2/n: Cyberspace Inc and the Robber Baron Age [cr-95/11/24]


Richard Moore

Here's the second installment.  Sorry for about the bad line breaks in
installment one.



         This article may be posted in entirety for non-commercial use.

To appear in:  INFORMATION SOCIETY, Vol 12(2)
   Edited by:  Mark Poster <•••@••.•••>
     See WWW:  http://www.ics.uci.edu/~kling/tis.html


                Cyberspace Inc and the Robber Baron Age,
                   an analysis of PFF's "Magna Carta"

                 Copyright 1995 by Information Society

                             Richard K. Moore
                             August 19,  1995


The text of PFF's manifesto is an artful piece of propaganda.  Clouded in
cyber-jargon, illogical in its flow of argument, and disjoint in its
presentation -- it does superficially appear to be a "rambling camel-of-a-
report", as Mr. Stahlman observes.  But beneath the deceptive rhetoric -- if
one digs patiently -- there can indeed be found a coherent set of proposals
for the commercial exploitation of cyberspace.

The rhetoric is grandiose.  It talks about the original American experience,
characterized as daring pioneers conquering a new land -- based on the
principles of individual initiative and freedom.  Cyberspace is described as a
similar frontier, and a rallying cry is raised to reaffirm freedom for the
individual -- especially from government control.  The preservation of the
American heritage itself, the manifesto argues, hangs in the balance: freedom
for the individual in cyberspace must be protected!

But the manifesto makes no mention whatever of protections for _individual_
freedoms.  There's no discussion, for example, of guaranteeing freedom of
expression or of protecting privacy.  In addition, there's no discussion of
preserving the viability of Internet mailing lists and bulletin boards --
which have proven to be cyberspace's equivalent of "freedom of association"
and "freedom of the press".

What the manifesto does discuss -- at great length -- is the protection of
freedoms for _telecommunications & media conglomerates_: freedom to form
monopolies, freedom to set arbitrary price rates and structures, freedom to
control content, and freedom from fair taxation, through special accounting
procedures.  This is a formula which harks back to the robber-baron capitalism
of the late nineteenth century, when railroad, oil, and steel monopolies ran
roughshod over America's economy and political system.

Hence the rhetoric of PFF's manifesto is aimed at accomplishing a clear
propaganda mission.  It aims to stir up sentiment for freedom of the
individual, and then to deftly shift the ground under the manifesto's
audience.  The pro-freedom sentiment is subtly transferred from the
_individual_ to the _corporation_, not explicitly, but by deceptive turns of
phrase.  "The corporation" is subtly equated to the "the individual", so that
"deregulation of conglomerates" _seems_ to be synonymous with "freedom for the

Implementation of the manifesto's agenda would not lead to individual freedom
at all.  It would lead to subjugation of the individual by corporate media
monopolies.  The right to access services, the price of the services, the
definition of what services would be provided, the content of "news" and
entertainment -- these would all be decided entirely by media conglomerates,
based on their business interests and political agendas.  Neither individuals
nor their elected representatives would have any say over how cyberspace is to
be developed or used, under PFF's charter for Cyberspace Inc.

Most of the remainder of this article is devoted to examining representative
excerpts of the manifesto text, in order to substantiate and illustrate the
summary analysis above.  At the end there's a brief discussion of the
relationship between the manifesto and the current legislative agenda in

* * *

In its Preamble, the manifesto sets forth its grandiose characterization of
cyberspace as the next frontier of the American Dream:

        What our 20th-century countrymen came to think of as the
        "American dream," and what resonant thinkers referred to
        as "the promise of American life" or "the American Idea,"
        emerged from the turmoil of 19th-century industrialization.
        Now it's our turn: The knowledge revolution, and the Third
        Wave of historical change it powers, summon us to renew the
        dream and enhance the promise.

In the first section, "The Nature of Cyberspace", the emphasis on cyberspace
as a delivery media for information products is introduced:

        Cyberspace is the land of knowledge, and the exploration of
        that land can be a civilization's truest, highest calling.
        The opportunity is now before us to empower every person to
        pursue that calling in his or her own way.

As is typical throughout the manifesto, the substance is hidden within fluff
rhetoric.  The operative phrases in this paragraph, confirmed by the rest of
the manifesto, are "land of knowledge" and "exploration".  Cyberspace is to be
primarily a source of "knowledge" -- meaning commercial media products -- and
the role of the _consumer_ will be to "explore" it -- meaning to navigate the
purchasing options.

This first section also introduces the theme that government is inconsistent
with cyberspace pioneering:

        [Cyberspace] spells the death of the central institutional
        paradigm of modern life,  the bureaucratic organization.
        (Governments, including the American government, are the last
        great redoubt of bureaucratic power on the face of the planet,
        and for them the coming change will be profound and probably

As you might expect, nowhere does the manifesto acknowledge that Internet was
established due to government initiative and sponsorship.  And interestingly
enough, the word "Internet" occurs only twice in the manifesto, and the
Internet precedent is seldom cited as a source of models for how cyberspace
might evolve.  Also, the authors are evidently blind to the possibility that
_corporations_ might be "redoubts bureaucratic power".

The next section, "The Nature and Ownership of Property", introduces a number
of complex topics regarding ownership of hardware infrastructure, intellectual
property, and the electromagnetic spectrum.  This section also introduces the
issue of pricing regulation, and touches on preferential taxation.

The main propaganda theme, intentionally confusing the individual with
corporations, is introduced at this point:

        At the level of first principles, should ownership be public
        (i.e. government) or private (i.e. individuals)?

The hook is set here, favoring private over government ownership -- in the
name of the individual.  But in all that follows, it is the corporation that
is granted privileges, not the individual.  As part of the same deceptive
dichotomy, "public/government" is everywhere equated to central bureaucracy,
with no acknowledgement that any kind of regulation could ever be useful, nor
that any kind of public agency, even if highly decentralized, could possibly
be beneficial.  And there is no hint that individuals might ever need to be
protected from corporations, or that government might play some role in such

The ownership of hardware infrastructure is mentioned, but not discussed.  It
is patently obvious, evidently, to both the authors and the presumed readers,
that this level of infrastructure is to be privately owned.  State operated
telecommunications systems are so far beyond the pale as to be unimaginable.
Again the precedent of Internet (until very recently supported by a public
backbone network) is conspicuously absent from the manifesto.

The discussion of intellectual property is interesting, and appears to have
some merit.  Patents and copyrights are described as being a "public good"
approach to intellectual property, outdated and cumbersome in the age of

        Third Wave customized knowledge is by nature a private good.

The manifesto's favored approach to intellectual property is described in a
quotation from John Perry Barlow:

       "One existing model for the future conveyance of intellectual
        property is real-time performance... In these instances, commercial
        exchange will be more like ticket sales to a continuous show...
        The other model, of course, is service... Who needs copyright when
        you're on a retainer?"

Apparently the model is that authors would sell their services or their rights
to a commercial distributor, who would then charge the consumer on a "pay per
view" basis.

Dealing with copyrights in electronic media has indeed proven to be a thorny
problem.  Journalists have complained about not being remunerated by
electronic republishing services; rap musicians have allegedly "sampled"
previous material without payment; copyrighted articles are forwarded around
Internet on a free basis.  New mechanisms are needed, and the private sector
_is_ likely to be a creative source of solutions, such as metering

This model makes no mention of royalties.  Many authors would prefer
royalties, based on distributor revenues, rather than being forced to sell
their services or works on a fixed-price basis.  This is a time-honored
practice in pre-electronic media, and a fully accountable and enforceable
royalty scheme would be a desirable part of any cyberspace solution for
intellectual property.

With regard to ownership of the electromagnetic spectrum, ominous questions
are raised, but a specific agenda is not developed.  Existing channel
auctioning practices are criticized as being too limiting.  Perhaps PFF's
corporate backers are seeking outright permanent ownership of this presumably
public resource:

        ...Is the very limited 'bundle of rights' sold in those
        auctions really property, or more in the nature of a use
        permit -- the right to use a part of the spectrum for a limited
        time, for limited purposes?...

Thus far, the manifesto has "established" that private ownership of
infrastructure, intellectual property, and the electromagnetic spectrum should
be strengthened and extended, with the root justification hanging on the thin
thread of deception equating corporation with individual.  Next, the specter
of evil regulation is raised:

        Regulation, especially price regulation, of this property
        can be tantamount to confiscation, as America's  cable
        operators recently learned when the Federal government
        imposed price limits on them... there is no disagreeing
        with the proposition that one's ownership of a good is less
        meaningful when the government can step in, at will, and
        dramatically reduce its value.

Thus the manifesto proposes that every aspect of cyberspace is to be corporate
owned, and that no price regulation should be imposed.  If adequate measures
were taken to insure healthy competition, this formula _might_ serve the
public welfare.  But the monopoly proposals, to be discussed further on, make
this a dangerous formula indeed.  Note above the use of the phrase "one's
ownership", reinforcing the confusion of individual and corporate identity.
Notice also, there was no discussion of the consumer complaints that led to
the regulation, nor of the immense profits that the cable operators continue
to reap subsequent to the "confiscation".


INSTALLMENT 3/N to follow

 Posted by Richard K. Moore (•••@••.•••) Wexford, Ireland
 CyberRights Co-leader |  Cyberlib=http://www.internet-eireann.ie/cyberlib