John Palfrey

Another blog-related dismissal, complete with photographs of G5s in a loading dock at MSFT, as reported by MSNBC.

I had the good fortune to present this morning on a panel at MIT on the issue of how to create a local “habitat” in developing countries for the successful growth of entrepreneurial activity in the information and communications technologies sector.  (The event is called “Workshop on Global ICT Education Program,” with a stellar list of sponsors and some very high-level participants from a diverse series of backgrounds and disciplines; I was clearly among the junior-most people in the room.  My friend and colleague Colin Maclay is our primary representative at the event.)  At the Berkman Center, we often talk about the need to create a legal “ecosystem” — not far from this notion of “habitat.”  I start from the premise that no single solution can work for all countries, whether developing or otherwise.  And I think of the legal regime as impossible to isolate from policy, business, technology, etc., which, I think, is why the Berkman Center has people from those disciplines among our community, despite the fact that we’re based at a law school.  I post these ideas here to invite further comment and refinement, as they are clearly just a starting point.

Here’s a stab at a series of four basic tenets that link the most successful legal ecosystems, from least controversial to most controversial (with the caveats that 1) these are much more easily said than done and 2) in order to have broad applicability the ideas must necessarily be pretty abstract):

I.  Basic Tenets, or Goals.

A) Rule of Law.  The ecosystem must have a certain commitment to the establishment and the perpetuation of the rule of law.  For instance, a business — or any other economic actor – needs to be able to rely upon the notion that their contracts will be enforced, that they can go to the legal system for recourse, and that a series of “wise constraints that set us free.”

B) Consistency, or at least Predictability, of the Regime without Imposition of Excessive Costs to Participate.  Any economic actor needs to be able to rely, to some extent, upon a set of assumptions before making an investment decision.  One aspect of this predictability: laws and policies that are written down and easy to access, and processes for approvals that can be understood.  The cost of this consistency, though, cannot be that costs to participate in economic activity related to ICT for development become too high.  Put another way, it’s important to seek to keep transaction costs with respect to the legal regime low, if at all possible, rather than setting up excessively high hurdles for participation in the economy.  (Dr. Hans Hoyer, my co-panelist, Executive Director of WorldLinks, noted that waiting periods for licenses can’t be too long, for instance.)

C) Limits on Corruption.  Over and over again, we hear that economic actors cannot succeed in one or another developing country ecosystem because those in positions of power are not making decisions on the merits.  Here, the legal regime needs to have both negative and positive aspects.  It’s negative in the sense that you don’t want the legal regime to get in the way, (i.e., you don’t want a legal regime that forces economic actors to have to pay in the form of bribery for approvals; it’s positive in the sense that you want an ecosystem that protects whistleblowers and punishes wrong-doers).  I know it’s not fully “PC” to say as much, but I’ve heard enough times that it’s essential to keep raising the problem and calling it what it is.  The idea here might also be about having a participatory regime – one where people can play a role in the decision-making process, to speak out and have an effect on legal and political outcomes — and about paying public officials sufficiently that they do not feel compelled to turn to “misallocating public resources” as a means of salary supplement.

D) Commitment to Competition.  This idea is the most controversial of the four tenets.  The pipes, for instance, that bring Net access to a country ought to be seen as a public good, a public throughway, on which people can compete, rather than choke-points that allow for centralized control and extraction of profits for one or a few actors.

[One good comment from the audience is that the order in which you tackle these four tenets matters a lot, and it may well be that their implementation relies upon the establishment of a tax base from which to pay qualified, neutral state actors and to establish the institutions to uphold the tenets.  It’s a point well-taken.]

II. Specific Issues to Address as First-Order Priorities.

Against this back-drop of four tenets, there are a series of specific decisions that have to be made with respect to the law as it relates to ICTs.  These decisions have to be made in the context of, and responsive to, the local environment.  I would be reluctant to proscribe any outcome on the following specifics, but highlight them as key problems to grapple with as first-order priorities:

A) Telecommunications regulation.  How do you deal with telecomms convergence?  Do you regulate telecomms differently from Internet?  How do you foster the development of new technologies, like wireless and VoIP, without excess disruption of the economy?  How do you regulate, if at all, VSAT terminals set up in urban – or rural – areas, as Dr. Hans Hoyer, my co-panelist and executive director of WorldLinks, mentioned?  Dr. Hoyer argued in favor of “progressive telecommunications policy,” which is certainly a laudable goal, depending, of course, upon what ”progressive” means precisely in any given ecosystem. 

B) Pricing controls (closely related to point A). How do you make the access to the Net affordable?  How do you use the legal infrastructure to regulate pricing?  Is it just a matter of creating an environmental that fosters competition and, as such, that makes pricing affordable?  Or are limits on pricing (e.g., regulation of the sort that the state often does for utilities like electricity) a necessary step?

C) Intellectual property regime.   As Dr. Lee-in Chen Chiu, another co-panelist, mentioned, it’s critical to think through the balance between the interests of creators and the rights of the public.  This issue is about creators of all forms of media: digital media in the sense of music, movies, art, books, but also about software.  A variant: how do you deal with the question of whether the government should promote either open or proprietary software?  No one answer is right; harmonization is good, but it should not be the end-all, be-all.

III. A Few Things to Avoid.

A) There is no one-size-fits-all solution to most (any?) of these specific issues.  Certain lessons can be gleaned from broad experience, but there must always be sensitivity to local variation.  In particular, it’s a mistake simply to look to the US or EU model and adopt.  Likewise, it’s important to resist the wholesale export of US policies, especially on matters of intellectual property.  We don’t have it right yet, particularly with respect to digital media, software, pharmaceuticals and the like.  It’s a bad idea for us to be seeking to impose our current framework on other countries through various means of export (multilateral and bilateral treaties, e.g.).

B) It’s a tactical mistake to start by just adopting an “e-commerce law.”  There are important aspects of an e-commerce law, but the development of Net businesses rely on a much broader sense of the legal regime, and it should be on aspects of that goal that we focus right from the outset.

I should note by way of attribution that much of this basic framework is derived from conversations with lots of people around the Berkman Center and far beyond.  In particular, we worked on thoughts of this sort for last year’s BOLD series on Internet and Development, for which I wrote with Jim Moore and Urs Gasser a module on Entrepreneurship.

On a pedagogical note: I’m posting these thoughts also because they’re on the general topic that we’ll be discussing in our team-taught course on Digital Democracy at HLS later this term.  Thoughts, refinements, specific examples for or against are strongly encouraged. 

One of the things I’m most excited about at the Berkman Center is the largely informal speaker series that we’ve been running.  Most sessions take place at lunchtime in Baker House and are quite informal in nature.  Occasionally, the lectures are on a larger stage, as when Yossi Vardi visited us last week.  For instance, today, we had a visit from Dr. Tony Feghali, who spoke about Lebanon and e-Readiness, hosted by Colin Maclay, who works on ICT and developing countries.  Wendy Koslow took good notes, which was particularly helpful to me, since I missed it.  Most of the sessions relate to Internet law, policy and/or technologies.  The idea is to create a sense of intellectual community here at the Berkman Center and to draw in people from elsewhere at the university, within the local community, and beyond.

Ben Adida says, “It’s going to take more than a makeup job to fix” the current state of politics in our society, in a riff off an Aaron Swartz post about the possibilities of rebranding.

We’re very fortunate to have Bill Ury and several of his colleagues from the Harvard Law School’s Program on Negotiation here at the Berkman Center today.   Bill Ury’s focused on the idea of “e-Parliament,” a means of “helping humanity get to YES.”  Ury knows a lot about this topic: he’s co-author of the long-time bestseller, “Getting to Yes.”  His work overlaps with ours on the issue of thinking about governance.  We’re both interested in how decision-making and conflict resolution happens in a world joined by the global, public, unitary network that we call the Internet.  We’re grateful that Prof. Roger Fisher, Prof. Frank Sander, PON Managing Director Susan Hackley and others from HLS, UMass, and elsewhere made the effort to participate.

The e-Parliament idea is to create a global network of parliamentarians, fueled by online tools.  The project would involve an online repository for ideas, building “unlikely coalitions” (in the words of Cong. Barney Frank, speaking of this project), and improving collaborative decision-making across national boundaries.  They have a list of 17,000 - 18,000 parliamentarians (of the approximately 25,000 in the world).  They imagine global hearings on common problems, like HIV/AIDS, energy and conflict prevention.  Their goal: nothing short of “reinventing participatory global democracy.”  Despite, or perhaps because of, this ambitious goal, they’re starting out under the radar screen and looking 10+ years out.

For me, the hard question raised by this project is how to tap into, and build onto, the networks that are already developing on a global level around issues and to use this process and wisdom to improve global and local decision-making.  It’s happened for years on usenet groups, and more, today, than ever, in the Weblogs space.  There’s work in the Online Dispute Resolution space that’s relevant.  If this project is “just another thing to do” for parliamentarians where they hear from one another, even on a global level, then the prospect seems relatively dim; if it’s a way to tap into the wisdom of the smart mobs, to pick up on Yossi Vardi’s “Edge v. Hub” lecture of yesterday, it has a long-term chance of extraordinary impact.

So, of those 25,000 parliamentarians, is it realistic to think that you could get 2,500 to respond to an e-mail to say they’re interested in HIV/AIDS?  Then 250 who’d give you an hour a week and come to a meeting a year on HIV/AIDS?  And 25 catalysts who would give you an “on-call” commitment and meet up 4 - 5 times per year in person on HIV/AIDS?  [Geoffrey Kirkman adds the question: do you care who those 25 or 250 or 2,500 are, in terms of male/female, urban/rural, progressive/conservative, etc.?]  And if that’s the math for parliamentarians, what’s the math for ordinary citizens?

[Update: mp3, stream, wav file of Yossi Vardi’s lecture available here.  Also, see Turmis’s Musings for additional color.]

“People are interested in a good story,” Yossi Vardi says, “and not in the facts.”  So take his lecture today at Harvard Law School, sponsored by the Berkman Center, on its own terms.

Yossi Vardi says the most important idea in the story of the Net is collaboration.  Things get interesting when you get past a zero-sum game.  It’s important to strive for the biggest non-zero-sum game possible.  One way to explain what’s happening is by turning to the emerging study of neuro-economics, an attempt to correlate economic activities and their effect on the brain, and collaboration v. competition.  It’s about dopamine that is released through collaborative activity. 

Google, eBay, Amazon are all taking advantage of collaboration and sharing online.  They’re all monetizing the rating of other people and products that users do for one another for free.

ICQ, of which Vardi was founding investor, is successful by “pushing dopamine over IP [Internet protocol].”

“We go from smart mobs up to swarms,” says Vardi.  What you really want are “wise mobs,” from which you can extract essential knowledge.

Like those who are paying attention to the digital music crisis, Vardi is wondering about what things we think of as “public goods” (non-rivalrous and non-excludable; see the first few pages of Prof. Terry Fisher’s chapter 6 of his forthcoming book, “Promises to Keep”).

On openness: the power is in harnessing the work and energy of smart people outside a given organization.  People are building platforms, not applications today.  ICQ was designed as a platform, onto which people can build and which outside work then returns value to the original platform.

A critical example of collaboration on the Net: dating, which is still growing.

Jim Moore: the message, leading up to this struggle for dominance between the edge and the hub, is that we should be grounded in the idea of human cooperation and build from there, scaling to new levels of productivity and power.

[Aside: Vardi on Wagner: “His music is not as bad as it sounds.”]

So, on to the struggles, as advertised. 

* At the Hub(s): Some of the struggles are between players who seek to control the hub.  Whose operating system will control the desktop?  How will people connect to the Net: via cable, telephony, etc.  Who will control the living room (the TV, the game platform, the PC)?  Do people really want one converged appliance, or do people, as Vardi suspects, really want a series of different appliances for different purposes, among which the bits can move.  What will be the hub?  Or are there a series of hubs even within the living room?  Will the content creators, distributors or the platforms govern?  Will Google beat Overture once and for all?  These are all struggles among players at the hub.

*The Edge v. the Hub: These struggles, Vardi tells us, are the more interesting ones.  The struggle is over the openness of the technology: on the legal fronts, the struggles are over ownership of intellectual property, spectrum, VoIP; on the technical fronts, on standards, architecture, APIs, morality of free v. paid, etc.  (The watching of advertising, like other low-paid work, is being farmed to developing countries, says Vardi, since you only get $0.40 per hour watching advertisements). 

* Why the Edge will win: The edge is highly motivated.  The edge doesn’t take lunch-breaks and doesn’t spend hours making fancy PowerPoints.  (”Power corrupts, and PowerPoint corrupts absolutely.”)  It has the advantages of no centrality — just as KaZaA survives Napster, the Edge will survive the Hub.  The power of Hub has traditionally been through big stupid money.  The Edge has much more power and can do more new things.  P2P users will always beat the RIAA.

Those who will win on the Net will recognize three things:

* Harness the goodwill of the Edge. 

* The Edge has already won.

* Microsoft will embrace Linux.  The RIAA will incorporate Napster.

Professor Charles Nesson: is the technology neutral as between left and right in politics?

Vardi: the technology is good for passionate people.  I think that more people of the left are on the Internet (but see Instapundit).  The Edge is more about idealism, youth, avant-garde; the Hub is about conservatism, money, vested interest, and — somewhat discouraging — big technology. 

Moore: it’s not about left or right, it’s about those who trust other people.  Those are the people drawn to collaboration and P2P (but see libertarians who are quite open to collaboration).

Discussion turns to Moore’s Second Superpower.  Is it too airy-fairy, or is there there there?  [No resolution on this important point, alas.]

Vardi: credit is due to Microsoft for combining the open and the closed.  The platform they’ve built enables some innovation by programmers, up to a point.  They’ve succeeded as a result — for other reasons as well, including bundling.  (Moore, by way of reply, gets things going by saying that MSFT is in fact the more open platform, as it’s more accessible to end-users than is much open-source software, which is accessible, he says, only to the super-elite of programmers.)

US lawmakers have their eye on piracy of music, movies and software on a global level.  The “worst offenders,” according to a member of the newly-formed Congressional Anti-Piracy Caucus, include Brazil, China, Pakistan, Russia and Taiwan.  Maybe so.  But the US Congress should take care in this matter to see the subtleties on this complex topic and not make the United States of America into the bully, yet again.

JJ Disini is exploring “the upper limit of human capacity for processing information — human throughput.”  He surmises: ”This probably explains why we will always need intermediaries to perform sorting functions for the Web or highlighting information we need to know (ah, the ever-enduring demand for advertising).  In the context of online democracy, this means that there’s an upper limit to bandwidth where you won’t get a significant increase in meaningful participation from individuals.”  JJ is an LLM student — which ordinarily means trained as a lawyer in another country and getting yet another law degree here — and a Berkman Center regular.  His post is Joi Ito and Jim Moore-inspired, and timely in light of Yossi Vardi’s lecture today.

From Scripting News, a fun way to be driven crazy.  Watch out: it could happen to you.

If you’re not in 02138 today from 5 - 7 p.m., but would like to be there virtually, tune in to the webcast of Yossi Vardi’s lecture, “The Edge against the Hub: The Struggle for Dominance on the Internet.”  We had a spirited breakfast this morning.  I’m confident that this evening’s talk will be lively and fun.  Stop by Hauser 104 on the Law School campus if you can, or gear up your Real player if not.  Thanks to Jim Moore for making this event possible.