Towards Policies in Support of Collaborative Production

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From the conclusion of the paper on the On the Political Economy of Collaborative Production in the Digital Age], by Mark Cooper.

See also the summary of these Key demands for a free communication infrastructure that enables productive collaboration. Proposed by Mark Cooper.


Mark Cooper [1]:

"There is a twilight zone in economics between market failure and market success inhabited by public goods and externalities. Collaborative production, and the goods it creates, will play a key role in filling this zone and creating economic growth in the digital age. The location of these goods with respect to traditional economic analysis is clear. In the industrial economy of the 20th century, economic analysis grappled with goods that were non-rivalrous and non-excludable. However, in the digital economy of the 21st century, computer and communications technologies expand the challenge of economic analysis. Anti-rivalry and inclusiveness are critical economic conditions. The value of anti-rival and inclusive goods increases as more users participate freely in their production, consumption, and distribution. By failing to implement policies that allow collaborative production to thrive in group-forming networks, society will suffer greatly.

To avoid this pitfall, it is necessary to understand the broad policy implications of choosing a mode of production. Developing specific policies in a number of areas will promote the efficient expansion of collaborative production. Broad policy goals must be developed with a clear understanding of what implications these goals will have for the telecommunication world.

A. Broad Policy Goals

Several characteristics of the collaborative mode of production give policymakers reasons to support it, including five economic and socio-political characteristics. First, there is accommodating uncertainty. Decentralized user driven focus has clear advantages in flexibility. It is less dependent on small numbers of network owners guessing what the demands on the network will be. It avoids large lumpy investment. It helps to lower the cost of updating and versioning. Flexibility enhances the ability of the structure to accommodate uncertainty.

Second, there is innovation. The decentralized end-user driven innovation is likely to accommodate far more experimentation and innovation. As I have shown, the experience of unlicensed spectrum in the age of digital technology shows that networked platforms exhibit the fundamental characteristic of user-driven innovation and aggressive atomistic competition because of its decentralized nature.

Third, there are incentives and infrastructure. Centralized networks give network operators an incentive and ability to exercise market power, to reduce or control communications to maximize private profits. The social cost of the exercise of market power in communications networks grows because it retards the ability to achieve collaborative gains. In collaborative production systems with embedded coordination, decentralized investment, and cooperation gain, this ability to abuse market power is reduced. Fourth, there is the democracy principle. Although this paper has focused on economic issues, there is no doubt that decentralized open networks have desirable political characteristics. The licensing regime that protected broadcasters excluded people from projecting their voices, thus limiting their right to speak. Because of the one-way broadcast nature of twentieth century electronic mass media, the First Amendment concentrated on the ability to hear di-verse points of view, also known as listeners’ rights. Open wireless and peer-to-peer networks expand the ability to speak and help ensure First Amendment rights by returning them more closely to their original formulation.

Fifth, there is the idea of creativity. There is a socio-cultural benefit in the growth of collaborative production independent of the aspect of political expression. The pleasure in creativity, attributed to the open source coder, is simply an example of the broader principle that self-expression through creative production is satisfying. Similarly, the desire to contribute without compensation is strong. People want to participate in the production of culture.

B. Communications Policy

This analysis has broad implications for many areas of public policy. The key principle of expanding the flow of information from the ends of the network, the end-to-end principle, is the cornerstone of the value creation. The unimpeded flow of communications is the key to collaboration on the supply-side and group formation on the demand-side. Future allocative and adaptive efficiency will depend upon a pervasive computing environment in which the endpoints are mobile.

Open wireless networks in the spectrum commons are better able to support such activity. Massive mobile computing is the future; the Sarnoff broadcasting networks are the past. A progressively expanding swath of unlicensed spectrum should be the main policy. Unlicensed spectrum is not the exception; it should be the rule. If unlicensed space becomes congested, it is necessary to move licensed applications out of the way, especially in the lower frequencies.

Network neutrality is vital to supporting the economics of collaboration. Tollgates and barriers restrict the flow of information and the ability of groups to form. Policymakers must resist the efforts of incumbents to throttle down the flow of information in the digital communications platform. As long as wire owners have leverage over last mile, middle mile, or backbone facilities, they cannot be allowed to undermine innovation in applications and content by withholding network functionality or discriminating against content or applications. Ironically, the torrent has barely begun and the oligopoly network owners are already complaining about bandwidth hogs consuming too much capacity, which will set off a campaign to restrict communications by price, or profit maximizing discrimination. Differentiation that utilizes enhanced network functionality is fine; discrimination that denies access to network functionalities is not. Open interfaces that promote seamless communications must remain the organizing principle of the network. The unfettered, many-to-many quality of the network must be preserved.

Telecommunications is infrastructure in the digital information age. More than ever, a ubiquitous and adequate communications network that is available, accessible, and affordable for all should be the objective of public policy. Because communications are so central to this economy, it is absurd not to have an industrial policy to ensure the achievement of this public policy. Universal service is more important in the 21st century than it was in the 20th because it creates a large market. In this network the sources of efficiency and innovation are dispersed and, frequently, accidental or surprising. The next big thing is not likely to come from the research and development departments of the incumbents.

There is a wide range of intellectual property issues that swirl around collaborative production, too many to address in this paper. From the point of view of information flow and communications, content owners should not dictate network architecture. If Hollywood and the music companies have their way, they will tag every file, fingerprint every user, and monitor every transaction. They will do so by forcing transactions back through a central server, which undermines the efficiency of exploiting distributive resources in peer-to-peer networks." (