An Excerpt From

Henry H Perritt Jr.'s

Law and The Information Superhighway

ISBN 0-471-12624-1

"Law and the Information Superhighway: Privacy * Access * Intellectual Property * Commerce * Liability" provides a comprehensive analytical framework for applying legal principles and concepts to new communication technologies. It is an indispensable reference for attorneys dealing with issues of intellectual property, employment, communications and corporate law.

Henry H. Perritt, Jr., is a Professor of Law at Villanova University. He was a key member of the Presidential team that developed government policy for the Information Superhighway, also known as the National Information Infrastructure (NII).

The following excerpt is taken from the introductory chapter and deals with the broad, general issues arising from new technological capabilities.

From Chapter One:

1.1    Introduction and Nature of Problems
1.7    Legal Status of the Four Traditional Categories
1.8    Effect of Digital Phenomena
1.9    Fast Replication
1.10 Computer Networks

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1.1 Introduction and Nature of Problems

The production, modification, dissemination, and use of information is an important economic activity in the developed world. Some information is valuable, and the law must allocate property rights to that information and adjudicate disputes over those rights. It also must facilitate contract and other commercial systems so that valuable information can be exchanged for money. The law also must adjudicate competing claims for access to distribution channels for information so that producers can reach markets, and so that consumers can have access to competing sources. Information also is an essential ingredient of representative democracy, and public law must determine who has rights to obtain and sell government information.

But information also does harm. It ruins reputations, exposes personal secrets, inflicts emotional injury, and misleads people into mistaken purchases and investments. The law must determine who bears the risk of loss from such harm--not only between originators and victims, but also among originators, victims, and all the intermediaries who handle injurious information.

While the law long has subjected communications to some of its most detailed regulation, it also has protected information under the First Amendment from governmentally imposed burdens. This sets up a tension that regularly must be readdressed as information and communication technology evolve.

The Anglo-American legal tradition is strongly based on geographically defined sovereigns; yet, information flows freely across sovereign boundaries. This presents problems for determining the jurisdiction of civil and criminal legal institutions, challenges that must be addressed anew as information technology changes.

This book proceeds from two premises. First, technological change always has been a major source of human problems that the law must address. This was so when the industrial revolution and improved railroad and marine transportation changed markets and employment relationships. It was so when the automobile changed the nature of personal injury claims. It is certainly so as information technology has become important to human activity and economic transactions. Changing information technology also changes dispute resolution. New types of disputes arise, while the feasibility of traditional methods for detecting illegal conduct and enforcing legal decisions diminishes. At the same time, the new technology makes possible new kinds of dispute resolution institutions and procedures that may have lower costs than traditional institutions and procedures. The law therefore must be responsive to changes in information technology. Legal architects and advocates must understand the changes in technology in order to define and apply legal principles appropriately.

Second, law lags technology. An important part of the ethos of market economics, and of the common-law tradition even as statutes and agency regulations have become far more important than pure case law, says that the legal system should not predetermine the course of technology application and product development. Rather, the law should remain in the background available to resolve deputes that cannot be worked out through private accommodation and market mechanisms.

If this is the law's role, then the shape of the technology and the direction of its changes are fundamental to sound legal analysis. Accordingly, this chapter begins by exploring the nature of the National Information Infrastructure and the changes that are occurring in it, especially changes in the four traditional legal compartments for publishers, common carriers, broadcasters, and cable operators.

1.7 Legal Status of the Four Traditional Categories

The different parts of the NII that now find themselves converging have different technological and market cultures. They also have very different legal traditions. Broadcasting and telephone common carriage have been heavily regulated, while newspapers and other publishers have enjoyed broad First Amendment immunity from regulation. Participants in the desktop computer marketplace have been more or less oblivious to both the First Amendment and detailed regulation. This section provides an overview of the legal regimes that have influenced the evolution of broadcasting, telephone and telegraph, cable, and publishing.

Publishing is the least regulated of the four traditional legal compartments. The First Amendment of the United States Constitution was aimed at protecting newspaper publishers and publishers of flyers and handbills.

Because of the central focus of the First Amendment, and the absence of countervailing characteristics justifying regulation as in radio broadcasting, legislators and administrative agencies largely have left traditional publishing alone. When the common law has intruded too far into content-related decision making by traditional publishers, the First Amendment has trimmed it back, as Chapter 6 explains.

Telephone and telegraph communication are at the opposite end of the legal spectrum from newspaper publishing. Providers of telephone and telegraph service to the public were categorized as common carriers from the earliest days of the telegraph service. The basic concept of common carriage obligates a carrier to accept all traffic presented within its physical capacity to handle it. Few controversies arose in which carriers claimed a First Amendment privilege against being required to handle traffic with which they disagreed. Some carriers preferred not to be publishers because of the reduced tort and criminal liability they enjoyed as common carriers. Other carriers and their lawyers no doubt assumed that common carriers simply did not enjoy First Amendment privileges perhaps because they waived First Amendment entitlement by becoming common carriers. In any event, the kind of control over content that is the hallmark of a publisher's First Amendment privileges was inconsistent with regulated common carriage.

In some ways broadcast radio and television looks more like newspaper publishing than it does telephone or telegraph service. It is a one-to-many operation, aimed at disseminating content, rather than providing channels for interactive communication on a one-to-one basis. People expect broadcasters to select and organize content that they, the users, receive more or less passively; they do not view broadcasting as a simple channel for them to use in originating communications with someone else. Nevertheless, broadcasting is more heavily regulated than print publishing.

From the earliest days of the radio broadcast industry, use of radio spectrum was the critical feature, economically and in terms of legal status. Spectrum use is the foundation for broadcast regulation. When broadcasters asserted First Amendment privileges to be free from FCC or state or common- law restrictions on broadcast content, their First Amendment arguments usually were deflected by the rationale that scarcity of spectrum justified government regulation of content. The high-water mark of this judicial doctrine was Red Lion Broadcasting, considered more extensively in Chapter 6.

Cable broadcasting began as a relatively weak substitute for local broadcast outlets for network programming. It was, thus, natural to suppose that cable occupied a niche in the legal framework identical to that occupied by television broadcasting. By 1994, however, it dawned on the cable operators, their lawyers, and the judges hearing their cases that the spectrum-scarcity assumption is unwarranted with respect to cable technology; the cable operator makes it own spectrum as it builds its cable plant. This greatly weakened the constitutional justification for regulation directly aimed at or significantly affecting content, and the Supreme court in Turner Broadcasting System, Inc. v. Federal Communications Commission, analyzed in Chapter 6, required regulators to come up with a completely different justification looking more like that required by antitrust law than communications law.

1.8 Effect of Digital Phenomena

The four traditional legal categories are converging because technologies used by entities occupying the four categories are converging. The move from analog to digital technologies for storing and transmitting information is the foundational shift in technology.

The movement of most forms of electronic communication to digital representation rather than analog representation makes a difference to technology configuration, economics, and law for the following reasons. Digital technology makes it easier to use packet communication techniques, which improve utilization of existing capacity. Packets, even those associated with a single message, can be distributed across a multiplicity of communication channels depending on the degree to which they are being utilized at the time.

Digital technologies permit routing and addressing to be based on the message itself rather than, as in analog telephone communication, requiring a separate process to set up a channel that remains intact for the duration of a communication session. Digital communication facilitates computer processing of content. An increasing proportion of content exists in digital form before it is transmitted, and recipients would like the option of computer processing after they receive it. Avoiding the conversions necessary to convert from digital to analog and back to digital again saves both sender and receiver time and cost. Digital representation also permits random access to parts of a document or message rather than, like analog representation, requiring review of an entire record from the beginning in order to find a particular segment. This results from computer processability of the digital formats.

Digital technology makes it much easier to combine different kinds of information representation--text, single images, audio, and full motion video. Digital communication does not increase the capacity of communication circuits, although it does permit available capacity to be used more efficiently by facilitating compression.

1.9 Fast Replication

A central feature of digital information technology is the speed with which pieces of information can be replicated. Each copy is as good as the "original," and there is virtually no difference technologically between making one copy on and ad hoc basis to permit human perception and making a large number of copies for distribution to a large number of recipients.

This characteristic, not found in analog technologies or in print and paper technologies, presents enormous challenges for adapting intellectual property law and the law of evidence. With respect to intellectual property, the traditional basic distinction between reading something, never within the monopoly granted by the copyright laws, and reproducing it, always within the copyright monopoly, vanishes. Efforts to enforce a copyright holder's reproduction right collide with the traditional privilege of anyone to read a copyrighted work when one possesses it.

Not only that, it is difficult, absent special arrangements, to tell where the copy came from. This opens up a variety of possibilities for forgery--and thus bedevils evidence and commercial law and makes it difficult to track down pirates of intellectual property.

1.10 Computer Networks

Digital computing crosses organizational boundaries, increasing the number of legal controversies because of two technologies: local area networks (LANs) of desktop computers and wide area networks linking geographically dispersed LANs. LANs permit users of desktop computers to enjoy the performance and autonomy advantages of running software directly on their own computers, while being able to share files and certain other resources with other users through the local area network and its associated "server." Such an architecture invites work groups to perform sequential steps, such as data entry, editing, and final production, by accessing files through a local area network. The latest generation of desktop computers, using the Intel Pentium microprocessor chip and the Power PC 601 and 604 chips in Apple Macintosh computers, has made it feasible to exchange fairly large files, including graphical images, through local area networks even when the exchange involves simultaneous access by a multiplicity of users.

Wide area networking permits local area networks to be joined electronically regardless of their geographic proximity to each other. Thus, a LAN in Louisiana can exchange information with a LAN in Luxembourg through a wide area network. Advances in modem speeds and wide area networking protocols began to make it realistic in about 1994 for significant quantities of graphical information and large text files to be exchanged over wide area networks. Sufficient bandwidth is available through the public-switched telephone network to perform these types of information exchange routinely.

Until the Internet became popular, however, most wide area networks were proprietary. The networks were organized around mainframe computers at one end of a connection running proprietary applications and desktop computers or dumb terminals at the other end of a connection running proprietary interface software. Sometimes these proprietary networks utilized international data communications standards such as X.25 for the communication link itself.

The Internet has accelerated an independent tendency toward two important technological phenomena: client-server computing and distributed database management. The client- server model permits software developers to allocate tasks between server and client connected to each other through a network so as to maximize performance, security, and other design criteria. For example, the client-server model permits the client, such as an individual user's desktop computer, to perform most or all of the tasks associated with graphical image management and screen displays. This makes it easier to implement Windows-based and highly graphical computing sessions without burdening the communications link with large quantities of data necessary to describe all the features of a particular screen image. Using this model, the individual user works with a Microsoft Windows or Macintosh display, communicating data and instructions to the server by pointing and clicking with the mouse. The client sends much abbreviated messages of one or a few characters across the communications link. The server can cause a particular image or change in the user display to be presented by sending a similarly abbreviated character or character string based on its "knowledge" of the graphical images the client already has and on its "knowledge" of the operational details of the client's interface software.

The second important phenomenon is distributed database management. This concept allows a user to combine data actually stored on a multiplicity of computers. For example, a client interested in a particular submission in notice and comment rule making could retrieve the docket kept on computer A, select a particular item from the docket, which would cause the desired document to be retrieved from computer B. Another document, for example, an opposing party's response, might be retrieved from computer C. Depending on the quality of the user's client software, the user might retrieve all of this material and have it presented to her as an integrated set with no indication that the elements of the set came from different computers. The flexibility and power of the client-server and distributed database models are enhanced when the protocols for implementing them are nonproprietary and "open." With open protocols, a multiplicity of designers and vendors can make up the pieces that can be combined into a distributed database or a client-server application.

The Internet has a particular role to play in facilitating public access to government agencies and to public information. The Internet is a useful framework for providing public access to agency materials of all kinds, including rule making and adjudication dockets. It is nonproprietary: it permits value-added features to be added by different entities in public and private sectors and it facilitates competition among vendors. Access is available at low cost to members of the public. With respect to electronic filings, the Internet is also attractive because it provides a universally available, standard, and nonproprietary way for lawyers and other members of the public to obtain information on agency proposals and to submit comments and documents.

The growing use of networking, especially wide area networking, complicates legal jurisdiction and choice of law questions because complementary events making up one legal transaction may occur in geographically separated areas (see Chapter 12). Open networking complicates protection of intellectual property because it breaks up the traditional product bundles to which owners and users of intellectual property have become accustomed (see Chapter 13). It complicates tort law because responsibility for harmful information is more difficult to assign (see Chapters 4 and 5). To realize its potential, open networking begs for reliable electronic payment and electronic systems (see Chapter 9).

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(c) copyright 1996 by John Wiley & Sons. Please request permission from the publisher before transmitting or reproducing this file.