Monday, October 08, 2007

Should the FCC Regulate Email Portability...

A few years ago the U.S. Congress passed a law that requires cell phone service providers to allow people to take their phone numbers with them when they switch companies. The reasoning was that phone numbers are essential identifiers in contemporary society, and therefore it is unreasonable, not to mention economically inefficient, for people to have to switch phone numbers every time they switched providers. If we can't bring our phone numbers with us, it was argued, we'll have a strong disincentive to switch service providers, despite other favorable market conditions. Of course, this is exactly what the cell phone companies want, but Congress and the FCC decided that this worked against the free market and was ultimately harming the interests of consumers and the economy.

Now the FCC is being petitioned to do the same thing but with email addresses. On the surface it seems logical. Certainly, email addresses are as vital to our digital lives as cell phone numbers, right? And we've all experienced the fear of switching our primary email addresses, usually just creating more of them rather than replacing our old ones - heck, I must have 6 or 7 different active accounts, and that's just a guestimate. And somehow, inexplicably, my uncle is still using a COMPUSERVE email account for his small business (even though the company was bought by AOL years ago).

However, in this article by Declan McCullagh, he lists seven reasons why it's a silly idea. He claims that "If you're running any kind of business... it's naive to use an AOL, Hotmail or Yahoo e-mail address". Really? I bet those companies beg to differ. Most techies recognize that these firms are actually better at filtering spam and other services because of all the resources at their disposal. In fact, the only reason not to use these services for a small business is the cost involved if you ever want to switch email accounts.

McCullagh also argues that services would set up email forwarding or "Internetwide standards" if there was sufficient customer demand. But does anybody doubt that there's enough customer demand? He seems oblivious to the reality that this is a market failure. While it's true that buying your own domain name may help mitigate the effects of this market failure, it is hardly a "counterpoint" which demonstrates that no market failure exists. The fact is that everybody wants this, yet nearly none of the big firms are willing to offer it, just like had been the case with cell phone numbers.

This is a classic policy question that gets to the appropriate role of government. It seems clear that email portability is a service everyone wants, but the market has failed to provide it, and this hurts both consumer interests and the overall economy. What McCullagh's argument represents is that it is not the proper role of the government to intervene in such matters. An overly interventionist government is just as likely (if not more likely) to screw things up by regulating the private sector - and besides, shouldn't the government focus on more urgent matters like national security?

Ultimately, forwarding emails takes the service providers only a couple of seconds and a handful of lines of code to implement. As much as everybody would LOVE to have this feature, it's unclear exactly why the FCC and the federal government really need to intervene. Some of McCullagh's points are not well constructed, but his larger point - that this should not be the role of the government - remains intact because cyberspace, for all its faults, has historically thrived when government interference was at a minimum. Unfortunately, we just need to deal with the status quo and wait for some private company to finally understand that loosening their grip of control and not locking-in their customers might actually make good business sense because it will attract more customers.


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