I'm writing this in reaction to a recent discussion of how to apply antitrust and common-carriage rules to the telecom industry. I was struck by the focus on the details and legal tradition of these laws as if they constituted a discussion of the issues themselves.
We need to be wary about treating laws as doctrine answerable only to themselves. The reason that NN regulation is problematic is not because it would stifle innovation in itself. It is because such legislation compounds the basic problem of a regulatory system based on the presumption of central control and it’s that larger framework that stifles innovation. Additional legislation no matter how well-intended is likely to compound the problem. It’s as if we tried to assure that SNOBOL conformed to the rules of both COBOL and Latin by adding more rules.
I've come to this view having spent decades, both as an observer and as a participant, trying to understand how systems and, for that matter, marketplaces work and don’t work. In particular when and why we do get Moore’s law type hyper-growth and its benefits (as well as disruptions) and what do we fail to get. I want to keep this short so I’ll simply note that decoupling marketplaces is a key element and the sharp distinctions associated with digital systems allow us to regenerate what works while preserving nuance. Failures are self-limiting. This gives us resilience and the ability to benefit from vibrant experimentation and discovery. Darwin’s undirected evolution was, in a sense, premised on the concept of genes.
This understanding is central to this discussion in a number of ways. One is that it helps us understand how the Internet works despite, not because of regulation. Fitting it into the mold of traditional telecom is akin to presuming intelligent design is the basis for biology and public policy. This is also true for technologists who are trying to preserve the current accidental properties of today’s Internet – in particular the centralized control as embodied in the IP address and the DNS – rather than learning from what doesn’t work very well.
The understanding gives us a way to think about how and why antitrust works. Saying it’s about market dominance is an oversimplification. Common carriage and antitrust decouple marketplaces to allow independent innovation rather than giving a gatekeeper control. The trick is to identify points where decoupling can be effective and how individual efforts can composite into a greater whole. It doesn’t work well, for example, if each owner of a segment of road has veto power of the traffic and can charge arbitrarily high prices or if we make it too difficult to cooperate and interconnect road segments by deeming it collusion. It can be collusion if the control is used to exclude other parties.
This is why I also cite the first amendment as being, perhaps, more relevant than antitrust. Avoiding prior restraint prevents a gatekeeper from prejudging ideas. This works because we can survive the harm done by “bad” speech and get the benefits of disruptive innovation. The fundamental problem is that we cannot have an a priori definition of what is beneficial nor can we give a static definition at any point in time. This is why it is so important to provide opportunity and to maintain fluid markets by reducing the friction between elements. The kind of silos we see in telecom deny us opportunity.
This doesn’t mean you can never intervene – just that one must do so tentatively while working towards a self-sustaining configuration. This is the crux of the problem with the Regulatorium – it might’ve been seen as necessary for a period of time but the approach had a fatal flaw in that it begged the question – it “solved” scarcity by assuring it.
Unfortunately we’ve detached our legal system from the basic principles and we don’t continually reinvigorate it by revisiting the basic principles. Instead we bury them behind a long chain of precedent. This is why I cite Robert Laughlin’s A Different Universe where we reminds scientists that they can’t simply pile theories upon theories because the significant factors change and some properties only appear in context or at scale.
I could understand the reluctance to embrace new ideas if there weren’t a clear and proven alternative. But we do have an alternative that is working rather well despite the regulations. Why are we arguing over antitrust rather than whether the assumptions defining the FCC’s regulatory system make any sense in light of our current understanding and experience?
Science is a way of challenging our assumptions. And that's disquieting to those with a stake in the status quo. No wonder we try to ignore even simple ideas like the fact that digital signaling undermines the defining assumption of our regulatory system. We still act as if communication (meaning) is an inherent property of the transport rather than something people do using the transport.
If I wanted to be more colorful I could cite Jefferson's admonition that the tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. The legal system should be able to respond short of bloodletting. I could also compare the current legal systems with cells that have lost their stem properties and cannot refresh themselves. But I would rather focus on the particular in this case. Very simply – telecom is modeled on railroads so it’s no surprise that we’re applying railroad law.
The Internet has nothing to do with telecom – it’s about creating solution at the edge and doing our own networking.
We can play within the legal tradition, as with product liability, by treating the legal system as a game of scrabble in which the most skilled player can find the pieces that fit together to get the most points. In this sense we can try to try to apply antitrust – but there is a risk. Antitrust can be used to assure multiple service providers divvy up the market or it can be used to decouple the transport from the services. The former interpretation is within the Regulatorium and the latter would mean going against many years, if not centuries, of precedent about rights of ways and easements that have granted providers exclusive ownership rights of their transport.
We could also try to challenge the presumption of scarcity that has legitimized the regulatory system but that would require unraveling too many prerogatives for those who have control. I've been told that we have to accept such control as a given even if such control violates basic principles such as the first amendment and deprives us of the opportunity to create our own solutions. I call this the "stole it fair and square" rule. I consider it legitimate to compensate people when the rules change but it is not a justification for maintaining in intolerable situation.
In telecom we now have a system in which each fix creates more problems – or the bug/path ratio >> 1.0. We can just wait till the whole fetid mess collapses on itself as we've seen with the subprime and other meltdowns.
Or we can stop ceding control to those who know the rules of the game without recognizing that the game itself is the problem and instead rise up to take back control of our infrastructure. Ignorance of the law may be no excuse but I consider disdain for basic facts to be inexcusable.
