Isn't technically the internet, as a whole, operating as #1 (at least, in theory?).
If I want to post material that is sketchy, or even illegal, I can typically get away with posting it somewhere. It means that I have to host the content but it also means I have total control.
So in a way, revoking section 230 would inevitably break up the big sites by forcing people who are interested in posting/hosting content that others disagree with on their own.
While this would have some economic impact (just like demonitization), it might also mean that the amount of content might go down because people would have to defend themselves and their use of said content.
In a way, I'm a bit torn about this because revoking section 230 would seem like it comes about it from a different angle: removing the protection would allow the "free market" to respond whereas the other option would be the government "forcing" the breakup.
Revoking 230 would disrupt big sites, but would likely further cement their monopoly. Liability for user generated content means that sites that feature user generated content need to spend a lot of resources on moderation, because the consequences of a false negative are large.
People who talk about section 230 breaking up large companies seem to be harboring the assumption that section 230 will only apply to large companies. This is not the case. It will be a massive blow to any site that features user generated content. A blow that only large sites have the resources to withstand.
I think if this happens, decentralized social networks will really take off.
The "small sites" you refer to , which I'm assuming are typical forum type sites, have been dying a slow death for the past few years anyway, since FB ate their lunch.
Small sites would be absolutely devastated because the threat of being held liable for user comments will be way too large of a risk. Small networks don't have the resources to pre-moderate comments or build sophisticated automated systems of identifying high risk content. How many people would host their own site when the consequences of user-submitted illegal content being posted could mean millions in liability? Very few, if any. The result is that large players are the only ones that can survive in a market where companies are held liable for user submitted content.
Maybe if by "small" you're talking about dozens of people. But I fail to see how comparably small sites like Hacker News could continue to exist without section 230 protections. It'd probably take fundamental changes like charging users a subscription in order to pay for enough moderators to pre-moderate comments and submissions and I am unsure if that's even a viable approach.
If I want to post material that is sketchy, or even illegal, I can typically get away with posting it somewhere. It means that I have to host the content but it also means I have total control.
So in a way, revoking section 230 would inevitably break up the big sites by forcing people who are interested in posting/hosting content that others disagree with on their own.
While this would have some economic impact (just like demonitization), it might also mean that the amount of content might go down because people would have to defend themselves and their use of said content.
In a way, I'm a bit torn about this because revoking section 230 would seem like it comes about it from a different angle: removing the protection would allow the "free market" to respond whereas the other option would be the government "forcing" the breakup.