Interoperability is a topic that has long been of interest to me. How networks, platforms, and devices work with each other–or sometimes fail to–is an important engineering, business, and policy issue. Back in 2012, I spilled out over 5,000 words on the topic when reviewing John Palfrey and Urs Gasser’s excellent book, Interop: The Promise and Perils of Highly Interconnected Systems.

I’ve always struggled with the interoperability issues, however, and often avoided them became of the sheer complexity of it all. Some interesting recent essays by sci-fi author and digital activist Cory Doctorow remind me that I need to get back on top of the issue. His latest essay is a call-to-arms in favor of what he calls “adversarial interoperability.” “[T]hat’s when you create a new product or service that plugs into the existing ones without the permission of the companies that make them,” he says. “Think of third-party printer ink, alternative app stores, or independent repair shops that use compatible parts from rival manufacturers to fix your car or your phone or your tractor.”

Doctorow is a vociferous defender of expanded digital access rights of many flavors and his latest essays on interoperability expand upon his previous advocacy for open access and a general freedom to tinker. He does much of this work with the Electronic Frontier Foundation (EFF), which shares his commitment to expanded digital access and interoperability rights in various contexts.

I’m in league with Doctorow and EFF on some of these things, but also find myself thinking they go much too far in other ways. At root, their work and advocacy raise a profound question: should there be any general right to exclude on digital platforms? Although he doesn’t always come right out and say it, Doctorow’s work often seems like an outright rejection of any sort of property rights in networks or platforms. Generally speaking, he does not want the law to recognize any right for tech platforms to exclude using digital fences of any sort.

Where to Draw the Lines?

As someone who has authored a book about the importance of permissionless innovation, I need to be able to answer questions about where these lines between open versus closed systems are drawn. Definitions and framing matter, however. I use “permissionless innovation” as a descriptor for one possible policy disposition when considering where legal and regulatory defaults should be set. Another conception of permissionless innovation is more of an engineering ideal; a general freedom to connect, tinker, modify, etc. (I speak more about these conceptions in my latest book, Evasive Entrepreneurs.) Of course, someone advocating permissionless innovation as a policy default will sometimes be confronted with the question of what the law should say when someone behaves in an “evasive” fashion in the latter conception of permissionless innovation.

Doctorow would generally answer that question by saying that law should not be rigged to favor exclusion through laws like the DMCA (and specifically the law’s anti- circumvention provisions), Computer Fraud and Abuse Act, patent law, and various other rules and laws. “[T]he current crop of Big Tech companies has secured laws, regulations, and court decisions that have dramatically restricted adversarial interoperability.”

Generally speaking, I agree. I’m not a fan of technocratic laws or regulations that seek to micro-manage interoperability and which stack the deck in favor of exclusionary conduct with steep penalties for evasion. But does that mean adversarial interoperability should be permitted in all cases? Should there exist any sort of common law presumption one way or the other when a user or competitor seeks access to an existing private platform or device?

Specifics matter here and I don’t have time to get into all the case studies that Doctorow goes through. Some are no-brainers, like the infamous Lexmark case involving refillable printer ink cartridges. Other cases are far more complicated, at least for me. Does Epic, creator of Fortnite, have a right of adversarial interoperability that it can exercise against Apple and their AppStore? As Dirk Auer suggests in a new essay, this episode looks more like a straightforward pricing dispute. Epic is making it out to be much more than that, suggesting Apple is guilty of unfair and exclusionary practices that require a legal remedy.

Why not take that logic further and just say Apple’s App Store us tantamount to a natural monopoly or digital essential facility that Epic and everyone else is entitled to on whatever terms they want? For that matter, why not apply the same logic to Epic’s Fortnite platform or even its Unreal Engine? Does every other gaming developer have a right to piggyback on the juggernaut that Epic has built?

This gets to the core question about Doctorow’s concept of adversarial interoperability: Exactly what should common law and the courts say platform owners make access rights a simple pricing matter and say: “You pay or you are out.” Like Doctorow and EFF, I don’t want Apple to benefit from any special favors from laws like DMCA. Where we differ is that I would still leave the door open for Apple to exercise various other common law contractual rights or property rights in court.

I suspect Doctorow would deny any such claims by Apple or anyone else. If so, I would like to see him spell out in more precise terms exactly what Apple’s property rights and contractual rights are in this instance. Or, again, should we just treat the App Store as a digital commons with unfettered open access rights for developers? If so, would Apple be required to still manage the resource once it is a quasi-commons?

I think that would end miserably, but would like to hear Doctorow’s preferred approach before saying more. I suspect a lot rides on the distinction between “open” verses “proprietary” standards, but compared to Doctorow and EFF, I am willing to embrace a world of both open and proprietary systems, and many hybrids in between. I don’t want the law favoring one type over the other, but that means I need to endorse a generalized property right for digital operators such that they can still exclude others (even in the absence of artificial regulatory rights like DMCA creates). Again, I suspect Doctorow would reject that standard, preferring a generalized right of access, even if that means the platforms become de facto commons.

More Radical Steps

Elsewhere, Doctorow has said is that some of these questions would be better addressed through more aggressive antitrust regulation. Mere data portability or mandatory interoperability isn’t enough for him. “Data portability is important,” Doctorow says, “but it is no substitute for the ability to have ongoing access to a service that you’re in the process of migrating away from.”

In his latest online book on “How to Destroy Surveillance Capitalism,” Doctorow suggests that it is time to “make Big Tech small again” through an “anti-monopoly ecology movement.” That “means bans on mergers between large companies, on big companies acquiring nascent competitors, and on platform companies competing directly with the companies that rely on the platforms.” And he desires a host of other remedies.

So, here we have the convergence of interoperability policy and antitrust policy, with a layer of property confiscation layered on top apparently. “Now it’s up to us to seize the means of computation, putting that electronic nervous system under democratic, accountable control,” he insists in his latest manifesto.

What’s funny about this is that Doctorow begins most of his essays by pointing out all the ways that politics is the problem when it comes to access issues, only to end by suggesting that a lot more political meddling is the required solution. He repeatedly laments how large tech players have so often been able to convince lawmakers and regulators to pass special laws or regulations that work to their favor. Yet, in his We-Can-Build-A-Better-Bureaucrat model of things, all those old problems will apparently disappear when we get the right people in power and get rid of those nefarious capitalist schemers.

Thus, what really animates Doctorow’s advocacy for adversarial interoperability is a deep suspicion of free market capitalism and property rights in particular. In this worldview, interoperability really just becomes a Trojan Horse meant to help bring down the entire capitalist order. Am I exaggerating? “As to why things are so screwed up? Capitalism.” Those are his exact words from the conclusion of his latest book.

Adversarial Innovation & Evolutionary Interop

Still, Doctorow raises many legitimate issues about interconnection and digital access rights. But we need a better approach to work though these questions than the one he suggests.

In my lengthy review of the Palfrey and Gasser Interop book, I tried to sketch out an alternative framework for thinking seriously about these issues. I referred to my preferred approach as “experimental interoperability” or “evolutionary interoperability.” I described this as 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.

Adversarial interoperability is important, but not nearly as important as adversarial innovation and facilities-based competition. Stated differently, access rights to existing systems is an important value, but the incentives we have in place to encourage entirely new systems is what really matters most. At some point, a generalized right of access to existing systems discourages the sort of platform-building that could help give rise to the sort of creative destruction we have seen at work repeatedly in the past and that we still need today. Taken too far, adversarial interoperability threatens to undermine this goal. Why seek to build a better alternative platform if you can just endlessly free ride off someone else’s by force of law?

Thus, I prefer to work at the margins and think through how to balance these competing claims of access / interoperability rights versus contractual / property rights. My take will be too utilitarian for not only Doctorow but also for some libertarians, who want clear answers to all these questions based upon their preferred natural law-oriented constructions of rights. The problem with that approach is that it leads to all-or-nothing extremes (complete digital property rights, or virtually none) and that approach is fundamentally unworkable and destructive. We need to work harder about how to balance these rights and values in pro-competitive, pro-innovation fashion.

There is No Such Thing as Optimal Interoperability

In sum, there is no such thing as “optimal interoperablity.” Sometimes proprietary or “closed” systems will offer the public features and options that they will find preferable to “open” ones.  “There are many reasons why consumers might prefer ‘closed’ systems – even when they have to pay a premium for them,” argues Dirk Auer in a separate essay. It could be greater convenience, security, or other things. Palfrey and Gasser correctly noted in their book that, “the state is rarely in a position to call a winner among competing technologies” (p. 174). Moreover, they concluded:

“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)

A thousand amens to that! The law should not artificially foreclose experimentation with many different types of platforms, standards, devices and the interoperability that exists among them.

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:

Hanno F. Kaiser, a U.S. and EU antitrust lawyer and partner with Latham & Watkins LLP, has just released an important essay on a topic I have devoted much time to here over the years: the debate over the relative advantages of “open” vs. “closed” technological systems and the Lessig-Zittrain-Wu school of thinking about these issues.

Kaiser’s essay is entitled, ” Are Closed Systems an Antitrust Problem?” and it appears in the latest edition of Competition Policy International.  This essay is not to be missed. Kaiser’s terrific paper helps us better understand and debunk many of the myths and misperceptions that continue to riddle this debate. Here’s Kaiser’s key insight:

At bottom, the bad reputation of closed systems or walled gardens in the “open versus closed” debate is quite undeserved. Walled gardens generally benefit their environments—both in the real world and the digital realm. The primary purpose of a garden wall, after all, is to shelter plants from wind and frost, not to keep intruders out. In the protected space of the garden, flowers can grow that would not otherwise survive in the wild. Walled gardens thus deliberately create a microcosm that is different from the surrounding ecosystem. Therefore, as long as the garden does not take over the entire ecosystem, walled gardens increase, not reduce, overall diversity. From a competition policy perspective, enjoying the fruits of a walled garden is generally not a guilty pleasure.

Therefore, “as a policy matter, ‘open’ is not necessarily better than ‘closed’,” Kaiser argues, and elaborates as follows:

Our initial question whether “closed” systems are inherently anticompetitive can be restated as follows: “Is there a reason to believe that intra-platform restraints imposed by the platform sponsor on various contributors are commonly exclusionary?” To that question, the answer is no. Is it possible that such restraints can lead to anticompetitive exclusion? Yes, but not unless the platform has significant market power vis-à-vis rival platforms.

In other words, it is foolish to over-simplify the debate as many scholars do when they imply that “open”=good and “closed=bad. (For a recent example, see my essay here earlier this month about Cory Doctorow’s misguided effort to equate open systems with “techno-optimism.”)

In my work, I’ve tried to focus on the happy balance and healthy competition that exists today between such systems. Shouldn’t that be what counts most? Scholars like Lessig, Zittrain, Wu, and Doctorow sometimes seem to want to force a false ‘open-or-nothing-else’ choice upon us. Such thinking is troubling from a policy perspective since it means law might force many consumers to use systems that may not be to their liking.  Moreover, such thinking reveals an ironic insecurity among these “Openness Evangelicals,” as I have called them: they seem to have very little faith in the open systems and technologies they trumpet. If such systems really are superior, shouldn’t they win out in the end?

Importantly, however, Kaiser also debunks the simplistic notion that “open” and “closed” systems are easily defined:

As an analytical tool the labels “open” and “closed” are of limited utility, because they cannot adequately capture the complexity of selective openness at various layers of a system within their single binary distinction.  Addressing the central antitrust issue requires that we move past the “ready labels” and focus on whether specific vertical restraints at all levels result in anticompetitive exclusion and foreclosure.

Quite right. I also appreciated Kaiser’s thought’s on Tim Wu’s “Separations Principle,” which would rigidly segregate all information services into three buckets–content, conduit, and devices–and keep them there. Kaiser says:

The Separations Principle amounts to a general rule against vertical integration in the information sector irrespective of market power, foreclosure, and efficiencies. Such a sweeping rule requires extraordinarily strong justifications, which Wu fails to provide. In fact, our analysis of the competitive effects of open and closed systems does not suggest that closed systems pose anywhere near the level of concern that would justify such a radical expansion of antitrust market regulation.

Kaiser is actually being too generous. Wu’s radical prescription for the information sectors flies in the face of decades of antitrust scholarship and would have devastating ramifications for the Digital Economy in practice, as I noted in part 6 of my multi-part review of his book The Master Switch.

Anyway, read Hanno Kaiser’s terrific paper. It’s a major contribution to the literature in this arena and a real breath of fresh air compared to what I regard as the hopelessly pessimistic (and usually overly-simplistic) literature on “open” vs. “closed” technological systems.

P.S … I put together a separate page here at the TLF to house my 30 or so essays addressing “Problems with the Lessig-Zittrain-Wu Thesis.”  Also, this chapter from the Next Digital Decade book on the case for Internet optimism ties together all my various critiques into one essay.

This is the second of two essays making “The Case for Internet Optimism.” This essay was included in the book, The Next Digital Decade: Essays on the Future of the Internet (2011), which was edited by Berin Szoka and Adam Marcus of TechFreedom. In my previous essay, which I discussed here yesterday, I examined the first variant of Internet pessimism: “Net Skeptics,” who are pessimistic about the Internet improving the lot of mankind. In this second essay, I take on a very different breed of Net pessimists:  “Net Lovers” who, though they embrace the Net and digital technologies, argue that they are “dying” due to a lack of sufficient care or collective oversight.  In particular, they fear that the “open” Internet and “generative” digital systems are giving way to closed, proprietary systems, typically run by villainous corporations out to erect walled gardens and quash our digital liberties.  Thus, they are pessimistic about the long-term survival of the Internet that we currently know and love.

Leading exponents of this theory include noted cyberlaw scholars Lawrence Lessig, Jonathan Zittrain, and Tim Wu.  I argue that these scholars tend to significantly overstate the severity of this problem (the supposed decline of openness or generativity, that is) and seem to have very little faith in the ability of such systems to win out in a free market. Moreover, there’s nothing wrong with a hybrid world in which some “closed” devices and platforms remain (or even thrive) alongside “open” ones. Importantly, “openness” is a highly subjective term, and a constantly evolving one.  And many “open” systems or devices are as perfectly open as these advocates suggest.

Finally, I argue that it’s likely that the “openness” advocated by these advocates will devolve into expanded government control of cyberspace and digital systems than that unregulated systems will become subject to “perfect control” by the private sector, as they fear.  Indeed, the implicit message in the work of all these hyper-pessimistic critics is that markets must be steered in a more sensible direction by those technocratic philosopher kings (although the details of their blueprint for digital salvation are often scarce).   Thus, I conclude that the dour, depressing “the-Net-is-about-to-die” fear that seems to fuel this worldview is almost completely unfounded and should be rejected before serious damage is done to the evolutionary Internet through misguided government action.

I’ve embedded the entire essay down below in Scribd reader, but it can also be found on TechFreedom’s Next Digital Decade book website and SSRN.

The Case for Internet Optimism Part 2 – Saving the Net From Its Supporters (Adam Thierer) http://d1.scribdassets.com/ScribdViewer.swf

I’m going to close out my series of essays about Tim Wu’s new book, The Master Switch: The Rise and Fall of Information Empires, by discussing his proposed solutions.  In the first five essays in the series, [1, 2, 3, 4, 5] I’ve critiqued Wu’s look at information history as well as his use of terms like “market failure,” “laissez-faire” and “open” vs. “closed.”  I argued there’s a great deal of over-simplification, even outright distortion, in his use of those terms throughout the book.

Anyway, let’s run through the basics of the book once more before getting to Wu’s proposed solutions.  By my reading of The Master Switch, Wu’s argument essentially goes something like this:

• Information industries go through cycles. After a period of “openness” and competition, they tend to drift toward “closed,” corporate-controlled, anti-consumer models and outcomes.
• The resulting “monopolists” then block much innovation, competition, and free speech.
• Consequently, “the purely economic laissez-faire approach… is no longer feasible.”
• Moreover, information industries are more important than all others (“information industries… can never be properly understood as ‘normal’ industries”) and even traditional forms of regulation, including antitrust, “are clearly inadequate for the regulation of information industries.” (p. 303).
• Thus, special rules should apply to information-related sectors of our economy.

Again, I’ve challenged some of these assertions in my previous essays, specifically, Wu’s incomplete history of cycles and the fact that he greatly underplays the role of governments in “locking-in” sub-optimal market structures or, worse yet, creating those structures through misguided public policies or regulatory capture.  Wu discusses some of those factors in his book, but he tends to regard them as secondary to the inquiry, whereas I believe they are crucial to understanding how most “closed” or anti-competitive scenarios develop or endure. Instead, Wu simplistically suggests that “the purely economic laissez-faire approach… is no longer feasible,” even though no such state of affairs has ever existed within communications or media industries. They have been subjected to varying levels of indirect influence or direct control almost since their inception.

Regardless, what does Tim Wu want done about the problems he has (mis-)diagnosed?

What Wu Wants: A “Constitutional” Approach to Private Regulation

Broadly speaking, Wu wants to counter what he regards as “the danger of private power,” “the Lockean sanctification of private property,” and the fact that “American economic life [has] been built mostly on freewheeling capitalism.” (p. 300)  More specifically, he wants to end the “cycle” he describes of markets moving from supposedly open to closed.

To do so, he proposes what he calls a “constitutional” approach to private marketplace regulation.  In reality, it would be a massive, unprecedented, and highly destructive information sector industrial policy that would substitute the Rule of Man for the Rule of Law.  But let’s hear how Wu describes it:

What I propose is not a regulatory approach but rather a constitutional approach to the information economy. By that I mean a regime whose goal is to constrain and divide all power that derives from the control of information. Specifically, what we need is something I would call a Separations Principle for the information economy. A Separations Principle would mean the creation of a salutary distance between each of the major functions or layers in the information economy. It would mean that those who develop information, those who control the network infrastructure on which it travels, and those who control the tools or venues of access must be kept apart from one another. At the same time, Separations Principle stipulates one other necessity: that the government also keep its distance and not intervene in the market to favor any technology, network monopoly, or integration of the major functions of an information industry.”  (p. 302, emphasis in original)

Wu calls this a “constitutional approach” because he models it on the separations of power found in the U.S. Constitution, such as the separation of church and State, as well as the separation of powers between branches of government.  Wu makes a few additional assertions:

• “[T]he Separations Principle accepts in advance that some of the benefits of concentration and unified action will be sacrificed, even in ways that may seem painful or costly.” (p. 305)
• But Wu believes that pain or cost is worth it because of the “corrupting effect of vertically integrated power.” (p. 305)
• “You cannot serve two masters, and the objectives of creating information are often at odds with those of disseminating it,” he says. (p. 305)
• Specifically, he claims the Separations Principle would better protect free speech and entrepreneurial freedom. On the former: “It is a recognition that the disposition of firms and industries is, if anything, more critical than the actions of the state in controlling who gets heard.” On the latter: “The Separations Principle protects entrepreneurial freedom by preventing stagnation and repression of business innovation, especially with the help of the state.” (p. 306)

There’s a lot to unpack here including Wu’s stunning claim that his Separations Principle doesn’t represent a regulatory regime, as well as his rather incredible belief that government meddling and machinations could be kept in check under this regime.

First, however, Wu deserves credit for coming clean about just how radical his proposal is.

Constitutional Limits on Governments vs. Private Actors

Wu admits that “It would be quite radical today even to contemplate imposing on the economy the kind of safeguards that the Constitution places on the political system.” (p. 301)  A few pages later he notes that “The Separations Principle… requires a certain breadth and ambition in its application.” (p. 308)

I’m glad Wu was willing to at least acknowledge the radicalness of his proposal.  But, as he is prone to do throughout the book, he raises an important potential objection only to quickly walk away from it.  In this case, however, it’s completely understandable why Wu wouldn’t want to continue this inquiry: His proposal really is “quite radical” since it is completely at odds with America’s constitutional heritage of individual liberty and limited government.

Let’s go back to Civics 101.  We require that governments live under certain constraints and the Rule of Law because we recognize that governments possess the unique ability to fine, punish, and imprison citizens.  Moreover, escape from government’s tentacles is difficult, if not impossible. A constitutional system is required, therefore, to limit government’s role over our lives and the economy.

By contrast, we do not impose similar constraints on individuals — or on individuals when they work collaboratively in organizations or corporations — primarily because we believe there should be a presumption of liberty in most human affairs.  Freedom is the default position.  We value freedom because it allows humans to exercise their free will and live a life of their own choosing — and that includes the freedom to pursue happiness by making money in a business venture.  Our nation’s founders saw the wisdom in this even before we had a grand historical clash between communism and capitalist systems.  From that experience, however, we now have undisputed proof that social and economic freedoms are closely linked, and that when humans are free, they prosper.  The other reason we default to freedom for private individuals and organizations is because the possibility of “escape” exists from undesirable social or economic situations.

Wu doesn’t bother slowing down to appreciate these distinctions. He gives occasional lip service to the dangers of excessive government power:

Again and again in the histories I have recounted, the state has shown itself an inferior arbiter of what is good for the information industries. The federal government’s role in radio and television from the 1920s through the 1960s, for instance, was nothing short of a disgrace…. Government’s tendency to protect large market players amounts to an illegitimate complicity … [particularly its] sense of obligation to protect big industries irrespective of their having become uncompetitive. (p. 308)

Quite right. Yet, as I pointed out in this earlier essay, there’s seemingly never any serious lesson to be drawn from that conclusion.  Wu just marches right along in his narrative and ignores that “disgrace” and its relationship to “the cycle.”

The crucial point here is that Wu doesn’t fully appreciate the qualitative difference between State power and corporate power.  Instead — consistent with many “media access” theorists who came before him — he largely equates those forms of power or even makes private power out to be the more significant threat to personal liberties and freedom of speech.  Again, we hear statements like “the disposition of firms and industries is, if anything, more critical than the actions of the state in controlling who gets heard.”

The problem with this is that (a) history shows it’s simply not true and (b) the corrective remedies such a theory counsels would require a massive enhancement of State power to counter the supposed threats of private power, which (c) would create an even bigger threat to human liberty since only the State can fine, imprison, and truly foreclose speech.

So, I’ll stick with traditional “constitutionalism,” thank you very much!  Tim Wu’s “constitutionalism,” by contrast, is the Rule of Man, not the Rule of Law.  Specifically, it would be the rule of a handful of unelected men (and women) down at the Federal Communications Commission, the Federal Trade Commission, or whatever other regulatory bureaucracies Wu would empower under this approach.   And, as we’ll see next, that approach is truly audacious in its scope.

Practical Considerations: An Unprecedented Information Control Regime

OK, let’s forget about all that philosophical and legalistic mumbo-jumbo.  After all, most people these days don’t really give a hoot about constitutional limitations or the first principles associated with our nation’s founding. Let us instead explore the Bold New World of information regulation that Wu wants imposed on the high-tech economy and consider its complexity and costs.  Wu is a bit short on details about how policymakers should go about constructing a “Separations” regime, or how it will work in practice, but he does suggest that Net neutrality regulation and expanded antitrust oversight are at least two of the core elements. But he says that will not be enough.

Despite the fact that Wu admits the FCC “has on occasion let itself become the enemy of the good, effectively a tool of repression,” Wu seems to suggest the agency will continue to have “day-to-day authority over the information industries.” (p. 309) Of course, the FCC’s role is currently limited mostly to older sectors of the information economy, but Wu seems to suggest that role should be expanded considerably.  Yet, FCC oversight isn’t enough either, Wu says.  He argues that “what is needed is not only an FCC institutionally committed to a Separations Principle but also a structural arrangement to guard against such deviations, including congressional oversight as well as attention and corrections from other branches of government.”

Here the “breadth and ambition in its application” associated with Wu’s Separations Principal becomes more apparent. We are talking about layers upon layers of regulation. More importantly, the key attribute of Wu’s Separations Principle is that it is preemptive and prophylactic in character.  He explicitly rejects the idea that marketplace experimentation should be allowed and that ex post administrative proceedings or antitrust enforcement will be good enough. “[T]here is the problem of taking an after-the-fact approach to a commodity so vital to our basic liberties,” he argues. (p. 204) Thus, Wu’s approach represent a return to the sort of anticipatory, “Mother, May I” regulatory regime America was supposed to be turning away from following the passage of the Telecommunications Act of 1996.

What’s most bizarre about Wu’s call for such a preemptive “Separations” approach is his insistence that it is not a regulatory approach.  It’s hard to know whether this is an astonishing bit of hubris or just plain naiveté.  I hate to suggest it, but I think Wu is perfectly aware of just how regulatory his system would be in practice; he just doesn’t want to admit it.  After all, for there to be “separations” of various segments of the information sector, someone would need to determine who and what belongs in which bucket.  Wu suggests we’ll need at least three buckets. To repeat, he says his Separations Principle “would mean that those who develop information, those who control the network infrastructure on which it travels, and those who control the tools or venues of access must be kept apart from one another.”  Let’s put some labels on these buckets:

• Bucket #1: Information Creators
• Bucket #2: Information Distributors
• Bucket #3: Information Hardware Makers

These would essentially become three of the new “titles” (or regulatory sections) of a forthcoming “Information Economy Separations Act.” (I’m assuming Wu understands it would take an act of Congress to implement this sweeping regime, although he never makes that clear.  Or perhaps he would just prefer the FCC “reclassify” the entire information economy by regulatory fiat? Who knows.  Again, he never really sweats the details on this important point.)

Regardless, the problem with these conceptually neat classifications is that don’t conform to our fast-paced, highly dynamic Information Age economy.  There is a fluidity of innovation and market activity that Wu utterly fails to appreciate.  I suppose it’d be easy to throw a couple of players into these buckets and tell them to stay put.  We could tell T-Mobile, for example, that they could be a wireless information distributor and absolutely nothing else; we could tell Discovery Networks, they could be a content creator and absolutely nothing else; and we could tell Intel, you can be a chip maker and absolutely nothing else.

But not every existing information sector actor or technology is so neatly compartmentalized. Moreover, Wu’s framework also begs the question: Would firms that currently have integrated operations and investments in multiple fields be forced to divest control of various operations to come in line with Wu’s Separations Principle?   Here are a few scenarios to consider (and with each example, ask yourself the question: What’s the harm here to would justify the sort of “separations” regime Wu proposes?):

• Cox Enterprises has a wide variety of content and distribution properties including: broadband services, cable TV channels and distribution systems, newspapers, radio stations, advertising and direct mail divisions, and AutoTrader.com.  How many pieces does the firm need to be split into to comply with Wu’s new “Separations” regime?
• Should an ISP be allowed to develop or offer (or directly integrate into their service) free anti-virus software and parental control technologies since that’s not part of the underlying distribution service? Nearly every major ISP does so already today.
• Even though the experiment was ultimately a failure, should Google have been allowed to break out of the search market and give the handheld device business a shot with the Nexus One?  Likewise, should Google be allowed to continue its experiment with local fiber or wi-fi networks even though it is so clearly outside their traditional line of business?  Finally, should the FCC have disallowed Google’s bid in the 700 MHz spectrum auction back in 2008 since it would have meant the firm was formally entering the information distribution business?
• Which bucket is Microsoft in as a traditional OS and software provider?  Regardless, was it a mistake to allow them to jump into the video game console marketplace with the Xbox many years ago?   Should MS have been forbidden from creating the Zune since it too was a digital device outside of Microsoft’s core field?  Should MS be allowed to have a content division that develops games or other content for its operating systems even though they might be considered two separate information markets?
• Sony produces movie and video game content but also develops hardware (video game consoles, televisions, music players, phones, etc.) on which that content can be played. Should that be illegal? Would they have to divest some of these divisions once Wu’s system went into effect?
• Apple is the ultimate example of an information hardware manufacturer that has not only diversified its hardware offerings from PCs to iPods, iPhones and iPads, but also become a (if not the) leading information distributor for digital music, movies, television shows, podcasts, books and audiobooks through iTunes.  The company’s Apps store also makes it a key distributor of software.  What bucket is it in?
• Should Amazon be allowed to be both the biggest online marketplace as well as the manufacturer of a device (the Kindle) that offers access to that store?

I could go on and on, but here’s the crucial point: Creating firewalls between the buckets Wu proposes would be a nightmare and would entail incessant regulatory interventions to make sure the walls weren’t breached.  As suggested above, the very act of regulatory line-drawing would be mind-bogglingly complex.  More importantly, each new information sector innovation would suddenly be subjected to a regulatory classification proceeding.

Wu is essentially saying there are few integrative efficiencies or other economic benefits associated with cross-sector deals or cross-platform technological developments.  Again, he dismisses the notion with one line: “[T]he Separations Principle accepts in advance that some of the benefits of concentration and unified action will be sacrificed, even in ways that may seem painful or costly.” (p. 305)  Well, that’s nice… except that this regulatory system would upend the U.S. information economy as we know it!  His Separations Principle is an unprecedented regulatory wrecking ball that would do untold destruction to the American economy in the name of creating a system of information apartheid. Wu also completely ignores the litigation nightmare that would ensue once the government started forcing the divestiture of various lines of business.  After all, many companies would likely have valid “takings” claims here under the Fifth Amendment.

But even if we could get beyond all that, we’d have to consider how this regime would work going forward.  Let’s consider a hypothetical example.  Virtual reality is an emerging field of our information economy that promises to experience rapid growth in coming years.  A number of companies are currently developing content and devices that will help bring a veritable Star Trek holodeck experience to our living rooms sometime very soon.  The market is still in a great deal of flux and it remains unclear which technologies will prevail or which developers and device makers will prosper.  One thing we know for certain, however: it’s a hugely complex and expensive undertaking.  VR technologies aren’t like creating a YouTube video of your cat playing a piano. There are significant costs associated with developing VR content and devices. Distributing VR bits over networks will, no doubt, be quite complicated as well.  Now, imagine two scenarios (which, for all I know, may already be playing out in the marketplace today):

• Scenario 1: A partnership is announced between some cutting-edge VR companies that have different core competencies in this field.  One of the companies is developing holographic imaging devices to project immersive environments directly into your living room or workspace.  Another of the partners is developing games that would take advantage of those new holographic imaging innovations.  And a third partner in the deal is developing software that will help manage the real-time, high-bandwidth flow of VR bits across broadband lines.  Under Wu’s Separations Principle, would this deal be illegal?
• Scenario 2: All of the activities discussed above are being handled by a single, integrated firm.  Is that illegal under Wu’s Separations Principle?

Now, it would be easy to dismiss this scenario with a casual wave of the hand and a ‘we’ll-figure-it-out-later’ attitude.  But consider the fact that deals and developments like this are happening every single minute of the day our modern information economy.  One wonders how regulators would even be expected to keep track of it all.  And they would have to keep track of it all because, again, Wu’s Separations Principle is preemptive and prophylactic in character.  His regulatory regime is going to have to come to grips with that fact that innovation happens. Markets evolve. People want to experiment and do bold new things. They tinker. They develop. They pitch. They deal. And so on.  As that dynamic process unfolds every day across the high-tech economy, Wu’s Separations Principle will be put to the test and necessitate a regulatory proceeding of some sort to determine what is permitted and what is verboten.  Meanwhile, the very uncertainty associated with Wu’s regime would delay and discourage investment in the field and formation of the partnership/venture necessary to successfully bring VR to market

Astonishingly, however, Wu argues that “a Separations regime would take much of the guesswork and impressionism, and indeed the influence trafficking, out of the oversight of information industries.” (p. 307) That’s a doozy of a claim.  To the extent his Separations Principle eliminates “guesswork” and creates more regulatory certainty, it would only do so by creating rigid artificial barriers to market entry and innovation across the information economy.  That’s “certainty” that we can live without.

Conclusion

Over on Amazon.com, I was interested to see Tim Wu post a glowing review of Kevin Kelly’s important new book, What Technology Wants (which I will be reviewing here next).  Kelly’s book argues that we should think of technology, or what he calls “the Technium,” as a “force” or even a living “organism” that has a “vital spirit” and which “has its own wants” and “a noticeable measure of autonomy.”  I think Kelly goes a bit far, but to the extent one buys into the notion that technology is like an organism, Tim Wu’s Information Industrial Policy would kill that organism.  Or, it would at least severely stunt its continued growth and evolution.

Because his information industry policy is every bit as “radical” as he suggests and would require, as he also admits, “a certain breadth and ambition in its application,” it is essential we reject this innovation-killing regulatory regime.  The health of the high-tech economy, the global competitiveness of the U.S. technology sector, and the long-term welfare of consumers depends upon it.

So, do I need to remind everyone of my ongoing rants about Jonathan Zittrain’s misguided theory about the death of digital generativity because of the supposed rise of “sterile, tethered” devices? I hope not, because even I am getting sick of hearing myself talk about it. But here again anyway is the obligatory listing of all my tirades: 1, 2, 3, 4, 5, 6, 7, 8 + video and my 2-part debate with Lessig and him last year.

You will recall that the central villain in Zittrain’s drama The Future of the Internet and How to Stop It is big bad Steve Jobs and his wicked little iPhone. And then, more recently, Jonathan has fretted over those supposed fiends at Facebook. Zittrain’s worries that “we can get locked into these platforms” and that “markets [will] coalesce [around] these tamer gated communities,” making it easier for both corporations and governments to control us.  More generally, Zittrain just doesn’t seem to like that some people don’t always opt for the same wide open general purpose PC experience that he exalts as the ideal. As I noted in my original review of his book, Jonathan doesn’t seem to appreciate that it may be perfectly rational for some people to seek stability and security in digital devices and their networking experiences—even if they find those solutions in the form of “tethered appliances” or “sterile” networks, to use his parlance.

Every once and awhile I find a sharp piece by someone out there who is willing to admit that they see nothing wrong with such “closed” platforms or devices, or they even argue that those approaches can be superior to the more “open” devices and platforms out there. That’s the case with this Harry McCracken rant over at Technologizer today with the entertaining title, “The Verizon Droid is a Loaf of Day-Old Bread.” McCracken goes really hard on the Droid — which hurts because I own one! — and I’m not sure I entirely agree with his complaint about it, but what’s striking is how it represents the antithesis of Zittrainianism: 

Yesterday, Google announced Google Earth for Android. It looks neat–and it requires Android 2.1, so it won’t run on the less-than-four-months-old Droid. That’ll get fixed when Verizon rolls out an update for the Droid, which may happen soon. But it points out frustrating, potentially crippling issues with Android: The platform is splintering, and it’s changing so rapidly that the majority of Android handsets feel stale. Even the Droid–I’m not sure if it’s a coincidence that Amazon is selling it for fifty bucks, or one-quarter of Verizon’s original after-rebate price. Over at InfoWorld, Galen Gruman has a good post with more evidence of Android’s fractured nature. There are multiple, incompatible versions of the OS out there, and I don’t know of any good reason to think the situation’s going to get better rather than worse. Google surely isn’t setting a good example by releasing an Android version of Google Earth which won’t run on most Android phones.

But wait… doesn’t Android represent an example of near Nirvana in terms of Zittrainian generativity? Isn’t this the model we should all be hungry to have dominate all devices? McCracken sure doesn’t think so. He’s all aboard the Steve Jobs “Screw Openness” Express:

Do I need to recap the situation with Apple’s iPhone OS? It gets only one major upgrade a year, instantly available to all owners of existing devices, and all software works on any iPhone OS gizmo that has the proper hardware. Android will never be like that, of course: It’s an open-source product that runs on an array of gadgets with varying hardware specs and capabilities. But how big a bummer is it going to be if it takes a nerdish interest in version numbers to determine if a given app works on your phone? Isn’t it a problem if the hot Android phone of the 2009 holiday season feels stale by February, even if the situation is somewhat temporary? In short, wouldn’t it be healthy for Android if it evolved a little more slowly, and everyone responsible for its fate agreed that compatibility is a key goal?

Now isn’t that interesting! Here, in essence, we have an argument that generativity and openness are bad for us.  McCracken is praising Apple’s “you’ll get your OS upgrades when we let you” model versus the wild west approach of rolling upgrades for Android devices. Are you OK with that? Personally, I’m not. But more on that in a moment.

Part of what McCracken is actually getting at here is something I talked about in an old essay here wondering what constitutes “Too Much Platform Competition.” That is, how many platforms or operating systems are too many? Do we really need dozens of video game consoles? I don’t know about you, but I personally wouldn’t want to buy more than the 3 consoles I have already spent way too much money on. And game developers absolutely hate having to code for multiple platforms. The same is now true for mobile application developers. They are not particularly fond of the sudden proliferation of mobile operating systems and apps stores using competing standards. It’s just more development expense from their perspective.

What the iPhone brings, by contrast, is stability, security, and certainty.  People value that even if Zittrain fears it.

But now for the not so dirty little secret I have whispered here before — I hate Apple for all this!!  I am more of Zittrainian than Zittrain!  Jonathan actually carries an iPhone around in his pocket when I wouldn’t consider owning one in a million years.  I want to hack away at my stuff and tweak it to my heart’s content. And when McCracken talks about that “nerdish interest in version numbers to determine if a given app works on your phone,” well, that’s me, baby!  I am the kind of uber-dork that sits around constantly hitting the refresh button on the Droid’s “About Phone” menu to see if new OS upgrades are ready to roll.  (Yes, sad, I know. Do you believe someone actually married a dork like me?) And as far as security and stability go… well I say screw that. I have bricked several phones trying to hack away at them. It doesn’t help that I almost never know what I am doing, but I do have an healthy spirit of digital adventurism!

Anyway, here’s the really important point: We can have the best of both worlds — a world full of plenty of “tethered” appliances and semi-walled gardens, but also plenty of generativity and openness at the same time. And we can have plenty of hybrid solutions, too.  On the “generative-vs.-sterile appliance” spectrum, the range of devices and platforms just continues to grow and grow in both directions.

Moreover, these “open” vs. “closed” notions are always hopelessly over-simplified in digital technology policy debates. It’s rare to find any device or platform that is perfectly open or closed. Indeed, the very notion that Apple is a “closed’ platform is somewhat misleading. As I mentioned just last night, Apple’s App Store alone has over 100,000 apps in 20 different categories (available in 77 countries) to choose from. So, even though Steve Jobs & Co. keep a tight grip on operating system upgrades and Apps Store policies, the reality is that there’s a whole lot of generativity taking place on top of that OS and within that app store. It’s somewhat reminiscent of what happened when supposedly Big Bad Bill Gates pissed off the whole world in the 90s by building a code empire around a proprietary operating system that he tightly controlled:  Countless exciting innovations developed for that platform even if Bill & Microsoft didn’t hand over the keys to OS to the rest of the world so they could tinker away with it.

Again, I am not saying that generativity and openness are overrated; only that they other side of the story rarely gets told.  And the ideal world, of course, is one in which we have options on both sides of the “open” vs. “closed” spectrum from which to choose. Luckily, that is increasingly the world we live in today.

Harvard Berkman Center professor Jonathan Zittrain has published another pessimistic, Steve-Jobs-is-Taking-Us-Straight-To-Cyber-Hell editorial building on the gloomy thesis he set forth in his 2008 book, The Future of the Internet and How to Stop It. His latest piece appears in the Financial Times and it’s entitled, “A Fight over Freedom at Apple’s Core. Concerning the recent Apple iPad announcement, Zittrain warns: “Mr Jobs ushered in the personal computer era and now he is trying to usher it out.”

I’m not going to go into yet another lengthy dissertation about what it so misguided about his thesis that cyberspace is becoming more “regulable” and that digital “generativity” is dying because of the rise of devices like the iPhone & iPad, or sites like Facebook.  Instead, I will just point you to the many things I’ve written before explaining just how far off the mark Prof. Zittrain is on this point. [See the complete list down below + video of our debate.]

But let me just say this… Ignoring that fact that he is an iPhone user himself — which makes no sense considering that he thinks of Apple as the font of all cyber-evil — he can’t muster any substantive empirical evidence proving that the Net and digital devices are being more “closed, sterile, and tethered,” as he repeatedly claims in his book and editorials.  And that’s not surprising because the reality is that the digital world is more open and generative than ever, and even if there are some “closed” devices and systems out there, they are actually quite innovative and not perfectly closed as Zittrain suggests. The spectrum of “open vs. closed” systems and devices is incredible diverse and nothing is perfectly “open” or “closed.”  We can have the best of both worlds: many open systems with some partial “walled gardens” here and there (or hybrid systems combining both). Regardless, we are witnessing greater digital “generativity” and innovation with each passing year. Until Zittrain can prove the opposite, his thesis must be considered a failure.

Finally, I want to associate myself with this excellent critique of the Zittrain thesis by Prof. Ed Felten, who points out that Zittrain’s argument doesn’t even work for the iPad, which I would agree is a fairly “closed appliance” in the Zittrainian scheme of the things:

For the iPad to become a Zittrain-type appliance, two things must happen. First, Apple must remain picky about which apps are available in the App Store. Second, Apple must limit the device’s browser so that it lacks the features that make today’s browsers viable application platforms. Will Apple be able to limit their product in this way, despite competition from other, more general-purpose tablets? I doubt it. But even this — even an appliance-style iPad — would not be enough to prove Zittrain’s thesis. Zittrain argued not just that appliances would exist, but that they would replace general purpose computers. Amazon’s kindle is an appliance, but it doesn’t prove Zittrain’s thesis because nobody is ditching their laptop in favor of a Kindle. Instead, the Kindle is an extra device which is used for its purpose, while the general-purpose device is used for everything else. If the iPad ends up like the Kindle — a complement to the laptop or netbook, rather than a replacement for it — this will not prove Zittrain’s thesis. It seems unlikely, then, that the iPad, even if it succeeds, will provide strong support for Zittrain’s thesis. General-purpose computers are so useful that we’re not likely to abandon them.

Exactly right. And here’s a few more things you might want to read to see why Zittrain’s thesis doesn’t add up (the first and the last one probably provide the best overview):

• Review of Zittrain’s “Future of the Internet” (3/23/08)
• Apple, Openness, and the Zittrain Thesis (3/30/08)
• Another Problem for the Zittrain Thesis — Old People! (4/12/08)
• [AUDIO] NPR “On Point” Debate over The Future of the Internet (5/13/08)
• iPhone 2.0 Cracked in Hours… What Was that Zittrain Thesis Again? (7/10/08)
• Enough anti-iPhone rants… just get another phone! (8/11/08)
• Another Review of Zittrain’s “Future of the Internet” (9/20/08)
• [VIDEO] My Debate with Jonathan Zittrain at New America Foundation (11/6/08)
• Zittrain’s Pessimistic Predictions and Problematic Prescriptions for the Net (7/20/09)
• Code, Pessimism, and the Illusion of “Perfect Control” (5/8/09)[1st part of Cato Unbound Debate “Ten Years of Code“ (featuring Lessig, Zittrain, Declan McCullagh, and me]
• Our Conflict of Cyber-Visions (5/14/09) [part 2 of the Cato Unbound debate]
• Cyber-Libertarianism: The Case for Real Internet Freedom (8/12/09)
• You’d Have to Be Smoking Dope to Believe the Zittrain-Lessig Thesis (9/15/09)
• Oh Farts! The Droid, the iPhone & the Lessig-Zittrain Thesis (11/12/09)

Last night here on the TLF, Bret Swanson raised a number of objections with this FCC-commissioned report about international broadband comparisons, which was conducted by some folks at Harvard University’s Berkman Center. Meanwhile, over at the Digital Society blog, George Ou also offers a hard-nosed look at the Berkman broadband report and concludes “The underlying data cited by Berkman study is simply too flawed to be of any use.”  I recommend everyone check out both essays.  It will be interesting to hear how the Berkman folks respond.  Some of these international broadband comparisons are really fishy.  [Here’s a podcast we did on that issue two years ago.]

One quick point… Like Bret, I also found it shocking that–even though the report reads like an ode to forced access regulation–the Berkman folks didn’t spend much time discussing the result of America’s previous open-access regime. “The gaping, jaw-dropping irony of the report,” Bret argues, “was its failure even to mention the chief outcome of America’s previous open-access regime: the telecom/tech crash of 2000-02. We tried this before. And it didn’t work!”  Indeed, America’s regulatory experiment with forced access regulation involved a lot of well intentioned laws and regulation, and too many acronyms to count–CLECs, TELRIC, UNE-P, etc– but it did not result in serious, facilities-based competition.  Instead it offered us the fiction of competition through network-sharing, or what Peter Huber once referred to as building “networks out of paper.” The results were disastrous for investment during that period since regulatory uncertainly led to a lot of stunted innovation.

In sum, sharing is not competing.  You can socialize and commoditize old pipes for awhile and get decent results in the short-term, but you’ll sacrifice long-run investment and innovation if you do.  [For more background, see my recent essay on “The Fiction of Forced Access ‘Competition’ Revisited” and this old Cato piece on “UNE-P and the Future of Telecom “Competition” as well as Jeff Eisenach’s PFF white paper, “Broadband Policy: Does the U.S. Have It Right After All?”]

Well, here we go again. Harvard’s Jonathan Zittrain has penned another gloomy essay about how “freedom is at risk in the cloud” and the future of the Internet is in peril because nefarious digital schemers like Apple, Facebook, and Google are supposedly out to lock you into their services and take away your digital rights.  And so, as I have done here many times before (see 1, 2, 3, 4, 5 + video!), I will offer a response arguing that Jonathan’s cyber-Chicken Little-ism is largely unwarranted.

Zittrain’s latest piece is entitled “Lost in the Cloud” and it appears in today’s New York Times.  It closely tracks the arguments he has set forth in his book The Future of the Internet–And How to Stop It, which I named the most important technology policy book of 2008, but not because I agreed with its central thesis.  Zittrain’s book and his new NYT essay are the ultimate exposition of Lessigite technological pessimism.  I don’t know what they put in the water up at the Berkman Center to make these guys so remarkably cranky and despondent about the future of of the Internet, but starting with Lawrence Lessig’s Code in 1999 and running through to Zittrain’s Future of the Internet we have been forced to endure endless Tales of the Coming Techno-Apocalypse from these guys.  Back in the late 90s, Prof. Lessig warned us that AOL and some other companies would soon take over the new digital frontier since “Left to itself, cyberspace will become a perfect tool of control.”  Ah yes, how was it that we threw off the chains of our techno-oppressors and freed ourselves from that wicked walled garden hell?  Oh yeah, we clicked our mouses and left! And that was pretty much the end of AOL’s “perfect control” fantasies. [See my recent debate with Prof. Lessig over at Cato Unbound for more about this “illusion of perfect control,” as I have labeled it.]

But Zittrain is the equivalent of the St. Peter upon which the Church of Lessigism has been built and, like any good disciple, he’s still vociferously preaching to the unconverted and using fire and brimstone sermons to warn of our impending digital damnation. In fact, he’s taken it to all new extremes. In Future of the Internet, Jonathan argues that we run the risk of seeing the glorious days of the generative, open Net and digital devices give way to more “sterile, tethered devices” and closed networks. The future that he hopes to “stop” is one in which Apple, TiVo, Facebook, and Google — the central villains in his drama — are supposedly ceded too much authority over our daily lives because of a combination of (a) their wicked ways and (b) our ignorant ones.

First, let’s talk about those corporate wicked ways. Jonathan waxes nostalgic about a mythical time not long ago when technologies were supposedly far more “open and generative” than they are now. In Jonathan’s revisionist history of the digital olden times, we are told that the early PC era was somehow the model for openness and generativity.  That’s damn peculiar to an old-timer like me because all I remember from those days is the tall stacks of proprietary programs sitting on my desk + a keyboard and other peripherals that were all hard-wired to the monitor + a guy named Bill Gates who was typically likened to the Darth Vader of openness.  In Zittrain’s retelling of things, however, those Digital Dark Ages have suddenly become the good ol’ days!  The real threat to openness and digital freedom, however, is now right before us.. or just over our head it seems. It’s up there in the cloud, he tells us. The freedom that “tinkerers and hackers” once enjoyed in those glorious good ‘ol days “is at risk in the cloud, where the vendor of a platform has much more control over whether and how to let others write new software,” Zittrain says.

Excuse me? Why would it be the case that generativity is now somehow more at risk today than it was in the era where we had to wake up every morning and wait for a C:\ prompt before loading an operating system or $50 spreadsheet software via three different 5.25 floppy disks?  [Seriously, does anybody else besides me remember how much those days sucked?]  Well, it turns out that the answer to that question goes back to the ignorant ways of the digital hoi polloi that I mentioned above.  You see, we are all sheep who just don’t know what’s good for us. Or here’s how Jonathan puts it, albeit spinning it in such a way to make his elitist pronouncements somewhat easier to swallow:

The market is churning through these issues. […] But the dynamics here are complicated. When we vest our activities and identities in one place in the cloud, it takes a lot of dissatisfaction for us to move. And many software developers who once would have been writing whatever they wanted for PCs are simply developing less adventurous, less subversive, less game-changing code under the watchful eyes of Facebook and Apple.

Ooooo.. spooky!  Beware ye naive Netizens, for “the watchful eyes of Facebook and Apple” are upon you!

No, seriously, what the hell does all that mean and what the heck is the problem here? By no conceivable stretch of the imagination can one paint a portrait of the Digital Dark Ages for me that makes that era look better than the Digital Renaissance we are now living through. There’s never been a better time to be tinkerers, hackers, or just regular citizen-consumers in cyberspace.

So, what gives?  Why is it that two smart guys like Lessig and Zittrain always seem to fear to worst even in the midst of a cornucopia of cyber-choices?  It comes back to the hyper-pessimism and remarkable short-sightedness of the Lessig-Zittrain worldview. In terms of their myopia, here’s how I put it in that recent debate with Lessig:

Lessig failed to appreciate that markets are evolutionary and dynamic, and when those markets are built upon code, the pace and nature of change becomes unrelenting and utterly unpredictable. …  a largely unfettered cyberspace has left digital denizens better off in terms of the information they can access as well as the goods and services from which they can choose. Oh, and did I mention it’s all pretty much free-of-charge? Say what you want about our cyber-existence, but you can’t argue with the price!

But there’s something else which drives their reasoning, and for lack of a softer term I will just label it what I think it really is: Elitism. At the end of the day, if we are to believe the scary tales that Zittrain and Lessig try to weave in their work we have to accept the notion that neither companies not consumers can really be trusted to make sensible decisions.  Basically, cyber-companies are only out to screw us and we’re just too stupid to realize it. Luckily for us, however, the fine folks up at Berkman know what’s best for us and, guess what, it’s not Facebook, Apple, TiVo, or Google!  These companies are apparently guilty of the heinous crime of giving consumers too much of what they want, and we can’t allow that because “it takes a lot of dissatisfaction for us to move.”  Or as Jonathan noted in an earlier essay:

I think we can get locked into these platforms as we (rightly, unfortunately) fear the wildness of the open Internet and general purpose PC, and as we shift and accumulate more and more of our data and relationships there. After the markets coalesce to these tamer gated communities, governments can later come along and insist that these platforms be tuned towards surveillance and control far more successfully than the wilder Internet that preceded them.

In other words, we’re lazy fools. Or perhaps maybe — just maybe — we’re reasonably happy with the choices we have been given and don’t have a good reason to flee some of our current favorite providers. My God, could it be that markets work!  No, no, no, Zittrain tells us, for these “tamer gated communities” (tamer than what?) have lulled us into a sleep as they concoct a plan to “tame” the Net, quash software innovation, and then invite the government in to take all our info or property.

So, we’re right back at Lessig’s AOL horror story from 1999, except now it’s Facebook, Apple, and Google staring in the role of our corporate captors — again, even though they offer us constantly improving services and constantly falling prices (and are completely free of charge in the case of Facebook and Google).  Regardless, the fear of lock-in and what Lessig and Zittrain refer to as the “regulability” of some of these services and platforms, leads them to argue that something ominous lurks around every cyber-corner.  Consequently, just as Lessig counseled a fair degree of government oversight and intervention back in ’99 to deal with the AOL era (non-)problem of walled gardens, a decade later, Zittrain is ready to call in the code cops to correct for our foolish allegiances to the latest crop of popular software providers or media platforms:

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. We’ve only just begun to measure this problem, even as we fly directly into the cloud. That’s not a reason to turn around. But we must make sure the cloud does not hinder the creation of revolutionary software that, like the Web itself, can seem esoteric at first but utterly necessary later.

Sorry, but where is the evidence warranting this sort of techno-pessimism?  I just can’t buy into the story that Zittrain spins: That some folks in the cloud are currently “hinder[ing] the creation of revolutionary software” or that one day soon we’ll all wake up and find our digital lives and property completely controlled by cloud-based companies and we will be utterly without recourse.  Honestly, is Google locking you down? Did someone make you sign up for all their free services? Any reason you can’t use a second e-mail service or a different search provider?  Likewise, did Steve Jobs force you to buy an iPod or an iPhone?  I would think we should be celebrating the fact that in just one year’s time there has been 1.5 Billion downloads of over 65,000 free and paid apps by consumers in 77 countries.  I call that progress — and I don’t even own an iPhone!  Again, nothing is stopping consumers from exercising their right to choose from many other products besides Apple, Google, and Facebook, just as I have.

Now, do companies make mistakes? Of course they do. All the time, in fact. Amazon’s bone-headed book deletion this week is the latest exhibit. But people learn from these things. And companies do as well. Things evolve. Companies correct their mistakes or people bolt. AOL lost 20 million paying customers and billions in market share in the span of just a few years. Time Warner is still cursing the day they made that deal and has now spun it off entirely. Last time I checked, the old AOL model wasn’t a favorite among most web vendors. Moreover, does anyone really think there’s a future for Amazon if they make it a habit of deleting digital books on people’s Kindles?  Frankly, if you want more competition in the digital book market, you should be inviting Amazon to play such silly reindeer games. It would be the best incentive ever for people to switch! But the fact remains, that’s the exception to the rule. Locking down customers or playing games with their digital goodies isn’t a viable long-term business model that I see many firms adopting these days. And if they do, they are screwing themselves.

This same principle applies to Facebook and the fear that they will hold onto customers or their data.  When they get too heavy-handed, people respond. Does anyone remember the Beacon incident or the flare-up of Facebook’s changing Terms of Service?  People got pissed, and the company listened. That’s a healthy sign that consumers have real power in the social networking market.  Moreover, how hard is it to escape from Facebook Land? It’s not a maximum security data prison. I went there for all of about a day, found it wasn’t for me, and then deleted everything and set up camp over at LinkedIn instead.  (Yes, that’s right, I do NOT have a Facebook account.  Somehow the sky hasn’t fallen on me.  People still find me just fine.)

So what about those solutions that Zittrain recommends for these new non-problems? In Future of the Net, he was surprisingly short on specific solutions. But in today’s NYT editorial he gets a bit more concrete with that suggestion “the time may come to ensure that their platforms do not discriminate,” possibly through regulation or other Sunstein-ian “nudges.” Here we have the truly frightening prospect of a handful of faceless bureaucrats becoming Facebook’s overlords.  I’m not even sure what it means to have the government “ensure they do not discriminate,” but I really don’t want to find out.  For Google it’s a lot easier to figure out what Zittrain’s medicine will taste like: Can you say “Right of Reply Mandates & a Fairness Doctrine for the Internet?”  Frank Pasquale and Oren Bracha can and they’ve already sketched the blueprint for what a new Federal Search Commission might look like to address “search bias.” [See Berin’s critique here. ]  And for Apple, non-discrimination at the device level would take the form of forced commoditization of the iPhone.  They’d be required to give it to any carrier that wanted it on government-approved terms and the iPhone Store would be regulated like grain elevator and subjected to common carrier rules.  You know, because that model worked soooo well in other contexts.  And then, just for good measure, we would layer on a bunch of restrictions on all these companies in the form of online advertising regulations.  We can’t have the mindless sheep of the Internet being subjected to more targeted ads, after all!   To be clear, Zittrain hasn’t recommended these specific regulatory remedies yet, but this is where his logic is taking us. The old regulatory playbook will become the new regulatory playbook.

OK, now that I have been so snarky and dismissive of most of what Jonathan says in his editorial today and in his book, let me close by noting where I (partially) agree with him and Lessig. Are some digital technologies “regulable” such that our government could coerce them to divulge data or personal information?  Yes, this is true.  But here’s how I addressed that concern in my recent Cato Unbound debate with Lessig:

[cyber-libertarians] are in league with Lessig [and Zittrain] when it comes to the forcible surrender of personal information or technological capabilities to government officials. When the Department of Justice comes knocking on Google’s door asking for records of our search histories to see who’s looking for online porn (or anything else), that’s a problem. The “deputization of the middleman” has long been a legitimate fear because, with the threat of liability hanging over their necks, online intermediaries could be coerced into giving the state information that leads to fines, imprisonment, censorship, or some other type of government harassment. However, this is a problem we should handle by putting more constraints on our government(s), not by imposing more regulations on code or coders. While, as a general principle, I think it wise for companies to minimize the amount of data they collect about consumers or websurfers, we need not force that by law. And we should certainly hold companies to high standards when it comes to data security and breach. But, again, the way to deal with the “regulability” threat that Lessig and Zittrain raise is to tightly limit the powers of government to access private information through intermediaries in the first place. Most obviously, we could start by tightening up the Electronic Communications Privacy Act and other laws that limit government data access. More subtly, we must continue to defend Section 230 of the Communications Decency Act, which shields intermediaries from liability for information posted or published by users of their systems, because (among many things) such liability would make online intermediaries more susceptible to the kind of back-room coercion that concerns Lessig. If we’re going to be legislating about the Internet, we need more laws like that, not those of the “middleman deputization” model.

But that is the extent of my agreement with Lessig and Zittrain. All this techno-pessimism emanating out of Berkman and their books is largely unwarranted.  I suppose one could argue that they are just sounding alarms in the hope of preemptively checking bone-headed corporate moves, but the problem is that they increasingly back up their pessimism with large doses of heavy-handed political prescriptions to keep the Net “healthy.”  Instead, they’ll just poison the wonderfully free waters of cyberspace with the same regulatory nonsense that has strangled traditional media markets for decades. And unless your idea of cyber-nirvana resembles the broadcast marketplace, you have to think that won’t benefit consumers one bit.

Signed,

An Unrepentant Techno-Optimist

I’ve posted another response in the Cato Unbound online debate over the impact of Lawrence Lessig’s Code and Other Laws of Cyberspace upon the book’s 10th anniversary.  You will recall that I went fairly hard on Prof. Lessig in my essay, “Code, Pessimism, and the Illusion of ‘Perfect Control,’” and Lessig responded with a counter-punch that went after me for it.  I respond in a new essay about “Our Conflict of Cyber-Visions.” In the piece, I address Lessig’s assertion that I just didn’t understand the central teachings of Code, as well as his reluctance to accept the “cyber-collectivism” label that I affixed to his book and life’s work.  Again, please hop over to Cato Unbound for my complete response.

But one thing from the essay that I thought worth reproducing here is my effort to better define the key principles that separate the cyber-libertarian and cyber-collectivist schools of thinking.  I argue that it comes down to this:

The cyber-libertarian believes that “code failures” are ultimately better addressed by voluntary, spontaneous, bottom-up, marketplace responses than by coerced, top-down, governmental solutions. Moreover, the decisive advantage of the market-driven approach to correcting code failure comes down to the rapidity and nimbleness of those response(s).

Of course, another key difference relates to how quickly one jumps to the conclusion that “code failures” are actually occurring at all. I argue:

What concerns me about the way Prof. Lessig approaches these issues in Code and in his subsequent work is that he is far too quick to declare the debate over by labeling short-term code hiccups as sky-is-falling market failures. The end result of such myopic techno-pessimism is the inevitable call for governments to intervene and “do something” to correct supposed code failures.  The cyber-libertarian instead counsels patience. Let’s give those other forces — alternative platforms, new innovators, social norms, public pressure, etc. — a chance to work some magic. Evolution happens, if you let it. Moreover, if you are always running around crying “market failure!” and calling in the code cops, it creates perverse marketplace incentives by discouraging efforts to innovate or “route around” bad code or code failure. We don’t want the whole world sitting around waiting for government to regulate the mousetrap to improve it or even give everyone better access to it; we should want the world to be innovating to create better mousetraps! To reiterate a key point I already stressed in my original essay: One need not believe that the markets in code are “perfectly competitive” to accept that they are “competitive enough” — or at least, better than regulatory alternatives.

Anyway, please head over to the Cato site to read the whole thing and let me know what you think.  If nothing else, I’m sure that Seth Finkelstein will have something incredibly nasty to say about me!  And I will wear his scorn as a badge of honor.

The week-long Cato Unbound online debate about the 10th anniversary of Lawrence Lessig’s Code and Other Laws of Cyberspace continues today with Prof. Lessig’s response to Declan McCullagh’s opening essay, “What Larry Didn’t Get,” Jonathan Zittrain’s follow-up essay, and my essay on, “Code, Pessimism, and the Illusion of ‘Perfect Control.’”  Needless to say, Prof. Lessig isn’t too happy with my response. You should jump over to the Cato site to read the entire thing, but here are a couple of excerpts and my response.

To my suggestion that there is a qualitative difference between law and code, Prof. Lessig says:

I’ve argued that things aren’t quite a simple as some libertarians would suggest. That there’s not just bad law. There’s bad code. That we don’t need to worry just about Mussolini. We also need to worry about DRM or the code AT&T deploys to help the government spy upon users. That public threats to liberty can be complemented by private threats to liberty. And that the libertarian must be focused on both.  […] Of course, law is law. Who could be oblivious to that? And who would need a book to explain it?  But the fact that “law is law” does not imply that it has a “much greater impact in shaping markets and human behavior.” Sometimes it does — especially when that “law” is delivered by a B1 bomber. But ask the RIAA whether it is law or code that is having a “greater impact in shaping markets” for music. Or ask the makers of Second Life whether the citizens of that space find themselves more constrained by the commercial code of their geo-jurisdiction or by the fact that the software code of Second Life doesn’t permit you simply to walk away (so to speak) with another person’s scepter. Whether and when law is more effective than code is an empirical matter — something to be studied, and considered, not dismissed by banalities spruced up with italics.

Well, I beg the professor’s pardon for excessive use of italics.  [I won’t ask for an apology for misspelling my last name in his piece!] Regardless, it’s obvious that we’ll just never see eye-to-eye on the crucial distinction between law and code. Again, as I stated in my essay: “With code, escape is possible. Law, by contrast, tends to lock in and limit; spontaneous evolution is supplanted by the stagnation of top-down, one-size-fits-all regulatory schemes.”

Lessig largely dismisses much of this with that last line above, suggesting that we just need to keep studying the matter to determine the right mix of what works best.  To be clear, while I’m all for studying the impact of law vs. code as “an empirical matter,” that in turn begs the question of how we define effectiveness or success. I suspect that the professor and I would have a “values clash” over some rather important first principles in that regard.  This is, of course, a conflict of visions that we see throughout the history of philosophy; a conflict between those who put the individual and the individual’s rights at the core of any ethical political system versus those who would place the rights of “the community,” “the public” or some other amorphous grouping(s) at the center of everything.  It’s a classic libertarian vs. communitarian / collectivist debate.

Lessig, however, makes it clear in his response that he doesn’t take kindly to being called a cyber-collectivist, even accusing me of “red-baiting” by using the term.  But the collectivism of which I speak is a more generic type; not the hard-edged Marxist brand of collectivism of modern times.   What separates Lessig’s brand of cyber-collectivism from the cyber-libertarianism that I espouse is a general preference for who calls the shots most of the time.  Quite obviously, I place an enormous amount of faith in largely unfettered markets in code to generally advance the values of individual liberty, freedom of speech, and economic innovation more often than rule by politics and public officials will.  Prof. Lessig is obviously far more enamored with the potential of the state and politics to play a beneficial role in shaping things.

Thus, even though Prof. Lessig rejects the association, Declan McCullagh was right to point to the distant influence of Plato on Code and much of Lessig’s other work.  (And there’s a bit of Rousseauian influence there, too.)  In any event, if Prof. Lessig takes offense at this label and wants to call his approach something other than cyber-collectivism, than by all means be my guest; invent a new term and I’ll use it.  But to me, as a student of political philosophy, I see his philosophy as just another variant of collectivism and just don’t know what else to call it.  This isn’t “red-baiting;” it’s simply an exercise in philosophical classification.

To some extent, Prof.  Lessig undercuts my arguments here in concluding his essay by asking that we “focus on a large number of difficult questions that remain… about how to preserve the liberty of society and the Net against the ever-expanding harm caused by the captured corruption that we call democratic government.”  Hey, now that sounds like something a true libertarian might say! (Except that we would have likely used the phrase “preserve the liberty of the individual” instead of “society”!) Regardless, Lessig is at least willing to admit that there may be some problems in paradise for Platonist thinking or Rousseauian romanticism.

Alas, for reasons articulated quite nicely here by Tim Lee in the past, “Lessig clearly understands what it takes to catch the interest of conservative- and libertarian-minded readers, and he’s not above spinning his arguments to maximize their appeal to the people he’s addressing.” For the libertarian, there is only one fool-proof solution to the problem of government corruption: You shrink the Leviathan. From what I’ve seen of Lessig’s proposals so far to address corruption, however, he’s not really willing to have that conversation. It’s all about the old “getting money out of politics” and “kill all the lobbyists” approach. Unfortunately, as Tim notes:

The problem isn’t that there’s a discrete list of corrupt practices that we can identify and prohibit. The problem is that if politicians are willing to be corrupted, and special interests are willing to spend resources to corrupt them, they’ll find ways to get it done. You can certainly reduce the effect on the margin — by banning overt bribery, for example — but once you’ve banned the really obvious categories of back-scratching, it becomes more and more difficult to make any further progress. What’s going on in Washington is disgusting, to be sure, but it’s not new or unique to the United States. And I think fixing it is going to be a lot more challenging than Lessig imagines.

I couldn’t agree more.  Nonetheless, I eagerly await more details from Prof. Lessig regarding his new effort to address corruption in our political system, however he defines it.  He may set forth some reform proposals that we libertarians find quite sensible and ultimately endorse.  But if “reform” instead comes in the form of layers of additional campaign finance regulations, well then, I think we’ll find ourselves disagreeing once again. Because many of those so-called reforms are simply free-speech violating restrictions on the rights of both individuals to petition their government.

But to conclude this exchange on a good note, let me just say that — at least in theory — I wholeheartedly endorse Lawrence Lessig’s call to protect “the Net against the ever-expanding harm caused by the captured corruption that we call democratic government.”   And I hope someday he will be more open to the notion that limits on the power of the state are the ultimate key to accomplishing that goal.

Over at the Verizon Policy Blog, Link Hoewing has a sharp piece up entitled, “Of Business Models and Innovation.” He makes a point that I have often stressed in my debates with Zittrain and Lessig, namely, that the whole “open vs. closed” debate is typically greatly overstated or misunderstood.   Hoewing correctly argues that:

The point is not that open or managed models are always better or worse.  The point is that there is no one “right” model for promoting innovation.  There are examples of managed and open business models that have been both good for innovation and bad for it. There are also examples of managed and open models that have both succeeded and failed.  The point is in a competitive market to let companies develop business models they believe will serve consumers best and see how things play out.

Exactly right.  Moreover, the really important point here is that there exists a diverse spectrum of innovative digital alternatives from which to choose. Along the “open vs. closed” spectrum, the range of digital technologies and business models continues to grow and grow in both directions.  Do you want wide-open, tinker-friendly devices, sites, or software? You got it. Do you want a more closed, simple, and safe online experience?  You can have that, too.  And there are plenty of choices in between.

This is called progress!

The Cato Unbound online debate about the 10th anniversary of Lawrence Lessig’s Code and Other Laws of Cyberspace continues today with my response to Declan McCullagh’s opening essay, “What Larry Didn’t Get,” as well as Jonathan Zittrain’s follow-up.

In my response, “Code, Pessimism, and the Illusion of ‘Perfect Control,'” I begin by arguing that:

The problem with peddling tales of a pending techno-apocalypse is that, at some point, you may have to account for your prophecies — or false prophecies as the case may be. Hence, the problem for Lawrence Lessig ten years after the publication of his seminal book, Code and Other Laws of Cyberspace.

I go on to argue that:

Lessig’s lugubrious predictions proved largely unwarranted. Code has not become the great regulator of markets or enslaver of man; it has been a liberator of both. Indeed, the story of the past digital decade has been the exact opposite of the one Lessig envisioned in Code.

After providing several examples of just how wrong Lessig’s predictions were, I then ask:

[W]hy have Lessig’s predictions proven so off the mark? Lessig failed to appreciate that markets are evolutionary and dynamic, and when those markets are built upon code, the pace and nature of change becomes unrelenting and utterly unpredictable. With the exception of some of the problems identified above, a largely unfettered cyberspace has left digital denizens better off in terms of the information they can access as well as the goods and services from which they can choose. Oh, and did I mention it’s all pretty much free-of-charge? Say what you want about our cyber-existence, but you can’t argue with the price!

I am forced to admit, however, that Lessig’s book has had enormous impact of the field of cyberlaw and digital technology policy:

This brings me to what I believe is the most important impact of Code: the philosophical movement it has spawned. As Declan noted in his opening essay, Code “offered a burgeoning protest movement [a] unifying theme and philosophy” in that it was both a polemic against cyber-libertarianism and a sort of call-to-arms for cyber-collectivism. It gave this movement its central operating principle: Code and cyberspace can be bent to the will of the collective, and it often must be if we are to avoid any number of impending disasters brought on by those nefarious (or just plain incompetent) folks in corporate America. Led by a gifted, prolific set of disciples such as Jonathan Zittrain and Tim Wu, as well as increasingly influential activist groups such as Public Knowledge and Free Press, Lessig’s cyber-collectivists continue to preach skepticism regarding markets and property rights, and a general openness to — and frequent embrace of — government solutions to digital-era dilemmas. […]  Prof. Lessig and his movement are winning the battle of ideas on the cyber-front today. We have Code to thank — or blame — for that.

Please head over to the Cato Unbound website to read the entire thing.  Prof. Lessig’s response is scheduled to be posted on Monday.

I’ve already laid out my own reactions to Google’s roll-out of an “interest based advertising” (IBA) program here.  In a nutshell, I applauded Google setting a new “gold standard” in user empowerment by providing:

• Notice in their IBA-targeted ads of who’s paying for the ad and the fact that Google is serving it; and 
• A link to a powerful “Ad Preference Manager” that allows users to:
  • See and modify the “digital dossier” (to use the fearmonger’s term) of interests associated with the cookie on their computer; and 
  • Opt-out of tracking for IBA purposes.    

But as I predicted, despite these pro-privacy features (and despite the fact that other major companies such as Yahoo! and Microsoft already have IBA programs), a number of privacy advocacy organizations are attacking Google for daring to enter the IBA (or “online behavioral advertising”) business at all.   I’ll have much more to say about the criticism of Google’s new Ad Preference Manager soon, especially coming from Marc Rotenberg of EPIC (a “disaster“) and Jeff Chester of CDD—precisely the sort of the “paroxysms of privacy hysteria” I predicted.  

But first, the criticism from Ari Schwartz of the Center for Democracy & Technology requires a response today.  At its best, CDT plays a vital role in calling corporations to continually raise the bar on privacy.  My own think tank, the Progress & Freedom Foundation, works closely with CDT on many issues, such as advocating user empowerment through technological means as a constitutionally “less restrictive” way of protecting children than government censorship.

 Here’s what Ari had to say:

[T]he opt-out is based on a failed premise. The truth of the matter is that the industry needs to work together to move beyond the discredited cookie opt-out model….  Google claims to have improved upon the old model by creating a plug-in for users to keep their opt-out cookie while deleting the rest of their cookies. While as a technical matter that may be true, without an industry-wide solution these plug-in options just serve to confuse users about what they need to do to protect themselves. If this plug-in approach catches on, will users need to download a plug-in from every network advertiser and every analytics company to stop the tracking? That model just isn’t sustainable.

Ari is setting up a straw man when he suggests that users are going to have to download a separate plug-in for every ad network.  The obvious solution, as Ari points out, is an industry-wide plug-in. But if it’s so obvious, why can’t CDT just write it themselves?  Indeed, why didn’t they write it years ago?

These aren’t rhetorical questions.  I  really  want to know what would be required to create a plug-in that does what Google’s plug-in does for every other ad network’s opt-out cookie in the Opt-out tool developed by the Network Advertising Initiative (NAI):  Maintain “persistent” user choice by checking to see whether a user has deleted whatever their opt-out cookies and, if so, restoring those cookies.  

CDT will probably insist that, if it’s really so easy to create such an industry-wide plug-in, NAI should have done so years ago.  Maybe so.  Perhaps if the industry had moved faster to innovate in privacy protection, they would be in a stronger position right now politically.  Of course, if the industry moves slowly in this regard, maybe that’s because they’ve got their hands full trying to keep advertising, the economic engine that funds the Internet’s “free” content and services, working-a reality Ari ignores.  Or perhaps it wouldn’t matter:  It seems that no matter what industry might do, it’s just not good enough for Ari.  Under the banner of “Keeping the Internet Open, Innovative and Free,” Ari is in fact leading CDT in a full-on attack on the Internet, pushing for regulation that will make the Internet:

• Less “Open” to competition among service providers and the diversity of voices and choices produced by online content creators who depend on advertising;
• Less “Innovative” in terms of new content, new services, new online personalization technologies, and new advertising business models that could broaden the base of economic support for the entire Internet; and
• Less “Free” both in political terms—“free” from government regulation and controls—and in financial terms—“free” to users because advertisers foot the bill.

CDT ignores these very real costs to crippling online advertising, which will ultimately be borne by the very consumers whom CDT claims to be protecting.  This is precisely why Adam Thierer and I have argued so strongly for a layered approach (and here at page 7) to privacy concerns about online advertising that combines self-regulation and tough FTC enforcement of privacy policies with a recognition that only by empowering individual users to make their own choices can we balance inherently subjective concerns about privacy with the need to fund the Internet’s future:

We stand at an important crossroads in the debate over the online marketplace and the future of a “free and open” Internet.  Many of those who celebrate that goal focus on concepts like “net neutrality” at the distribution layer, but what really keeps the Internet so “free and open” is the economic engine of online advertising at the applications and content layers.  If misguided government regulation chokes off the Internet’s growth or evolution, we would be killing the goose that laid the golden eggs. 

Back to the plug-in…  CDT argues that the opt-out cookie system is flawed in respects other than ensuring the persistence of user opt-outs.  We can debate that question.  But I’d just like to get a clear answer once and for all about why CDT hasn’t already developed this plug-in themselves.

Here‘s the NAI opt-out, Ari, and here‘s the code for Google’s plug-in—it’s open source! How much easier could Google have made this for you?  Quit yapping and start coding! 

Since CDT doesn’t seem up to the task, we’ve already modified the Google plug-in to preserve another ad network’s opt-out cookie (download our beta plug-in here) and are currently working to expand the plug-in to work for multiple cookies—which is simply a matter of coding.  We’d welcome help from anyone with experience in writing Firefox plug-ins. 

NAI could (and probably should) do this, themselves.  But if CDT wants to start being philosophically consistent about empowering consumers across in the board —on privacy issues as well as child protection issues—writing this plug-in themselves is a great way to shame the rest of the advertising industry into picking up where Google left off.   I suspect CDT’s failure to do so thus far reflects a crass political calculation that anything they does to empower users to manage their own privacy through technical solutions simply undermines their arguments that only government can protect users—thus weakening their push for regulation.  So much for CDT’s declared mission of “seek[ing] practical solutions to enhance privacy!”

I’ve been hammering Jonathan Zittrain pretty hard here over the past year for the thesis he sets forth in The Future of the Internet and How to Stop It that digital “generativity” is at risk today. The reason I have been doing so is because all signs point in the exact opposite direction, and more so with each passing day. Contrary to Jonathan’s fear that the Internet and digital technologies are growing more closed, tethered, and sterile, I have argued that the facts on the ground show us how the world is actually becoming far more open, untethered, and innovative.  And that’s true even for the technology that Jonathan singles out in the book for special scorn — the iPhone.

Consider David Pogue’s post today on the New York Times‘ technology blog today entitled “So Many iPhone Apps, So Little Time.” Pogue reports that:

there are now 15,000 programs available on the App Store, and so many more are flooding in that Apple’s army of screeners can’t even keep up. I keep meaning to write a thoughtful, thorough roundup of the very best of these amazing programs, but every day that I don’t do it, the job becomes more daunting. […] Apple, which runs the store, keeps 30 percent of each sale. Even so, Ocarina [an application Pogue discusses in his essay] demonstrates that a programmer can make a staggering amount of money from the iPhone store. It’s a crazy new software model that I don’t remember seeing anywhere else. It’s not a boxed software program for $600, or even a shareware program you download for $25. It’s a buck a copy. The beauty here is that at these prices, there’s very little risk in trying something out. How many software programs have you bought for your Mac or PC? Two? Four? Well, the average iPhone owner may wind up installing 10, 20 or 30 programs. In all, according to Apple, iPhone owners have downloaded 500 million copies of these programs. Half a billion–since last July. There’s a lot of gloom in the tech industry (and every industry, for that matter). But even when the economy is crashing down around us, there’s still amazing power in a single good idea. And the one on display here–pricing software so low that millions of people buy it without batting an eye–is turning a few clever programmers into millionaires.

I ask you: Does this sound like a world that is growing less generative, as Zittrain argues? Because it sure doesn’t sound like it to me.  Moreover, if you still don’t think the iPhone is open enough, then there’s always a simple solution to that: just buy another phone!

“Hasn’t Steve Jobs learned anything in the last 30 years?” asks Farhad Manjoo of Slate in an interesting piece about “The Cell Phone Wars” currently raging between Apple’s iPhone and the Google’s new G1, Android-based phone. Manjoo wonders if whether Steve Jobs remembers what happen the last time he closed up a platform: “because Apple closed its platform, it was IBM, Dell, HP, and especially Microsoft that reaped the benefits of Apple’s innovations.” Thus, if Jobs didn’t learn his lesson, will he now with the iPhone? Manjoo continues:

Well, maybe he has—and maybe he’s betting that these days, “openness” is overrated. For one thing, an open platform is much more technically complex than a closed one. Your Windows computer crashes more often than your Mac computer because—among many other reasons—Windows has to accommodate a wider variety of hardware. Dell’s machines use different hard drives and graphics cards and memory chips than Gateway’s, and they’re both different from Lenovo’s. The Mac OS, meanwhile, has to work on just a small range of Apple’s rigorously tested internal components—which is part of the reason it can run so smoothly. And why is your PC glutted with viruses and spyware? The same openness that makes a platform attractive to legitimate developers makes it a target for illegitimate ones.

I discussed these issues in greater detail in my essay on”Apple, Openness, and the Zittrain Thesis” and in a follow-up essay about how the Apple iPhone 2.0 was cracked in mere hours. My point in these and other essays is that the whole “open vs. closed” dichotomy is greatly overplayed. Each has its benefits and drawbacks, but there is no reason we need to make a false choice between the two for the sake of “the future of the Net” or anything like that.

In fact, the hybrid world we live in — full of a wide variety of open and proprietary platforms, networks, and solutions — presents us with the best of all worlds. As I argued in my original review of Jonathan Zittrain’s book, “Hybrid solutions often make a great deal of sense. They offer creative opportunities within certain confines in an attempt to balance openness and stability.”  It’s a sign of great progress that we now have different open vs. closed models that appeal to different types of users.  It’s a false choice to imagine that we need to choose between these various models.

Which raises a second point I always stress: There are an infinite number of points along the “open vs. closed” spectrum.  In reality, there are very few products that are perfectly “open” or “closed” out there. These are terms of art, not science.  The iPhone is becoming more “open” with each passing day.  Granted, it’s not as open as the Windows Mobile and certainly not as open as Android, but many people feel those platforms aren’t perfectly open either, or have that they have their own sets of problems.  Bottom line is, you can shop around and find the phone (and level of “openness”) that is right for you. No one is forcing you to buy an iPhone.

Third, efforts to tightly bottle up any technology or business model these days are usually doomed to fail. It’s not just the iPhone that is cracked in mere hours these days; seemingly every new gadget and service has a small army of hackers waiting to pounce when the product doesn’t do everything that consumers want it to. It’s getting harder and harder for product developers to “cripple” or limit functionality out of the gate.  They either offer it immediately or someone else we make sure it is offered for them.

Fourth and final point: The proper policy position with regards to the “open vs. closed” debate should be one of techno-agnosticism.  Lawmakers and courts should not be tilting the balance in one direction or the other.  Let the great experiment (and debate) continue.