Friday, October 14, 2005

I'm afraid of Americans

To start with, let me say that this is the title of a David Bowie song, rather than an entirely serious sentiment. However, as an American resident in Europe, I sometimes find myself asked by baffled Europeans to explain some of the actions of my countrymen. Notwithstanding the fact that it often makes easy fodder for some very high quality satire, I have to confess that sometimes I'm left speechless. Here are two more examples to add to the sucker pile. I seem to recall from history that previous attempts to seize control of and micromanage aspects of other countries' economies and internal politics (such as the classic early 20th century case when a group of American investors successfully had the Nicaraguan railways legally declared part of the state of Maine) can have unforeseen and negative implications.

I'm not sure I completely agree with Jeff's assertion that the rest of the world necessarily looks to the FCC as a guiding light (indeed, in broadband access regulation, Europe and the US are headed in opposite directions), however, given how politically sensitive the issue of "Motherland/Fatherland/homeland security" has become, I can imagine few countries would be eager to be perceived as uncooperative. No one wants to find themselves creeping into the "axis of evil."

But I'm being somewhat flippant here. My genuine long-term concern is that through the measures afoot in the US (and in Europe if it marches in lockstep), there is a significant risk that compliance and legal costs distract from innovation, exclude capital constrained newcomers, and drive fragmentation in the fabric of the internet. Cellular carriers (and their customers) continue to suffer 15 years on from the barriers created by the development of radio standards which were highly politicized and nationalistic exercises. I believe the internet is far too important to our collective future to risk this, and if allowed to take root, I believe the macroeconomic impacts on the instigators will be negative.

All that said, I'm not terribly certain what most of us can do about it. Some very bright and eloquent people will shout, lawsuits will be filed, lawyers will buy new Ferraris, the smart money will lobby (operative word = "money"), investors and innovators will be discouraged and look elsewhere. Somewhere else in the world, people will be getting on with developing some amazing things, and the risk for the US is that the next Skype/BitTorrent/Firefox comes out of Russia, India or Brazil, and that's where the capital will flow.

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