Regulating Code: Inter-Disciplinary Empirical Case Studies in Governance and Regulation

Abstract

Introduction: Regulating Code

This paper summarizes and concludes a multi-year inter-disciplinary project designed to make a significant addition to the Internet governance literature. The challenge is to incorporate earlier analyses, but address the complex interplay of the most intractable of future Internet regulatory conundra, in which fundamental human rights meet corporate and state objectives in controlling and marginalizing those rights. We reject a search for single theses or easy examples that demonstrate the 'truth' of technical, political, legal or economic solutions based on self-, co- or state regulatory approaches. A serious discussion of Internet regulation needs to examine the deficiencies and benefits of all these approaches. The approach we take is to test the existing 'received truths' of Internet regulation from a technical and legal policy perspective.

These hold that: [1] From the technical and economic perspective, self-regulation and minimal state involvement is most efficient in dynamic innovative industries such as the Internet (Clark 1988, 2011); [2] From the legal policy perspective, that self-regulation critically lacks constitutional checks and balances for the private citizen, including appeal against corporate action to prevent access or remove materials (Diebert 2010, Marsden 2011); [3] Multi-stakeholder co-regulation - reintroducing both state and citizen - is the approach that has the best chance to reconcile the market failures and constitutional legitimacy failures in selfregulation (Mueller 2010, Kleinwachter 2011).

However: • technology is never neutral; • network and scale effects appear to be driving massive concentration in information industries; and • voters will not allow governments to ignore the impact on day-to-day life of the most significant one-to-one and one-to-many communications medium of the 21st century.

We see as much government as market failure in Internet regulation to date: industry capture of regulators and legislators, incumbents protecting and introducing new barriers to entry, and continued exclusion of wider civil society from the policy discussion - not least because of the extremely tenuous chain of accountability of participants within international fora to voters, shareholders and NGO stakeholders. There are significant questions as to the effectiveness, accountability and legitimacy of these groups in representing the public interest.

Based on extensive case study examination in a series of European Commission and research councilfunded as well as independent research projects, the authors find that the benefits of co-regulation outweigh significantly the extra costs and legitimacy gaps that inevitably accompany such a transient regulatory arrangement. They conclude by analyzing the recent reform initiatives proposed by the administrations in both Washington and Brussels, whose policies appear to institutionalize a more consensual basis for Internet regulation in the medium term. We assess these 'received truths' and counterpoints via empirically grounded, multidisciplinary case studies of the five 'difficult' areas. We examine five ‘hard cases’ in which there is no effective selfregulation, including surveillance and security, social networking, personal data protection.

The case studies are: 1. DATA PROTECTION: RFIDs/”Internet of Things”, behavioural advertising, privacy by design in revised DPD (inc. SNS defaults) 2. COPYRIGHTS: Technical Protection Measures (inc. trusted platform modules), peer-topeer/ graduated response, domain takedown; machine-readable licenses; YouTube. Case where only business model change works 3. CENSORS: Technical Protection Measures, copyright and fair use/dealing. Government capture by concentrated industries is demonstrated, also technical ignorance, which has led to distortion of copyright law's aims, imposition of inappropriate code solutions (DRM), forum-shifting from WTO to WIPO to ACTA. 4. SOCIAL NETWORKING: Social Networks, User Generated Content and Innovation. Focus on privacy, terms of use, user consent and lack of regulation. Constitutional limits on government power, and the division of powers are foci of attention. TPRC Marsden-Brown 25/9/2011 – Draft not for attribution, comments welcome [e-mail] 5. SMART PIPES: Net neutrality, Phorm, innovation and barriers to entry. History of common carriage. Architecting a low barrier-to-entry Internet that supports fundamental rights is a key concluding policy challenge.