Authors: Jeremy Rifkin
Deutsche Telekom’s flagrant attempt to undermine network neutrality drew an immediate response from German regulatory bodies. The Bundesnetzagentur—the country’s telecom regulator—said it is reviewing the Deutsche Telekom proposal to see if it is in violation of network-neutrality protocols that prohibit service providers from discriminating against classes of customers by charging different rates.
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The struggle over network neutrality is, at its core, a battle of paradigms. The Second Industrial Revolution telecom giants are anxious to gain control of the new communications medium and force on it a centralized command and control that will allow them to enclose the content and the traffic, boost their margins, and secure a monopoly by dint of their ownership of the “pipes.” End users are equally determined to keep the Internet an open Commons and find new apps that will advance network collaboration and a push to near zero marginal costs and near free services.
Governments seem to be caught in the middle attempting to serve two masters, one dedicated to a capitalist model and the other to a Commons model. While the FCC had previously championed network neutrality, in 2010 the agency published an open Internet order laying out three cardinal rules to ensure an open and free Internet that seemed to alter its
long-standing, ironclad commitment to do just that. The first two rules called for transparency in management practices and forbade the blocking of applications and services. The third rule, however, gave network providers a ray of hope that they might re-seize the initiative and bring the Internet into their web of enclosure. The rule states that “fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic.”
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The third principle raised more than a few eyebrows. Some see the rule as a “coming to their senses” and others as a “capitulation.” Brett Frischmann’s wry comment that “what is (un)reasonable remains to be seen” seems to capture everyone’s second-guessing of what the FCC really intended.
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And it’s not just the big bad telecoms and cable guys that are muscling in from the outside, attempting to enclose the Internet. It’s coming from the inside as well. Some of the best-known social media sites on the Web are revving up to find new ways to enclose, commercialize, and monopolize the new communications medium. And their bite is potentially far bigger than the companies managing the pipes.
In a November 2010 article in
Scientific American
, Tim Berners-Lee, inventor of the World Wide Web, issued a damning missive on the twentieth anniversary of the day the Web first went live. He was concerned about what was happening to the Internet.
Berners-Lee’s invention was simple in design and acute in impact. The Web allows anyone, anytime, anywhere to share information with anyone else without having to ask for permission or pay a royalty fee. The Web is designed to be open, universally accessible, and distributed.
Unfortunately, some of the biggest applications on the Web, like Google, Facebook, and Twitter, are cashing in on the very rules of engagement that made them so successful and selling the masses of transmitted Big Data that comes their way to commercial bidders and businesses that use it for targeted advertising and marketing campaigns, research efforts, the development of new goods and services, and a host of other commercial propositions. They are, in effect, exploiting the Commons for commercial ends. In his article, Berners-Lee warns that “large social networking sites are walling off information posted by their users from the rest of the Web” and creating enclosed commercial spaces.
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While the Internet is a commons, the applications on the Web are a hybrid of nonprofit organizations, generally operated as Commons, and commercial enterprises with an eye to the market. Wikipedia and Linux line up in the first category and Google and Facebook in the second category.
Although users of Web applications on the Internet are aware that sites like Amazon are purely commercial, they are less likely to feel so about sites like Google and Facebook, because the apps provide them with opportunities to link up to a range of free services, from the world’s premiere search engine to inclusion in the largest family album on Earth. The
smattering of ads at the margins of the screens are a small inconvenience to bear for connectivity. Behind the scenes however, Google, Facebook, Twitter, and scores of other social networking sites are sequestering Big Data coming into their system, either to provide value-added services on their sites or to sell the data to third parties.
Berners-Lee explains that the key to capturing your data for their exclusive use is understanding what happens to the user’s universal resource locator (URL) when he or she enters a social media site. Each user’s URL allows the user to follow any link on the Web, becoming part of the flow in an interconnected Commons information space. But when someone connects to commercially driven social media sites, unbeknownst to them, at least until recently, their vital information is immediately captured, siloed, enclosed, and commodified.
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Berners-Lee describes how a user’s data is enclosed:
Facebook, LinkedIn, Friendster and others typically provide value by capturing information as you enter it: your birthday, your e-mail address, your likes, and links indicating who is friends with whom and who is in which photograph. The sites assemble these bits of data into brilliant databases and reuse the information to provide value-added services—but only within their sites. Once you enter your data into one of these services, you cannot easily use them on another site. Each site is a silo, walled off from the others. Yes, your site’s pages are on the Web, but your data are not. You can access a Web page about a list of people you have created in one site, but you cannot send that list, or items from it, to another site. The isolation occurs because each piece of information does not have a URL. Connections among data exist only within a site. So the more you enter, the more you become locked in. Your social-networking sites become a central platform—a closed silo of content, and one that does not give you full control over your information in it.
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Should we worry about social media sites sharing everything they know about us with third-party commercial interests? Of course, no one wants to be pestered by targeted advertising. More sinister, however, is the prospect of health insurance companies learning whether you had been Googling research on specific illnesses or prospective employers prying into your personal social history by analyzing your data trail on the Web to spot potential quirks, idiosyncrasies, or even possible antisocial behavior.
Of course, not all social media sites are commercial. Many, like Wikipedia, are nonprofit and remain true to a purely Commons governance. For social media sites operated by commercial firms, however, the business model Berners-Lee describes is the standard operating procedure. He continues: “The more this kind of architecture gains widespread use, the more the Web becomes fragmented, and the less we enjoy a single, universal information space.”
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Berners-Lee is hinting at a darker force at work. Is it possible that the very operational features of the Internet itself—its distributed, collaborative, peer-to-peer, laterally scaled architecture—are providing a treasure trove of valuable personal data that is being mined, rebundled, and sold to profit-making firms for targeted commercial leveraging? Worse, is this newest form of commercial exploitation creating corporate monopolies in virtual space that are every bit as centralizing and proprietary as the Second Industrial Revolution companies they are dislodging from power?
By 2012, Google was fielding “3 billion queries every day from users in 180 or more countries.”
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In 2010, Google enjoyed a market share of 65.8 percent among search engines in the United States, 97.09 percent in Germany, 92.77 percent in the United Kingdom, 95.59 percent in France, and 95.55 percent in Australia.
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The company’s revenue topped $50 billion in 2012.
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Facebook has gobbled up 72.4 percent of the global market share of social networks, and as of March 2013, boasted over 1.1 billion active
users—that’s about one out of every seven human beings living on Earth.
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When it comes to measuring how many minutes per month visitors spend on the most popular social media sites, Facebook breaks away from the pack. Its visitors spend an average of 405 minutes a month on the site: that’s the number of minutes of the next six most popular sites combined—Tumblr (89), Pinterest (89), Twitter (21), LinkedIn (21), Myspace (8), and Google+ (3).
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Facebook’s revenue in 2012 was $5 billion.
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In 2012 Twitter had 500 million registered users, of which 200 million are active tweeters.
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The rest prefer to be listeners. The company is expected to make more than $1 billion in revenue in 2014.
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The overtly commercial sites, like Amazon and eBay, that include Collaborative Commons features, are also quickly becoming online monopolies. According to a study conducted by Forrester Research, one out of every three online users starts their product searches on Amazon.com, “compared to 13 percent who started their search from a traditional search site.”
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Amazon has “over 152 million active Amazon customer accounts,” “over 2 million active seller accounts,” and a worldwide logistical network that serves 178 countries.
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By 2008, eBay had grabbed 99 percent of the market for online auctions in the United States, with a similar track record in most other industrialized countries.
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EBay’s revenue in 2012 was $14.1 billion.
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The dominance of new social media sites is now so pervasive that users are rarely even aware of how often they reference them. Case in point: a recent ruling by the French government forbids broadcasters from mentioning Facebook or Twitter on air unless the stories pertain directly to the companies. The decision itself inspired a few tweets from media pundits and a not-unexpected poke at French bureaucrats for butting in. Still, the government made a valid point, arguing that by continually referring to Facebook and Twitter, for example, in their news and entertainment
reporting, broadcasters were providing a form of free advertising, favoring market leaders at the expense of ignoring wannabes among their distant competitors.
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Tim Wu, a professor of law at Colombia University and a senior adviser to the U.S. Federal Trade Commission, raises an interesting question about the new corporate giants that are colonizing large swaths of virtual space. He asks, “how hard would it be to go a week without Google? Or, to up the ante, without Facebook, Amazon, Skype, Twitter, Apple, eBay, and Google?”
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Wu is putting his finger on a disquieting new reality—that the new communication medium a younger generation gravitated to because of its promise of openness, transparency, and deep social collaboration masks another persona more concerned with ringing up profit by advancing a networked Commons. Wu writes:
Most of the major sectors [on the Internet] today are controlled by one dominant company or an oligopoly. Google “owns” search; Facebook, social networking; eBay rules auctions; Apple dominates online content delivery; Amazon, retail; and so on.
Wu asks why the Internet looks “increasingly like a Monopoly board.”
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If there were any lingering doubts about the intentions of these new corporate players, argue some of the critics, a search of recent patent acquisitions should put the qualms to rest. In just 2 years—2011 and 2012—new patent acquisitions were enough to take the breath away from even the most seasoned intellectual property attorneys. In 2011, Apple, Microsoft and other companies won Nortel networks’ 6,000 patents worth $4.5 billion—in auction; Google purchased Motorola for $12.5 billion, acquiring 17,000 patents; Microsoft purchased 925 patents from AOL for $1.1 billion; and Facebook bought 650 patents from Microsoft for 550 million.
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A growing number of communications-industry analysts, antitrust attorneys, and Free Culture Movement advocates are asking whether these new heavyweights in virtual space are really “natural monopolies” like AT&T and the power and utility companies of the twentieth century and therefore either legitimate candidates for antitrust action or for regulation as public utilities. They argue that if one or both of these courses is not rigorously pursued, the great promise of the Internet as a shared, networked global Commons is going to be irretrievably lost and, with it, the hopes and aspirations of a generation that has put such store on a peer-to-peer collaboratist ethos.
Commons advocates contend that when a search engine like Google becomes an “essential facility,” because it provides a universal service that everyone needs and alternative search engines pale in comparative performance, there is really nowhere else to go. In such circumstances,
Google begins to look and feel like a natural monopoly. Some voices are beginning to call for “search neutrality” and clamoring for regulations not dissimilar from those imposed by governments to assure network neutrality. They warn that a dominant search engine in the private sector might be tempted to manipulate search results, either for commercial or political reasons.
Others are concerned that social media sites like Twitter might be tempted to manipulate rankings, one of the more popular features used to engage their members. For example, Twitter hosts a feature called Twitter Trends, which identifies hot topics and issues of current interest that are “trending.” Questions have been raised about whether the algorithms companies use to spot and rank trends might be programmed to reflect the biases of the management that oversees them, consciously or otherwise. Julian Assange’s supporters suspected that Twitter deliberately finagled the trending during the WikiLeaks scandal.
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Industry watchers are beginning to ask, how we can maintain “algorithm neutrality”?