Friday, May 11, 2018

Scale change and regulatory change

The current and forecast growth in the number of satellite systems is putting strain on how the FCC and other agencies regulate satellites. There’s a lot of talk of regulatory reform, and calls for comprehensive rather than incremental change.

That leads me to wonder: are there instructive precedents where a step change in the scale of an industry or activity forced a complete restructuring of regulation; or conversely, where change in regulation let to a change of scale?  Perhaps there are examples where one might take lessons for the reform of space governance.

The introduction of cellular radio systems led to dramatic increase in the number of base stations. This was associated with the introduction of area licenses; previously, transmit licenses were associated with a specific location (think broadcast tower). The catch, though, is that I don't know whether cellular drove area licenses, or vice versa.

Unlicensed radio was enabled by the mid-1980s spread spectrum rules, leading to the Wi-Fi boom in the 2000s. The success of Wi-Fi led to questions about the openness of unlicensed bands to all comers, when Wi-Fi users and manufacturers opposed the introduction of LTE-based unlicensed devices in the mid-2010s.

The DMCA (Digital Millennium Copyright Act, wikipedia) is an example of a dramatic (and unanticipated) change in scale rendering a regulation largely inadequate. As I learned from Kristelia Garcia, the DMCA notice-and-takedown procedure under Section 512 envisioned content owners sending one-off notices for the removal of infringing content from online service providers' platform. In 2016, Google alone was receiving hundreds of thousands of such notices per hour (TorrentFreak). Private agreements like YouTube’s ContentID have evolved to pick up where regulation leaves off.  In fact, there's a feedback loop. Blake Reid has noted that Section 512 enabled the same technology that now obviates its application in many cases. For example, YouTube’s growth was initially a function of Section 512, but YouTube is now so big that Section 512 has been obviated by Content ID.

A regulation can also trigger a change in scale. Blake Reid told me that Eric Goldman and others have argued that Section 230 of the Communications Decency Act (giving internet service providers immunity to claims about information posted by a third party, see Britannica) is responsible for the bloom of publishers over the last two decades.

Scale certainly creates problems for governance. As Blake has noted, it's hard to craft a regulatory apparatus to deal with problems stemming from platforms that serve billions of people across the globe, let alone without creating unintended consequences for platforms a fraction of that size.

Section 512 offers one possible lesson for space regulation: new rules could lead to, or at least facilitate, a boom in (say) low-Earth orbit satellites that is so dramatic that the rules aren't able to cope. This might prompt market solutions along the lines of Content ID, such as private sector space situational awareness (SSA, i.e. what's up there) and space traffic management (STM, ordering avoidance maneuvers).

Acknowledgement: I'm grateful to Kristelia Garcia, Blake Reid and Margot Kaminski for comments and examples. Any mistakes and misunderstandings in the above retellings are mine.

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