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Abstract

In August 2003, the Federal Communications Commission (FCC) reversed a ruling it had made in 2001 regarding regulation of America Online's (AOL) instant messaging program. Instant messaging (IM) is one of the Internet's most popular technologies, used recreationally and to facilitate business transactions. It is a major worldwide communications tool with the potential to serve as a catalyst for a new generation of Internet applications based on real-time computing. In contrast to Internet technologies like e-mail and access to the World Wide Web through browser programs like Microsoft Explorer or Mozilla's Firefox, the technical underpinnings of these IM systems are not open or publicly available. As a result, users of one IM system cannot communicate with the users of a competing IM system. The FCC's decision in 2001 was more proper. The current state of the IM market warrants that the FCC should have even gone further than just to regulate AOL's use of its IM and mandated industry-wide interoperability among all IM providers. Before the FCC's reversal, IM providers appeared willing to work toward interoperability between their consumer IM offerings. Right now, IM provides neither a fully interoperable communications network to consumers nor an innovation commons. The public interest is harmed by the former due to forcing consumers to adopt inefficient communications practices while the latter effectively keeps potential entrants out of the market, which limits the evolution of an important Internet platform. While Microsoft arguably has a long-term strategic reason to refuse such interoperability, that it was willing to work toward operability demonstrates that even that economic giant appreciates the importance of interoperability. However, unless providers are given a reason, by carrot or by stick, to move in that direction, it is unlikely any two providers will make the move toward interoperability on their own.

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