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'Net Insider


Gambling forces the question: Who controls the 'Net?


By Scott Bradner, Network World, 08/29/05


From what I read, being addicted to gambling is not a cheap date. What I have seen in Las Vegas confirms this. If billion-dollar hotels can be paid off in a few years using just the house part of the cash flow, there has to be a lot of money in this picture.


In the future, fewer of the hotels might be needed because their patrons can telecommute. Internet gambling is a big deal and getting bigger in spite of the efforts of a lot of people to squash it. While gambling proponents (for example Roy Cooke) say there are no federal laws that specifically outlaw Internet gambling, the U.S. Department of Justice says that the 1961 Wire Act applies to the Internet and outlaws Internet gambling.


But this column is not about the legality or illegality of Internet gambling in the U.S., nor is it about the impact of gambling on tax revenues or society. It is about a funny battle the U.S. has gotten into with a minuscule Caribbean nation over Internet gambling and the implications of the precedent that this battle might create. Antigua and Barbuda, a nation comprising a pair of Caribbean islands with a combined area about 2.5 times that of Washington, D.C., and a population of about 68,000, decided a while back to invest in Internet casinos as a way to augment the tourist trade. Imagine their annoyance when the U.S. government tried to prohibit U.S. residents from partaking of their "gambling and betting services."


Antigua and Barbuda did what any law-abiding country should do in cases like this: It appealed to the World Trade Organization (WTO). The WTO ruled in April that the U.S. could not just outlaw access to Internet gambling and earlier this month ruled that the U.S. has until next April to mend its ways .


The WTO basically said that the U.S. could not block its residents from using Internet-based companies offering services that are perfectly legal in the service provider's own country. There are some exceptions, but the WTO said that Internet gambling was not one of them.


This ruling establishes that the U.S. cannot unilaterally control what people can use the Internet for, even U.S. residents using the Internet from within this country. This is certainly not going to go over well with those people in Congress or other parts of government who think the U.S. should own the Internet because "we built it."


In this case, the U.S. told the WTO that the country would comply with the organization's ruling but would not "ask Congress to weaken U.S. restrictions on Internet gambling." Seems to be a tricky balance to me. It's not just the WTO that is telling the U.S. that it cannot control the 'Net by itself. The final report of the United Nations' Working Group on Internet Governance does the same. This report will go to the World Summit on the Information Society later this year, which is likely to agree. The next few months will be interesting on the Internet governance front, and I expect to return to the topic from time to time.


Disclaimer: There are multiple groups at Harvard that deeply ponder Internet governance issues, but the above observation is my own.


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