Marvin Ammori

Europeans are proposing a pro-democratic Internet treaty. And it’s being compared to the 1967 Space Treaty. If it takes off, this’ll keep both sides the Nebraska Space & Telecom Program busy. We’ll have advice to give.

Europe has proposed a global Internet Treaty to protect the net from political interference and place into international law its founding principles of open standards, net neutrality, freedom of expression and pluralistic governance.

The draft law was compared to the 1967 Outer Space Treaty as the Council of Europe presented it to web luminaries from around the world at the Internet Governance Forum (IGF) in Vilnius, Lithuania, this week.

This line was also interesting:

“Openness and interoperability” and “network neutrality” would become two of 12 Principles of Internet Governance.

A pigeon races a broadband provider in the UK, to demonstrate slow speeds in some regions.

I have written a lot about the cable companies’ likely anti-competitive attempts to stifle new, more consumer-friendly ways to distribute TV. If this story is right, it looks like Time Warner Cable is punishing Epix (partners are Lionsgate and Paramount) for a distribution deal making shows available online through Netflix.

The cable provider will not carry the premium movie channel in large part because of the  splashy $1 billion distribution deal that the pay-TV channel signed with Netflix this summer, a spokesperson told TheWrap

An open Internet is necessary for progressive speech, argues Mark Weisbrot, of Center for Economic and Policy Research. “We the people need the Internet as we know it is the essential tool in ongoing battle of ideas.”

Several of us at Nebraska Law have been busily organizing a conference in DC, at the Newseum, next Thursday and Friday. I forgot how much work putting together a conference was.

But, with the DC conference right around the corner, I figured I’d post something on my thoughts at the moment.

Main thought: This. Will. Be. Awesome.

The setting of the Newseum is a  start—-beautiful, with French windows overlooking the Capitol.

But the strength of any conference rests on the speakers sharing their expertise and engaging one another. Our speakers include the Vice-Chair of the Joint Chiefs of Staff, General Cartwright; the cybersecurity man, myth, and legend that is Bruce Schneier; the former top lawyer for the National Security Agency, Stewart Baker; the current top lawyer for U.S. CyberCommand, Gary Brown; and (not least) the NASA Deputy Administrator Lori Garver. Then you have Pamela Meredith, Jim Lewis, Marc Sachs, and many others.

Can’t even think of a synonym for “awesome” that does these folks justice.

But here’s a synonym for gratitude. “Thanks.” We have had help on panels and in getting out the word from Center for Strategic and International Studies, Federal Communications Bar Association, New America Foundation, U.S. CyberCommand, Council on Foreign Relations, and others. We have received help organizing speakers from a lot of friends across DC.

Thanks again. To our speakers, thanks in advance. See you in D.C.

To attend: it’s free, and register here.

I just got off the phone with a law scholar whose research focuses on innovation. He told me that, on his desk, at the top of his short stack of new books to read, is Barbara van Schewick’s celebrated new book, Internet Architecture and Innovation. I wasn’t very surprised: it seems everyone interested in Internet law and policy or innovation is talking about the book. Harvard’s Larry Lessig recommended it in the New York Times; Cardozo’s Susan Crawford, formerly a top White House advisor, recommended it in an op-ed; Brad Burnham, a venture capitalist who was an early investor in Twitter and Flikr, praised it on his blog; and MIT engineering professor David Reed, and co-author of the original end-to-end arguments, endorses the book on its jacket.

So I wanted to flag this book even for those among you who tend not to read the latest book on Internet policy, but who would be interested more broadly in an important book on law, economics, architecture, and innovation.

I have already posted a longish review of the book for a general audience, on my (only sometimes-updated) personal blog. Mainly I explain why general readers should not be scared of an academic book–something about which I needn’t worry for law professors and law students.

The framework and arguments of the book have broader applicability to legal thinking, even beyond Internet issues.  

First, it’s the best example of a “law and architecture” book.  A few years ago, Larry Lessig published a paper called “The New Chicago School.” The paper (playfully) built on the “Chicago School,” a school of legal analysis grounded in economics. Lessig’s “new” school proposed four categories of constraints on human behavior–law, economics, norms, and architecture. He developed the importance of the last, architecture, in his seminal book about software and the Internet, called Code. By architectural constraints, Lessig meant “the world as I find it”: walls are a constraint on snooping, the weight of large objects is a constraint on stealing. (Of course, economics is also at play; if I had enough money, in theory, I could buy the wall and tear it down, or hire strong thieves. But for most of us, that’s not a realistic option.) He discussed how markets and law interact with, and shape, online architecture to yield particular constraints on individuals, or to enable particular liberties. For the Internet, architecture is even more malleable than in the real world; you can add or remove a “wall” to affect snooping with just a few key strokes. We can architect “cyberspace” (in the language of 1999) or the technologies of the Internet to promote certain social values, like free speech, innovation, or privacy. Or we can architect the technologies to undermine those values.

Barbara’s book is the best analysis built on an analysis of architecture, economics, and law. She analyzes how the original architecture of the Internet–built according to particular, open design principles–promotes one particular, important value, innovation.

Second, the book is interdisciplinary of necessity, incorporating deep insights from computer engineering (Barbara has a phd in computer science), law (she is a law professor at Stanford), management science, and economics.  Since she is expert in all these areas, she can see and make connections that other scholars, focused in one discipline, will overlook. And since she is writing for so many different audiences, her book is fascinatingly informative for all of us who wondered how the Internet actually works.

Finally, her economic analysis of innovation is among the most interesting law and economics analysis I’ve come across. It rests on the leading research in innovation economics and succeeds in disproving several economic arguments previously considered conventional wisdom to some economists, especially those discussing telecommunications. Her framework clarifies thinking on the one monopoly rent theory as well as assertions on where competition should and should not lead to optimal public interest outcomes–using the example of competition among cable and phone companies, which, she proves, should not ensure an open Internet, despite industry arguments to the contrary.

And the website for her book is here.

I usually post my media appearances here. I spoke with David Louie of ABC-7 in San Francisco yesterday, video-Skyping from Nebraska. The segment is well-done, and focuses on Silicon Valley.

There’s a new book out on Internet policy that is essential reading for anyone interested in Internet policy—and probably for anyone interested in the law, economics, technology, or start-ups. I recommend it to everyone. It’s that good.

Barbara van Schewick’s new book, “Internet Architecture and Innovation,” is one of the very few books in my field in the same league as Larry Lessig’s Code, in 2000, and Yochai Benkler’s Wealth of Networks, in 2006, in terms of its originality, depth, and importance to Internet policy and other disciplines. I expect the book to affect how people think about the Internet; about the interactions between law and technical architectures in all areas of law; about entrepreneurship in general. I also think her insights on innovation economics, which strike me as far more persuasive than lawyers’ usual assumptions, should influence “law and economics” thinking for the better.

Books this good don’t come along every day—or even every year–and I’m already late to the praise-party. Lessig, a Harvard Law Professor, sang its praises on the book jacket and in the New York Times. MIT computer scientist David Reed has joined in, and so has venture capitalist and Twitter investor Brad Burnham. There’s a reason leading legal minds, technologists, and investors are raving about a book: really, it’s that good.

For those who want to skip the review and go straight to the source, here’s the Amazon link and the book’s site, NetArchitecture.org.

The remainder of this post explains why this book is important and eye-opening for everyone who reads books, not only for those who (like me) have spent their careers in Internet policy.

The Author

Barbara van Schewick is well-known to Internet lawyers as a brilliant, extremely thorough lawyer. And engineer. And expert on innovation economics. She was (with Yale’s Jack Balkin and Harvard’s Charles Nesson) one of three academics joining consumer groups to prompt the FCC’s 2008 investigation of Comcast interferinge with peer-to-peer technologies like BitTorrent. The FCC’s 2009 open Internet proposal, in its background policy discussion, cites her scholarly work far more than any other scholar. Her law review articles advance novel, seminal critiques of what economists considered “conventional wisdom” on the one-monopoly profit principle and the role of competition in ensuring open technology platforms. This scholarship was influential not only in the US, but also in Europe and Canada’s recent Internet policy proceeding.

The Argument

The book addresses how–specifically–the Internet’s original architecture has fostered tremendous innovation in consumer and business software and therefore economic growth. The relationship between innovation and the Internet’s architecture has been central to government policy debates around the world–as well as to the business plans of entrepreneurs and investors. While others have asserted and guessed that the Internet’s architecture fosters economic innovation, she puts these assertions on solid theoretical and empirical ground, incorporating insights from engineering, management science, behavioral economics, real options theory, network economics, evolutionary economics, and legal policy. And you don’t have to know anything about these areas in advance, as she doesn’t expect the reader to be expert in one these fields. (Almost nobody could be expert in all of them.)

Each section of the book is valuable on its own terms. She begins with a straightforward technical description of the Internet that is helpful for all of us who’ve wondered how our email works. She then develops a framework for analyzing the relationship between innovation and constraints imposed by a technological architecture. She does this with what some law professors would call a “law and economics” approach. (In Wealth of Networks, Benkler also uses these economic tools for his purposes.) The upshot of her analysis is that innovation benefits from more innovators. Because the value of a particular innovation is often impossible to predict in advance, innovation benefits from many innovators, all with different experiences and worldviews, experimenting and constantly adapting. Other architectures would lead to fewer innovators and less innovation–particularly architectures that increase costs to innovators, and so eliminate much of the accidental and iterative innovation we have experienced on the Internet.

Setting out this framework for thinking about issues, she then applies the framework to the Internet, contrasting its original architecture, where anyone could innovate with few initial expenses, and without seeking permission from any government or central office, with a now-possible architecture that would require greater investment and force innovators to negotiate with the network-infrastructure-owners to bring innovative ideas to market.

She ends with a discussion of policy, identifying the features of the Internet’s architecture that we must preserve to ensure robust innovation, and discussing the proper role of government policy in preserving architectural features necessary for innovation.

My Favorite Part

This is one of those rare books where every chapter is full of novel and important ideas. But I’ll tell you about my very favorite part. In the eighth chapter, beginning with “The Value of Many Innovators,” van Schewick presents the stories of how several major technologies were born: Google, Flickr, EBay, 37Signals, Twitter, and even the World Wide Web, email, and web-based email. I had always suspected that the “accidental” beginnings and unexpected successes of these technologies were a series flukes, one fluke after another. Rather, van Schewick explains, it’s a pattern. Her models actually predict the pattern accurately–unlike other academic models like the efficient market hypothesis and theories on valuing derivatives. These entrepreneurial stories (or case studies, to academics) are eye-opening; they’re also counter-intuitive unless you consider the management science and evolutionary economics van Schewick applies to analyze them. So if you wondered what the invention of Flickr, Google, Twitter, and the World Wide Web had in common, van Schewick answers the question.

And … the Book’s Intimidation Factor

Most of you are not techies. Like me, you may have studied the humanities or law. I consider you my people.

I know some of you, among my people, will be wrongly intimidated by a book titled simply “Internet Architecture and Innovation.” (Although this is a far catchier title than my favorite article’s title: “Coercion and Distribution in a Supposedly Non-Coercive State.”)

But don’t be so intimidated by the title that you miss out on van Schewick’s important ideas.

For the terminally intimidated, I recommend beginning with van Schewick’s short, concrete, straight-forward testimony to governments (see here and here and here) and an amicus brief.

For others, I will list the things-that-I-know-scare-you-but-should-not.

1. Her name. “van Schewick.” What an intimidating, scary German name, worthy of a Dr. Strangelove scene or an Austin Powers movie. I know. But no worries. Despite her meticulous thoroughness, her  German accent, and her “van”–her academic writing is gentle and clear. It’s not turgid like those H-Germans, Habermas or Heidegger. In fact, she knows her book “crosses a number of disciplines,” like engineering, economics, and law and had consciously aimed to make it “accessible to all” of us who have different backgrounds. There are zero equations in the text. And equations can be scary to lawyers and law students.

2. Equations. Nope. No need to worry. Not one of those books.

3. The difficult concepts. van Schewick is addressing difficult questions. She is not addressing fluff. But that’s a strength. She cuts through the complexity to put her finger on the key issues, to address all counterarguments and angles, and to make sense of it for the reader.

4. Length. It is almost 400 pages. But van Schewick includes several shortcuts–like three charts of page references as guides for reading the book to  answer particular questions. (Policymakers will likely rely on those charts.) The way I look at it: the book itself is a short-cut.  It may take one or two weeks to read. To get a similar grasp of these issues, I would otherwise have had to spend ten long years locked in a library, reading and analyzing the global literature on Internet engineering, economics and innovation, legal policy, and business-managerial decision-making, all while speaking often to the top thinkers worldwide in all these areas and eating brain foods to increase my mental ability to keep up with the task. But, luckily for me, van Schewick spent a decade exploring all these issues, apparently locked in the architectural economist’s equivalent of the Room of Requirement, surrounded by books, some full of equations, and top experts.

5. Abstraction. The book at times sets forth general frameworks and arguments that go beyond, and therefore abstract from, particular stories and economic conditions. Very abstract models can be hard to wrap the mind around. But van Schewick’s models are not too abstract. Plus, a model for understanding complexity is the point of the book (and of most non-fiction books I have read, from The Tipping Point and Outliers to Freakanomics and The Origin of the Species). Such books are meant to make broader sense of particular phenomena.

So be not afraid.

And check out the book (on Amazon or NetArchitecture.org). You’ll see for yourself why so many of us are talking about the book.

[Note on digital version: MIT Press is not making the digital version available for three years.]

Today’s Room for Debate focused on network neutrality and the Verizon/Google pact.

The line-up for the debate was an all-star team of constitutional and technology lawyers including Larry Lessig, Tim Wu, and Jon Zittrain. Add to that venture investor Brad Burnham and public interest lawyer Gigi Sohn. (Others in the debate disagreed with net neutrality, and made interesting arguments, worth reading.)

I was happy to contribute a piece.  Here it is.

A lot of people have been discussing the Verizon-Google pact, including venture capitalists (on NYT’s Room for Debate) and Silicon Valley companies. Most people agree: Google does evil, calls it net neutrality.

Last week I wrote up a guide of the FCC negotiations on net neutrality, setting out all the loopholes, and noting that the carriers needed only one loophole to kill an open Internet. Verizon and Google announced their pact two days ago. Rather than including one loophole, they went down the checklist and included just about every loophole they could.

Maybe the most ridiculous one–which has received almost no attention–is something I didn’t mention last week. It’s the liability limit. The maximum fine for a violation, after all the loopholes are met, is $2 million dollars.

Limiting liability comes straight from the corporate lobbyists’ playbook to get away with whatever they want.

Let’s say you want to engage in off-shore drilling. There’s a slight chance of, um, a huge environmental disaster in the Gulf causing billions in damage, requiring billions for clean-up. No worries, says BP. Limit liability for clean up to only $75 million.

This liability limit has become a symbol of corporate greed in passing the risk of disaster to the US government and US citizens.

Yet, the BP limit is almost 40 times larger than the Google/Verizon pact.

You have to hand it to Google. Going from “Don’t Be Evil” to “Greedier than BP” overnight is a pretty impressive trick.

Let’s play this out a little.

Vuze. When Comcast blocked peer-to-peer technologies, a company called Vuze filed a petition with the FCC. Venture capitalists had invested over 20 million in Vuze. Under the Verizon-Google Pact, Comcast could violate net neutrality, after all the procedural hurdles and loopholes tying Vuze’s lawyers (and its funders) in agency litigation, Comcast would only have to pay $2 million.

Facebook. Google competes with Facebook, having a social network that was once popular in Brazil. Let’s say, through a shady deal between Google and Verizon, and no disclosure, a pure flagrant violation of net neutrality results in Facebook operating with annoying glitches. Users are frustrated. Facebook loses market share. Facebook presses its case, tries to prove Verizon is interfering. After months of litigation, Facebook manages to convince the FCC–though the FCC is usually captured by telco companies like Verizon. So the victory is great news. In fact, Facebook even gets an injunction–going forward, Verizon can’t engage in the same activity.

But what does Facebook get for months of lost market share–some of which may not return–and months of litigation? Verizon has to pay 2 million dollars.

Verizon makes 2 million dollars in revenue every 10 minutes. Verizon makes 10 million in profit every 3 hours.

Facebook, while still private, is likely valued at far over a billion dollars. It is so much cheaper for Google to pay off Verizon and mess with Facebook than to invest in a better social network, or something else useful for society. (I am assuming social networks are more useful than blocking technologies and lobbyists.)

I know: why would Verizon and Google do something so egregious? One goal of law–as we learn in law school from the first day of contracts–is to deter bad behavior. If the punishment for bank robbery was $10, we’d have more bank robberies. Google and Verizon would mess with Facebook because there is no penalty. Oliver Wendell Holmes used the example of the “bad man,” explaining we cannot assume people will act well without any penalty. Verizon and Google have a duty to their shareholders to maximize profit. Their proposal essentially says that cheating on your taxes lets you keep the taxes, if you pay 5 bucks. Of course their shareholders will expect cheating; the law makes it profitable.

Maybe that’s why Facebook opposes the pact. The pact is full of loopholes, and then, in the $2 million dollar fine, a trap door.

The same works for any other company. Amazon has billions in revenue. While interrupting Amazon, even egregiously, without disclosure, Verizon can direct consumers to its own e-commerce site. For Verizon, just three hours of profits is enough to take billions in market share from Amazon. What would stop them? This is easy money. Easier than innovating.

Amazon too opposes the pact.

Let’s say you’re a venture capitalist.  You know, one of the ones who supports net neutrality. Like all of these guys. You make an investment in a software company you think could hit big. You invest 1 to 5 million, if not more, depending on the round and nature of financing.

For three hours of profit, or a mere 2 million fine, Verizon or AT&T or Comcast can run roughshod over your company. You can bring a case–but only for wireline interference, not wireless (the biggest loophole). You bring your case to forums favoring the carriers, to be honest about the FCC. You hire lawyers who can address every loophole, who likely are specialized in the FCC.  And then, after all that, if you win (unlikely), Verizon pays the FCC a measly 2 million…

You’re better off just bribing Verizon to stop blocking you. Or paying for priority on the new, different Internet with paid priority, that is part of the pact.

But I guess, that’s probably the point. For Verizon and Google, you having to pay to play is a “feature” not a “bug” of the 2 million dollar fine. It gives them leverage.