This is my second post on The Twenty-Six Words That Created The Internet, by Jeff Kosseff. Chapter 2 tells the story of two online service providers, CompuServe and Prodigy, and how litigation against them with opposite outcomes set the scene for the passing of Section 230.


CompuServe, as was common in those days, operated “closed” internet services that were only accessible to other CompuServe users. There were, Kosseff writes, “close to 100 bulletin boards” for CompuServe users to post on, and CompuServe took a hands-off approach by not moderating anything.

At this time, there existed (at least?) two newsletters about the broadcast industry: Bob Blanchard’s Skuttlebut, open to anyone, and Don Fitzpatrick’s Rumorville, accessible to CompuServe subscribers only. When Rumorville started mounting attacks on Skuttlebut, Blanchard sued both Fitzpatrick and CompuServe.

Judge Peter Leisure became the first judge to decide whether an online service could be held liable for a third party’s words. Leisure wrote:

With respect to the Rumorville publication, the undisputed facts are that DFA uploads the text of Rumorville into CompuServe’s data banks and makes it available to approved CIS subscribers instantaneously.[1] CompuServe has no more editorial control over such a publication than does a public library, book store, or newsstand, and it would be no more feasible for CompuServe to examine every publication it carries for potentially defamatory statements than it would be for any other distributor to do so.

Given that CompuServe was merely a distributor, Leisure cited Smith v. California and dismissed the claims against them. Leisure’s decision did not set a precedent in the legal sense—this was just a trial court—but attracted attention as the first case about liability for third-party content online.


Prodigy took a different approach than CompuServe by creating and enforcing content standards, much like platforms today. Its stated goal was to create a “family-oriented” environment. From Wikipedia:

In October 1994, an unidentified user of Prodigy’s Money Talk bulletin board created a post which claimed that Stratton Oakmont, a Long Island securities investment banking firm, and its president Danny Porush, committed criminal and fraudulent acts in connection with the initial public offering of stock of Solomon-Page, Ltd. Stratton Oakmont sued Prodigy and the unidentified poster for defamation.[3]

The question here was, because Prodigy moderated its content, whether or not they would be considered a publisher of it (like a newspaper) or a distributor (like a newsstand). Justice Stuart Ain found that it was Prodigy’s “conscious choice” that opened them up to liability here:

PRODIGY’s conscious choice, to gain the benefits of editorial control, has opened it up to a greater liability than CompuServe and other computer networks that make no such choice. For the record, the fear that this Court’s finding of publisher status for PRODIGY will compel all computer networks to abdicate control of their bulletin boards, incorrectly presumes that the market will refuse to compensate a network for its increased control and the resulting increased exposure.

The last part is interesting. Ain wrote that the free market would support services who chose to moderate their content for their increased quality, evening out their increased liability. He had known, Kosseff writes, “that his ruling would set precedent for this new industry,” but that it’d be unfair to treat Prodigy with the same immunity that bookstores, and CompuServe, received.

The birth of Section 230

The CompuServe and Prodigy decisions created this weird hole where services could absolve themselves of liability by throwing their hands up in the air and not moderating their content at all. Perhaps this was possible in the days of the early Internet. Today, though, a Twitter, Reddit, or Facebook without moderation would be completely unusable.

Some while after the Prodigy decision, Representatives Chris Cox (Republican, from Orange County, CA) and Ron Wyden (Democrat, from Portland, OR) felt that it was backwards—that the simple choice to moderate its content should not have opened Prodigy up to millions of dollars in liability.

The birth of Section 230 was not dramatic. Cox said “Nobody in Congress had heard of Stratton Oakmont,” giving him and Wyden an opportunity to pass new legislation. They drafted a bill in the House; the law made its way into the House/Senate “conference” version of a bill; and it passed as part of an enormous, 46,000-word Telecommunications Act of 1996 with little fanfare.

Included in the Act was an indecency law from Senator James Exon, which punished with fines and jail time the use of a telecommunications device to make porn available to minors. This received harsh criticism and a legal challenge immediately after it passed, and the Supreme Court struck it down in Reno v. American Civil Liberties Union. The Court held that “a law may violate the First Amendment if it is so overly broad that it curtails protected as well as unprotected speech.”

Section 230 lived on.