The Federalist Society

Bringing Law to New Frontiers: Cyberspace

Intellectual Property Practice Group Newsletter - Volume 3, Issue 1, Spring 1999

July 1, 1999

Mark F. Schultz, David G. Post, Andrew Shapiro

THURSDAY, NOVEMBER 12, 1998

PROCEEDINGS

Following are excerpts from one of the Intellectual Property Practice Group Session panel discussions held as a part of the Federalist Society's 1998 National Lawyers Convention. The convention took place on November 12-14, 1998, in Washington, D.C. The panel discussion is entitled "Bringing Intellectual Property Law to New Frontiers, Part One: Cyberspace." The comments below are a transcription of oral remarks edited by Federalist Society members. The moderator for the panel discussion was Mark Schultz, Vice Chairman of the Intellectual Property Practice Group.

I am Mark Schultz. I'm the moderator, a vice chairman of the Intellectual Property Practice Group, and President of the Chicago Lawyers Chapter. Thank you all for coming.

In setting up this panel, we were thinking about regulation of the internet and talking about a few different perspectives that are out there on this topic. We asked ourselves, "what should be the regulatory regime for the internet?"

There are probably three points of view out there. One is that we should allow self-regulation. It's too soon to regulate the internet. We should step back and see what order emerges.

Another point of view is that changes brought about by the internet are far too rapid and disruptive to just completely ignore. We need some help from the government, and there is a wide range of views on what positive role government could play in a regulatory regime.

The third point of view is a bit contrary and can mesh with either of the first two points of view. . . . [T]here is a fear that new technology could allow governments or big business to oppress us, to give them awful tools for blocking people's freedom to view published materials and other forms of censorship.

We'll be hearing from the panelists today where they fall within that spectrum of views and what their thoughts are about how the internet should be regulated, if at all.

As our first speaker, we're very pleased to have Professor David Post. Professor Post is an Associate Professor of Law at Temple University Law School. He's also co-founder and co-director of the Cyberspace Law Institute. Before joining the legal profession, Dr. Post was an anthropologist and tallght anthropology at Columbia University.

He went to Georgetown University, where he graduated summa cum lallde. He then clerked for Judge Ruth Bader Ginsburg on the DC Circuit. He joined Wilmer, Cutler & Pickering for six years, practicing in intellectual property law and working on high tech transactions. He then went back to clerk for Justice Ginsburg, once she joined the Supreme Court. Professor Post is a frequent speaker on these topics in a wide range of media, both second wave and third wave media. He's actually been the subject of a Wired profile, so that means he's "right dead on" for our topic.

DR. POST: I want to talk briefly about . . . the notion of what it means when those of us say that the internet is a kind of complex adaptive system that is best left, in many cases, to its own devices, as it were, in an uncoordinated and unstructured way for solving policy problems.

I'll just start with one, I think it's a fairly obvious point, at least these days, from which to start this discussion. I think the very existence of the internet and its extraordinary growth over the past half dozen years or so really proves one very important principle-that coordination at the most detailed technical level and, simultaneously, on a global basis, is possible; is possible at amazing speed, entirely without centralized control of any kind, and without the imposition of coercive force of any kind. We sort of take it for granted, but I think the adoption of a set of uniform internet protocols, for example, is a remarkable achievement of the global community.

As I say, we do take it for granted that I can - as I just did a few weeks ago - walk into an office building in a city in provincial China and access my own web page in Philadelphia and all the Java applets work right. I can send myself messages. It's now quite commonplace, but, in fact, that has required a kind of agreement and coordination among thousands and thousands of individual actors, none of whom were told what to do, none of whom were ordered what to do. And I guess I would go even further to say that this could not have been achieved by any kind of centralized control, by any kind of interference with what is the natural evolutionary processes that are at work in a system like this.

Now, I don't think that this principle solves any particular public policy problem standing alone. It doesn't necessarily mean that there are no circumstances in which regulatory intervention is permissible or a good idea. But I also don't think that there are any policy problems regarding the internet that can be addressed without serious consideration of this principle and of this phenomenon. And I guess what I wanted to do was to give an example of... how I think this helps one to think about policy issues and, in particular, the current controversy over the domain name system.

To give a 30-second background for those of you who are not familiar with this, the system under which internet addresses, numerical addresses and internet domain names are handed out-ibm.com, temple.org, aol.com, for example-is in a state of crisis at the moment. The United States Government has played a role in this by funding or partially funding the institution that has had primary responsibility for handing out both names and numbers on a global basis. A funding role has been declining over the last several years, as the internet became capable of generating its own revenue, and it ended formally last month with the expiration of a contract under which NSI, Network Solutions, has been operating.

Last spring, the Commerce Department began plans for an orderly transition of this system. They had determined that they wanted to discontinue the government's role in this system more or less entirely and that they were looking for ways to transition to the private sector. . . .

A non-profit corporation has, in fact, been set up with the government's blessing. It's called ICAN [Internet Corporation for Assigned Names and Numbers]. They are in the process of wrestling with their own bylaws and charter to determine exactly how they proceed. Again, the Commerce Department has been looking over its shoulders to make sure that it proceeds in a way that comports with the government's goals here.

I guess one question I had when I started to get involved with . . . this issue is why the government really felt compelled to do anything at all. That is, having funded this for some time, and with the contract expiring in October 1998, why didn't they just walk away and say, "you're not getting any more money from the US taxpayers to do this, you can generate the money on your own, and we'll keep an eye on you should anything really dreadful happen, but off you go and let's see where this system takes itself in the ensuing months."

Now, there would certainly be a period of uncertainty. There would perhaps be a period of some chaos on the net. There might be multiple suppliers of the domain name services such that I would type www.ibm.com and be taken one place and [you] might type it in from [your] computer and be taken to a different place, because . . . [your] service provider would be resolving these names and numbers in a different way.

But it is, in fact, in the nature of complex systems that they can adjust, in a sense, to chaotic perturbations to find new adaptive configurations when they are subject to stress. And it's adaptive configurations that we can't order in advance, and that often we can't even imagine in advance.

Beyond this period of initial chaos, there is nobody who can tell me what this system would look like four months down the road or six months down the road, as all of the interested players began to adjust to each other's actions, and to reroute their browsers to different sources of supply. There would be new players in the game who would seize an entrepreneurial opportunity to provide this system.

Where this system would resolve itself is unknowable. . . . [W]ould we come up with a better solution to this problem in advance? That is, can we dictate in advance exactly what the best solution to the domain name system might be, as opposed to allowing the multiple players in this system, in a decentralized and uncoordinated way, to perhaps find the right or the best configuration of this system?

I think that's a central question for internet policy and I think the existence of the internet itself puts a thumb on the scales in favor of the uncentralized and unordered approach because it has proven that such an approach can in fact be very successful on a global scale. At the very least, the policy that the government needs to adopt . . . is to avoid, at all cost, the use of governmental force and governmental power to freeze the system in some way so that individual entrepreneurs and others are not permitted to be experimental and unpredictable in the future.

Evolutionary change in a system like this is . . . in a sense, the enemy of orderly transitions, and orderly transitions are the stock and trade . . . of officials at the Department of Commerce. There is a real tension that would be difficult to resolve in favor of adaptive change in the system and against the notion of orderly transitions and orderly policy-making. I think the internet is a huge global experiment in the adaptive significance of complex systems and their ability to regulate themselves. That, so far, has proven quite remarkably the . . . internal power of systems to configure themselves in... ways that could not have been predicted or ordered in advance.

MR. SCHULTZ: Thank you. Professor Post. Next we will hear from Andrew Shapiro. Andrew Shapiro is the Director of the Aspen Institute's internet policy project. He is also currently a First Amendment fellow at the Brennan Center at New York University.

Mr. Shapiro is a journalist, a writer, a scholar, and a policy analyst. His writings have appeared in numerous periodicals. He's a contributing editor at The Nation. He has also written for the American Prospect, Feed, Lingua Franca, the New Republic, the New York Times, the Washington Post, USA Today, and the list goes on.

He's also been a fellow at the Harvard Law School's Berkman Center for Internet and Society and a fellow at the 20th Century Fund. He graduated from Brown University in 1990, and in 1995 graduated from Yale Law School. In 1992, he spoke at President Clinton's postelection economic summit at Little Rock and this coming spring he will teach a seminar at Columbia Law School on new media and the law.

One of Mr. Shapiro's primary areas of focus is the impact of the internet and new technologies on the First Amendment. We are pleased to welcome Andrew Shapiro.

MR. SHAPIRO: First, the general question of whether the internet should be regulated. I think the first thing we need to do is step back and really disaggregate that question. What is the internet? Now, I just really thought of this, but here in my pocket is a cell phone. It's a digital cell phone and I was looking at this as we started here and 1 noticed, on the inside, it says this device complies with Part 15 of the FCC rules, et cetera, et cetera. This is a regulated device and one of the reasons it's regulated is because the spectrum is regulated in terms of what can be used where.

Now, what does that have to do with the internet? Well, if I pay the fee to my service provider for the phone, I can get e-mail on this telephone. What that means, essentially, is that the internet, as we know it, is becoming increasingly amorphous. You can hook a device up to your television, a web TV device, to get internet access. . . . And increasingly it's going to be difficult to distinguish one technology platform from another. One of the ways that people who write about this stuff think about it is just basically to say we have one big net. Forget internet. It's just one large net that's going to encompass so many technologies that separating one from the other

[will] be almost impossible.

In fact, the FCC has started to realize this, because they face the conundrum of what to do with cable modem access to the internet. Are those cable channels that come over by an IP protocol-a visual representation over your screen-bound by the cable public access rule, public education and governmental access standards? It's a tough question, right? It is a cable box, but it's not cable broadcasting. It's internet access over your cable TV. . . . [E]essentially, you can watch Seinfeld on a web site. Should that be under the same regime as cable TV? No one really knows the answer.

My calltionary point, though, is that it's going to be increasingly difficult to distinguish these media. Now, this is a prediction that was made 15-20 years ago by people like ETL Desola Pool and others who said it's going to be very difficult to distinguish, and the answer is we should treat all electronic media the way we treat print media. Don't regulate it. Just leave it alone.

Now, I want to take issue with that by further disaggregating our original question: should the internet be regulated? Well, we say, "what's the internet?" Now we want to ask what regulated means. What is regulation?

My position is that the internet and other developments and technology are going to actually challenge our notion of what constitutes regulation. Traditionally, when we think about the state, we think about rules that are promulgated by administrative agencies. We think about laws, statutes that are passed by legislatures at the state and the Federal levels. We think about treaties that are implemented by groups like WIPO, the World Intellectual Property Organization.

I think regulation increasingly is going to take different forms. We've talked about what industry might do to make up its own rules and govern itself. But I think we need to go even beyond that, to start thinking about how the technology itself can be a regulator.

I think the best way to think about the internet is that it's a force that can actually affect people's lives. It can allow for control and power to shift from one place to another, from institutions to individuals. What that means, essentially, is that the internet itself is a regulatory force.

So when we ask the question, whether the internet should be regulated, we really need to think about what regulation means. Is it just the state acting in ways that can change behavior and change social and political relationships, or is it the technology itself?

Let me give you an example. Professor Post mentioned the copyright changes that have recently taken place, the Digital Millennium Copyright Act. I interpret the Digital Millennium Copyright Act as a sign basically of the copyright industry's anxiety about a giant copying machine. They see digital media as a giant copying machine. You can put anything on there, copy it instantly, and send it anywhere.

What was their response? Over the last five to ten years, people have been trying to figure out what are we going to do when you can so easily copy material. Should we pass new laws that prevent that? Well, that's one way to deal with it and that might be a traditional regulatory angle. But that's not really what we've done. What we've done is invent new tools. We've changed the code of technology to essentially achieve the same goal of protecting creative original works, in the case of copyright, from this giant copying machine. And so there has been the invention of something called trusted systems, also known as copyright management systems or copyright management tools, which do with technology what we would like to do with law-prevent people from distributing or copying, otherwise illegally, so we think in the traditional sense, using our materials that we own. These trusted systems are just coming into play. But what the Congress just did with this anti-circumvention provision that Professor Post mentioned was make it illegal to create tools that would allow you to go around trusted systems.

That's not direct regulation. Congress is not saying you can't copy on the internet, because, frankly, a lot of people think, that should already be a violation of the existing copyright statutes. What Congress is saying is that when people create trusted systems, we are going to make it illegal for you to go around them. That's not state regulation. That's regulation by technology and it's the state buttressing that kind of regulation by saying if you intentionally don't comply with technology as regulation, you're going to go to jail.

Let me flag a few more things for you. As we start to think more expansively about what regulation is, I think that we need to have a more sophisticated, nuanced understanding of government's role on the electronic frontier.

Does government have a role on the electronic frontier? Absolutely it has a role. To think that government doesn't have a role on the internet in cyberspace is to marginalize the internet and cyberspace to a place that doesn't matter. Even the most laissez faire, pro-competition, anti-state, pro-deregulation individual must recognize that there has to be a framework for contract, for property, and for other rules, and, therefore, there is going to be a role for government. And, frankly, I would take slight issue with what Professor Post has said in terms of what we can see in the way of precedent with the internet. It was the Federal Government that created this tool. It was the Federal Government that did establish the contracts that allowed the domain system to happen with IANA, with NSI.

What's going on now in the DNS reformation process is a recognition that what government did was insufficient. It handed an exclusive monopoly to one player to be in charge of the domain name system. We wanted to make things more competitive and to make them more competitive, the internet community is going through this soul-searching process of figuring out where do we put the locus of control. The thought now is that it will be put in the private sector, with a non-profit entity that will assume some of these functions that were being played by a group called IANA.

But it's not as if there won't be government. It's just that the locus of government will be less familiar to us. It may not be in Washington, DC or Albany, New York or Sacramento. It will be in ICAN, which is going to be, in a sense, a governmental entity for the internet. And the question is, whether there are going to be the constitutional values, the democratic principles, and the notion of the public interest that we're accustomed to when it comes to traditional governance.

One more point on this idea of what role government has played. Often, when you hear people say the government should just get out of the internet, they don't know that much about the underlying structure of the net. Frankly, if the government did pull out of the internet, what would happen?

With respect to the DNS reformation process Professor Post spoke about, that was one option. I think everyone recognized that if there wasn't an orderly transition, we wouldn't be sitting here because I would never have gotten the e-mail . . . three months ago that allowed me to know about this conference. And many of the business transactions that all of you are involved in with your practices would not have occurred. All sorts of systems that rely on the orderly back-and-forth of information would have been disrupted, and we recognize that that was a social cost that was just too large. And so there is now an orderly transition process.

In some ways the internet has gotten preferential treatment relative to other telecommunications technologies. If you know about the issue of access charges and the access charges that long distance carriers pay to local phone companies, there is a big controversy about whether internet service providers should be paying access charges. They don't pay them and that's because of the way that the FCC has, wisely, I believe, chosen to not regulate electronic communications over computer networks. In a series of decisions starting in the '80s, they decided that, and that's the continuing regime. Now, is that fair? As we increasingly have what's known as IP telephony, telephone conversations over internet protocol, why should there be no access charges paid by ISPs, internet service providers, when long distance phone companies pay them?

The internet is not being regulated. It's getting a regulatory boost. It's being put up on a pedestal and is considered a child that we need to protect. And, increasingly, that's not the case because of the convergence I mentioned earlier. As it becomes increasingly difficult to distinguish between these tools, it won't make sense to have a preferential regulatory regime for IP, TCP/IP, the internet protocol, relative to traditional analog telecommunications.

I want to leave you with a case that represents, I think, some of the different kinds of regulatory power I'm talking about and some of the clashes of values that I think we, as lawyers, need to be attuned to.

There is a web site called Free Republic, (freerepublic.com). It's a conservative web site that is very well designed. It's got bulletin boards and fora for just about every topic you can imagine and it's really easy as a user to create new fora. So if you want to talk about Gingrich resigning, you can create a forum. If Gingrich resigns, people can post messages there. It's pretty well designed. I encourage you to check it out.

The most interesting thing about freerepublic.com is that it encourages users to post news articles that they find on the web or that they find in their local newspaper. The site says take that article, copy it, and post it on the Free Republic site with commentary. That's a key point. There is an interface that allows you to post the article, but it says add your own critique. When The Washington Post and LA Times sued, as they did, for copyright infringement, is this an infringement of the copyright laws and, perhaps more interestingly, should it be? Now, we all know about the principal of fair use. Fair use is, some would say, an exception to the copyright statute, which says that for certain limited uses, like news or criticism or certain educational uses, you're allowed to use a copyrighted work in some limited way. The purpose is to further creativity, and free expression-all the things that copyright is supposed to allow us to do.

Who should win that case? I think that's something I want you to think about, because it points to a fascinating tension, a tension that I think is becoming more and more obvious now because of digital media. It's a tension between free speech principles, on the one hand, and intellectual property principles on the other. And for the Federalist Society, this should go to the heart of what you are concerned about.

It's property, on the one hand, free expression on the other. Who wins? Does The Washington Post win? Free Republic is taking the full article. There is major economic value there in terms of the resale of that on line. The Washington Post licenses that. On the other hand, Free Republic is critiquing it; that would seem to be the heart of political fair use. Critique for a political purpose.


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