Free-speech via the social networks and P2P would appear to be assisting in lowering the crime rate.

In the USA, Internet was an available public commentary resource before any other country in the western world.

1992 was the year that competition hit the USA with tremendous growth in pay-based online services, like Prodigy, GEnie. AOL and Compuserve.

Compuserve introduced the first known WYSIWYG e-mail content and forum posts, with forums growing rapidly to allow individuals to post opinions and commentary on a wide variety of subjects.

The Compusurve (and other competitive offerings) forums evolved into the present day Blogshere and social networking that has taken the Internet by storm and gave the people of the world a non edited conduit to their peers.

1992, was curiously also the year that crime rates started to drop in the USA; and 1998 was the year that another noticeable dip occurred. The year that Napster was born.

Of course this is anecdotal at this stage. (I'm an Economist, not a social-behavioral Psychologist.) But it would seem that when the population have an alternative – (economically priced entertainment) they turn away from crime.

On that basis, since the Internet "commercialised" in the USA, the US Government have saved an estimated $58,151,289,000 (Calc @$50 p/day) on prisoner “accommodation costs” alone, with obvious additional monies saved in transportation, arraignment, trial and public attorney fees.

This does not include the insurance moneys saved, the decreased crime rate effect on consumer psychological well being and the lives and property saved.

I trust that the new Internet Czar keeps all of this in mind when handing out his “stop the people talking to each other” solution to prevent the spread of Internet “rumours”.

Source: http://www.disastercenter.com/crime/uscrime.htm

(Calculation based on 3,186,372 prisoners not serving one year or 365 days in prison between 1992 and 2007.)

Update 30th of July.

It has been suggested on the Zeropaid forum that the US "Three Strikes Initiative had more to do with lowering crime rates than anything else.

The Three Strikes Legislation was introduced throughout the USA in the years 1995-1996.

Whilst it may hold true (to some extent) for the reduction in crime after that time, it does not allow for the drastic drop in crime in the years 1992-1995 which preiod saw a reduction of over 500,000 prisoners in the US for the period.

Further a research report entitled:

Three Strikes and You're Out: A Review of State Legislation Series: NIJ Research in Brief
Published: September 1997
20 pages 39,472 bytes

U.S. Department of Justice
Office of Justice Programs
National Institute of Justice

And sumarised by

Jeremy Travis, Director
September 1997

Concluded that:

Several States had preexisting habitual offender laws that allowed for, but did not require, enhanced sentences; the new laws make such sentences mandatory.

Early evidence shows that, with the exception of California, most of the laws will have minimal impact on those States' prison systems because they were drafted to apply to only the most violent
repeat offenders. Only broadly defined two-strikes provisions like California's have the potential to drastically alter existing sentencing practices.

References:

Barbara D. Warner, ‌ Pamela Wilcox Rountree‌ "Local Social Ties in a Community and Crime Model: Questioning the Systemic Nature of Informal Social Control"

Armour, Stacy. "Local Institutions and Neighborhood Crime: Does Participation Matter?" Paper presented at the annual meeting of the American Sociological Association, Hilton San Francisco & Renaissance Parc 55 Hotel, San Francisco, CA,, Aug 14, 2004 <Not Available>. 2009-05-26 <http://www.allacademic.com/meta/p108697_index.html>