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There is no "innate nature" of the web. This was one of the key insights that Lawrence Lessig expressed in his important book, Code. The coast of Maine has an innate nature. The Great Plains have innate nature, as do the slickrock canyons of Utah. In each of these places, someone starting a business must contend with truly immutable dimensions of climate and geography. The fundamental character of such a place does not change except in geologic time; it exists apart from the people who live and work there.
The web is not like that. It is made up of computer code, which is made by people. If people don't like the effects of the computer code, they can change it, quickly. The typical way to change a complex application that is in daily use, like the World Wide Web, is to add layers. The layers can consist of new computer code that changes the way people and companies access and use the web. The layers can also consist of legal code, often coupled with encryption and other technical constraints, that has the same effect.
The fact that the face of the web can be changed relatively quickly, over a matter of a year or two, means that talking about the "nature of the web" is risky, if not out and out misguided. This has not stopped people from writing thousands of books and articles that do just that. The formula for such "web nature" books is simple and, by now, familiar. They start by asserting that the web changes everything and that old strategies cannot work in the new Internet era. Then, building on some set of assumptions about the supposed nature of the web, the books reason forward to projections about what to do and what will succeed in the new Internet era of business.
Starting a business built on assumptions about the nature of the web is even riskier than the writing of books about it. For example, it was supposed to be in the nature of the web to do away the middleman ("disintermediation") creating a new world in which digital content moved freely and without control. But the Digital Millennium Copyright Act and the rest of copyright law has intervened to change all of that. People involved in creating technologies to enable free exchange of DVD movies are now involved in lawsuits that could ultimately lead to jail terms. Napster, the free music exchange website, is, as I write this, facing possible shut down by the major music labels.
Here is another example: it was supposed to be in the nature of the web to enable new, individually personalized, one-to-one shopping, thus creating enormous new retail opportunities. Many things have gone wrong with this idea over the past three years, transforming it from an article of faith to something that is now viewed with deep suspicion. One critical thing that got in the way is that consumers became uneasy about the collection and use of personal information on the web. This consumer malaise has a good chance of transforming itself into Federal privacy legislation. The new legislation, if enacted, will create a new web nature.
The nature of the web was also supposed to usher in a new era of business innovation. But it turns out that evolving patent law makes it possible for companies to own monopoly rights to such innovation for a period of twenty years. Sperry and Hutchinson, the S & H Green Stamps company that pioneered buyer incentive programs for retail stores, now licenses patented technology owned by Netcentives in order to offer incentive promotions on the web. Once again, the intersection of law and the web has transformed web nature into something very different than people first expected.
Not long ago people believed that the web, by the force of its innate nature, would radically change business, opening enormous new opportunities. It was a great time to be in the stock market. It was a great time to be starting companies. There was the expectation of new beginnings.
Many things came together to change such expectations. The change came, in part, because many web businesses were built on naive, though hopeful, ideas. Another problem was that investment extended itself too far, indulging in "irrational exuberance," to use Alan Greenspan's memorable phrase. Part of the problem was simple miscalculation and poor execution.
Web companies also lost sight of the fact that they work in a firmly established context of existing property rights, power structures, and laws. Like an exuberant, self confident kid, web business has discovered that it needs to learn some lessons about how the world really works.
This metaphor of "growing up" is useful because it captures both what is necessary and what is dangerous as we come to terms with the web. The necessary part is the recognition that the web exists in a powerful context of constraints. The once popular notion that the web's freedom loving, anarchistic "nature" will sweep away existing rules, business arrangements, and even governments is, of course, romantic and a poor foundation for planning, policy, or new business strategy.
The dangerous aspect of the current transition is that vision and excitement about the future could be replaced with cynicism and control. The other side of the belief that the web is an inevitable, irresistible force of positive change and growth is the belief that it is a force of chaos and destruction that must be controlled. For every John Perry Barlow who proclaims to the governments of the world that Cyberspace has no elected government and that governments are not welcome [1], there is a Jack Valenti who sees "brazen disdain for laws and rules." [2]
Neither approach is good for web business.
I wrote this book because it is clear that government regulation and new legislation, coupled with technology, have the potential to dramatically change the nature of the web. Lawrence Lessig is right: The intersection of new web architectures, new laws, and commercial business interests will create a new kind of web business reality. The new web business has the potential to be so radically different from the web of the late 1990s as to be nearly unrecognizable to a denizen from the old world of "Net 95."
Here's the critical thing: you can change the outcome of this story. The shape of web business -- its "nature," if you like -- is in flux. Most legislation regarding key web business issues is still tentative and uncertain. The arguments for and against different kinds of regulation or new government action are still taking shape.
What this means is that there are two really good reasons for you to pay more attention to the way that laws, business interests, and web architecture are intersecting to change web business. The first is, of course, that it is in your own business interest to understand the changes and to be able to anticipate the next stage of developments. The second and even more interesting reason is that you can work to ensure that the new developments make sense for you and your business.
I have found that most business managers are ill prepared to capitalize on either of these potential benefits. It is clear that they need to:
This book is the result: It strives to meet these needs.
This book is not a tract. The business community is always characterized by a broad diversity of viewpoints. Business people from all points of view are well served by a careful review of recent developments and by an attempt to sort through the issues and set them out fairly. I have tried to produce such a review and attempt at explication.
But it is inevitable that in spending so much time working with policy issues and talking with experts, a point of view emerges. What emerged was not what I expected when I started out gathering material for this book. At the outset, I saw that the issues that this book examines -- copyright, patent law, privacy, and electronic identity -- would have big impacts on the nature of the web and on the shape of web business. Naively, I hoped to uncover policy programs and proposals that were as large and striking as the issues themselves.
What emerged instead was a strong sense that we should be cautious and parsimonious in proposing regulations and legislation. In some cases we already have new legislation that is potentially dangerous, changing the web and the fundamental relationship between producer and user in ways that seem to me to be too rapid and far reaching, given our current level of understanding. In other cases we seem too anxious to patch problems and to use bailing wire to effect quick solutions before we understand the bigger picture of what is going on. So, the result of all of this research, for me, was increased respect for the argument that we should proceed with restraint, understanding that the full development of the web will take decades. Far from being a "do-nothing" point of view, this emergent viewpoint argues strongly for forceful, articulate intervention against some of the current proposals being put forth by different interest groups who want rapid development of new policies to "fix" the web.
Whether you agree with my arguments for this emergent viewpoint or not, I hope you find the background perspective and the arguments that I present useful in establishing your own point of view. Debate is a good thing; we need more of it, and more effort to inform and support it.
This is a difficult time. We are about five years into what was supposed to be a revolution in the way we use information and collaborate with others. As with any difficult revolution, not everything has worked as planned. Reactionary forces have mobilized and have, in some cases, aligned with government forces in order to use the original momentum and strength of the revolution as a way to consolidate power and position. At times like this what is needed is not renewed revolutionary zeal, but careful, clear thinking about outcomes, about the mechanisms of change, and about the arrangements of property and power.
This sounds like radical stuff. It's not. The business community as a whole has a vested interest in continued growth, change, and innovation. The web has been a prime generator of these benefits for the last five years. We now know that there is nothing inevitable about continued growth, change, and innovation. We have learned that the web will only reflect the "nature" that we create for it. It is time to stop acting on the basis of an innocent hope in the power of the web as something that is real in itself, apart from the businesses and people that use it and shape it. It is time to start accepting responsibility for creating the policies that will make the web the kind of place that we want it to be.
It is my hope that this book contributes to your participation in that process.
1. John Perry Barlow, A Declaration of the Independence of Cyberspace. 8 February, 1996. Available on the web at www.eff.org/~barlow/Declaration-Final.html.
2. Jack Valenti, President and CEO of the Motion Picture Association of America, testifying before the House Commerce Committee's Subcommittee on Telecommunications, Trade and Consumer Protection on 16 Feburary, 2000.
Government regulation and new legislation, coupled with technology, have the
potential to dramatically change the nature of the World Wide Web. This thought-provoking
book explains what effects regulation may have on business managers, their organizations,
and the Web as we know it.
CyberRegs brings you up to speed on current developments in patent, copyright, digital signature, and privacy policies. Taking an even-handed approach to the debate between greater and lesser control of the Internet, this book provides fascinating background on recent Web legislation. It discusses in depth the many complex policy issues now being hotly debated, and speculates on possible future legal outcomes.
PART ONE: Copyright
Chapter 1: Creating and Resisting Change
Chapter 2: Congress Asserts Control
Chapter 3: Control Put into Practice
Chapter 4: Copyright Policy and Progress
Chapter 5: Copyright: Further Reading
PART TWO: Patents
Chapter 6: Subdividing the Internet Frontier
Chapter 7: Patent Sprawl
Chapter 8: What Is Patentable?
Chapter 9: Claiming More: Business Method Patents
Chapter 10: Predicting the Impact of Internet Patents
Chapter 11: The Business of Inventing
Chapter 12: Congress and Patents
Chapter 13: Maximizing Benefit, Minimizing Cost
Chapter 14: Patents: Further Reading
PART THREE: Electronic Signatures
Chapter 15: Matching the Legislation to the Problem
A Deeper Look: Technical Background on Digital Signatures
Chapter 16: The Impact of the Legislation
Chapter 17: Learning from the Electronic
Chapter 18: Electronic Signatures: Further Reading
PART FOUR: Privacy
Chapter 19: A Market for Privacy
Chapter 20: The Right to Privacy
Chapter 21: Consumer Concerns
A Deeper Look: Technical Background on Cookies and Web Bugs
A Deeper Look: Technical Background on the Platform for Privacy Preferences Project
Chapter 22: The Privacy Debate in Congress
Chapter 23: A Privacy Framework
Chapter 24: Privacy: Further Reading
Epilogue
Index
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