Google Book Search and the Future of the Cloud

Take a look at this recent post by Nicholas Carr, and then read the first comment (by Tom Lord).  They are talking about “network strategies” (cf. “network effects”) and the future of online businesses, with an eye over the shoulder (Nick’s earlier post) on the here-sooner-than-we-realize “cloud” computing platforms from Google, Microsoft, and others.  Nick and Tim O’Reilly are going back and forth on the significance of the cloud.

The dialogue here is economic, not legal, so a bit of translating and re-conceptualizing is needed to tease out regulatory and/or de-regulatory implications.  You can explore that on your own.  Here’s the payoff:  Does the cloud matter to law, i.e., is there anything different here?  At least in part, the question is whether the cloud’s capital investment structure and returns to scale match those of natural monopolies.  In other words, should the cloud be regulated as a public utility?

It strikes me that this question is at least part at the core of competition-based concerns over the pending Google Book Search settlement, and in retrospect it was part of what prompted me to question the future of copyright law as we now know it.  Frank Pasquale puts the issue more concretely:  What will the price of access be?