paced sector of our economy.

“Splitting the Root”

And innovation is possible. Is it really that unthinkable that a Twitter competitor might come along? In a sense, TweetDeck shows the way forward.  TweetDeck has already bucked Twitter’s 140-character limit by offering “Deck.ly,” an exclusive service that allows TweetDeck users to type Twitter messages longer than 140 characters, but which will only be visible via TweetDeck platforms. What if TweetDeck took the next bold step and offered an entirely separate API in direct competition to Twitter? It would be the tweeting equivalent of “splitting the root,” to borrow a concept from the domain name space.

Some would decry the potential lack of interoperability at first. But I bet some sharp folks out there would quickly find work-arounds. Has everyone forgotten the hand-wringing that took place over instant message interoperability just a decade ago (and the resulting restrictions placed on the company following its merger with Time Warner)? Big bad AOL was going to eat everyone’s lunch in the IM space, don’t you remember? But all the hand-wringing about AOL’s looming monopolization of instant messaging seems particularly silly now since anyone can download a free chat client like Digsby or Adium to manage IM services from AOL, Yahoo!, Google, Facebook and just about anyone else, all within a single interface — essentially making it irrelevant which chat service your friends use.

Again, people respond to incentives, and sometimes it takes bone-headed moves by market leaders to really get people off their butts and motivate them to code work-arounds and superior solutions. Is it so hard to imagine that a similar response might follow Twitter’s move this week? After all, we are not talking about replicating a massive physical network of pipes or towers here. We are talking about pure code, for God’s sake! Competition to Twitter is more than possible and it’s likely to come from sources and platforms we cannot currently imagine (just as few of us could have imagined something like Twitter developing just five years ago).

Conclusion

So, Twitter’s move is not an end but rather a new beginning. Personally, I think it could spawn another amazing round of innovation in this space. Again, we must not forget that we are dealing with a space that is still so new that we do not know what to call it. For that reason alone, we should be skeptical of calls for a preemptive regulatory strike. We need to have a little faith in the entrepreneurial spirit and the dynamic nature of markets built upon code, which have the uncanny ability to morph and upend themselves seemingly every few years. In the short term, Twitter will continue to possess a dominant position in whatever we call this market that it serves. But the short term is just that; it’s not the end of the story.

Now excuse me while I get back to Tweeting!

by Berin Szoka & Adam Thierer, Progress Snapshot 5.11 (PDF)

Ten years ago, Nobel Prize-winning economist Milton Friedman lamented the “Business Community’s Suicidal Impulse:” the persistent propensity to persecute one’s competitors through regulation or the threat thereof. Friedman asked: “Is it really in the self-interest of Silicon Valley to set the government on Microsoft?” After yesterday’s FCC vote’s to open a formal “Net Neutrality” rule-making, we must ask whether the high-tech industry—or consumers—will benefit from inviting government regulation of the Internet under the mantra of “neutrality.”

The hatred directed at Microsoft in the 1990s has more recently been focused on the industry that has brought broadband to Americans’ homes (Internet Service Providers) and the company that has done more than any other to make the web useful (Google). Both have been attacked for exercising supposed “gatekeeper” control over the Internet in one fashion or another. They are now turning their guns on each other—the first strikes in what threatens to become an all-out, thermonuclear war in the tech industry over increasingly broad neutrality mandates. Unless we find a way to achieve “Digital Détente,” the consequences of this increasing regulatory brinkmanship will be “mutually assured destruction” (MAD) for industry and consumers.

New Fronts in the Neutrality Wars

The FCC’s proposed rules would apply to all broadband providers, including wireless, but not to Google or many other players operating in other layers of the Net who favor such broadband-specific rules. With this rulemaking looming, AT&T came after Google with letters to the FCC in late September and then another last week accusing the company of violating neutrality principles in their business practices and arguing that any neutrality rules that apply to ISPs should apply equally to Google’s panoply of popular services. In particular, AT&T accused Google of “search engine bias,” suggesting that only government-enforced neutrality mandates could protect consumers from Google’s supposed “monopolist” control.

The promise made yesterday by the FCC—to only apply neutrality principles to the infrastructure layer of the Net—is hollow and will ultimately prove unenforceable. The reality is that regulation always spreads. The march of regulation can sometimes be glacial, but it is, sadly, almost inevitable: Regulatory regimes grow but almost never contract. Indeed, in some ways, the prediction we made just three weeks ago is already coming true: The basic premise of neutrality regulation is already being proposed for other layers of the Internet—and not just by AT&T in retaliation. One need not agree with all of AT&T’s accusations to recognize that, whatever the FCC might say today, any large online intermediary with a popular platform potentially faces the threat of “network neutrality” mandates—because every platform is essentially a “network,” too. We’re not just talking about “search neutrality” (Google as well as Microsoft) but also about “device neutrality” (mobile handsets), “app neutrality” (Apple’s iTunes store, Facebook’s developers and Google’s Android mobile OS) and so on for social networking, email, instant messaging, online advertising, etc.

An open letter sent to FCC Chairman Julius Genachowski this week by 28 founders and CEOs of leading application providers—including Amazon, Google, Facebook, Netflix, Craigslist, Sony and Twitter—speaks generally about the need for the FCC to enforce a “guarantee of neutral, nondiscriminatory access by users.” While many of these signatories may have in mind ISPs as the network “gatekeepers” that need to be reined in by the FCC, the more successful among them are likely to find this letter used against them in the future—perhaps even by co-signatories—to advance a broad conception of what the government must do to ensure “openness” and “access” for platforms at all layers of the Internet.

Dumb Networks, Dumb Devices

The intellectual foundations for this regulatory creep have already been laid by groups like Free Press and Public Knowledge and law professors like Columbia’s Tim Wu, Harvard’s Jonathan Zittrain and Seton Hall’s Frank Pasquale. As originally conceived by Tim Wu in 2003, “network neutrality” is not unique to broadband networks: “the basic economic problem found in the network neutrality debate (a form of ‘platform exclusion’ or ‘vertical foreclosure’) can be found in many other markets.” Indeed, Wu’s popular Net Neutrality FAQ declares:

The promotion of network neutrality is no different than the challenge of promoting fair evolutionary competition in any privately owned environment, whether a telephone network, operating system, or even a retail store. Government regulation in such contexts invariably tries to help ensure that the short-term interests of the owner do not prevent the best products or applications becoming available to end-users.

Zittrain picked up where Wu left off in The Future of the Internet and How to Stop It—attacking, as the enemies of innovation, not ISPs but the supposedly “closed” platforms of Apple, TiVo and Microsoft’s Xbox. Zittrain warns that:

If there is a present worldwide threat to neutrality in the movement of bits, it comes not from restrictions on traditional Internet access that can be evaded using generative PCs, but from enhancements to traditional and emerging appliancized services that are not open to third-party tinkering.

Zittrain’s general solution is “API [Applications Programming Interface] neutrality:” If you create a platform (whether hardware or software) and begin allowing third-party contributions (“generativity”), you will lose all control over devices or applications that can run on that platform.

Those who offer open APIs on the Net in an attempt to harness the generative cycle ought to remain application-neutral after their efforts have succeeded, so all those who built on top of their interface can continue to do so on equal terms…. [N]etwork neutrality ought to be applied to the new platforms of Web services that, in turn, depend on Internet connectivity to function.

Clearly, if Zittrain and his allies have their way, the sort of neutrality mandates envisioned by the FCC or some Congressmen for ISPs will eventually cover companies such as Apple, Google, Facebook, Myspace, Twitter and Amazon—all singled out by Zittrain in a New York Times op-ed in July:

If the market settles into a handful of gated cloud communities whose proprietors control the availability of new code, the time may come to ensure that their platforms do not discriminate. Such a demand could take many forms, from an outright regulatory requirement to a more subtle set of incentives — tax breaks or liability relief — that nudge companies to maintain the kind of openness that earlier allowed them a level playing field on which they could lure users from competing, mighty incumbents.

Frank Pasquale agrees on the need to restrain all “the dominant players at all layers of online life,” but focuses on his demand for a Federal Search Commission to control supposedly “biased” search results. While the FCC wrings its hands over “managed services” offered by ISPs, search engines are increasingly offering their own value-added services by “blending” algorithmically-derived results with special features like maps, videos, books or music depending on what the search term suggests the user is interested in. “Artificially” ensuring that these features appear on the first page of search results is clearly non-neutral, and necessarily involves search engines making ”managed” decisions as to whose features to include. Yet such features also clearly benefit users—dramatically improving the usefulness of search engines and helping to sustain struggling business models like music retailing.

But one need not resort to the works of “ivory tower” academics to see the slippery slope we’re already tumbling down with the infinitely elastic principle of “neutrality.” The prospect of the FCC gradually transforming into a “Federal Information Commission” becomes more apparent when one reads the Wireless Innovation and Investment Notice of Inquiry recently released by the FCC:

As other approaches, such as cloud computing, evolve, will established standards or de facto standards become more important to the applications development process? For example, can a dominant cloud computing position raise the same competitive issues that are now being discussed in the context of network neutrality? Will it be necessary to modify the existing balance between regulatory and market forces to promote further innovation in the development and deployment of new applications and services?

One can imagine how some might use such language to accuse Google of being in “a dominant cloud computing position” such that “the context of network neutrality” will be applied to cloud service (like Google Voice) to “modify the existing balance between regulatory and market forces” through regulation. Indeed, that’s precisely what AT&T has suggested in recent letters (September 25 ^th and October 14 ^th) to the FCC.

AT&T’s partner Apple has already been the subject of such attacks for its decision to block the Google Voice app earlier this summer. The incident marked the beginning of open warfare between Google and AT&T/Apple. The FCC quickly jumped into the mix, first questioning how Apple manages its iTunes apps store for the iPhone, then questioning how Google runs its free Voice application. What legal authority the FCC has over either service is far from clear, but Apple seems to have gotten the message: It recently approved the Spotify music streaming app for the iPhone, which could be a serious competitive threat to the iTunes music store. This small incident highlights how easily regulators can impose their will through informal mechanisms like open-ended investigations even without clear authority to issue rules or bring enforcement actions. Yet none dare call it what it is: regulatory blackmail.

The Inevitability of Regulatory Capture

No doubt, other industry players will cheer on such regulatory harassment of the titans of tech—and maybe even demand more of it. Regulatory creep is driven by more than the self-interests of every bureaucracy to expand its own mission, budget and staff. As the Electronic Frontier Foundation has noted, “Experience shows that the FCC is particularly vulnerable to regulatory capture.” While lobbyists play an important role in defending business from government, all too many businesses naively look at government as a beast that can be tamed, trained, and turned to one’s own advantage, and often try to use the expanding regulatory apparatus to their own advantage or simply throw their competitors under the bus to save themselves. The result is a Hobbesian regulatory “war of all against all” within industry.

As Professor Alfred E. Kahn explained in his 2-volume opus, The Economics of Regulation, all regulation—however high-minded—is inevitably captured by special interests because:

When a commission is responsible for the performance of an industry, it is under never completely escapable pressure to protect the health of the companies it regulates, to assure a desirable performance by relying on those monopolistic chosen instruments and its own controls rather than on the unplanned and unplannable forces of competition. […] Responsible for the continued provision and improvement of service, [the regulatory commission] comes increasingly and understandably to identify the interest of the public with that of the existing companies on whom it must rely to deliver goods.

If Internet regulation follows the same course as other industries, the FCC and/or lawmakers will eventually indulge calls by all sides to bring more providers and technologies “into the regulatory fold.” Clearly, this process has already begun. Even before rules are on the books, the companies that have made America the leader in the Digital Revolution are turning on each other in a dangerous game of brinksmanship, escalating demands for regulation and playing right into the hands of those who want to bring the entire high-tech sector under the thumb of government—under an Orwellian conception of “Internet Freedom” that makes corporations the real Big Brother, and government, our savior.

Toward a Less MAD World: Digital Détente

Sincere defenders of real Internet Freedom—that is, freedom from government techno-meddling—recognize that there will always be disputes over how companies deal with each other online across all layers of the Internet. The question is not whether we need a technical coordinating mechanism for handling such disputes. Someone should mediate conflicts over alleged deviations from abstract neutrality principles. But should that arbitrator be an inherently political body like FCC? Or should we instead look to truly independent, apolitical arbitrators like the Internet Engineering Task Force or collaborative efforts like the Network Neutrality Squad? Such alternative dispute resolution mechanisms and fora need not have the power of law to be effective: The weight of their expert opinion, based on careful investigation of the facts, would likely resolve most disputes, because companies have strong reputational incentives to comply with reasoned rulings by truly neutral experts. And the white hot spotlight of public attention has a way of disciplining marketplace behavior as well.

Government would still have a role to play, of course, in enforcing antitrust laws where anticompetitive harm to consumers can be proven, and in enforcing the promises companies make to consumers. Ultimately, however, certain business models and technologies require non-neutral treatment, and the best remedy for concerns about non-neutrality is competition itself: In the high-tech sector more than any other, disruptive innovation makes it difficult for even the most successful companies to stay on top forever. Competitive entry—or even the threat of new entry—provides a powerful check on the power of so-called “gatekeepers,” but even more important is the prospect that today’s leaders will be tomorrow’s laggards: There’s little reason to think Google (search and advertising), Apple (smart phones and music) and Facebook (social networking) won’t someday find themselves playing catch-up, just as IBM (computers), Microsoft (desktop software and search), Friendster and MySpace (social networking), and Yahoo! and AOL (web portals) have had to do.

“Digital Détente” would require that all parties concede something and work constructively toward a more “peaceful” ( i.e., less regulatory) resolution. And yet, no Internet company wants to disarm unilaterally, foreswearing politics as a continuation of competition by other means. Only through multilateral disarmament could they break out of the current cycle of regulatory one-upmanship: If the companies in the Internet ecosystem could form a united front against increased government regulation and in favor of removing existing regulatory obstacles to competition, they could all return to their core competencies of creativity and innovation.

The alternative is a regulatory “nuclear winter”: high-tech titans turning their political fire on each other, catching innocent third parties in the cross-fire and bringing a dark cloud of government regulation over the entire Internet. Such increased regulation would stifle investment and innovation throughout the Internet ecosystem. Thus, it is consumers who will ultimately suffer most from the tech industry’s suicidal impulse, as their choices and digital lives are impoverished. For their sake, we hope all industry players will step back from the brink to avoid such high-tech mutually assured destruction.

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.

Jonathan Zittrain, who is affiliated with Oxford University and Harvard’s Berkman Center, recently released a provocatively titled book: The Future of the Internet–And How to Stop It. It’s an interesting read and I recommend you pick it up despite what I’ll say about it in a moment. (Incidentally, if you ever have a chance to hear Jonathan speak, I highly recommend you do so. He is, bar none, the most entertaining tech policy geek in the world. Imagine Dennis Miller with a cyberlaw degree.)

Jonathan’s book contrasts two different paradigms that he argues could define the Net’s future: The “generative” Net versus what he refers to as a world of “tethered, sterile appliances.” By “generative” he means technologies or networks that invite or allow tinkering and all sorts of creative uses. Think general-purpose personal computers and the traditional “best efforts” Internet. “Tethered, sterile appliances” by contrast, are technologies or networks that discourage or disallow tinkering. Basically, “take it or leave it” proprietary devices like Apple’s iPhone or the TiVo, or online walled gardens like the old AOL and current cell phone networks.

Jonathan’s thesis is that, for a variety of reasons [viruses, Spam, identify theft, etc], we run the risk of seeing the glorious days of the generative, open Net give way to more tethered devices and closed networks. He states:

“Today, the same qualities that led to [the success of the Internet and general-purpose PCs] are causing [them] to falter. As ubiquitous as Internet technologies are today, the pieces are in place for a wholesale shift away from the original chaotic design that has given rise to the modern information revolution. This counterrevolution would push mainstream users away from the generative Internet that fosters innovation and disruption, to an appliancized network that incorporates some of the most powerful features of today’s Internet while greatly limiting its innovative capacity—and, for better or worse, heightening its regulability. A seductive and more powerful generation of proprietary networks and information appliances is waiting for round two. If the problems associated with the Internet and PC are not addressed, a set of blunt solutions will likely be applied to solves problems at the expense of much of what we love about today’s information ecosystem.” [p. 8].

In other words, Jonathan fears that many people will flock to tethered appliances in a search for stability or security. That’s bad, in his opinion, because those tethered appliances are less “open” and more likely to be “regulable,” either by large corporate intermediaries or government officials. Thus, the “future of the Internet” he is hoping to “stop” is a world dominated by tethered digital appliances because it is too limiting and too easy for others to control.

My primary objection to Jonathan’s thesis is that (1) he seems to be over-stating things quite a bit; and in doing so, (2) he creates a false choice of possible futures from which we must choose. What I mean by false choice is that Jonathan doesn’t seem to believe a hybrid future is possible or desirable. I see no reason why we can’t have the best of both worlds–a world full of plenty of tethered appliances, but also plenty of generativity and openness.

Importantly–and Jonathan acknowledges this point to some extent–the boundaries between “generative” and “tethered appliances” are growing increasingly murky. Social networking sites, for example, allow a great deal of generative activity, but they also impose some limitations on what can be posted, or limit the porting of profiles / information over to other sites. Similarly, the iPhone—which Jonathan calls a “sterile” technology—was completely closed at first, but is now growing more open to tinkering with the SDK rollout. But it’s unlikely it will ever be perfectly open. Finally, the TiVo, which Jonathan also throws into the “sterile” bucket, is a tightly controlled technology in some ways, but allows consumers to do some truly wonderful things with it within certain confines.

And there’s a good reason for all of this: Hybrid solutions often make a great deal of sense. They offer creative opportunities within certain confines in an attempt to balance openness and stability. And this brings us back to how Jonathan is over-stating his thesis, in my opinion; he just doesn’t convince me that the old order—of open networks & general-purpose PCs—is dying. It’s still around and always will be. It’s just that a new crop of characters—let’s call them “mere mortals”—have joined us in cyberspace and are increasingly part of the ongoing digital experience. But those of us who are true-blue tech geeks and tinker-happy gadgeteers still have plenty of generative toys at our disposal even though the mere mortals now walk among us.

For example, like many other tech geeks, I have an outrageously expensive mobile phone that allows me to add just about any application I want to it. Problem is, the more I muck with it, the slower and less reliable it gets in some ways, which is precisely why some mere mortals just want a good old-fashion “sterile” phone that won’t give them any hassles. Regardless, on the “generative-vs.-sterile appliance” spectrum, the range of mobile devices just continues to grow and grow in both directions. You can decide what type of device you want. I want something more generative—warts and all. My wife—a true mere mortal if there ever was one—just wants something that works, even if has far fewer options in terms of generative capabilities. (Of course, she’s not trying to compose blog posts like this on her phone like I am! She just wants to check e-mail on occasion and make phone calls. Imagine that: using a phone just to make calls. Crazy!)

So, my question to Jonathan is—to quote the great philosopher Rodney King—Why can’t we all just get along? Isn’t it a sign of progress that we now have different models that appeal to different types of users? After all, those supposedly “sterile” applications like the iPhone and Tivo are loved by millions. Even calling them “sterile” seems a bit silly to me. After all, those devices have “fostered innovation and disruption” just like PCs and the Net have, just in a different way. Regardless, does Jonathan think all those people would really be better off if they were forced to fend for themselves with completely open iPhones and TiVos? Should the iPhone be shipped to market with no apps loaded on the main screen, forcing everyone to get them for on their own? Should TiVos have no interactive menus out-of-the-box, forcing you to go online and find some homebrew that someone whipped up to give you an open source guide in all its blocky ugliness?

Again, before you answer that question for yourself, put yourself in the shoes of a mere mortal. It’s easy for many us who are tech geeks to look down our noses at those who seem to want to have the hand held through cyberspace or digital experiences. But there’s nothing wrong with those people who seek stability and security in digital devices and their networking experiences—even if they find those solutions in the form of “tethered appliances.” Not everyone wants to have the same cyber-experiences we do. Not everyone wants to reprogram their mobile phones, hack their consoles, write their own code, or even just write a blog or join a social networking site. Millions upon millions of people live perfectly normal lives without ever doing any of these things! (It’s true, I’ve even met a couple of these people… They are called my parents!) Still, many of those mere mortals WILL want to use many of the same toys we tech geeks use, or take cautious steps into the occasional cold pool called cyberspace—one tippy toe at a time. Why shouldn’t those folks be accommodated with “lesser” devices?

I fear that Jonathan has spent a little too much time in the ivory tower surrounded by countless people like me who are almost part cyborg in that they use so much technology that they are practically at one with their devices. (If I don’t have a laptop in my backpack and a mobile phone in my pocket I start to experience phantom pains, like I am missing appendages). If one finds themselves stuck in an echo chamber with enough of these other cyborg-humans, they can start to fear the consequences of what might happen when the mere mortals start walking in the front door and asking asinine questions about how to boot up their devices or log on to certain websites. But we have nothing to fear from these aliens. They can have their closed systems and we can have our open systems. We can tinker; they can just play with what they are given. We can be highly interactive cyber-goobers; they can be utterly passive couch potatoes. And so on.

Moreover, a big part of the gap here is simply generational and will pass with time. Once today’s tech geeks are grandparents, most of our kids and grandkids will largely demand the same sort of systems we do because they will be more accustomed to the occasional downsides that accompany the Wild West that cyberspace can sometimes be. But there will always be a crowd who demands some hand-holding and added security.

Jonathan’s short-term concern about how the desire for more stable and secure systems will lead to a more “regulable” world, is understandable. Concerns about privacy, child safety, defamation, identity theft and so on, will continue to lead to calls for more intervention. At the corporate level, however, some of that potential intervention makes a great deal of sense. For example, if ISPs are in a position to help do something to help alleviate some of these problems—especially Spam and viruses—what’s wrong with that? Of course, it gets a lot trickier with things like child safety and copyright issues. That’s where excessive intervention by ISPs could create serious speech and privacy problems—namely in the form of a forced surrender of anonymity.

But, again, I think there is a happy balance here. Bruce Owen, one of my intellectual heroes, really nails it in his response to Jonathan’s thesis:

“Why does Zittrain think that overreaction is likely, and that its costs will be unusually large? Neither prediction is self-evident. Faced with the risk of infection or mishap, many users already restrain their own taste for PC-mediated adventure, or install protective software with similar effect. For the most risk-averse PC users, it may be reasonable to welcome “tethered” PCs whose suppliers compete to offer the most popular combinations of freedom and safety. Such risk-averse users are reacting, in part, to negative externalities from the poor hygiene of other users, but such users in turn create positive externalities by limiting the population of PCs vulnerable to contagion or hijacking. As far as one can tell, this can as easily produce balance or under reaction as overreaction—it is an empirical question. But, as long as flexibility has value to users, suppliers of hardware and interconnection services will have incentives to offer it, in measured ways, or as options.”

That’s exactly right. We can find happy middle-ground solutions. By contrast, Jonathan’s alternative solutions to these problems are quite amorphous. He speaks of the need for a “latter-day Manhattan project, not to build a bomb but to design the tools and conventions by which to continuously defuse one.” (p. 173). That seems like a strange metaphor or paradigm for him to choose since the Manhattan project was highly secretive and centrally planned, the exact opposite of what he seems to desire. But, again, what he desires remains very murky. It seems he wants to solve the problems brought about by openness with more openness—primarily in the form of collective intelligence and action. If we all just find smart ways to work together, we can improve open systems, he argues. Well, sure we can.. sorta. But it will never work perfectly on its own. Some people are going to want more safety and security. They should get it, even if comes in the form of “sterile appliances and tethered devices.” Because, again, the rest of us always have the option to choose something else.

One proposed solution that Jonathan does spell out in a bit more detail troubles me greatly. When discussing the future of Net neutrality, he makes some interesting arguments similar to those we often make here about how unlikely it is that network intermediaries will really be able to stifle the free flow of bits. But then Jonathan goes on to say:

“If there is a present worldwide threat to neutrality in the movement of bits, it comes not from restrictions on traditional Internet access that can be evaded using generative PCs, but from enhancements to traditional and emerging appliancized services that are not open to third-party tinkering.” (p. 181)

He then blasts cable and satellite boxes as being “walled gardens” and creating “mediated experiences” and goes on to ask: “So when should we consider network neutrality-style mandates for appliancized systems?” I would have hoped the answer would be NEVER, since we don’t want pesky FCC bureaucrats making those sort of calls for us and stifling device innovation as a result. Alas, Jonathan seems to feel differently, and responds to his own question as follows:

“The answer lies in that subset of appliancized systems that seeks to gain the benefits of third-party contributions while reserving the right to exclude it later. … Those who offer open APIs on the Net in an attempt to harness the generative cycle ought to remain application-neutral after their efforts have succeeded, so all those who built on top of their interface can continue to do so on equal terms.” (p. 184)

I have many problems with that logic. First, most developers who offer open APIs aren’t likely to close them later precisely because they don’t want to incur the wrath of “those who built on top of their interface.” But, second, for the sake of argument, let’s say they did want to abandoned previously open APIs and move to some sort of walled garden. So what? Isn’t that called marketplace experimentation? Are we really going to make that illegal? Finally, if they were so foolish as to engage in such games, it might be the best thing that ever happened to the market and consumers since it could encourage more entry and innovation as people seek out more open, pro-generative alternatives.

Consider this example: Now that Apple has opened to door to third-party iPhone development a bit with the SDK, does that mean that under Jonathan’s proposed paradigm we should treat the iPhone as the equivalent of commoditized common carriage device? That seems incredibly misguided to me. If Steve Jobs opens the development door just a little bit only to slam it shut a short time later, he will pay dearly for that mistake in the marketplace. For God’s sake, just spend a few minutes over on the Howard Forums or the PPC Geeks forum if you want to get a taste for the insane amount of tinkering going on out there in the mobile world right now on other systems. If Apple tries to roll back the clock, Microsoft and others will be all too happy to take their business by offering a wealth of devices that allow you to tinker to your heart’s content. We should let such experiments continue and let the future of the Internet be determined by market choices, not regulatory choices such as forced API neutrality.

Anyway, read Jonathan’s book. I’ve probably gone a bit too hard on him here, but it’s an important and enlightening book about one possible vision of the Net’s future. In the end, I guess my outlook is just a little rosier than his.

( Update: Following this review, I discussed my reservations in a series of follow-up essays. (Part 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]. Finally, I named Jonathan’s book the “most important tech policy book of 2008” on my end-of-year Top 10 list.)