Trying to Take Ownership

By Jonathan Krim
Thursday, December 15, 2005

A frequently served bromide in Washington these days is that the Internet became its hulking, life-altering self because it was never regulated.

Often offered by companies lobbying to avoid rules that might cause them indigestion, this version of history is hard to resist for any of us who cherish free markets. And it has the benefit of being half true.

But with 2006 looming as a watershed year for congressional action on the Internet's future, it would be good if all concerned dissected this notion, or at least took a close look at the truth's other half.

Compared with, say, the banking, utility or telephone systems, the Internet is indeed barely regulated. But what gave the Internet its disruptive power and exhilarating appeal was that it was barely owned .

Suddenly, the mom-and-pop store in Des Moines could advertise and sell to the world, without paying the freight of someone else's marketing apparatus. Intellectual and artistic works could be shared rapidly, at little or no cost. Games could be created and distributed without ever having to manufacture a physical item.

We may think of it as the information superhighway, but really the Net has been a gigantic bypass, circumventing barriers to entry and whole swaths of middlemen (think travel agents or, I'm sad to say, newspaper owners) who are now trying to figure out how to survive.

It's been a ride akin to the opening of the Wild West, with booms and busts, a goodly share of lawlessness, and the thrilling sense that anything was possible because everything was so wide open and cheap.

No one owned the Internet itself (there's no patent on it), and its rules were the province of a handful of volunteers whose motivation was purely to make it work. You paid a small fee to get on, and the sky was the limit after that.

But large stakeholders don't sit idle in the face of this kind of uncertainty and upheaval. For them (and many others), private ownership brings efficiency and entrepreneurship.

So, much of the lobbying and jockeying over the past several years have been efforts to restore order by assigning property-like rights to cyberspace wherever possible.

Thus, we've had the end of requirements that network owners lease their pipes to competitors that who want to provide Internet access. We've seen the lengthening of copyright terms, an explosion of patents, and moves by companies to block governments from adopting open-source software standards or from offering their own wireless Internet systems.

Some of these are regulatory in their own right, such as the entertainment industry's push to require design of electronic equipment that prevents copying of programming.

Yet none is as breathtaking as the recent vision for the Internet put forth by William Smith, chief technology officer of BellSouth Corp., a major telecommunications company.

Along with a handful of other telephone and cable companies, BellSouth owns the pipes most people use to get to the Internet and thus can control the flow of digital traffic.

In Smith's view, network owners should be able to, for a fee, give one Web vendor's traffic priority over the traffic of a competitor.

In this world, if the travel site Orbitz pays the freight, it will work faster and better on your computer than Travelocity. And of course any service provided by the network carrier itself will go to the head of the line.

It reminds me of a start-up company that has developed a newfangled jukebox for bars and restaurants. Among its features: If you pay more than the person who put his money in before you, your song will get played ahead of his. And if someone else comes along willing to pay more money, well, you get the idea.

These notions may be capitalism at their best, but a pay-for-performance Internet will profoundly alter its character and what made it so powerful.

Imagine a new search-engine company seeking to challenge Google. But where will the money come from to match what cash-rich Google can pay to the network owner for priority treatment?

The playing field will tilt again, and perhaps this is as we like it: To the owners go the spoils.

But as Congress rethinks telecommunications policy next year, let's hope it looks hard at this equation and is absolutely sure that this new Internet will be better than the one we have now.

Staff writer Jonathan Krim can be reached

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