A DECADE AGO, THE DEPARTMENT of Justice filed its landmark antitrust case against Microsoft. Four years later, a unanimous US Court of Appeals ruled that the company had used its power illegally to protect its monopoly Windows operating system.
That behavior, the government had charged, chilled competitive innovation. A reluctant DOJ concluded that the only solution was a lawsuit. How else, Microsoft's competitors asked, could the software giant be restrained? If not by the US government, then by whom?
This was a very hard question to answer. An OS is a standard – meaning that, over time, one tends to dominate. Any company with a commercial operating system would have a huge incentive to protect itself. Did the government really expect IBM or Apple to behave differently? And did the DOJ really want perpetual oversight of software design? The government was fighting a business model, and even the attorneys arguing its case wondered whether such a powerful one could ever be regulated.
I was one of those reluctant regulators. As the evidence of Microsoft's practices became clear, I remember well thinking, "Of course the government needs to do something." And I remember very well the universal impatience with the notion that the market would solve the problem. How could it, when any other company was likely to behave just as Microsoft did?
We pro-regulators were making an assumption that history has shown to be completely false: That something as complex as an OS has to be built by a commercial entity. Only crazies imagined that volunteers outside the control of a corporation could successfully create a system over which no one had exclusive command. We knew those crazies. They worked on something called Linux.
I wanted to believe that Linux would prevail. But I'm a lawyer, and lawyers aren't programmed to see how profitable innovation might happen without commercial control. I didn't like the idea of regulation; I just didn't see any alternative. The suits would always beat the rebels. Isn't that why they were so rich?
I think about this mistake whenever I think about the current Microsoft-like network-neutrality debate – whether network owners can pick the stuff that flows across "their" network. In this debate, too, I am a reluctant regulator. And again, I don't see how it's possible to steer broadband providers away from a business model that – like Microsoft's – may benefit them but could stifle innovation. Every dominant commercial competitor has the same incentive: to build a business that extracts all potential value from the pipes that company owns.
But life is all about repeating the same mistakes in many different contexts. So, are we reluctant regulators wrong again? Is there something we think is impossible today that will be obvious tomorrow? Can last-mile broadband be developed in a way that doesn't rely on the incentives that drive current providers toward innovation-stifling business models?
Yes. There isn't yet a Linus Torvalds of broadband, nor is a single competitive platform being built by volunteers to displace AT&T. But there are forces mucking up the game for those who would profit most from last-mile control.
The core of this resistance comes from municipalities. Local governments are building neutral infrastructures that allow anyone, from ISPs to community networks, to use and extend blisteringly fast broadband networks. At the end of its first year, a project in Sandoval County, New Mexico, for example, already provides many in the area with more than 10 times the capacity than anywhere else in the US.
And municipal networks are just a first step. Many Linux-style volunteers are building free wireless networks that enable participants to share access and offer capacity to others. These volunteers are also building free protocols that enable legal access without shifting control to a last-mile access provider.
These activists recognize the basic truth of what I call the McAdams theorem: Monopolists, as Cornell economist Alan McAdams puts it, don't monopolize themselves. If the monopoly-like asset is owned by the user, he has little incentive to exploit himself. Put differently, private ownership by users creates its own business model.
Will these grassroots alternatives check the power of the big companies? I remain skeptical. But the frantic efforts of traditional broadband providers to persuade states to ban municipal broadband should give you some clue as to the potential of these services.
Those who oppose network-neutrality regulation should also oppose this regulation of last-mile broadband's most important competitor. Municipal competition won't kill commercial broadband any more than Linux has killed Windows. Yet it could change the business model of last-mile broadband, just as Linux has changed the business model of Microsoft. If there's going to be a Linux-like miracle to counteract innovation-threatening broadband business models, then, at a minimum, miracles must not be a crime.
Email lawrence_lessig@wiredmag.com.
- Lawrence Lessig
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I Blew It on Microsoft
