Keeping the Internet Open

[as ever, you can read this on the BBC News website]

In a desperate search for a reason to issue a press release the US-based Software and Information Industry Association has latched onto the tenth anniverary of the US Government’s ‘Framework for Global Electronic Commerce’ as an excuse to put out yet another ranking of significant developments in internet history.

A group of unnamed ‘policy and industry experts’ has chosen the top ten developments in ecommerce since 1997, and although pseudo-polls like this one usually merit little attention there are some unexpected nuggets in the list.

The usual suspects are there of course, including eBay. Amazon and iTunes. Even the Blackberry scrapes in at number ten, though it is hard to see what it has to do with ecommerce, while ‘user-generated content’  make number eight, despite admitting that ‘right now it is impossible to say what the full ramifications of the “citizen journalist” era will be’.  Clearly they felt they had to acknowledge the growth of interactivity even if they have no idea what it signifies.

The main surprise was that the Google search engine was top of the list, while Google’s AdWords service only made it to number five.

This seems to betray a misunderstanding of what Google is and what it does. It may have started off as a search engine, but today the advertising network and the revenue it generates are Google’s real business. Search, maps, email and applications are all just ways to drive traffic to sites that serve adverts and generate revenue.

Google didn’t even invent the pay-per-click model that has fuelled its growth and placed it at the centre of online commercial activity.  As John Battelle notes in his fascinating study of the company, The Search, the idea of using the keywords someone enters on a search engine to find relevant ads and then charge advertisers only if the ad is clicked on came from Bill Gross, who used it on his site.

The Google team, desperate for a way to generate income from search when their plans to license their technology to others did not work as well as they had hoped, took the central idea and refined it, using their better search engine and a sophisticated keyword auction service to turn themselves into the market leader.

While individual companies like Google, Amazon and eBay are important, the really interesting winners in the SIIA poll come in at number two, six and nine:  broadband, open standards and wifi.

These three developments are vitally important to the development of ecommerce because they provide the environment within which online trading can take place. Open standards are by far the most important because it is only by having freely available, published and non-proprietary techniques for creating computer networks that we have an internet at all,

Neither broadband nor wireless would be possible without the technical standards laid down by industry bodies like the International Electrotechnical Commission, and the continued growth of the web relies on the work of the Web Consortium to keep vendors and developers honest by providing them with standards – or ‘recommendations’ as they call them – to work with.

The standards matter because of the strange nature of the internet. Despite the fact that it covers the world, the Internet does not really exist. It is best thought of as a joint technical undertaking in which all the organisations and individuals who want to take advantage of the benefits which the network can offer agree to conform to a set of technical requirements for connecting their computer networks to other computer networks.

These requirements are not onerous: they are the basis for the interconnectedness that makes the network both possible and valuable. And unlike externally imposed rules, the rules that make the internet possible are generated from within, by open debate within standards-setting organisations whose prescriptions are deemed to be mutually acceptable by the wider community.

One of the most important aspects of the process is that the technical standards are not owned by anyone: they are intellectual property held in common, hence the description of them as ‘open standards.’ They can be changed only by mutual consent. They are published in a form which allows them to be used by anyone.  And they are freely available online.

The history of the internet is therefore a triumph of mutualism and joint endeavour. All the many interests have worked together to create a system which is transforming the world, and anyone who doubts what can be achieved by cooperation should consider just how much we have achieved by working together online.

Yet there is a contradiction at the heart of the network. It is a mutual enterprise that relies absolutely on co-operation, but the resulting network supports the harshest and most brutal free market ever created.

The market was not, until recently, based on economic value but on intellectual ascendancy, where the reward for good programming was simply to see your peers acknowledge your skills and use your code.

This ethos still drives the open source movement, but many net entrepeneurs are more concerned with finding ways to use the network for financial gain, to cut out the competition, lock in markets and, like Google, Amazon or eBay, dominate their particular segment of the market.

The problem facing the network as it grows is how to reconcile these two models. We need to ensure that the network remains a common space for all, that its core technologies are freely available and mutually agreed, but we also need to allow markets for goods and services to flourish, and for new ideas to develop into viable companies.

The people behind the SIAA poll, by giving equal weight to the companies, the technologies and the standards, seem to have recognised this too.

Bill’s Links
Software and Information Industry Association