: Code 2.0

Telephones

Telephones

The architecture of telephone networks has undergone a radical shift in the past decade. After resisting the design of the Internet for many years[5], telephone networks are now shifting from circuit-switched to packet-switched networks. As with the Internet, packets of information are spewed across the system, and nothing ensures that they will travel in the same way, or along the same path. Packets take the most efficient path, which depends on the demand at any one time.

This design, however, creates problems for law enforcement in particular, that part of law enforcement that depends upon wiretaps to do their job. In the circuit-switched network, it was relatively simple to identify which wires to tap. In the packet-switched network, where there are no predictable paths for packets of data to travel, wiretapping becomes much more difficult.

At least it is difficult under one design of a packet-switched network. Different designs will be differently difficult. And that potential led Congress in 1994 to enact the Communications Assistance for Law Enforcement Act (CALEA). CALEA requires that networks be designed to preserve the ability of law enforcement to conduct electronic surveillance. This requirement has been negotiated in a series of safe harbor agreements that specify the standards networks must meet to satisfy the requirements of the law.

CALEA is a classic example of the kind of regulation that I mean this chapter to flag. The industry created one network architecture. That architecture didnt adequately serve the interests of government. The response of the government was to regulate the design of the network so it better served the governments ends. (Luckily for the networks, the government, at least initially, agreed to pick up part of the cost.[6]) As Susan Crawford writes,

Most critically for the future of the Internet, law enforcement . . . has made clear that it wants to ensure that it reviews all possibly relevant new services for compliance with unstated information-gathering and information-forwarding requirements before these services are launched. All prudent businesses will want to run their services by law enforcement, suggests the DOJ: Service providers would be well advised to seek guidance early, preferably well before deployment of a service, if they believe that their service is not covered by CALEA. . . . DOJ would certainly consider a service providers failure to request such guidance in any enforcement action.[7]

CALEA is a signal, Crawford describes, that the FCC may take the view that permission will be needed from government authorities when designing a wide variety of services, computers, and web sites that use the Internet protocol. . . . I nformation flow membranes will be governmentally mandated as part of the design process for online products and services.[8] That hint has continued: In August 2005, the Federal Communications Commission (FCC) ruled that Voice-over-IP services must be designed so as to make government wiretapping easier.[9]

Of course, regulating the architecture of the network was not the only means that Congress had. Congress could have compensated for any loss in crime prevention that resulted from the decreased ability to wiretap by increasing criminal punishments.[10] Or Congress could have increased the resources devoted to criminal investigation. Both of these changes would have altered the incentives that criminals face without using the networks potential to help track and convict criminals. But instead, Congress acted to change the architecture of the telephone networks, thus using the networks directly to change the incentives of criminals indirectly.

This is law regulating code. Its indirect effect is to improve law enforcement, and it does so by modifying code-based constraints on law enforcement.

Regulation like this works well with telephone companies. There are few companies, and the regulation is relatively easy to verify. Telephone companies are thus regulable intermediaries: Rules directed against them are likely to be enforced.

But what about when telephone service (or rather telephone service) begins to be carried across the Internet? Vonage, or Skype, rather than Bell South? Are these entities similarly regulable?[11]

The answer is that they are, though for different reasons. Skype and Vonage, as well as many other VOIP providers, seek to maximize their value as corporations. That value comes in part from demonstrating reliably regulable behavior. Failing to comply with the rules of the United States government is not a foundation upon which to build a healthy, profitable company. Thats as true for General Motors as it is for eBay.


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