GLOCOM Forum Speech in Session 2

Freedom and Minimum Rules of Internet Communications: Beyond an "Integrated Telecommunications-Broadcasting Act"

Koichiro HAYASHI (Professor, Keio University, and Senior Research Fellow, GLOCOM)

English translation of the speech in session 2 by Professor Hayashi at GLOCOM's 10th anniversary forum on November 19, 2001

In the age of convergence of telecommunications and broadcasting, the need for a comprehensive media act has been increasing, but virtually no attempt has been made to prepare and propose such an act. Based on my study in legal systems for telecommunications and broadcasting for about five years, I wrote an article "A Proposal for a Comprehensive Media Industry Act" in March 2000. In response to various comments on my article, I have tried to draft such an act in detail myself.

My analytical approach is such that regulations in the media industry in general can be classified into two types: regulations on "conduit" and those on "content." Then we have four possibilities: (1) "Publishers model" with no regulations on either conduit or content, (2) "Common carriers model" with regulations on conduit but no regulations on content, (3) "Broadcasting model" with regulations on both conduit and content, and (4) no regulations on conduit but some regulations on content, a case which does not correspond to any existing media business. But what about the "Internet model"? While there is no regulation on the Internet, there seem to be two camps in terms of content regulations: the "First Amendment camp" against content regulations versus the "Paternalist camp" for content regulations. The situation becomes even more complicated when we think of the issue of the responsibility of ISPs.

Four Plans for a Comprehensive Media Act

I have come to realize that there are four plans for a comprehensive media act. Plan A: Inclusive Internet communication type, or the idea that existing telecommunications and broadcasting as a part of telecommunications in a broad sense are to be included in the Internet field to be left unregulated.

Plan B: Supplemented multimedia act type, or the idea that, as pushed by former Vice President Gore, proposes a new act for a new field, while keeping existing laws intact. In other words, new provisions for "multimedia" are to be added as a new Chapter 7 in the Communications Act of 1934, while the existing Chapter 7 should be labeled as a new Chapter 8, accordingly. If we make the new Chapter 7 a "telecom haven" with minimum regulations, then it would prosper by attracting many ambitious companies such as venture businesses.

Plan C: Extracted common provision type, or a kind of Continental European idea in which all we need is to make general or common provisions extracted from various existing media laws.

Plan D: Horizontal separation type, which is in fact my idea that we should set up regulations, if necessary, for each of the three horizontal domains--electronic messaging, electronic media, and rights of way--where the less regulations on messaging the better, in light of the principle of freedom of speech. As of the year 2000, I decided to to proceed with Plan D, although I anticipated some difficulties ahead.

Since then I have modified my approach through my research on the following points. First, I noticed the introduction of the concept "public transmission" into the Copyright Law in Japan, and realized that this concept might be used for my purpose. Second, I studied "unregulation policy" on the Internet in the U.S., and found it interesting and relevant when it comes to economic and conduit aspects of the Internet. Third, I came across some materials showing the process of examining Chapter 7 of the Communications Act as initiated by former U.S. Vice President Gore, and found many understandable points in Gore's idea.

Based on these studies, I have reworked an integrated telecommunications-broadcasting law with the following questions in mind. The first question is whether or not we need an integrated law. Why not patchwork? It is becoming clear from a forthcoming report by Japan's FTC, for example, that there are limitations on patchwork and that it is meaningful to think of a comprehensive act from scratch.

The second question is what to do with segmentation according to copyright, such as neighboring copyright given to broadcasters and no such right granted to telecommunication operators. It seems that broadcasters are demanding that those neighboring rights be extended to the right to "making transmittable" in the international context. I think we must avoid such asymmetry and for that purpose need a comprehensive act.

The third question is what kind of responsibility information intermediaries should assume. For example, the responsibility of ISPs for their content is at issue not only in the U.S., but also in Japan these days. This means that we need a new media act.

The fourth question is whether regulations are needed on new businesses at large corporations such as L mode Internet services at NTT East/West and Internet broadcasting services at NHK. Current regulations on these new services may have undesirable effects and, therefore, should be lifted by adopting a comprehensive media act.

Basic Structure of "Electronic Public Transmission Act"

By taking all these points into account, I have tried to draft an "Electronic Public Transmission Act" to provide a basis for discussions. Let us take a brief look at its overall structure.

Chapter 1 (general provisions) explains the purpose and the main concepts of the bill. Chapter 2 (rules for electronic public transmission services) sets out general rules that must be followed by everyone such as freedom of speech, prohibition of censorship, protection of privacy, and freedom of reception. Chapter 3 (obligations of electronic public transmission operators/business agents) has three layers: (1) securing important transmission and securing necessary services as obligations for all those who engage in electronic public transmission regularly, (2) protection of private information as an obligation for those operators who do business in electronic public transmission, and (3) guarantee of open access and interconnection as obligations for those operators larger than a certain size. Chapter 4 (the Electronic Public Transmission Commission) defines the authority and the organization of an independent administrative commission to monitor electronic public transmission, but only focusing on wired transmission and not on wireless transmission at this moment. This incompleteness should be corrected in a future version of this act. Chapter 5 (indemnification and penalties) provides for the immunity of ISPs from liability and prescribes penalties, mainly for violation of regulations in Chapter 2. Finally, Chapter 6 (miscellaneous provisions) lists exemptions, related regulations, etc. Actually, the number of articles in this act is much less than the number of articles in those related laws that are to be replaced by this new act. So in this sense this is a definite move towards deregulation.

Having written down these new articles, I have realized that this should be called a "law for freedom and rules for the Internet" rather than an "integrated law for telecommunications and broadcasting." This is natural, since the Internet is not just merging with telecommunications and/or broadcasting, but is growing to include both of these fields. I also should note something that might be called a paradigm shift.

The first point is that because no reception is possible without transmission, and public transmission can include personal transmission as a special case, our approach leads to a legal reversal. So far, broadcasting has been regarded as a part of telecommunications, at least according to Japanese laws, but in the future, personal media including wired communications may become a part of mass media. In other words, "specific transmission" is a special case of electronic public transmission.

The second point is that business agents and general operators have been clearly separated in their legal treatment, but such separation among business agents, operators, and users may no longer be possible or relevant, as anyone can participate in Internet activities through LAN, WAN, etc. Although I have not been able to solve this dilemma in my proposed bill, we should start thinking about how to deal with it in the future.

Furthermore, there remain so many unresolved problems, such as (1) needs for a comprehensive law for "Right of Way," including radio wave allocation, (2) appropriateness of penalizing "attempted offenses" in all cases, (3) coordinating the time schedule for the adoption of new acts and the abolition of old acts, and (4) coordinating new acts with recently enacted acts and regulations.

Finally, let me conclude by saying that my approach has turned out to be not entirely based on Plan D, but adopting some features of Plan A regarding the adoption of an all-inclusive concept of "public transmission" for the Internet and Plan B regarding the enactment of a new act with loose regulations while maintaining the Broadcasting Law. I welcome your comments and suggestions.