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An Economic Analysis of Domain Name Policy - Part II

"Comparisons with Telecommunications Policy" is the focus of part two of a three-part series based on a study prepared by Karl M. Manheim, Professor of Law at Loyola Law School and Lawrence B. Solum, Professor of Law at University of San Diego. Special thanks and credit to Hastings Communications and Entertainment Law Journal, Vol. 25, p. 317, 2004.

In the United States, an independent federal agency, under the direction of Congress, is charged with developing and implementing policies governing the major telecommunications industries. These include broadcast radio and television, wireline and wireless telephony, and video distribution via cable, wireless, and satellite. One might wonder why the Federal Communications Commission ("FCC") does not likewise have jurisdiction, at least in the US, over perhaps the most significant telecommunications industry — the Internet. The FCC's authority does extend over those elements that comprise the Internet "backbone" and connectivity, i.e., the wireline infrastructure and the wires, cables, or wireless frequencies Internet users employ to connect to the backbone. But the agency does not regulate those elements of the Internet which comprise its functions or value. Thus, the fundamental components of the Internet's functionality — the computers, servers, content, architecture, protocols, users, and Internet service providers — are not regulated by the FCC or any other governmental body.

This is not an oversight. Deliberate federal policies during the Clinton administration were intended to leave the Internet mostly in private hands and unregulated. As explained by Ira Magaziner, President Clinton's senior policy advisor, "almost two-thirds of the real growth of the U.S. economy [during the mid- and late 1990s] [came] from the Internet economy." Privatization, in the view of the White House, was essential to foster this growth and its transformative effect on the global economy. Thus, while the Internet was developed under the auspices and support of the US military, the Department of Commerce, and several funding agencies, post-natal government involvement is mostly noted by its absence.

Regulating the Internet would be a daunting task, and it is not obvious that it would even be feasible for national agencies to regulate effectively. National regulation would likely retard the growth of the Internet, and create more controversy than consensus. Indeed, the few ad hoc regulations that do apply uniquely to the Internet, usually relating to content such as child pornography, spam, or trademarks, have either been unconstitutional, ineffective, or supplemented by private regulation.

While we generally oppose any regime of national government regulation of the Internet, we believe that it both illuminating and instructive to examine regulatory policies in other telecommunications industries as a basis for the formulation and evaluation of Internet policy. There are two principle reasons for doing so. First, the interminable struggle over telecommunication policies elsewhere reinforces the wisdom of leaving the Internet mostly unregulated. Second, those analogous policies have undergone rigorous examination, both for their theoretical soundness and practical efficacy. There is much to be learned from what scholars, regulators, courts and the industries themselves have to say about various policies and principles in telecommunications law.

Aside from the Internet, the two most dominant telecommunications industries, both in the US and worldwide, are broadcast and telephony. Examining these industries allows for comparative analysis of Internet policies, especially those involved in access to the name space. In many ways, the DNS system resembles the radio spectrum because scarcity limits access, thereby requiring a licensing scheme. Scarcity also creates value and markets, which may in turn influence policy formation.

The DNS and IP Address systems also bear similarity to the telephone name and number spaces. Regulation of the latter is accomplished by such familiar conventions as country codes (e.g., 1 for North America), area codes, three-digit prefixes and four-digit suffixes. But resulting value in telephone numbers has lead to ancillary regulation such as information and public safety protocols (411 and 911, respectively) and number portability requirements. 

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Share your comments

Re: An Economic Analysis of Domain Name Policy - Part II ericdierker  –  May 29, 2004 2:38 PM PDT

I am sorry but I could not help but read the first line 5 times. "In the United States, an independent federal agency, under the direction of Congress".
Only in legal briefs or out of a child's mouth denying he lied, have I ever seen such double speak.
1. Independent;
2. Federal;
3. Agency;
4. Under;
5. Direction;
6. Of Congress;

I thought these guys were professors not politicians.
Sincerely,
Eric Dierker

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