The Future of the Internet

Stephen DeAngelis

November 13, 2009

The Internet has now been around for 40 years and a lot of people believe it needs a facelift. Some analysts are even questioning if the Internet can survive long enough to reach 50 [“Will the Internet Survive Its 40th?,” by L. Gordon Crovitz, Wall Street Journal, 2 November 2009]. Crovitz writes:

“The Internet recently celebrated the 40th anniversary of its founding, just in time to be welcomed in Washington by opposing political visions of its future. One is reflected in a proposal called the Internet Freedom Preservation Act, which would empower regulators to micromanage the Web. The alternative, the Internet Freedom Act of 2009, would keep regulators away. As their similar names suggest, these laws, sponsored respectively by Rep. Edward Markey (D., Mass.) and Sen. John McCain (R., Ariz.), are both ostensibly intended to keep the Internet open. The two sides disagree about whether the way to do this is via firmer control or by keeping regulators away. Into this divide has marched the Federal Communications Commission (FCC), which under the banner of ‘net neutrality’ proposes an expansion of its powers over the Web. The agency argues it needs to control broadband Internet providers to make sure they don’t discriminate in favor of or against any particular content, application or device. FCC Chairman Julius Genachowski acknowledges that his agency operates in an ‘uncertain legal framework’ that makes it unclear what power it has to set rules on the Web. Despite this uncertainty, he wants his agency to ‘evaluate violations of the nondiscrimination principle as they arise, on a case-by-case basis.'”

Before continuing this discussion, I should probably point out that despite its high opinion of itself, the U.S. Government isn’t the only player who has a say about the future of the Internet. The rest of the world is no longer willing to sit back and let the U.S. call all the shots. More on that later. Crovitz continues:

“One way to look at the battle over net neutrality is simply as one set of companies against another. There are the network owners and administrators, who want to continue to control access rules, pricing and traffic management on their networks. Then there are content companies and other users of the network, who want regulators to ensure easy access for them. The corporate dividing lines are growing hazier. Microsoft and Yahoo recently dropped out of a net-neutrality lobbying group. Google, which has in the past supported some definition of net neutrality, is now not so sure about the wisdom of giving regulators broad authority. ‘It is possible for the government to screw the Internet up big time,’ Google Chief Executive Eric Schmidt recently told the Washington Post. Even the FCC proposal yields on many once-sacred net-neutrality precepts. Its rules would be subject to ‘reasonable network management,’ so that providers could treat bandwidth-hogging content such as video differently from simple email. Providers would be able to respond to increasing demand by rationing services through premium-pricing models.”

To be fair to network providers, someone has to pay for the infrastructure that increases bandwidth capacity and making those who use the most bandwidth pay for that infrastructure seems fair. It’s like a road tax. People who use the roads should pay for maintaining them. Mobile phone network providers are also running up against bandwidth limitations and they are more than likely going to start charging customers according to the amount of bandwidth they use (e.g., smart phone users will have to pay more than regular cellphone users). Internet providers will eventually have to start charging the same kind of premiums for heavy users. Crovitz continues:

“The uncertainty over how to ensure an open Web is the latest example of how technology is moving so quickly that our regulatory institutions can’t keep up. A new book, ‘The Laws of Disruption’ by technology consultant Larry Downes, explains this gap with a powerful idea: ‘Technology changes exponentially, but social, economic and legal systems change incrementally.’ We’re used to ever-increasing computing power and endless innovation online, but politicians and regulators are left trying to manage technologies beyond their control or understanding.”

That’s not entirely a bad thing. It’s hard to regulate technologies when you don’t really know how they are going to be used. Who would have ever thought you’d carry out banking transactions on your phone when cellphones first appeared; or who ever dreamed that doctors could remotely read x-rays hundreds of miles away from where they were taken using the Internet? I agree with Mr. Downes when he says, “The bottom line is simple. Encouraging infrastructure is good; micromanaging it is bad.” Crovitz notes that emotions are rising on this subject:

“Why do emotions run so high on what is in essence a technical debate about how to run a network? Mr. Downes told me last week that ‘consumers have been done a great disservice by corporate interests on both sides of this fight, who have reduced a complicated business and technical problem into a sound bite. They’ve been told that net neutrality is nothing more and nothing less than a fight for the soul of the Internet.’ His view is that ‘U.S. consumers have plenty of reasons to be suspicious of both the FCC and the communications industry.’ His advice: ‘Consumers should ask themselves which of these powerful interests is more likely in the end to abuse its power. Who, in other words, has the greater potential to make things worse for everyone?’ His answer seems sensible: ‘Absent any evidence of serious market failure yet, I’d much rather deal with the devil I know than a resurgent FCC.'”

I’m not sure that consumers who feel that commercial enterprises are using invasive tactics to breach their privacy would agree completely with Downes and Crovitz. In some ways, letting the market control what happens on the Internet is like letting the fox guard the chicken coop. Crovitz, however, believes the best guardian again abuse is competition. That might be true when it comes to pricing and access. I’m not so sure it’s true when it comes to protecting privacy. Crovitz, however, seems to be limiting his arguments to access. He writes:

“The best defense against access providers’ acting unreasonably is more competition. The alternative would treat the modern network of the Web as if it were the 19th-century network of railroads, with the FCC as a modern-day version of the Interstate Commerce Commission, which set rail rules and tariffs, slowing innovation in transportation until the agency was abolished in 1995 as a bureaucratic anachronism. In highly regulated industries, regulations become barriers to entry. It’s costly for new competitors to comply with the rules, which are designed for incumbents. As the U.S. falls further behind in broadband, we need more innovation and more competition, not a cozy, regulated cartel. Technology may be changing faster than we can keep track, but we are well acquainted with the frailties and foibles of human institutions in Washington. Sometimes it’s wiser for mortals to stand aside and leave technology to advance at its own pace. After its first 40 years delivering freedom and abundance, the Web has earned the benefit of the doubt.”

Crovitz could have pointed out that regardless of what the U.S. Government decides to do within America’s borders, the future of the Internet per se belongs to world. That couldn’t have been made more clear than when the Internet Corporation for Assigned Names and Numbers (ICANN), the world body that controls internet addresses, agreed to allow non-Latin alphabets to be used in Internet addresses [“Internet set for language revolution,” by Christian Oliver, Kathrin Hille, and Joseph Menn, Financial Times, 31 October 2009]. They write:

“[ICANN has] agreed … to allow countries to mark their territory not only with their own abbreviations, such as .uk or .fr, but with their own alphabets as well. Icann’s willingness to add top-level country codes in Chinese, Korean, Cyrillic and Arabic characters ends a monopoly by Latin letters that has endured since the web’s beginning and limited its appeal. About half the internet’s users do not speak languages based on the Latin alphabet. They could still travel to much of the web by clicking on links compiled by search engines and other sites, but they have been far less likely to get to the site they had in mind when first logging on.”

This new change should be a great help to Internet users who are unfamiliar with Latin letters or use PCs whose keyboards use different alphabets. The article concludes:

“After national internet bodies apply and meet technical tests, speakers of the additional languages will be able to navigate directly to site addresses by typing them into the browser. That helps solidify the web’s claim to be truly worldwide, and it has more subtle political implications as well. China has the world’s greatest share of the estimated 1.6bn internet users, with about 340m of its own. But the government monitors what leading search engines link to and many sites practise self-censorship. That has meant that web pages controlled by dissidents have been rendered essentially invisible to much of the population. Now those uncomfortable with the Latin alphabet will be able to steer themselves to the right place without relying on referral links. ‘This is a huge and positive change in internet history,’ said Wang Peng, senior project manager at HiChina, the country’s leading internet service provider. ‘This will bring access for more people to get to know the internet without even a basic knowledge of English letters.’ The end of Latin rule will help smaller companies as well as political minorities, its supporters said. Baidu, China’s leading search engine, lists search results mainly through commercial bidding for keywords. This means that direct navigation by users is more important for sites with small marketing budgets. The decision to expand the languages of address endings represented what Icann’s chairman called the greatest technical change since the web’s inception. … The impact will vary by location, with more remote countries seeing the biggest expansion. Rod Beckstrom, Icann’s president, called the step ‘an historic move toward the internationalisation of the internet. … We just made the internet much more accessible to millions of people in regions such as Asia, the Middle East and Russia.'”

There are going to be many more interesting developments for the Internet in the future, some those changes are not yet even conceptions in some innovator’s mind. My guess, however, is that the Internet will survive past 50 even if it gets hundreds of facelifts between now and then.