Externalities

Ever walk through the grocery story, annoyed at the woman apparently talking to herself, only to realize she is actually talking on a cell phone? Its a good example of a negative externality, not unlike air pollution. Often externalities are mitigated by social norms. For instance a stern look at the offending woman in the grocery store will hopefully get her to lower her voice if not hang up. Other solutions are often imposed by store owners themselves who impose bans on cell phone use in their stores. In this article covering internet access on airlines we see that different airlines are responding differently.

We think decency and good sense and normal behavior" will prevail, said Jack Blumenstein, chief executive of Aircell LLC, which is launching service on some American and Virgin flights in 2008.

In many ways, airlines are facing issues similar to those encountered by Wi-Fi networks on the ground — at airports, coffee shops and other public places.

Glenn Fleishman, editor of the Wi-Fi Networking News site, said operators of public networks generally do not filter because users are conscious that others can see what they surf. A coffee shop employee might occasionally ask a customer to leave, Fleishman said, "but those stories tend to be pretty far between."

Airplanes, however, are different because customers are in closer quarters and are more likely to include kids.

Allowing porn could subject an airline to harassment complaints much like an employer that refuses to clamp down, said John Palfrey, a Harvard Law School professor.

"I think they have a right to (filter), but I come up short of saying they have the responsibility," Palfrey said. "I'd rather have the responsibility in the hands of passengers and require them to be accountable for what they do on laptops and airplanes."