Prelude to an Interview: Barbara van Schewick’s Internet Architecture and Innovation

In the next few weeks, Concurring Opinions will be discussing various aspects of Internet policy in earnest.  On September 7 and 8, we will hold an online symposium on Jonathan Zittrain’s The Future of the Internet (And How To Stop It) featuring thoughtful scholars, journalists, and (lucky for us) the author. 

One of those exciting participants is Barbara van Schewick, who has recently published Internet Architecture and Innovation.  Sometime in September, I will interview van Schewick about her important book.  To whet your appetite, I’m going to reproduce Marvin Ammori’s review of her book below.

“There’s a new book out on Internet policy that is essential reading for anyone interested in Internet policy—and probably for anyone interested in the law, economics, technology, or start-ups. I recommend it to everyone. It’s that good.

Barbara van Schewick’s new book, “Internet Architecture and Innovation,” is one of the very few books in my field in the same league as Larry Lessig’s Code, in 2000, and Yochai Benkler’s Wealth of Networks, in 2006, in terms of its originality, depth, and importance to Internet policy and other disciplines. I expect the book to affect how people think about the Internet; about the interactions between law and technical architectures in all areas of law; about entrepreneurship in general. I also think her insights on innovation economics, which strike me as far more persuasive than lawyers’ usual assumptions, should influence “law and economics” thinking for the better.

Books this good don’t come along every day—or even every year–and I’m already late to the praise-party. Lessig, a Harvard Law Professor, sang its praises on the book jacket and in the New York Times. MIT computer scientist David Reed has joined in, and so has venture capitalist and Twitter investor Brad Burnham. There’s a reason leading legal minds, technologists, and investors are raving about a book: really, it’s that good.

For those who want to skip the review and go straight to the source, here’s the Amazon link and the book’s site, NetArchitecture.org.

The remainder of this post explains why this book is important and eye-opening for everyone who reads books, not only for those who (like me) have spent their careers in Internet policy.

The Author

Barbara van Schewick is well-known to Internet lawyers as a brilliant, extremely thorough lawyer. And engineer. And expert on innovation economics. She was (with Yale’s Jack Balkin and Harvard’s Charles Nesson) one of three academics joining consumer groups to prompt the FCC’s 2008 investigation of Comcast interferinge with peer-to-peer technologies like BitTorrent. The FCC’s 2009 open Internet proposal, in its background policy discussion, cites her scholarly work far more than any other scholar. Her law review articles advance novel, seminal critiques of what economists considered “conventional wisdom” on the one-monopoly profit principle and the role of competition in ensuring open technology platforms. This scholarship was influential not only in the US, but also in Europe and Canada’s recent Internet policy proceeding.

The Argument

The book addresses how–specifically–the Internet’s original architecture has fostered tremendous innovation in consumer and business software and therefore economic growth. The relationship between innovation and the Internet’s architecture has been central to government policy debates around the world–as well as to the business plans of entrepreneurs and investors. While others have asserted and guessed that the Internet’s architecture fosters economic innovation, she puts these assertions on solid theoretical and empirical ground, incorporating insights from engineering, management science, behavioral economics, real options theory, network economics, evolutionary economics, and legal policy. And you don’t have to know anything about these areas in advance, as she doesn’t expect the reader to be expert in one these fields. (Almost nobody could be expert in all of them.)

Each section of the book is valuable on its own terms. She begins with a straightforward technical description of the Internet that is helpful for all of us who’ve wondered how our email works. She then develops a framework for analyzing the relationship between innovation and constraints imposed by a technological architecture. She does this with what some law professors would call a “law and economics” approach. (In Wealth of Networks, Benkler also uses these economic tools for his purposes.) The upshot of her analysis is that innovation benefits from more innovators. Because the value of a particular innovation is often impossible to predict in advance, innovation benefits from many innovators, all with different experiences and worldviews, experimenting and constantly adapting. Other architectures would lead to fewer innovators and less innovation–particularly architectures that increase costs to innovators, and so eliminate much of the accidental and iterative innovation we have experienced on the Internet.

Setting out this framework for thinking about issues, she then applies the framework to the Internet, contrasting its original architecture, where anyone could innovate with few initial expenses, and without seeking permission from any government or central office, with a now-possible architecture that would require greater investment and force innovators to negotiate with the network-infrastructure-owners to bring innovative ideas to market.

She ends with a discussion of policy, identifying the features of the Internet’s architecture that we must preserve to ensure robust innovation, and discussing the proper role of government policy in preserving architectural features necessary for innovation.

My Favorite Part

This is one of those rare books where every chapter is full of novel and important ideas. But I’ll tell you about my very favorite part. In the eighth chapter, beginning with “The Value of Many Innovators,” van Schewick presents the stories of how several major technologies were born: Google, Flickr, EBay, 37Signals, Twitter, and even the World Wide Web, email, and web-based email. I had always suspected that the “accidental” beginnings and unexpected successes of these technologies were a series flukes, one fluke after another. Rather, van Schewick explains, it’s a pattern. Her models actually predict the pattern accurately–unlike other academic models like the efficient market hypothesis and theories on valuing derivatives. These entrepreneurial stories (or case studies, to academics) are eye-opening; they’re also counter-intuitive unless you consider the management science and evolutionary economics van Schewick applies to analyze them. So if you wondered what the invention of Flickr, Google, Twitter, and the World Wide Web had in common, van Schewick answers the question.

And … the Book’s Intimidation Factor

Most of you are not techies. Like me, you may have studied the humanities or law. I consider you my people.

I know some of you, among my people, will be wrongly intimidated by a book titled simply “Internet Architecture and Innovation.” (Although this is a far catchier title than my favorite article’s title: “Coercion and Distribution in a Supposedly Non-Coercive State.”)

But don’t be so intimidated by the title that you miss out on van Schewick’s important ideas.

For the terminally intimidated, I recommend beginning with van Schewick’s short, concrete, straight-forward testimony to governments (see here and here and here) and an amicus brief.

For others, I will list the things-that-I-know-scare-you-but-should-not.

1. Her name. “van Schewick.” What an intimidating, scary German name, worthy of a Dr. Strangelove scene or an Austin Powers movie. I know. But no worries. Despite her meticulous thoroughness, her  German accent, and her “van”–her academic writing is gentle and clear. It’s not turgid like those H-Germans, Habermas or Heidegger. In fact, she knows her book “crosses a number of disciplines,” like engineering, economics, and law and had consciously aimed to make it “accessible to all” of us who have different backgrounds. There are zero equations in the text. And equations can be scary to lawyers and law students.

2. Equations. Nope. No need to worry. Not one of those books.

3. The difficult concepts. van Schewick is addressing difficult questions. She is not addressing fluff. But that’s a strength. She cuts through the complexity to put her finger on the key issues, to address all counterarguments and angles, and to make sense of it for the reader.

4. Length. It is almost 400 pages. But van Schewick includes several shortcuts–like three charts of page references as guides for reading the book to  answer particular questions. (Policymakers will likely rely on those charts.) The way I look at it: the book itself is a short-cut.  It may take one or two weeks to read. To get a similar grasp of these issues, I would otherwise have had to spend ten long years locked in a library, reading and analyzing the global literature on Internet engineering, economics and innovation, legal policy, and business-managerial decision-making, all while speaking often to the top thinkers worldwide in all these areas and eating brain foods to increase my mental ability to keep up with the task. But, luckily for me, van Schewick spent a decade exploring all these issues, apparently locked in the architectural economist’s equivalent of the Room of Requirement, surrounded by books, some full of equations, and top experts.

5. Abstraction. The book at times sets forth general frameworks and arguments that go beyond, and therefore abstract from, particular stories and economic conditions. Very abstract models can be hard to wrap the mind around. But van Schewick’s models are not too abstract. Plus, a model for understanding complexity is the point of the book (and of most non-fiction books I have read, from The Tipping Point and Outliers to Freakanomics and The Origin of the Species). Such books are meant to make broader sense of particular phenomena.

So be not afraid.

And check out the book (on Amazon or NetArchitecture.org). You’ll see for yourself why so many of us are talking about the book.

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4 Responses

  1. “Her models actually predict the pattern accurately–unlike other academic models like the efficient market hypothesis and theories on valuing derivatives.”

    I lost you here.

    1) The efficient market hypothesis works spectacularly well in terms of predictions, *in domains where it can make predictions*. It does not predict there will be simple and stable valuations (people sometimes think it predicts this, but they are wrong, and why that is wrong is a deep topic).

    2) Valuing derivatives also works pretty well – lots of people are working a con-job here, basically, blame the model, because it can’t be fined or go to jail.

    I haven’t read the book, so I’m not taking a stand. But I can’t see what pattern there is to predict that’s not question-begging (i.e. boiling it down to something like innovators innovate when there is an environment that encourages innovation).

  2. A.J. Sutter says:

    I haven’t read the whole book, but I did check out the recommended Chapter 8 via Amazon, and some of your other links. Some observations:

    1. The retrospective fitting of a few salient historical cases into a theory is not creating “models [that] actually predict” anything. This kind of ‘postdictive’ exercise is the bread and butter of fatuous business books. As far as I could tell, van Schewick doesn’t present detailed data about the 90+% of start-ups that fail — perhaps lots of them had products/services with characteristics similar to those that succeeded.

    2. The book and the SSRN article to which you’ve provided a link assume that economic growth is good, and that it justifies the policies for which BvS is advocating. The assumptions that economic growth is beneficent, and an end in itself, are both conventional and contestable.

    3. Another conventional, neoclassical idea is that all user “needs” are put onto an equal footing. Just like economic theory, it ignores the question of whether all uses of the Internet are socially desirable.

    4. None of the above necessarily undermine a narrow policy argument BvS seems to be promoting, viz. that the private oligopolists who control the (US) network should not be allowed to optimize their respective networks for — nor, conversely, to “block or degrade” — specific applications. But it seems to me that when advocating for a more open network, the best mode of discourse on this issue should be political, not economic. BTW when I did a search on the term “public good” in the book, it shows up only in the footnotes.

  3. Marvin Ammori says:

    Hey, there are some thoughtful responses here.
    I’ll begin with Seth’s comments.
    His main point is that my off-hand remarks about about efficient market hypothesis (EMH) and derivative models are wrong. It’s sort of off-topic to the review
    (1)Seth says derivative models work well, but people want to blame them. The models pricing housing derivatives had very wrong assumptions about the expected rate of default. Means the model was wrong. At a more abstract level, Michael Lewis’s The Big Short explains how some investors were able to exploit a flawed assumption in the usual Black-Scholes derivative pricing model–to make billions. (Pages 113-116). I’m assuming these mistakes have been corrected; but they were clearly mistakes.

    2. EMH, Seth says, is good at predictions *in domains where it can make predictions*. i don’t feel like debating this in comments, but I’ll just point out a lot about EMH is contestable, comes in several forms, and has been criticized for its wrongness by many sources. http://en.wikipedia.org/wiki/Efficient-market_hypothesis

    3. Seth’s comment going to the book which he has NOT read is one that loses me. He speculates that the argument must be circular: “boiling it down to something like innovators innovate when there is an environment that encourages innovation).”
    She specifying what kind of environment encourages innovation. If someone wrote a book saying “educators can educate in conditions that encourage education” that’d be circular; but if they specify those conditions encouraging education, it’s a major contribution.

    I don’t really have time to go back and forth on such things if Seth doesn’t have the time to read the book.

    As for A.J.’s comments, I think #2 is interesting (the desirability of economic growth is contestable; i think the consensus is “for”); and #3 is also interesting (some uses of the Internet are more valuable than others). But #1 I think is interesting but not super useful–it’d be hard to look at all the companies that failed, and I’m not sure that’s necessary. She’s contrasting open platforms and controlled platforms; she shows many of the biggest successes are very unlikely in a controlled platform because they were accidental etc. It’s true that some companies that failed, of the 99%, may have succeeded in a controlled environment. (Is that your point? She should show the benefits of a closed platform by looking at the 99% that failed and determine which were likely to succeed in a closed platform?) Maybe, with a closed platform Friendster would still reign. Google Wave would have succeeded, Pets.com would the world’s most popular website.

    And, though I’m referencing Pets.com, I don’t mean to be snarky–some of your points are very interesting, and am curious what you think the better way to address that chapter would be. That chapter isn’t conclusive, but it’s helpful evidence I think.

  4. A.J. Sutter says:

    Marvin, thanks for your response. My point in #1 is simpler: coming up with an ex-post narrative that purports to explain the success of a few well-known companies isn’t coming up with a predictive model. For one thing, one can often find a set of characteristics Q common to all members of some set of famous successful companies S; the issue is whether some other companies with characteristics Q failed. If so, that would at least negate Q as a sufficient explanation of the success of S, in which case one wouldn’t be able to “predict” success. For another, even if one could show a strong correlation in a huge sample of start-ups between success and Q, that wouldn’t necessarily show that Q explained the success. BvS’s book, like most business books and all too many PowerPoint pitches (I speak as a former Silicon Valley corporate VC), (i) tend to reason only from the most salient and easily visible characteristics of the most salient and famous cases, and (ii) have a vested interest to find some “common factor” to explain success. That often leads to fallacious attributions of causation.

    On point #2, you’re right about the consensus, which is why I call her position conventional. My point being that, at least for rich countries like the US, most arguments in favor of continuing GDP growth into the future fail when examined critically, which they rarely are. So too, BTW, do arguments linking innovation and growth. Here are some GDP growth rates for a few countries, expressed as pairs (20-year average, 10-year average) for periods through 2009: Qatar (8.6%, 11.2%), China (8.6%, 10.6%), Ethiopia (5.0%, 7.0%), Uzbekistan (3.0%, 6.3%), Bangladesh (5.3%, 5.9%), Israel (4.3%, 3.4%), USA (2.6%, 2.2%), Japan (1.3%, 0.69%). (Source of underlying data: Groningen Total Economy Database TEDI_2010).

    On the question of a better way to frame the chapter, I appreciate your asking, but I confess I’m not at all expert in this field. My comments are based simply on thinking critically about whether BvS’s arguments (or the claims made therefor in the review) were supported, and I can’t pretend to suggest an alternative constructive argument, other than my point about a political rather than an economics POV.