Three Spheres of Internet Regulation

What I'm thinking about today
Broadly speaking, Internet regulation today can be conceived of as involving three related spheres: Direct regulation of the internet infrastructure itself; regulation of activities that can be conducted only over the internet; and, regulation of activities which can be, but need not be, conducted over the Internet.

1. Direct regulation of the internet infrastructure itself, including
a. the standards of communication,
b. the equipment used to provide and access Internet communication,
c. intermediaries engaged in the provision of Internet communications, e.g. Internet Service Providers (ISPs)

2. Regulation of activities that can be conducted only over the internet and which have no significant off-line analogues. An example is the regulation of anonymous online communication via anonymizing re-mailers.

3. Finally, there is the regulation of the enormous category of activities which may or may not be conducted over the internet, e.g. e-commerce in both tangible and intangible goods. In many cases the Internet version of an activity often will simply be swept up in the general regulation of the type of conduct.
a. In some cases, however, the Internet version may be subject to special or additional regulation because the use of the Internet is seen as somehow aggravating an underlying problem or offense. An example of this is US attempts to regulate the provision of obscene or “indecent” content to minors via the Internet.
b. In other cases, there may be attempts to craft special regulations for the Internet version of an activity because of fears that its international character (and concomitant regulatory arbitrage), the ease of anonymization, or the elimination of formerly prohibitive transactions costs changes the danger, incidence, or character of the activity — or, most commonly, makes the enforcement of the pre-existing rules difficult or impossible. Examples of this include attempts to regulate peer-to-peer sharing of material copyrighted by others and regulation (or in some cases discouragement) of e-cash.

These spheres of regulation are obviously related in many ways. This schema underlines why approaches to the first sphere of regulation, direct regulation of the infrastructure, have two sometimes radically different sets of motives even though the regulatory techniques and tools often may overlap or even interfere with one another.

One the one hand, some regulatory (or de-regulatory) strategies pursue goals that are primarily internal to the first sphere. For example, the current Internet architecture depends on the unique assignment of Internet Protocol numbers; the regulation of the mechanisms that control assignment of these potentially valuable resources — and which determine when and how the underlying standards might be modified — is a matter of critical importance to the Internet, one that is (currently) internal to the first sphere. Similarly, the regulation of the creation of new Top-Level Domains (TLDs) and the regulation of the assignment of Second-Level Domains (SLDs) are in the first instance an issue in the first sphere, albeit one influenced by external rules such as trademark law.

More generally, a number of independent, private, non-profit, standards bodies define the technical standards for various parts of the Internet. These groups include the Internet Engineering Task Force (IETF), an unincorporated international volunteer organization of software and network engineers, and the W3C, a consortium of corporations and interested individuals who concentrate on HTML and WWW-oriented standards. These bodies do not, however, tend to venture beyond classic standard-setting activities.

In contrast, other bodies, notably governments and industry pressure groups, seek to facilitate and deploy regulatory strategies that regulate the Internet infrastructure aim to leverage control over that infrastructure to achieve social goals external to the infrastructure itself. An example of this are calls to expand the information that domain name registrants must publish in the WHOIS database in order, for example, to allow copyright owners to know to what address they should address their writs in the event that they believe that their rights are being infringed online.

The contrast between what I have labeled the internal and external motivations not only influences the type of rule likely to be advanced, but more importantly has institutional implications. Of these, the most critical is the type of regulatory body likely to be seen as a legitimate source of the rule in question. Questions about the mis-match between legitimacy and effectiveness lie at the heart of both current and future debates about the regulation of the Internet infrastructure. Many bodies — governments — with legitimacy to make rules in the second and third spheres lack, or believe they lack, the ability to regulate the infrastructure effectively; the most apparently effective bodies extant today, the Internet Corporation for Assigned Names and Numbers (ICANN) and its seemingly subsidiary body, the Internet Assigned Numbers Authority (IANA) face substantial questions about their legitimacy, especially when they venture out of the first sphere. There is more acceptance of the legitimacy of established technical standard setting bodies such as the IETF and the W3C but this is in large part because they tend to restrict their activities firmly to the first sphere, and also because there is greater respect for the quality of their decisions (or, perhaps, less general knowledge of them). In contrast, ICANN already acts like a market regulator, and faces pressures to expand its remit further into realms ordinarily occupied by governments. Simultaneously, governments are taking an increasingly direct role in this supposedly private body's decision-making, but are doing so in a manner notably lacking in transparency.

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