Monday, November 28, 2005


Is the Internet a Place?

I've been struck by this question a few times, lately.

First there was this article, which I already praised, insisting that the internet is not a separate place, and that activities carried on using the internet are still subject to (in this instance) the tax laws of an actual geographical place.

Then there was this piece from Eric Raymond, insisting that the internet is a place.

Now there is this article by Doc Searls, "How to Keep the Carriers from Flushing the Net down the Tubes". He points out:

To the carriers and their regulators, the Net isn't a world, a frontier, a marketplace or a commons. To them, the Net is a collection of pipes.

(in fact, these two are backwards: The esr piece is a reply to the Searls piece. I read them in reverse order).

In the background, there is Lawrence Lessig's deep and subtle reasoning about the relationships between "cyberspace" and the real world, which I have referred to before.

Now, I think it is fairly obvious that the internet isn't literally a place. So the question is whether the metaphor is useful. But useful how? It could be useful as an aid to understanding, or it could be useful (to someone) as a way of persuading people to a particular viewpoint.

I'll get back to that. First, let's leave metaphor aside and look at what the internet really is.

The internet is not a place, nor is it the pipes. The internet is an activity performed by humans, like football, or government.

It requires certain tools - computers (general-purpose or special-purpose), and those pipes. Because it is a group activity, it requires co-operation among the participants.

There is an open question as to whether the activity (or set of activities) which is the internet actually includes things like using web pages or sending email, or whether these are activities which use the internet. As a matter of definition, I am going to say that those are uses of the internet. That will make my discussion much clearer.

The root of the conflict which the Searls and Raymond articles address is that the internet as practiced, currently and historically, has been open-ended: it isn't particularly designed for any specific use, and can be used for new things without making any changes to it. The core activity of internet is the same, whatever it is being used for.

There are two problems caused by this feature:

Problem 1) Because the core activity of the internet can be used for anything, it is difficult to prevent it being used for any specific thing - distributing child porn, libels, copyrighted materials, and criticisms of the government.

Problem 2) Because the people facilitating the activity don't know, at any particular point, what it is being used for, they can't extract revenue from it commensurate with the value to the users.

The first problem is a problem for everyone, although how big a problem you consider it to be depends to a large extent on your view of freedom generally.

The second is put by the CEO of SBC, quoted in the Searls article:

How concerned are you about Internet upstarts like Google (GOOG), MSN, Vonage, and others?

How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?

The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! (YHOO) or Vonage or anybody to expect to use these pipes [for] free is nuts!

Whiteacre is being dishonest here, because Google, Vonage, etc. aren't getting anything for free. They're paying for their pipes, and I would be very surprised if they weren't paying SBC for some of them.

The issue for Whiteacre isn't that Google, MSN and Vonage aren't paying SBC for the pipes, it's that they aren't paying extra for the particularly lucrative use they are making of the pipes.

And of course, the real issue for Whiteacre isn't just that Google, MSN and Vonage are making lucrative use of the pipes (for one thing, that has yet to come about), it is that their use of the pipes is in direct competition with SBC's other business - telephone calls.

So how are SBC to deal with this problem? Here are their options:

Strategy 1) Restrict what their pipes can be used for. This is technically tricky, and doing it effectively would probably mean that the pipes could only be used for an enumerated list of activities specified in advance. This is what we (Searls, esr, Lessig, me, etc. etc.) are so afraid of: Once you need permission from SBC to introduce a new use of the internet, the rate of innovation, and of the increase in value of the internet, will be slashed.

Strategy 2) Get government to regulate away the uses of the internet they don't like. Whiteacre makes what looks to me like a fair point:

If you want us to get a franchise agreement for TV, then let's make the cable companies get a franchise for telephony.

Given the range of different businesses with different regulatory histories now finding themselves in competition, there are blatant inconsistencies. Someone can always ask that their competitors be more stringently regulated to level the playing field.

Strategy 3) Accept a small slice of a large pie, and work to make the pie bigger. As I understand it, there's no regulation limiting what SBC can charge for internet access - there's no reason they shouldn't be able to earn a return on their investment in their pipes just charging by the megabyte. The uneven regulation problem still exists, but in this strategy it would make more sense to call for their regulation to be reduced to the level of their competitors.

Because SBC and its pipes are real, and not a metaphor, what happens to them is really the most important question here. There are three ways it can go: Internet controlled by the telcos via technology, internet controlled by the government via regulation, or open internet.

The three aren't totally disjoint, but positive-feedback mechanisms are likely to mean whichever way it goes, it will be pushed further in the same direction. In detail:

The open internet tends to go all the way, because small attempts to control the content via regulation or technology are likely to be ineffective: if you ban activities, they can hide from government using the anonymity of the open internet, and they can hide from technology by moving protocols and connection points. To effectively ban stuff means allowing only approved users or only approved uses.

Regulation of internet, like all regulation, is self-accelerating because that is in the interests of the regulators. The big players like regulation because it falls disproportionately on their smaller rivals, and political influence is the biggest economy of scale.

And the telco-run internet will tend to go all the way in order to prevent runaway to the other two poles. Any openness will be used to tunnel all the things the telcos don't want, all openness must be sealed up.

So there's the map: We have three possible outcomes, and a number of different groups with different preferences.

There are us good guys, who want the internet, and dread the telco-run internet. There's a division here, however: some are willing to accept the regulated internet as a compromise, or a way of ensuring we don't get the telco-run internet. The division is more or less on political lines, with the libertarian stream of thought (like esr and me) more hostile to regulation and more optimistic of the open internet surviving in the marketplace, and the more leftist elements (Lessig, Seth Finkelstein, etc.) more confident in democracy to produce a healthy government-regulated internet regime.

I should emphasize at this point that nobody has written as deeply about these issues as Lessig, and, particularly as I disagree with his conclusions, one shouldn't accept my version of his viewpoint without reading his stuff.

I call us the "good guys" because I think what we want is what is best for everyone in the long run, and not just our sectional interest. The bulk of the future benefits of internet are yet to be invented, and won't be if it is closed up now.

Close to us are the anarchists. They want an open internet because they see what I listed as "problem 1" as an opportunity - an opportunity to do things that most people want to stop them doing.

In fact, the anarchists blend into the good guys. Many good guys want at least some of what the anarchists want - some want freedom of speech greater than is available even in Western democracies, some question whether copyright should exist, some want to see businesses existing outside the reach of government taxation and regulation.

While some of the anarchists believe they want the best for everyone, in order to persuade the population they would need to persuade them of propositions well beyond the technical effects of internet - their political views are currently minority.

I described the "good guys" as divided between libertarians and leftists, implying there aren't many conservatives. Conservatives are likely to see "problem 1" as more severe. They are likely to be turned away from open internet unless they can be convinced that the benefits outweigh problem 1. They are also likely to be resistant to this argument if they believe it is coming from anarchists who want the open internet for what they see as ulterior motives.

Now we have the various interest groups. The telcos want to control their pipes to extract monopoly rent. Even they might be mistaken. There is an idea around that the worst thing that can happen to a company is for its business to be "commodified", which is strange given that many of the biggest companies in the world are in commodity businesses. There's plenty of money in a commodity that everybody uses every day.

Among those adversely affected by "problem 1", the biggest are the movie studios and record companies. They have been given certain rights by copyright law, and those are being taken from them by open internet. They would like to see it closed one way or the other.

Another important interested party is the technology industry. They need open internet, but many of them don't realise it. Some of them are in a position where they could prosper with telco-run internet through close relations with the telcos, or with any closed internet through close relations with the studios, but in the long run all the power in their relationship will be on the other side.

Finally there are governments. Whatever party, they are likely to be instinctively conservative in their attitude to internet: after all, if they want more free speech or less copyright, they are in a position to have it without needing open internet to produce it through the back door. They are also subject to influence from powerful interests, whether telcos or studios. But they are also subject to influence from voters, so if the argument for open internet is won in public, governments should go along.

So where does this leave the "place" metaphor? I'm not sure it's all that relevant. It may be intended to imply that things are possible using open internet that wouldn't be possible otherwise, but that's not really clear. It might be meant to give the impression that it's extraterritorial and intrinsically out of anyone's control, but that's not only untrue, it's obviously untrue, and if it were true there wouldn't be anything to be arguing about. I think it obscures what is really at issue.

What's really at issue among the "good guys" is whether the government or the market is more likely to preserve open internet. I think it has to be one or the other, because any regulatory regime that could preserve "network neutrality" would, at the same time, put up barriers to entry that would stifle competition, and without competition the market would certainly allow the telcos to take control.

And what's really at issue between the "good guys" and the rest is the extent to which the benefits of internet depend on openness, and the extent to which the problems of openness are exaggerated by interested parties. There are a number of reasonable positions on copyright, but that internet needs to be strangled to preserve it isn't one of them. Terrorists and criminals can use open internet, but the rest of us need it more than they do.

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