AuthorCandeub, Adam

Table of Contents Introduction I. Regulating Network Liability and Public Goods: Common Carriage, Network Neutrality, and Section 230 A. Common Carriage 1. Common Carriage's Liability Deal 2. The Common Carriage Sticks 3. The Common Carriage Carrots B. Network Neutrality's Regulatory Deal 1. Network Neutrality and Common Carriage 2. The Common Carriage/Network Neutrality-Type Deal in Cable Television and Broadcast C. Section 230's Regulatory Deal 1. Genesis of Section 230 2. Section 230's Sticks and Carrots 3. Zeran and Its Progeny: Empowering Internet Censorship II. Common Carriage, Discrimination, and a Unified Regulatory Deal to Protect Free Speech A. Sticks: Discrimination and Curation B. Condign Carrots for Free Expression's Weakest Link Conclusion INTRODUCTION

Democracy and the innovation economy depend on the free flow of ideas. Justice Holmes's classic analysis of the First Amendment identifies a vibrant marketplace of ideas as a central pillar of a self-governing society. (1) Similarly, "free speech guarantees should have a great deal to do with a knowledge economy, and a world in which wealth and power increasingly depend on information technology, intellectual property, and control over information flows." (2) As the internet is now the primary global platform to exchange ideas, both democracy and innovation depend upon internet freedom.

Many fear dominant internet platforms' interference with the free flow of ideas online--and these concerns motivate today's most important legal and policy debates about the internet. First, so-called network neutrality advocates worry that dominant broadband services providers, such as Verizon or Comcast, may use their market power to block, degrade, or otherwise discriminate against content originating from unaffiliated firms. (3) For instance, Comcast allegedly degraded or threatened to degrade Netflix's content because both firms compete in the home video entertain business. (4)

A second set of concerns focuses on search engines' and social media's controlling online behavior and censoring speech, i.e., "platform regulation." Legal academics have long recognized how anticompetitive motives could bias search engine results, (5) and businesses have long complained that Google biases its search results. (6) Consistent with these claims, the EU Commission recently fined Google $2.7 billion, (7) and the Department of Justice has recently opened a high-profile investigation of the dominant internet firms. (8) Finally, social media is seen as playing an oversized and often unaccountable role in shaping public discourse. (9)

Both network neutrality and platform regulation seek to counter a powerful internet firm, whether a Comcast or Google--a broadband provider or social network/search engine--which has the market power to discriminate among users and businesses that rely on their network. Even though these economic and policy concerns are quite similar, broadband service providers and dominant search social networks face different regulatory regimes. The Federal Communications Commission's (FCC) network neutrality regulation, promulgated under Title II common carriage jurisdiction of the 1934 Communications Act, (10) governs, at least potentially, broadband service providers. Under this jurisdiction, the FCC may impose the whole range of common carriage duties, including rate regulation, mandatory interconnection as well as anti-discrimination obligations. (11) The FCC has regulated the internet pursuant to this power on and off for a decade--with the network neutrality debate continuing as one of the most controversial regulatory matters in recent memory. (12)

In contrast, search and social media platforms such as Google, Facebook, and Twitter only face section 230 of the Communications Decency Act. Rather than impose common carriage obligations, section 230 exempts internet platforms from liability arising from third-party speech. (13) Under its protections, if a newspaper publishes a libelous letter to the editor, the newspaper faces legal liability. But, if you post the same letter to the newspaper's online forum, the newspaper faces no liability under section 230. (14) Section 230 remains controversial with some who see it as a giveaway to the giant search/ social media firms while others see it as protecting free speech--and with numerous bills pending in Congress to reform. (15)

Despite different historical origins, network neutrality and section 230 platform liability--and so-called "common carriage," the body of law that has regulated transportation and communications networks for centuries, all reflect a historically typical "regulatory bargain." In exchange for liability relief from tort or antitrust law and for other government-granted privileges, a dominant network firm provides public goods it can uniquely offer: a universal communications platform enabling free speech and promoting democratic institutions. Common carriage's historical concern was carrier liability, which was designed to protect consumers and expand access. In the early modern period, common carriage required a higher level of liability for bailors, innkeepers, and ferries to protect consumers who often had no choice as to carriage service or innkeeper in those early industrial times.

Nineteenth century courts limited these liabilities but still imposed upon common carriers higher liability standards and other special obligations--and required carriers to refrain from discriminating against individuals or the content of their messages, i.e., provide a universal communications platform. In return, common carriers received special legal benefits such as protected monopolies, rights of condemnation for rights of way, or immunity from certain types of suits. (16)

Similarly, section 230, part of the 1996 Communications Decency Act, encouraged the early internet platforms, such as AOL or CompuServe, to regulate pornography and other matters traditionally subject to media or communications regulation, but at the same time fostered the free flow of ideas. It did so by creating the two different liability standards found in section 230(c)(1) and section 230(c)(2). (17) Notably, section 230 asked very little in return for this liability relief. (18)

But, unending network neutrality and section 230 debates--and continued concerns about network discrimination as search and social networks are no longer nascent industries but dominant global communications hubs--argue for a new, unified internet liability regime. And, any new deals should respond to firms' most blatant and destructive use of market power, discrimination.

This Article presents a novel interpretation of network regulation as a "regulatory deal." First, this interpretation offers a new interpretation of common carriage and network regulation--not as a sort of junior, ex ante antitrust regulation--but as an exchange of liability relief and other government goods for public goods that dominant network firms can uniquely offer such as a universal communications platform for free speech. Second, the Article shows how this "deal" is found not only in common carriage but also in network neutrality, other network regulations, and section 230. Third, the Article shows how some court rulings have twisted the terms of section 230, expanding its immunity to an absurd degree--further calling for a renegotiation of the section 230 regulatory deal to protect free speech. Fourth, the article describes what a unified internet liability regime should look like--and how it would not involve much regulation at all but simply impose a mild anti-discrimination requirement while encouraging platforms to enable users to block objectionable content and decide for themselves how to protect their own individual online experiences.

  1. Regulating Network Liability and Public Goods: Common Carriage, Network Neutrality, and Section 230

    Few areas of economic and legal regulation have received more attention than communications networks--whether the old AT&T telephone monopoly, the period of competitive long-distance during the 1980s and 1990s or the network neutrality and social media censorship debates. (19) This section argues for a new understanding of network regulation: it is a deal where the government allows dominant firms to maintain market power, or even monopoly, in order to obtain and preserve public goods of universal communications platform, free speech, and democratic institutions. (20) In other words, the dominant firm is not regulated only to curb its market power. Rather, its dominance is tolerated to provide additional public goods not otherwise obtainable.

    Depending on the historical and industrial context, the deal often imposes or relieves liabilities, grants government powers, such as the right of condemnation, or requires terms and conditions, such as non-discrimination or universal service. The basic element, however, remains the same: the government tolerates a firm with market power in exchange for the provision of a public goods.

    In contrast, most legal and policy work has assumed that the sole and only goal of regulating networks is to regulate a natural monopoly or combat market power. (21) In other words, regulators have feared that the dominant firm would extract excess profits, impose deadweight loss on the economy, or use its market power to pursue various strategies, such as vertical foreclosure, to drive out competition, or otherwise harm consumers. (22) For instance, the 1983 breakup of AT&T was predicated on such a foreclosure scheme, as was the Microsoft antitrust litigation--and much subsequent telecommunications legal controversy. (23)

    But, communications regulation, particularly common carriage, has always encompassed more than antitrust because communications networks offer essential public goods. Economists define a public good as (i) non-rivalrous, meaning that when a good is consumed, it doesn't reduce the...

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