the financial times

November 30, 2001

The Internet's Undoing: Commercial control and tighter protection of
intellectual property will end up stifling innovation,
warns Lawrence Lessig

By LAWRENCE LESSIG

The internet revolution has fizzled out just as surprisingly as it
began. No one foresaw the explosion of innovation that it
produced; no one guessed it would end as precipitously as it did.

Yet neither the rise nor the fall of the net is hard to understand
if you know where to look. Its source is in the ecology produced
by the network's basic design. The innovation of the internet
flowed from the network's architecture - and the demise of that
innovation flows from the corruption of the environment created
by that architecture.

Network 'architecture' is not the usual place where policy is
found, so policymakers can be excused if they have failed to
notice its role so far. But we shall lose a great opportunity for
growth and creativity if we do not come to understand the ecology
of this network and how changes to this ecology lessen its
potential.

Though it was built on computers and wires that were owned, the
internet belongs to no one. Its design left a core resource - the
right to innovate - essentially free. The network's communication
protocol, for example, did not enable network owners to
discriminate about the flow of information through their wires.
It offered equal access to all who could develop content or
applications - and broadcast them - without seeking the
permission of a network owner or administrator. The internet's
original architecture thus created a sort of 'innovation
commons'.

That commons is now under attack. Those who were threatened by its
potential have sought to contain it. Changes in the network's
physical infrastructure and in the legal environment within which
the network exists threaten to destroy it.

The physical infrastructure is transforming as cable companies,
and soon telecommunications companies, persuade governments to
free them of traditional common-carrier responsibilities. As a
result, companies can exercise more control over what runs along
their wires and even decide which content flows at what speed -
something called 'policy-based routing'.

This change alters a crucial premise of the original internet:
that no one should exercise control over the platform to set
'policy' about how the network would develop. By permitting such
a fundamental shift, governments are allowing the enclosure of
the innovation commons. That will destroy innovation.

A similar change is happening in the content layer of the net. As
intellectual property laws have been expanded and strengthened,
stakeholders of pre-internet industries have used them to veto
threatening innovations. Online music is the best example: a
concerted campaign by traditional record labels has stopped every
independent form of online music distribution and production. The
big labels call these new competitors 'thieves' and defend their
legal action in the name of their 'property'.

But these innovators are no more - and no less - thieves than
cable television companies were thieves when they 'stole'
broadcasting content and resold it to their customers. In that
case, however, courts were slow to stop the 'theft' because they
were slow to extend old laws to cover new technologies. And when
the US Congress eventually tackled the matter, it ensured that
the old (broadcasters) could not veto the new (cable) by
exercising control over property to stifle innovation. The same
can, and should, happen with online music but this time the
courts have been quick and Congress slow.

In both architecture and content, changes to the network's
original environment are being justified in the name of
protecting 'property'. But this property-focused debate misses
the equally important need to protect the innovation commons.
Over-zealous protection of property rights can allow yesterday's
property owners to stifle tomorrow's innovations.

Governments sometimes get this point, though never consistently
and never in time. This was the core of the case against
Microsoft. Microsoft defended its 'unrestrained right to
innovate' in the name of its property copyright; the court of
appeals for the DC circuit unanimously held that upholding this
property right was secondary to preserving a competitive and
neutral platform for innovation. A similar insight has led
Michael Powell, chairman of the US Federal Communications
Commission, to hint that overly protective intellectual property
laws may be stifling broadband deployment. And recently, the
Federal Trade Commission announced it would investigate the
effect of software and business-method patents on internet
innovation.

These are hopeful signs but they are incomplete. Governments that
want to see more innovation should be careful to ensure that the
architecture of the new network preserves the values of the past.
Enclosure of the innovation commons is the first step to the
undoing of the internet revolution. There is little evidence that
regulators understand these changes or will stop them in time.

The writer is professor of law at Stanford Law School and author
of The Future of Ideas


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