The Internet's effects on law can be understood by looking at this figure (with apologies to those who are printing this out to read it):
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Here's the "problem": The Internet is extremely powerful technology, and is only getting more powerful. There isn't a single axis of our diagram that hasn't been significantly affected by the Internet. Cost of entry? Believe me, if this was 40 years ago you would not be reading this, because I could never afford to self-publish this physically, and I would simply have never written this. Transportation? It doesn't get any easier then sitting in your own home and accessing the world. Scale? Sometimes people accidentally send email to tens of thousands of people when they intended to only send it to one person; that's how easy large-scale communication is on the Internet.
Remember when I defined information? "Basically, if it can be digitized, it's information"? The Internet is all about the transmission of information. When considered in the context of the rest of the computer revolution, which has digitized everything, from simple words to video to interactive games to, well, everything, the true effect of the ability to transmit information in all of its forms becomes visible: The Internet allows every model to be viable economically, all at once!
Want to create a movie for the enjoyment of you family members (and nobody else) over the Internet? No problem, people do that all the time. Publish music to the entire world? Yep, we can do that too. Write an e-mail to Grandma? Yep. Write an e-mail to every one of the thousands of employees of Intel (Intel vs. Hamidi) almost as easily? Can do.
The Internet in a period of just a few years has taken each of the bubbles that we saw in the previous section and rapidly expanded each of them until they all touch, overlap, and envelop each other. For instance, creating a video for an audience of two is possible because the Internet expands the capabilities of a consumer to have much of the distribution power of a major television network to send someone a video. On the other side, the Internet expands the television studio's viable scales of production, usually limited only to the "ultra-large" scale, to include the ability to make truly economical microcontent available. Similar things have occurred in the radio domain, and entire sites have indeed sprung up in an attempt to make a profit off of this, such as Live365.com, which assists people in creating what are essentially radio stations.
The DMCA (Digital Millennium Copyright Act) is providing another example of this kind of crossover. It is probably safe to say that the DMCA, specifically the anti-circumvention-device clauses, were only intended to protect movies, music, software, and other traditional media. Because it is excessively broad and poorly worded, it has been twisted to prevent people from buying "unauthorized" printer ink refills. On the other hand, through some serious sophistry it has been found not to prevent people from manufacturing compatible garage door openers. To prevent abject absurdity requires extreme effort on the part of the judge, and the result is still far from logically rigorous; instead it smells like an attempt to continue to justify a law even in the face of obvious absurdities.
One could hardly imagine a more thorough way to challenge the traditional communications frameworks. As you recall, the important thing about the diagram I developed in the previous section was that all the sections were isolated, which became an unspoken assumption in the rest of the legal discourse. To put the problem succinctly, the problem with the current legal system is that the foundational assumption that the legal domains are independent is no longer valid, which has invalidated all laws built on that assumption.
We cannot simply patch around this problem, because the system is already a patchwork quilt and you can't continuously patch patches. From day one, laws were made without regard for the other communication domains so contradictions and simple conceptual mismatches between the domains are the rule, not the exception. The very principles upon which the practical system was built have been shown lacking. We must fix the problem at a deeper level.