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Dec-03-2009 02:11printcomments

Techno-Regulatory Arbitrage and the Future of the Internet

Current technology and the absence of legal and regulatory adaptation to that technology have already created a situation where individual rights and freedoms have been impaired.

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(EUGENE, Ore.) - In this article I will introduce a concept that most people are probably unfamiliar with: Techno-Regulatory Arbitrage. Techno-Regulatory Arbitrage is the art of designing new technologies that circumvent existing laws.

Laws are constructed as definitions of permissible and impermissible actions as they relate to defined objects and defined objectives.

For example, a crime like drunk driving is broken down into a set of elements such as: having an impermissible level of intoxication, which is related to the act of consuming specific intoxicating substances; and operating a motor vehicle while intoxicated. Techno-Regulatory Arbitrage is a technical means of changing some condition so that the same objective can be achieved while not breaking the law. Designing a car that drives itself would be a form of Techno-Regulatory Arbitrage.

It could be argued that the intoxicated driver is not actually operating the car, and so they are not driving drunk, even if they are drunk and behind the wheel. In some cases Techno-Regulatory Arbitrage may make perfect sense, and result in logically consistent legal conclusions.

If a person really has no control over a car, it does not make much difference how intoxicated they are. In other cases, Techno-Regulatory Arbitrage may result in logically inconsistent legal conclusions that dramatically change the way the law is applied to everyday behavior.

Understanding Techo-Regulatory Arbitrage is essential in a society where technology is rapidly shifting. If the law does not take into account changes in technology, then technology itself becomes the means of creating or eliminating laws, and the democratic process becomes irrelevant.

Techno-Regulatory Arbitrage and Search and Seizure

The 4th Amendment to the U.S. Constitution provides "the right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures." The 4th Amendment has historically been applied to mail. It is impermissible to search and seize personal communications transmitted via the mail without a warrant.

Email, which contains the exact same personal communications as letter mail, has no corresponding requirement. Email may be seized and searched without a warrant.

This is a prime example of Techno-Regulatory Arbitrage. Because email is transmitted via a private network, it is not considered to be the property of the sender after transmission. It becomes the property of the Internet Service Provider transmitting it, and they are free to do with it as they please. The judicial response to this situation has been mixed.

Some courts have said that the 4th amendment does protect emails, and some have reached the opposite conclusion. The operating consensus is that law enforcement can search and seize any email that they please without warrant or notice.

The shift in personal communications from letter mail to email shows very clearly how technology can be used to change the effects of the law. Amending the constitution to eliminate the 4th amendment would be, for all practical purposes, impossible. Inventing a new technology for communications achieved the same effect with little or no discussion or debate.

Techno-Regulatory Arbitrage and Free Speech

The shift to the Internet as a means of communications has free speech ramifications as well. Because everything transmitted via the internet is transmitted via private networks and private servers, there is no right to free speech.

Constitutional protections of free speech rights only apply to government interference with free speech, not private interference with free speech. If the modern town square is the internet, then the modern town square has nothing like the constitutional protections for free speech that existed in the town square of yesteryear.

Private providers can set whatever rules they want for what you publish through their services. They can change the rules whenever they want to, and a user has no grounds for any legal challenge whatsoever.

Most providers have a "Terms of Service," but in most cases, these Terms of Service allow the provider to alter them at any time. Also, a website Terms of Service is of questionable legally validity for many reasons, so enforcement is an open question, even if the provider does not reserve for themselves the right to alter the Terms of Service.

Addressing Techno-Regulatory Arbitrage

It is a matter of opinion, but at least I believe that mass adoption of technologies that negate basic individual freedoms is not a healthy course for society. To argue the other way, you would need to make a strong argument for the elimination of the 1st and 4th amendments, among others.

Being aware of the potential for Techno-Regulatory Arbitrage is a good first step towards making informed decisions. This awareness can benefit consumers and business people, and should be a priority for legislatures.

The other basic fact to be aware of is that technology is not neutral.

All design has intent, and the products of technological design, to the extent that they function, serve the intentions of their designers.

The intention behind design may be purely focused on functionality. A designer may never take into account the potential social ramifications of the mass adoption of technology.

Technological development is a cumulative process, building progressively upon existing foundations. Innocuous design decisions made at an earlier stage may have drastic outcomes when expressed at a later stage of development.

The development of the internet, based upon the development of computers, has been a many decades long process of technological innovation. Computers, the building blocks of the Internet, were not designed with their current use in mind.

The technological biases inherent in the design of computers are something that should be considered if computers are to be used as the foundation for an essential social service such as the Internet.

Computer Design and Ramifications for the Internet

Computers, and specifically computer Operating Systems, are designed around an ownership model.

Assumed in the design is that the owner of the computer should have complete control over the operations of the computer and all of the data on it. This design makes perfect sense where computers are being used in a non-networked environment exclusively by their owners. The ownership model creates problems when computers are used to provide internet services.

Most of the data being stored and transmitted via internet servers should be the property of the individuals who are using those services.

However, the design of the computers that provide internet services effectively re-assigns the property rights for that data to the owners of the hardware used to provide those services. The underlying design model used in computers makes it difficult or impossible for internet users to maintain their rights to their own data once that data is transmitted or stored via the internet.

The Future of the Internet

If the internet is to play a crucial role in society as a communications tool, then the individual rights issues currently present must be addressed.

Where the internet negates individual rights, this is largely due to the fact that it is built on top of computers that use a design model that is unsuitable for the internet environment.

Legal and regulatory change is one way of addressing the disparity between the design of computers and the rights that Internet users are entitled to. The other avenue of change is to build internet services on a design model that is consistent with individual rights.

One or both of these avenues must be pursued. Both require informed citizens to be discriminating in their use of technology and to push for laws that re-establish rights where they have been negated by technology.

The Internet is already pervasive in society as a communications tool.

Current technology and the absence of legal and regulatory adaptation to that technology have already created a situation where individual rights and freedoms have been impaired. This is a process that needs to be reversed, and going forward, greater attention should be paid by all to the potential ramifications of mass adoption of new technologies.

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Salem-News.com Business/Economy Reporter Ersun Warncke is a native Oregonian. He has a degree in Economics from Portland State University and studied Law at University of Oregon. At a young age, his career spans a wide variety of fields, from fast food, to union labor, to computer programming. He has published works concerning economics, business, government, and media on blogs for several years. He currently works as an independent software designer specializing in web based applications, open source software, and peer-to-peer (P2P) applications.

Ersun describes his writing as being "in the language of the boardroom from the perspective of the shop floor." He adds that "he has no education in journalism other than reading Hunter S. Thompson." But along with life comes the real experience that indeed creates quality writers. Right now, every detail that can help the general public get ahead in life financially, is of paramount importance.

You can write to Ersun at: warncke@comcast.net




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Ersun Warncke December 3, 2009 1:23 pm (Pacific time)

Thanks Daniel. Since my professional work is in this area, I am sure that I will write about it in the future. I would say that the internet is a paradigm shifting tool without question, but not all change is progress. The primary benefit of the internet is that as a technology it has less of a tendency towards centralization than either television or radio. This is largely a result of the highly conscious and well organized activities of the open source software community, which has worked to make publishing on the internet very low cost. Cost is the primary driver of centralization, because capital is always centralized. The internet allows for a diverse array of viewpoints because publishing is cheap. One of the misconceptions that exists is that the internet just appeared in this form, when it fact has only developed as it did because people outside of the government and business communities consciously devoted a lot of time and effort to building the tools that make the internet an open platform. As it happens, a broad diversity of voices has a secondary effect, which is information overload. Information overload has allowed re-centralization of the internet around search engines, which require massive capital investment to operate. Even though it is technically very cheap to publish on the internet, the cost of delivering a message to a wide audience is actually very high, because information overload has made it very difficult to reach a mass audience without advertising. Search engines, which give preference based on popular appeal, also tend to return results that mirror the largest players in the traditional print and television mediums. Dominant players in traditional media are able to use their monopolies there to disproportionately increase their audience in the internet medium. I definitely do raise more questions than I answer. The answers are in the hands of the people who use the internet, and they need to ask the questions if they are going to arrive at them.


Daniel Johnson December 3, 2009 10:53 am (Pacific time)

Ersun: There is an exceptional amount of food for thought in your article. You've asked more questions, than you've answered, which is as it should be. I know you're interested in other things, but this is a theme I think you should pick up in more depth in the future. Not arguing for a Part 2, but it would be good if you didn't let this foundation of ideas drift away for lack of attention. I see the internet as a paradigm shifting tool for democracy. But both government and private interests are still in a position to legally nip it in the bud.

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