From: Tim May <tcmay@got.net>
Date: Fri, 11 Jul 1997 00:37:40 +0800
To: cypherpunks@Algebra.COM
Subject: The Recent Trend in "Collective Contracts"
Message-ID: <v03102805afeab8b29d2f@[207.167.93.63]>
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I'm not a lawyer, but I am interested in the various ramifications--and the
constitutionality--of recent "sweeping contracts" between vendors,
lawmakers, consumers, etc.

Two recent example:

1. The "tobacco agreement." Supposedly a deal involving the transfer of
$360 billion from some number of tobacco companies in exchange for dropping
of liability suits, immunity from future claims, voluntary restrictions (!)
on advertising, etc. (And the "etc." is especially complicated in this huge
case.)

2. The "voluntary ratings" agreement being announced today by Al Gore and
some of the television networks. (Earlier "voluntary agreements" were
implemented, but, according to supporters of censorship, "failed." Hence
the new push for newer voluntary restrictions.)

The issue, it seems to me, is that ordinary concepts of illegality and
civil liability are being swept aside in favor of these huge "deals" to
reduce liability in exchange for various actions. Well, who is bound by
these deals?

If "Tim's Tobacco Company" starts up next year, after this deal is
"signed," is his company bound by this deal? If Tim the Smoker develops
lung cancer, is he blocked from suing?

(Caveat: My personal and libertarian view is that lawsuits against
cigarette companies are wrong and should not be supported in a free
society. And lawsuits by various states to "recover health care costs" are
especially bogus. By this logic, McDonald's could be sued by California
because California paid out more health care benefits to meat-eaters than
it did to vegetarians. Utterly bogus.)

Anyway, the free speech aspects of these deals are also worrisome. The
"voluntary restrictions" on advertising, for example. Would the
aforementioned "Tim's Tobacco Company," not a party to this Grand Deal, be
somehow bound by a deal wherein it could not sponsor sporting events? Or
advertise? Or even speak out against the deal?

Imagine the implications for cryptography, using the logic of these kinds
of deals:

"The voluntary agreement reached between the cryptography industry and
Washington calls for companies to voluntarily limit key sizes to 64 bits
unless a key recovery scheme is used. And Washington agrees to drop RICO
charges against PGP Inc. and RSA Data Security Inc. in return. Book
publishers, who became part of the negotiations last summer, have agreed to
limit the information published in books in exchange for relaxations on the
export requirements for computer media. "

Far fetched? Perhaps. But note the similarities to these other "collective
contracts."

And in many ways the Telephony Act, aka CALEA (Communications Act for Law
Enforcement Access), was just such a deal. When the various telecom
companies essentially said "we can live with this bill," they were tacitly
committing themselves to just such a collective contract. (What happens
when a new telecom company starts up and finds that it has been "bound" to
provide wiretap points into its switches?)

It seems to me that these contracts are going to collapse completely when
the Supreme Court points out that they bind nonparticipants to terms which
limit their constitutionally protected rights. (Quibblers can claim that
"corporations have no constitutional rights," but the publishing companies
which publish newspapers would take exception to this. And so on. There are
many cases where corporations are enjoying the fruits of the Constitution.
As it should be.)

These huge mega-deals are a crummy way to interpret the U.S. Constitution.
I fear the "Grand Compromise" deal that the telecom and crypto companies
are being drawn into.

--Tim May

There's something wrong when I'm a felon under an increasing number of laws.
Only one response to the key grabbers is warranted: "Death to Tyrants!"
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
tcmay@got.net  408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Higher Power: 2^1398269     | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."