Net Regulation Attempts:
Keeping Those Lawmakers in Business

by Anthony Cabot

Copyright © 1997 Anthony Cabot. All rights reserved.


The first time lawyers, lawmakers and judges encountered the Internet is probably much like the first time the natives of Papua New Guinea saw an airplane. It mystified them and, in the absence of their understanding, they attributed cosmic qualities to it. Thus, articles are appearing that discuss the mythical "Law of Cyberspace." Even the district court that held the Federal Decency Act to be unconstitutional wanted to assign some special import to communications over the Internet.

Maybe I'm missing the point-it wouldn't be the first time-but let's step back for a moment.

The old telephone system is a network. If the telephone lines are cut in one place, it does not shut down the entire telephone system. Hmmm...are there some similarities here? Let's face it, the Internet is a network via which computers talk to computers, whereas the telephone network is a network via which people talk to people. Most outstanding legal issues that apply to the Internet can be easily analogized by looking at how the courts have addressed the same issue relevant to telephone transmissions.

What really bugs lawmakers is not that the legal issues presented are all that unique, but that the Internet is so good at delivering information cheaply. No one really went nuts when the 1-900 porn lines started proliferating. After all, how many people are willing to pay $9.95 a minute to talk dirty to someone who probably looks like a beluga in real life? Likewise, how many suckers will send $2,000 to a sports book in Belize to open an account? In the past ten years, even Mickey Mouse could count the number of prosecutions for pornography and gambling over interstate telephone lines on one hand. Outside of Tennessee, even the porn BBS's didn't raise much attention.

In contrast, since the Internet scare of 1996, the federal government is approaching the Internet as the next great national security threat. The troubling aspects of the Internet are not based on legal considerations, but on practical ones. The Internet simply offers better quality information dissemination at cheaper rates than the telephone network or just about anything else. Instead of just listening to someone talking dirty, you can actually see them talking dirty and doing...eh...other stuff. While this may still cost $9.95 a minute, the newsgroups are filled with free images of everything a person can imagine (and some that even exceed the imagination). All for $19.95 a month for unlimited access, except for some Internet Service Providers, where it's $19.95 a month for intermittent random access ("IRA").

Lawmakers understand that when it comes to vices, a simple formula applies: nearly free + accessible + good = popular. More than the technological wonders of building a really big computer network, this is the equation that is driving would-be regulators nuts. The idea of having popular, unregulated vices runs contrary to the ways of government since at least the time of Caligula. Lawmakers have never been comfortable with the notion or the reality that the masses decide the morality of a society. They see the free, easily accessible and unregulated environment of the Internet as a threat to their perceived role as society's moral code setters.

When faced with such challenge, the natural reaction of lawmakers is to legislate. And so they did. Two pieces of Internet morals legislation are noteworthy. The first was the Communications Decency Act, which made it a crime to post on the Internet material that was "indecent or "patently offensive" to minors. It didn't take a genius to see that the Act would soon run afoul of the First Amendment. Heck, even Newt Gingrich decried the Act, calling it "a violation of free speech." But then, in typical Washington fashion, he voted for it.

Everyone from the neo-Nazis to the pro-choice lobbyists jumped all over the Act. Court cases in New York and Philadelphia resulted in the Act's being held unconstitutional. And the case has wound its way uptown to the number-one act on the legal circuit, The Supremes. They heard oral arguments on March 19th. Little reason exists to suggest that they will not join the chorus, and the Communications Decency Act will have died an early and unspectacular death.

Bill number two is the recently introduced Internet Prohibition Act of 1997. The bill was introduced in mid-March by Senator Jon Kyl (R-Arizona) and others who hope to scare Internet Gambling operators into hiding. The Kyl Bill would make it illegal for anyone to use the Internet to send or receive a wager, or information assisting in the placing of a wager, on anything. So if you bet your sibling by email that Uncle Ralph will get drunk and throw up at your sister's wedding reception, you could face a year as Charlie Manson's cell mate.

If passed, the Kyl Bill also would require Internet Service Providers to police Internet content. The Bill would allow any local, state or federal law enforcement agency to notify an ISP of an offending server, and request the ISP to terminate service to that server. No penalty, however, would attach to the failure to terminate service after notice. Instead, the ISP would be protected from civil liability if it voluntarily terminates service. If the ISP refuses to terminate service, the law enforcement agency can then seek an injunction from the court requiring the ISP to terminate service to the offending server.

Of course, the Kyl Bill is wholly unenforceable because the gambling operators will simply take up residence in sunny Belize, and the feds are unlikely to stage an invasion to simply make an arrest. Moreover, to stop the ISPs would require an entire new branch of government with a billion-dollar budget and headed by a former U.S. Senator. Then again, this may be the real reason for the Bill.

Which, of course, leads to my final point: shameless self-promotion. My Internet Gambling Report is a 276-page book that covers a topic most other lawyers normally could have covered in 50 pages, (except, of course, if they were on retainer). But the bulk justifies my asking $35, plus $3 shipping. The publisher only has a half million copies left, so if you want one you'd better send a check today to Trace Publications, 325 S. 3rd Street, Suite 1-305, Las Vegas, Nevada 89101. Buying multiple copies is suggested so you won't be inconvenienced if you lose your first copy. You can get a convenient order form online from the HotelCasinoMedia book page.


Anthony Cabot is a partner in the Nevada law firm of Lionel Sawyer & Collins. He is the author of The Internet Gambling Report and Casino Gaming: Policy, Economics & Regulation.