Can Congress Tell a Virtual World from the Real One?

Some say online virtual reality operations like “Second Life” have attained the stage of evolution that blogging and the Internet itself occupied several years ago. In other words, extremely immersive virtual reality games are about to explode into the public and commercial consciousness.

If you’re not familiar with online games like “Second Life,” you will be (the best primer is probably Wired’s “Travel Guide”: Google it.). Think “The Sims” on steroids, an online realm wherein your “avatar,” or cartoonish digital representation, easily enjoys the ability to communicate, post and broadcast information, go to “real” concerts and lectures, buy land and virtual personal and capital goods, and create and manufacture merchandise and services for sale to others (like condominiums).

Unlike many online game companies, Linden Labs, the creator of “Second Life,” for the most part lets entrepreneurial users keep what they earn from interacting and transacting with others. But in a twist that in itself serves as a laboratory for free-market economics, a real-world market has emerged for virtual earnings. Individuals have begun to buy and sell virtual currency. Earnings from the gaming world can be converted into U.S. dollars. Many hip companies–Adidas, Starwood Hotels, and Toyota among them–have set up shop within.

“Second Life” is no utopia. Disputes inevitably arise in “Second Lives” as well as people’s first ones, yet there is optimism that participants, in conjunction with Linden Labs (presumably a benevolent dictator), can resolve them.

Nascent public policy issues now resemble those of the Internet a decade ago. Early on, the Internet was threatened with regulation regarding content, privacy, copyright, gambling, overall governance, and more. It’s early, but “Second Life” and other Massively Multi-Player Online Games are also threatened–prematurely, I’d argue–by various forms of regulation.

Regulating the Virtual World

The Joint Economic Committee of Congress is already investigating taxing virtual economies; cyber-stalking is a problem (apparently cute female avatars get lots of attention); and also there are accusations that Linden Labs supposedly inappropriately yanked someone’s privileges and property (seemingly a rudimentary contract term issue, little different from “First Life”).

Can political regulation be avoided? “Second Life” is a grand experiment: Those appreciative of today’s numerous revolutions in communications, of which “Second Life” is one striking example, have a stake in keeping voluntary, private networks like “Second Life” as unregulated as possible, or at the very least, relying on existing law that obviates the need for harmful regulatory adventurism.

Networks like “Second Life” are already proprietary and less subject to the lack of authentication that afflicts the “capital-I” Internet and makes private discipline of online misbehavior difficult.

Indeed, the source of so many of the Net’s problems (spam, privacy, pop-ups, even intellectual property piracy) has been its status as a “commons,” along with interventionism that, I’d argue, inappropriately attempts to force or keep it in that role–witness the so-called “net neutrality” debate today, which would deny network owners like AT&T and Verizon the right to easily offer tiered pricing to enable premium services like enhanced speed and security.

As an ultra-proprietary network–albeit one residing within the overarching Internet–“Second Life” has the advantage of not starting out with the utopian “openness” presumptions that, while in many ways a blessing, in other ways plague the non-proprietary Internet and have made irreconcilable differences and regulatory disputes an ongoing fact of life.

And if “Second Life” loses its benevolent reputation? Happily, there can be infinite virtual online worlds beyond “Second Life” to browse and occupy. Some are already in the works. Digital reincarnation may be something more real than even “Second Life,” perhaps only the first of many, imagines.