Back to Net Freedom Up to Site Map $Date: 2002/07/31 08:37:12 $

An Open Letter to Reed Hundt, Chairman of the FCC

Mr. Chairman Hundt:

I'm responding to your request, in your September 18th speech to the Wall Street Journal Business and Techology Conference, for input on the direction of U.S. telecommunications and regulatory policy.

Allow me to present my credentials for addressing these issues:

First: I have been using the Internet since 1976, back in the pre-TCP/IP days when it was called ARPAnet. Today I am an expert Internet technologist actively involved in the development of Internet tools and standards. For details on my many free-software and network-service projects, see my home page at <>.

Second: As the editor of the Jargon File <>, (and its book version "The New Hacker's Dictionary", ISBN 0-262-68092-0) I am recognized as one of the major chroniclers of the Internet's culture both within that culture and outside it. My work has been written up in Time, Newsweek, and Wired, and People Magazine's October 21st 1996 issue just ran a profile of me titled "The Guru of Geek-Speak".

Third: I have spent much of the last three years tackling the community Internet access problem personally. In 1993 I helped found Chester County InterLink (CCIL). This volunteer-run nonprofit organization offers an hour a day of free Internet access to anyone who lives or works in Chester County, PA (where I live). We concentrate on reaching the people commercial Internet service providers (ISPs) don't -- the elderly, the poor, minority ethnic groups, and the disabled.

In a previous speech, you had (I think very incisively) framed the policy challenge in terms of five questions. I'd like to offer answers to these based on my twenty years of experience -- of having watched the Internet grow from a private sandbox for me and a handful of other techies to a world-transforming mass medium.

While some of my remarks will seem radical, even provocative to many, I assure you that they represent a strain of opinion widely prevalent among old Internet hands. Indeed I can assert with some confidence (from my vantage point as a chronicler of Internet culture and folklore) that they represent at least a plurality, and quite possibily a majority, of informed opinion among those who actually built the Internet and keep it running and growing today.

1. How can public policy promote or at least not deter expansion of bandwidth to power up the development of the Internet?

I believe public policy can best serve current and potential Internet users (and users of all other media) simply by getting out of their way.

First, the U.S. government should withdraw itself both from economic regulation of media and from content regulation of media.

Second, it should move speedily to redefine electromagnetic-spectrum slots and all other forms of government-controlled telecomms monopoly resources as tradable property on the model of land ownership (with interference problems treated as property torts).

Third, it should dispose of its property by (a) recognizing the homesteading rights of nonprofit organizations like the American Radio Relay League, and (b) disposing of the remainder by public auction to for-profit corporations, with proceeds from the latter being used to buy down the Federal debt.

Finally, it should celebrate and ratify these successes by abolishing the FCC.

I will develop arguments for details of this program in the course of answering your remaining four questions. But the general grounds for it is this: the whole of the public-interest and national-security rationale for government intervention in the telecommunications industry (as codified in the FCC's 1934 enabling legislation) depends on the assumption of scarce bandwidth and relatively expensive communications, a regime naturally conducive to monopolization. That assumption no longer holds.

I submit that your own public meditations on this trend do not go far enough. You recognize that abundant cheap bandwidth over the Internet wire makes nonsense of traditional regulatory assumptions about voice telecomms, because it destroys the whole context that made voice telecomms appear a natural monopoly. Less directly, but by the same compelling economic logic, it vitiates the rationale for government electromagnetic-spectrum allocation and all other forms of "public-interest" media regulation.

Indeed, the advent of cheap Internet implies that regulation-induced rigidities in the electromagnetic-spectrum market will begin to seriously injure the consumer very soon, and may already be doing so. Nicholas Negroponte (founder of the M.I.T Media Lab) pointed out back in the 1980s that the association of broadcast media with wireless transmission is a historical accident. The success of cable TV demonstrates that in a world of cheap wire, EM spectrum stops making sense as a broadcast or long-haul medium. When costs of broadcast and long-distance communications over the wire fall below some threshold, there's more value in dedicating EM spectrum to short-haul mobile communications (cell phones, PCS, and technologies like Metricom's Ricochet system).

When we reach that crossover point (if we haven't already) traditional electromagnetic-media firms won't be able to do the economically rational thing, which would be to switch to cable and Internet multicasting and sell their spectrum slots to mobile-telecomms entrepreneurs. Because they're monopolies created by spectrum and cable allocation for politically prescribed uses, they will only be able to exploit spectrum by wasting it on broadcast and long-haul. How many millions of man-hours and billions of dollars in foregone opportunities are we going to lose before we get the lobbyists and politicians out of the picture and let the market solve this allocation problem?

More generally: in a world of ubiquitous Web pages, of a thousand digital cable channels, of MUDs and MUCKs and MOOs, of home-built virtual-reality simulations and every man his own publisher and media conglomerate, who can sensibly argue that access to a broadcast audience is an elite privilege demanding of government scrutiny?

Communications will go where costs and regulatory barriers are low. In a world of cheap wire, producers and consumers will simply migrate where government-imposed restrictions (and their costs) are not. Regulation cannot stop this; it can only impose unnecessary costs and jeopardize our First Amendment rights while it tries.

Consider in this context the success of American call-relay entrepreneurs in raiding megabucks of international voice business away from rigid telecomms monopolies in Europe and elsewhere. Consider also the way that the U.S. regulations on export of cryptographic software have handed the international secure-communications business to foreign corporations.

In the world of cheap Internet, the inefficiencies at the margin created by telecomms regulation are no longer merely irritants, they are economic suicide -- fruitless, bootless, and stupid.

2. What rules can we get rid of and what rules should we write to promote the development of the Internet?

First, all the regulatory regimes and tariff rules that protect old media and voice carriers from competition should be scrapped as rapidly as procedurally may be. This will speed and ease the transition to an Internet-centered telecommunications infrastructure by discouraging further monetary and human malinvestment in dead-end technologies and sunset industries.

Second, the government ought to respect the First Amendment as it was written and intended ("Congress shall make no law abridging freedom of speech...") and entirely recuse itself from regulating the content of the Internet.

I have presented above reasons that soi-disant "public-interest" regulation of older media creates market rigidities harmful to consumers. Analogous reasoning would apply to the Internet, in spades. Thankfully you already seem to realize this.

Write no rules. The public is being served magnificently well without rules. Already our children and our advertising media toss around URLs as casually as phone numbers -- and not just wealthy children either. Everybody is getting into the act. Unlimited Internet access is already down to $20 a month for most of the U.S., less than the cost of an average restaurant dinner for two. Internet cafes and library kiosks are spring up like mushrooms, and so many of the homeless poor have email addresses that it's become a running joke in several national newspaper comic strips.

In this regime, the only rule we need is "Laissez faire. Laissez passer."

3. Should we be concerned that the economics of pricing on Internet -- influenced as they are by current out-of-date regulatory policies -- won't in fact sustain development of the Internet?

Your question implies its own answer. All regulation has a market-rigging side effect that raises prices on the regulated good. When the regulatory policies you admit are out-of-date are scrapped, costs will drop to their natural clearing level, benefiting everybody.

But they won't drop below the point at which Internet development is sustainable, because that's the same point at which carriers large and small stop making a profit -- and carriers aren't in business for their health.

Large Internet carriers like to grumble that the existing settlement system is unfair, that they carry far more traffic for the small ISPs and regionals than vice-versa. They agitate for pricing by volume or by connection and advocate regressive, doomed non-solutions like ATM. Some interpret these complaints to mean the Net's growth is not sustainable -- but to do this, they ignore the fact that these same complainers are still aggressively seeking business, laying cable, and building infrastructure.

Evidently their real estimates of return-on-investment exceed their rhetorical ones. The market is sustaining Internet development very nicely -- and a freer market will do it better still.

4. How can we make sure that Internet reaches all Americans, especially kids in classrooms?

I'm not sure how universal schoolroom access will happen. But I am certain that government intervention will slow, complicate, and corrupt the process. And this is not mere theoretical libertarianism on my part -- it is first-hand observation. I have watched lavishly funded school-networking efforts run by government in this county stumble and fail repeatedly, while CCIL did more with a shoestring budget and a handful of volunteers. I know that many other Internet activists nationwide have had parallel experiences.

I am therefore adamantly opposed to proposals that an excise tax be levied on phone bills to fund government-run educational networking programs. That way lies only another huge, ineffective federal bureaucracy and a raw deal for our kids.

We owe our children more than this. We owe them lower taxes, less regulation, and the kind of abundant communications infrastructure that only a vigorous free market and volunteer efforts can create.

5. How can we make sure the Internet reaches across the globe? Don't we need government policy in the United States and worldwide to guarantee that Internet access becomes a truly universal product? Don't we need to guarantee that everyone gets access to the common network of networks?

The welfare of humanity as a whole is a noble goal. But the best we in the U.S. can do for it is provide a good example by cleaning up our own act. It's pretty arrogant of us to think we have the power to do effective social engineering on other countries, or even the right to try, given what we've wrought with government intervention in our own.

I can certainly understand the desire of the public education and social-welfare establishment to hitch its wagon to the Internet star. But these are the same people who, operating from the very noblest of intentions, have social-engineered our once-thriving inner cities into drug-riddled free-fire zones and our once-proud primary schools into an international disgrace. I fear the possibility of being smothered by their toxic good intentions more than I fear any other plausible future for the Internet; even Supreme Court affirmation of the abominable Communications Decency Act might frighten me less.

Nor am I alone. The general feeling among Internet technologists (as opposed to pundits, politicians, and other professional busybodies) is that the Internet is well on its way to meeting universal-access goals now, and will do so naturally if the would-be censors, the busybodies and the social engineers don't step in and screw things up for everybody.

I've been in those trenches for years now, personally putting in long hours to help the people least ready to adapt to the Internet world. CCIL and hundreds of volunteer groups like it all over the U.S. will do what the money-economy part of the market can't. Between us, we'll solve the universal-access problem, if government will stay out of the way.

And by "staying out of the way" we do not merely mean refraining from hindering us. Well-intentioned but destructive "help" -- like an excise tax for school networking funding hives of eager bureaucrats, rent-seekers, and political drones -- would be worse than hindrance. In my experienced opinion, and that of many of my colleagues, no greater danger to universal cheap Internet access could easily be imagined.

Yours truly,
Eric S. Raymond

Copies of this open letter are being emailed to:

A copy will also be kept available on my Network Freedom page at <>.

Back to Net Freedom Up to Site Map $Date: 2002/07/31 08:37:12 $

Eric S. Raymond <>