In a story posted yesterday – A Remedy to Clueless Tech Lawyers – my old friend Jonathan Askin describes some work he did as a young lawyer for another good friend of mine, tech innovator Jeff Pulver. In the mid-90s, Jeff was trying to create a peer-to-peer communications service called Free World Dial-Up (FWD).
Jonathan beats himself up in his essay because, as Jeff’s lawyer (or “wartime consigliere” as he called himself), he “put the reins on FWD” and advised Jeff to ask the FCC for permission “to launch FWD free of regulatory constraints.” Jonathan rightly understood that the FCC could decide to regulate FWD as a telephone service, and sought to protect his client from that risk.
“Permissionless Innovation” may be one of the key features of the Internet, but as Jonathan rightly understood, regulated companies and service providers too often have to ask permission from their regulators before innovating, or else face potential consequences.
After more than a year, the FCC agreed that FWD was an “information service” not subject to common carrier telephone regulation. Unfortunately for Jeff Pulver, the many months it took to get permission from the FCC allowed a non-US company to innovate freely and capture the market opportunity. In 2013, you may not have ever heard of Free World Dial-Up, but you’ve certainly heard of Skype.
In retrospect, perhaps Jonathan would have advised his client to “just do it,” as the delay waiting for permission was indeed a very bad thing for FWD. However, the eventual FCC decision – the “Pulver Order” - was a critically important precedent. Jeff’s sacrifice helped pave the way for innovators everywhere to offer new services in the US (and we owe him our heartfelt thanks!).
As a young phone company engineer trying to get into broadband and VOIP in the 90s, I experienced firsthand the problem of needing regulatory permission to try new, innovative things that don’t fit into the existing regulatory buckets. That is why decisions like the Pulver Order that protect some new services like FWD from common carrier regulation, the “Vonage Order” protecting VoIP services from state telephone regulators, the FCC actions protecting cable modem broadband service from regulation by 30,000 local franchise authorities, and the FCC orders confirming that traditional common carriage regulation doesn’t apply to broadband services, were so important to enabling innovation without the regulatory overhang that early innovators like Pulver and Askin faced.
Permissionless innovation shouldn’t be reserved for just certain types of innovators (like software developers) and not others. Given the dynamism, innovation and competition that are the hallmarks of today’s Internet ecosystem, the ability to innovate without having to seek permission from regulators at every step along the way is critical to the continued success of the Internet, and must be preserved.