FEDERAL COMMUNICATIONS COMMISSION
Application for Consent to the
Transfer of Control of Licenses
MediaOne Group, Inc. to AT&T Corp.
WRITTEN EX PARTE OF PROFESSOR MARK A. LEMLEY AND PROFESSOR
We offer this written ex parte to address the question of “open access” and its
relationship to the architecture of the Internet. It is our view that the extraordinary growth and
innovation of the Internet depends crucially upon this architecture. Changes in this architecture
should be viewed with skepticism, as they may in turn threaten this innovation and growth.
The proposed design of the merged AT&T and MediaOne entity, once allied with
the existing merged AT&T and TCI, threatens to compromise an important architectural
principle of the Internet. As we describe in more detail below, it threatens to weaken the
Internet’s “End-to-End” design. In our view, this change could have profound implications for
the future of growth and innovation on the net.
The FCC’s analysis to date does not consider these principles of the Internet’s
design. It therefore does not adequately evaluate the potential threat that this merger presents.
Neither does the FCC’s approach properly account for its role in creating the conditions that
made the Internet possible. Under the banner of “no regulation,” the FCC threatens to permit this
network to calcify as earlier telecommunications networks did. Further, and ironically, the FCC’s
supposed “hands off” approach will ultimately lead to more rather than less regulation.
We do not yet know enough about the relationship between these architectural
principles and the innovation of the Internet. But we should know enough to be skeptical of
changes in its design. The strong presumption should be in favor of preserving the architectural
features that have produced this extraordinary innovation. The FCC’s presumption should be
against approving mergers that threaten these design principles, without a clear showing that the
threat would not undermine the Internet’s innovation. No such showing has been made in this
In Part I of this declaration, we explain our background and interest in this matter.
In Part II, we describe the design principles of the Internet, and how they differ from the
principles animating traditional telephone networks. In Part III, we explain why permitting
AT&T to bundle ISP service with network access threatens the structure of the Internet. Finally,
in Part IV we respond to arguments that have been made to permit the merged AT&T/MediaOne
to extend its monopoly to control ISP service.
Lemley is the Marrs McLean Professor of Law at the University of Texas in
Austin, Texas, where he teaches intellectual property, computer law, patent law, antitrust,
electronic commerce and regulation of the Internet. Beginning January 1, 2000 he will assume an
appointment as Professor of Law at the Boalt Hall School of Law, University of California at
Berkeley. He is of counsel to the law firm of Fish & Richardson, where he litigates and counsels
clients in the areas of antitrust, intellectual property and computer law. He is the author of four
books and twenty-eight articles on these and related subjects, has taught intellectual property law
to federal judges at the Federal Judicial Center, and has testified before Congress and the Federal
Trade Commission on patent and antitrust matters. His articles have appeared in the Yale Law
Journal, the Stanford Law Review, the California Law Review, the Texas Law Review, the Duke
Law Journal, and the Southern California Law Review, as well as numerous specialty journals.
He has chaired or co-chaired a dozen major conferences on intellectual property and computer
law, including Computers Freedom and Privacy ‘98, and he was the 1997 Chair of the
Association of American Law Schools Section on Law and Computers. He received his J.D.
from Boalt Hall School of Law at the University of California at Berkeley, and his A.B. from
Stanford University. After graduating from law school, he clerked for Judge Dorothy Nelson on
the United States Court of Appeals for the Ninth Circuit, and practiced law in Silicon Valley
with Brown & Bain and with Fish & Richardson before coming to Texas.
Lessig is the Jack N. and Lillian R. Berkman Professor for Entrepreneurial Legal
Studies at the Harvard Law School, where he teaches courses related to the law of cyberspace.
He has just completed a book, Code and Other Laws of Cyberspace, which analyzes the
relationship between the architecture of the Internet and the freedoms the Internet enables. Lessig
has written many articles, both for scholarly and popular journals, about the Internet and its
regulation. Among scholarly journals, he has published articles in the Yale Law Journal,
Stanford Law Journal, Harvard Law Review (forthcoming), Michigan Law Journal
(forthcoming), Emory Law Journal, and the Proceedings of the IEEE (forthcoming); among
popular journals, he has published articles in The Industry Standard, The New Republic, and
Wired Magazine. Lessig teaches constitutional law, contracts, comparative constitutional law,
and the law of cyberspace. In 1995, he taught the basic antitrust course at the Yale Law School,
as well as a course on the law of cyberspace. Except for this year, he has continued to teach
courses related to the Internet and its regulation, including a seminar examining United States v.
Microsoft. He graduated from Yale Law School in 1989, and clerked for Judge Richard A.
Posner of the Seventh Circuit Court of Appeals, and then Justice Antonin Scalia of the Supreme
Court. In 1991, he was appointed to the faculty of the University of Chicago Law School, where
he received tenure in 1994. He was a visiting professor at Yale Law School in 1995. During
1996-97, he was a fellow at the Program for Ethics and the Professions at Harvard University. In
1997, he joined the Harvard Law School. He is currently a fellow at the Institute for Advanced
We are not experts in computer architecture, or in software technology. We have
studied these subjects to understand their relationship to the competitive environment that the
Internet has created, and to the values that we have come to recognize in the Internet. It is our
view that any analysis of policy related to the Internet must explicitly consider these architectural
aspects of the Internet’s design. This “architecture,” as the Electronic Frontier Foundation puts it,
“is policy.” Changing the architecture is to change that policy.
We have not been retained by any party in this matter. At the request of Bell
Atlantic and GTE, Lessig attended a meeting with the Justice Department, to discuss the
AT&T/MediaOne merger, and helped arrange a meeting with Bell Atlantic and GTE, and some
in the Internet community to discuss broadband cable access. Bell Atlantic and GTE paid for
Lessig’s expenses relating to those two meetings. Lemley has had no involvement with any party
with an interest in this litigation.
This declaration does not address the general question of the merger of AT&T
and MediaOne beyond its effects on the market for broadband Internet service. We also assume
for purposes of this declaration that “residential broadband access” is properly considered a
separate antitrust market. Our statements here relate solely to the question of the architecture of
the resulting network under that assumption.
It is our view that it is important for the FCC to consider these matters now in the
context of this merger. It is not our view that every entity that connects its network to the Internet
must obey the principles that we describe below. Innovation in the Internet generally is not
threatened by what any one (small) company on the Internet might do. But when a policy of
closed access covers a portion of the net as significant as AT&T’s would after this merger, the
FCC must consider the overall effect that AT&T’s proposed change in architecture would have
on innovation. More importantly, even if AT&T’s policy affected the same footprint of the net
before the merger as after the merger, the increased ability post merger for the actors to behave
strategically increases the significance of the threat. So far, the FCC has considered only the
effect its “regulations” would have on broadband investment. In our view, that is only one part of
the equation. The more significant part is the effect that the FCC’s failure to regulatewill have
on innovation generally.1
Design Principles of the Internet
The Architecture of the Internet
The Internet is the fastest growing network in history. In the 30 years of its life, its
population has grown a million times over. It is currently the single largest contributor to the
growth of the United States economy, and has become the single most important influence
linking individuals, and commerce, internationally.
1 For an analysis similar to our own, see François Bar, Stephen Cohen, Peter Cowhey, Brad DeLong, Michael
Kleeman, John Zysman, Defending the Internet Revolution in the Broadband Era: When Doing Nothing is Doing
Harm, E-conomy Working Paper 12, Berkeley Roundtable on the International Economy (BRIE), August 1999.
It is not, however, the first communications network. There have been other
networks before the Internet that did not experience the same extraordinary growth. These
networks followed different design principles, including different principles governing how
protocols would evolve and become adopted. It is our view that these differences in growth can
be traced, at least in part, to these differences in design.
It is a view of many in the Internet community, and ours as well, that the
extraordinary growth of the Internet rests fundamentally upon its design principles. Some of
these principles relate to the openness of the Internet’s standards and the openness of the
software that implemented these standards. Some are engineering principles, designed to make
the net function more flexibly and efficiently. But from the very beginning, these principles have
been understood to have a social as well as technological significance. They have, that is, been
meant to implement values as well as enable communication. In our view, one aspect of this
social significance is the competition in innovation the Internet enables. The tremendous
innovation that has occurred on the Internet, in other words, depends crucially on these design
Among the Internet’s design principles is one that is particularly relevant to these
proceedings. This is the “End-to-End” design principle has been latent in system design for many
years, but was first articulated explicitly as principle in 1981 by Professors Jerome H. Saltzer,
David P. Reed, and David D. Clark.2
The “End-to-End” principle organizes the placement of functions within a
network. It counsels that that “intelligence” in a network be located at the top of a layered system
— at its “ends,” where users put information and applications onto the network — and that the
communications protocols themselves (the “pipes” through which information flows) be as
simple and general as possible.
One consequence of this design is a principle of non-discrimination among
applications. Lower-level network layers should provide a broad range of resources that are not
particular to or optimized for any single application — even if a more efficient design for at least
some applications is thereby sacrificed. As described in a subsequent paper by Reed, Saltzer, and
End to end arguments have … two complimentary goals: (1)
Higher-level layers, more specific to an application, are free to
(and thus expected to) organize lower level network resources to
achieve application-specific design goals efficiently (application
autonomy); (2) lower-level layers, which support many
independent applications, should provide only resources of broad
utility across applications, while providing to applications useable
means for effective sharing of resources and resolution of resource
conflicts (network transparency).3
While the End-to-End design principle was first adopted for technical reasons, it
has important social and competitive features as well. End-to-end expands the competitive
horizon, by enabling a wider variety of applications to connect and use the network. It
maximizes the number of entities that can compete for the use and applications of the network.
As there is no single strategic actor who can tilt the competitive environment (the network) in
favor of itself, or no hierarchical entity that can favor some applications over others, an End-to-
End network creates a maximally competitive environment for innovation, which by design
assures competitors that they will not confront strategic network behavior.
3See David P. Reed, Jerome H. Saltzer, and David D. Clark, Comment on Active Networking and End-to-End
Arguments, IEEE Network 12, 3 (May/June 1998) pages 69-71.
The End-to-End design of the Internet has facilitated innovation. As Reed, Saltzer
and Clark argue, for example: “had the original Internet design been optimized for telephony-
style virtual circuits (as were its contemporaries SNA and TYMNET), it would not have enabled
the experimentation that led to protocols that could support the World-Wide Web, or the flexible
interconnect that has led to the flowering of a million independent Internet Service providers.
Preserving low-cost options to innovate outside the network, while keeping the core network
services and functions simple and cheap, has been shown to have very substantial value.”4
The principle of End-to-End is not unique to computer networks. It has important
analogs in American constitutional law and in other legal contexts. Vis-à-vis the states, for
example, the dormant commerce clause imposes an End-to-End design on the flow of commerce:
No state is to exercise a control over the flow of commerce between states; and the kind of
control that a state may exercise over commerce flowing into that state is severely limited. The
“network” of interstate commerce is to be influenced at its ends — by the consumer and
producer — and not by intermediary actors (states) who might interfere with this flow for their
own political purposes. Vis-à-vis transportation generally, End-to-End is also how the principle
of common carriage works. The carrier is not to exercise power to discriminate in the carriage.
So long as the toll is paid, it must accept the carriage that it is offered. In both contexts, the aim
is to keep the transportation layer of intercourse simple, so as to enable the multiplication of
4 Id. at 70 (emphasis added). Note the initial ARPANET did not implement End-to-End perfectly into its design. It
was because of changes in the 1970s suggested by Vint Cerf and David P. Reed that the network we now recognize
as the Internet conformed to End-to-End.
The Consequences of these Architectural Principles
The effect of these Internet design principles — including, but not exclusively,
End-to-End — has been profound. By its design, the Internet has enabled an extraordinary
creativity precisely because it has pushed creativity to the ends of the network. Rather than
relying upon the creativity of a small group of innovators who work for the companies that
control the network, the End-to-End design enables anyone with an Internet connection to design
and implement a better way to use the Internet. By architecting the network to be neutral among
uses, the Internet has created a competitive environment where innovators know that their
inventions will be used if useful. By keeping the cost of innovation low, it has encouraged an
extraordinary amount of innovation.
The contexts in which this innovation has occurred are many. By keeping the
network simple, and its interaction general, the Internet has facilitated the design of applications
that could not have originally been envisioned. And by keeping the cost of innovation low in the
future — especially in the context of broadband media — the Internet should continue to
End-to-end design does not only promote innovation by creating the opportunity
for innovators to offer services to the network. In our view, the effect comes as well from the
expectation that innovation will not be countered by strategic actors who might control the flow
of commerce. The potential of an actor in the distributional network to act strategically is a cost
to innovation. The expectation that an actor can act strategically is an expected cost to
innovation. Thus to the extent an actor is structurally capable of acting strategically, the rational
innovator will reckon that capacity as a cost of innovation. Compromising End-to-End will, then,
tend to undermine innovation.
The End-to-End design of the Internet thus minimizes the cost of strategic
behavior, while creating an extraordinary market that innovators can rely upon when developing
new applications for the Internet.
The Difference with the Architectural Principles of the Old Telephone
The Internet’s design principles are different from the design principles that
governed the telephone network prior to the series of actions by the FCC and Antitrust Division
of the Justice Department that resulted in the break-up of AT&T. Prior to that break-up, the
telephone network was not governed by the principles of End-to-End. The old telephone network
was not neutral about the uses to which the telephone system could be placed. For much of the
history of the telephone network, it was a crime to use the network in ways not specified by the
AT&T. It was a crime, for example, to attach devices that performed services not offered by
AT&T, or to provide services that competed with the services provided by AT&T. In the 1940s,
even the telephone book was owned by AT&T.
Innovation under the old design was thus controlled by AT&T. If a person with a
competing conception of how a communications network should be designed wanted to
implement that competing conception, he or she would have to either work for AT&T, or
convince AT&T of the merits of this alternative design. AT&T was, therefore, a bottleneck on
creativity in network architecture. While no doubt AT&T did much to advance
telecommunications, through Bell Labs and other research, it also decided which innovations
would be deployed. No doubt its decision turned in part upon the expected effect a new
technology would have on AT&T’s own business model.