Today’s communication architecture

Mark Jamison writes,

Netflix and other large edge providers are bypassing the internet. More specifically, they are building or leasing their own networks designed to their specific needs and leaving the public internet — the system of networks that only promise best efforts to deliver content — to their lesser rivals.

…Mobile internet is leaving wireline internet in its dust in numbers of users and traffic. Mobile internet increasingly bypasses the World Wide Web because about 90% of customers’ mobile time is spent in apps, not the web

Back in the 1990s, the term “walled garden” emerged as an expression of contempt for AOL and other companies that tried to combine control over infrastructure with content. We thought that the Internet would drive out the walled gardens. I am getting the sense that we were wrong about that.

I assume that the walled garden approach is emerging because it is more efficient economically than the 1990s Internet. One downside is that the walled gardens are conducive to censorship and regulation.

Some questions about Google

Salil Mehta writes,

On Friday afternoon East Coast Time by surprise, I was completely shut down in all my Google accounts (all of my gmail accounts, blog, all of my university pages that were on google sites, etc.) for no reason and no warning.

A couple years ago, Tyler Cowen linked to one of Mehta’s blog posts, and I linked to it also.

Mehta received a form letter from Google saying that he had violated its terms of service.

My questions:

1. If I search the terms of service for “terminate account,” I only find a reference to copyright infringement and “repeat infringers.” Otherwise, the terms of service do not appear to list any specific reasons for terminating someone’s account. What other offenses, if any, can lead Google to terminate accounts?

2. What is Google’s policy with respect to giving warnings prior to terminating accounts?

3. Google’s terms of service state that

We believe that you own your data and preserving your access to such data is important. If we discontinue a Service, where reasonably possible, we will give you reasonable advance notice and a chance to get information out of that Service.

I guess this refers to Google generically terminating a service for everyone, as they did with their blog newsreader. But what happens when an account is terminated? Does the individual have any way of recovering old blog posts, emails, and email contact lists?

[UPDATE] 4. As usual, I schedule posts in advance, and in the interim professor Mehta’s accounts have been restored. That raises the question of what prompted this decision (and the other three questions still remain unanswered).

Internet hopes, disappointed

1. The death of distance. Supposedly, the Internet was going to reduce the importance of location. Instead, the economic importance of a few key cities seems to have increased.

2. Many of us foresaw the tebirth of highly decentralized markets, in which the small entrepreneur could compete on a level playing field with corporate giants. Instead, the Internet is dominated by key “platforms,” such as YouTube and Amazon, which rake in revenue. Those of us who try to use those platforms to earn our own living are more like Uber drivers than like entrepreneurs in charge of our own destinies.

3. A libertarian moment. The Internet would be a model of decentralized, unregulated human activity. Instead, we see corporations and governments discovering the ability to exert control. As I noted previously, the censorship that we thought was impossible 20 years ago is a reality today.

Thoughts on Internet censorship

Tyler Cowen Alex Tabarrok writes,

When Facebook and Twitter regulate what can be said on their platforms and Google and Apple regulate who can provide a platform, we have a big problem. It’s as if the NYTimes and the Washington Post were the only major newspapers and the government regulated who could own a printing press.

1. Back in the 1990s, two cliches were “Nobody owns the Internet” and “the Internet interprets censorship as damage and routes around it.”

These are no longer applicable. For people who rely on smart phones for access, Google and Apple own the Internet. In addition, Google owns a major domain name server.

Although I do not have a confident understanding of the technology and business environment, it would seem to me that today censorship on the Internet is feasible. I infer that when I hear of web sites being “shut down” because of the hateful thoughts that they convey.

Reversing the company’s previous stance on not censoring content, founder and CEO Matthew Prince wrote in an internal email that he “woke up this morning in a bad mood and decided to kick them off the Internet. It was a decision I could make because I’m the CEO of a major Internet infrastructure company.”

2. I wonder how there can be overlap between the people and organizations that champion regulations intended to impose “net neutrality” and those that want to see hateful web sites shut down. I believe that such overlap exists, but it is hard to take those as intellectually consistent positions.

3. I would like to see those who provide Internet infrastructure refrain from censorship. But having government enforce non-censorship would not be a very libertarian way of going about it. I would rather see non-censorship as a social norm that has sufficient compliance to make an uncensored Internet available to everyone who wants it.

4. For those of us who don’t like Nazis, jihadists, etc., I recommend expressing solidarity with their intended victims and support for efforts to prevent and punish acts of violence. I do not see shutting down web sites as doing much to prevent violence. I see it as more of a futile gesture, akin to confrontational counter-demonstrations.

5. My generation is aging out, and the “snowflake generation” is coming into its own. Once the anti-censorship social norm starts to break down, my guess is that it will not stop with just a few fringe Nazi sites being shut down.

Virginia Postrel on Martin Gurri

She writes,

As information becomes abundant, he writes, “the regime accumulates pain points.” By this he means that problems like police brutality, economic mismanagement, foreign policy failures and botched responses to disasters “can no longer be concealed or explained away.” Instead, “they are seized on by the newly empowered public, and placed front and center in open discussions. In essence, government failure now sets the agenda.”

She says that Gurri’s thinking is that notwithstanding their greater awareness of failure, people are expecting more from government and other organizations.

In my mind, I keep going back and forth between seeing our political sectarianism as unprecedented on the one hand and seeing it as a replay of 1968 on the other. In the 1968 election, the public, preferring a representative of the existing order against the forces of rebellion, ultimately turned to a familiar face, even though he was widely disliked and viewed as unscrupulous. Thus, although right now I do not know a single person who is positively disposed toward Hillary Clinton (and almost all of my friends are Democrats!), it is conceivable that she will win a landslide.

Read Postrel’s whole essay. I will put Gurri’s book on my list of items to read. And is Martin any relation to Adam?

The Year I Beat Bill Gates

Shane Greenstein writes,

Gates misinterpreted the value of the Internet’s commercial prospects. This error would take three interrelated forms in its conventional assessment:

1. Underestimating the Internet’s value to users;
2. Underestimating the myriad and clever ways entrepreneurs and established firms would employ Internet and web technologies to provide that value for users;
3. Underestimating the ability of Internet firms to support applications that substituted for Microsoft’s in ther marketplace.

This is from How the Internet Became Commercial, Greenstein’s new book. I started my business on the Internet in April of 1994. Gates did not become a believer in the Internet until a year later.

Greenstein offers a well-judged analysis of the business strategy and Internet governance issues during the first decade of the Internet’s commercialization, starting in 1994. However, I think that there is still plenty of room for someone to write another book on this historical episode. I would like to see a book that makes the dynamics more vivid.

In the introduction, Greenstein sketches a few timelines on which he lists events. I am not clear whether he chooses the events for their significance or to try and help the reader understand the order in which certain developments occurred. In any case, his choices are mostly very different from what mine would have been.

I actually would include several timelines:

–the release date and processing speed of Intel’s chips. Another would show

–the amount of hard disk storage on a top-selling personal computer each year.

–the speed of the most commonly used Internet connection each year. I remember when 28.8 Kilobytes per second was an upgrade.

–the number of people with Web access each year. When I started my business, unbeknownst to me that figure was less than a million. I had read, correctly, that there were 20 million Internet users in the U.S., and I very naively figured that this was approximately the number of people with Web access. The Web did not become a mass-market phenomenon until the fall of 1995, when AOL began offering Web access and Microsoft released Windows 95.

–the total number of web sites and the top five web sites in terms of traffic each year.

–well-hyped businesses that failed, such as MecklerWeb, Web TV, and PointCast Network.

–buzzwords that no longer have meaning, such as portal and push technology.

–creation of important software and protocols, such as JavaScript, Java, Flash, MP3, JPEG, and Linux.

–appearance of iconic web sites, such as Yahoo, Amazon and Google

–fading of once-iconic web sites, such as AltaVista, the NCSA home page, and the Netscape home page.

–Internet IPOs, by year

My point is that the environment evolved very rapidly. Your business strategy could not be based on what was there at the time. It had to be based on a guess about what was coming.

I describe my business experience in those days as a sequence of miscalculations, because I got so many things wrong. But I made some fundamentally good guesses about what was coming, and that was sufficient.

Emergent Anarcho-Capitalism

“Scott Alexander” reviews David Friedman’s classic, The Machinery of Freedom.

My overall conclusion is that I am delighted by this fascinating and elegant system and would very much like to see it tried somewhere very far away from me.

I might contend that a version anarcho-capitalism is being tried very close to us, in fact right here on the Internet. The Internet’s legal apparatus might be said to be its communication and software protocols. Those emerge in various ways, but not through legislation backed by force.

One might counter that much of what we do on the Internet rests on a layer of commercial practices, and those in turn rest on a layer of government enforcement. This line of reasoning might go: if you took away government, then Google could not enforce its advertising contracts, and then Google would not have revenue, and then we would not have Google.

But I think the argument that we should be afraid of anarcho-capitalism because we lack experience with such a system might not be trumps.

Niall Ferguson on Networks and Hierarchies

He writes,

European history in the 17th, 18th, and 19th centuries was characterized by a succession of network-driven waves of innovation: the Scientific Revolution, the Enlightenment, and the Industrial Revolution. In each case, the sharing of novel ideas within networks of scholars and tinkerers produced powerful and mainly positive externalities, culminating in the decisive improvements in economic efficiency and then life expectancy experienced in the British Isles, Western Europe, and North America from the late 18th century. The network effects of trade and migration were especially powerful, as European merchants and settlers exploited falling transportation costs to export their ideas, as well as their techniques and goods, to the rest of the world. Thanks to those ideas, this was also an era of political revolutions. Ideas about liberty, equality, and fraternity crossed the Atlantic as rapidly as pirated technology from the cotton mills of Lancashire. Kings were toppled, aristocracies abolished, and churches dissolved or made to compete without the support of a state.

Yet the 19th century saw the triumph of hierarchies over the new networks. This was partly because hierarchical corporations—which began, let us remember, as state-sponsored monopolies like the East India Company—were as important in the spread of industrial capitalism as horizontally structured markets. Firms could reduce the transaction costs of the market as well as exploit economies of scale and scope. The railways, steamships, and telegraph cables that made possible the first age of globalization had owners.

He argues that networks once again have gained an advantage, but he backs away from forecasting the demise of hierarchical corporations and states.

Asymmetrical Surveillance

Bruce Schneier writes,

welcome to a world where all of this, and everything else that you do or is done on a computer, is saved, correlated, studied, passed around from company to company without your knowledge or consent; and where the government accesses it at will without a warrant.

I was strongly influenced by David Brin’s The Transparent Society, which envisioned a world where surveillance is symmetric: you can be watched by corporations and government, but in turn you can watch them. The current state, as described by Schneier, is asymmetrical.

My own view is that we need a new set of checks and balances for the 21st century. I articulated this about ten years ago in The Constitution of Surveillance. Comments on that essay would be welcome. However, please compare my proposals to the status quo or to alternative proposals, not to nirvana.

Seeing Broadband Like a State

A commenter on my post on Why Large corporations? asks

Any thoughts on subscription tv and/or broadband service? There are obviously economies of scale for the providers. But, how does that impact consumers?

I think it is relatively easy to tell a story in which the state prefers less competition. For one thing, they can tax the heck of out of broadband service. For another, the process of awarding cable franchises fattened many a local politician’s wallet, because the rent-seeking behavior was so heavy.

Technically, I believe it is possible to imagine a world in which spectrum is not allocated to specific uses. Instead, devices are designed to share spectrum, automatically roaming to find the best available band on which to communicate. This approach would take the FCC totally out of the picture. It might allow wireless broadband Internet access without people having to sign up for service from a big telecom company. Not surprisingly, the FCC is not pushing this. From a political perspective, the status quo is much preferable.

Look, maybe I am paranoid. I picked up on the Open Spectrum idea years ago from lefty-techies, and as far as I know they have not backed away from their view that this approach to spectrum usage is feasible. If they are correct, then broadband Internet might very well be a poster child for an industry where large corporations emerge because of government policy rather than any inherent efficiency.