News Release

March 13, 2003

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High-Tech Socialism?
Cato book warns against demands for "open access"

In a new book from the Cato Institute, What's Yours Is Mine: Open Access and the Rise of Infrastructure Socialism, authors Adam Thierer and Clyde Wayne Crews Jr. examine the hazards of mandatory "open access" -- a new trend in which hyper-regulatory bureaucrats and central planners are increasingly commanding technology companies and industry sectors to share networks, facilities, or specific technologies with rivals.

Telephone and cable companies, wireless carriers, electric utilities, AOL's Instant Messenger service, the Visa/Mastercard network, Microsoft's Windows operating system -- all these and more have been targets of demands for forced access. Although supporters claim that open access is pro-competitive, the opposite is true. Forced access policies inevitably mean price and quality controls, stagnation, increased litigation, and a crippling of innovation.

Genuine competition requires that firms have the ability to exclude rivals. Government seizure of existing networks or technologies on behalf of rivals means that next- generation technologies will not be created by those rivals or the incumbents. The recent decision by the FCC to continue such micro-management of local telecom markets illustrates this principle; regulators have opted to continue to require sharing of local telephone lines and switches despite the fact that those rules have decimated innovation and investment in the U.S. telecom market.

The key message for policymakers hoping for a high-tech renaissance: Competition in the creation of networks is as important as competition in the goods and services that get sold across those networks. Competition, innovation, and consumers will suffer if forced sharing policies are not abandoned. In today's world of increasing global communications and digital technologies, What's Yours Is Mine makes an urgently needed pro-consumer case for laissez-faire in the evolution of technology industries.