My name is Andrew Orlowski from The Register, I was looking for an illustration to try and bring a very old debate to have a fresh perspective, and I came across this in my library, which is an extraordinary book written by a gentleman called Yoneji Masuda. The book was written in 1980 and it was the Japanese plan to computerise Japanese Society on Cybernetic lines.  It was a very modest project. It would have cost about $65 billion in the currency at the time, and plans included robotically controlled personal transporters, he forecast the death of the television by about 1985; an “information sharing” society would follow, democracy would be reborn.  Much of this utopian rhetoric is stuff we have heard since then, but we are in a very interesting time, I think, for digital networks and for society. 
 
We are faced with a paradox, very briefly, I will try and encapsulate it in about a minute. (more…)

Exclusive Ofcom will encourage ISPs to be transparent about traffic management, but won’t ask them to detail the information in a standard format, according to meeting notes seen by The Register.

The regulator is sounding out opinion from ISPs and consumer groups on traffic management, which it sees as the only aspect of the US "Net Neutrality" debates applicable to the UK.

In the US, the debate was politicized and emotive; pressure from left-wing activists attempted to push both Congress and the FTC into passing pre-emptive technical regulations. At the loonier end of the debate, some called for compulsory nationalisation of the private assets, without compensation.

Here the debate is more rational; Ofcom doesn’t agree that pre-emptive rules must be made, and favours a hands-off approach.

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By the mid 1990s it had become pointless to compete with Microsoft in operating systems and office software – and investment in potential competitors dried up. The best you could hope for as a software company was to carve out a niche as part of the Windows Office system; this was a very small niche indeed.

The same thing is happening today with web services. But what Google and other web giants are doing goes largely unnoticed, even by analysts, pundits and Presidential advisors. What they are able to do is use their scale, and clever and cynical politics to obscure how they’re solidifying their competitive advantage. In particular, they’re swearing allegiance to (and lobbying for) an idea which doesn’t apply to their operations, but which will keep smaller competitors out of the market. A Zoho, for example – or the next new YouTube.

To understand this, you have to keep in mind that there isn’t really such a thing as ‘The Internet’, which may sound strange. It might be even stranger to consider that the internet was never designed as a masterplan to be ‘The Internet’, thankfully, as it turned out.

Instead of one network, picture lots of private networks. The internetworking protocols (the clue’s in the name) provide guidelines for some lowest common denominators by which these private networks can cooperate.

The good thing is that the architects’ more modest ambition of "internetworking" succeeded where many grand plans had failed. It explains why the internet is so resilient, and why it’s so hard to regulate, or control. The downside is that it’s hard to improve upon today’s internet, either, since innovation chugs along at the pace of the slowest significant network.

But one way around the bottlenecks is permissible. Deliverers of content and services can climb off the public internet, and do deals directly with the customer-facing networks to which you or I subscribe. Instead of making a journey of two dozen hops around the world, the material need only take two or three.

This is what Google, Amazon and others do. They operate private internets of their own, and peer with the largest ISPs.

Read more at The Register…

Delicious news from the United States, where ‘Net Neutrality’ is again being recast for a new political purpose.

The term long since ceased to mean anything – it now means anything you want it to mean. But as a rule of thumb, advocating Neutrality means giving your support to general Goodness on the internets, and opposing general Badness. Therefore, supporting Neutrality means you yourself are a Good Person, by reflection, and people who oppose Neutrality are Bad People.

This is a wonderful thing, and the beauty is, it’s all so simple. It’s like the Good Guys Wearing White – the Bad Guys oppose Neutrality. And because Neutrality is anything you want it to be, you have an all-purpose morality firehose at your disposal. Just point it and shoot at Baddies.

But best of all is that you get to define the Baddies, raise a lynch mob, catch them and hang them – before somebody has had a chance to ask "Where’s the harm, exactly?".

This time the accusation of Neutrality Violations is being turned on copyright holders, minority groups – and anyone who wants a network to run the way they want it to.

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Google has two prongs to its long-term strategy, but Wave, the “digital dashboard” it unveiled last week, casts light on a third.

One strategy is to drive down the value of copyright material on the internet to zero. Google has a ruthless and calculating view of the real value of stuff. It reasons that if all we do on the net is talk to each other, then it’s merely fulfilling the role of a switchboard operator at a Soviet-era state monopoly telco – connecting us, while listening in. That’s a pretty unglamorous business, it doesn’t save the world… and hey, where’s the money?

The YouTube experience has taught Google that the value of “user generated content”, of the “new era of creativity” is as close to zero as a rounding error – while quite irrationally we continue to throw money at DVDs, CD box sets of stuff we already have, Susan Boyle, and even ringtones. That’s all copyright stuff. They are clever people, and this hasn’t escaped their notice.

The other strategy is to drive down the value of the “access networks” to zero. Unable to offer innovative value-add services of their own, the ISPs and mobile networks become interchangeble suppliers, merely undifferentiated suppliers of bits. Hence the “Net Neutrality” scare. Google didn’t invent “net neutrality”, but it lost little time in taking advantage of it, to its own ends. No company in the 25-year history of the net had ever dared propose a technical rulebook for what the net’s operators could and couldn’t do – until Google started to write legislation.

In both cases the entertainment and network “industries” have been the timid architects of their own demise. The networks well may be becoming commoditised bit pipes without Google’s assistance, and the content businesses – by refusing to take elementary steps such as synchronising releases across markets, and monetising P2P file sharing – may too see the value of their assets disappear. But it doesn’t harm Google to speed things along a bit.

Take the two together and you’ll start to see why Google is building those vast power-guzzling data centers. With copyright holders and last-mile service providers unable to realise value, those data centres aggregate all that’s left. Google becomes the internet company by default.

…Read more at The Register

This week Apple threw the kitchen sink at its iPhone/Touch software stack, removing most of the most irritating nuisances at a stroke. It’s a stunning achievement.

So Apple now finds itself where everyone else in the mobile handset business wanted to be 15 years ago. Large companies full of clever people devoted years of planning and expenditure to fail to get here. If the iPhone continues to flourish (see below for the many obstacles en route) – then both rival manufacturers and the networks have to tear up some long established strategies.

For the established handset competition, if Apple takes the lucrative high end, that leaves them scrambling around for gimmicks in a cutthroat market that’s increasingly low margin. For the networks, they’ll need to find devices that people actually want – or pray that Apple drops its carrier exclusivity policy and partners with any network that wants to sell its gear.

So how did someone with no track record in a notoriously difficult business find itself walking away with the laurels? What can explain this paradox?

For Apple, coming late to the phone business has actually been a huge advantage. The success of the iPhone is down not just to great engineering, but profiting from several years of desperate and outright stupid behaviour by the mobile phone networks, who set the terms for the manufacturers. The received wisdom of the industry – that you had to know the wiles of the mobile networks to succeed – turned out to be completely mistaken. And to explain this we find another paradox, which looks like this.

The mobile phone business is actually the most “customer friendly” or “customer responsive” in the world. This might seem a strange thing to say. Have a read of Brendon McLean’s splendid rant from two years ago – Why we hate the modern mobile phone, for a summary of customer unfriendly business. But it’s true.

That’s because the customer isn’t you or me, or the billion and a half other phone users in the world. Phone manufacturers have only 800 customers, of which only around 200 really matter: these are the gentlemen from the networks.

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Big label pressure has forced British cable ISP Virgin Media to suspend plans to introduce a legal music sharing service for its subscribers, just weeks ahead of its launch, The Register has learned.

The radical initiative, tentatively branded as “Virgin Music Unlimited”, represented a major investment for the ISP, and would have been the first such attempt to monetise P2P file sharing in an ISP partnership in either Europe or the USA. However, 11th hour “anti-piracy” demands by major record labels including Universal Music and Sony Music meant Virgin could no longer launch the service as it had envisaged. Labels demanded that Virgin block uploads and downloads of songs from subscribers’ PCs, sources suggest. Since the system is designed to encourage file sharing, the demand removed the service’s USP.

Virgin is believed to be particularly disappointed at the collapse of the initiative. The ISP had been the first to co-operate with the music business-ISP Memorandum of Understanding (MoU) signed last July and send warning letters to file sharers. It had also made a significant investment in the Music Unlimited initiative, estimated at eight figures.

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Almost half the nation’s households don’t have net access – and most of them aren’t going to sign up.

In what will be unwelcome news for ISPs, ecommerce providers, and the government, a survey of UK households suggests internet hold-outs are getting more stubborn.

The availability of cheap broadband has eroded the refusenik camp very slightly, with 3.6 per cent of non-net households signing up over six months. However, the increase in broadband is largely at the expense of dial-up, and isn’t winning net converts. The number of households with no access fell by 1.6 per cent year-on-year from the previous survey, while broadband uptake rose 7.1 per cent.

Overall, 44 per cent of UK households don’t have net access and views are becoming more entrenched.
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If you throw a rock in the air in London on any day of the working week, chances are it will land on a New Media conference. These are primarily social gatherings for the same group of academics and media hangers-on, and you can bet they’ll be Twittering.

(I’m often invited – usually it’s because they think I’ll oblige them by saying something stupid, like “The Internets is Evil”. It isn’t hard to decline.)

But apart from the inanity and groupthink, these New Media sessions proudly define their irrelevance by focusing purely on the Web. Pipes and politics are boring to this crowd – so deeper structural, technical and economic issues about the “internet” are ignored. Yet the parameters of what the “Web” can or cannot do are defined by its infrastructure. The Twitterers wouldn’t be there if it wasn’t for the pipes.

So Spiked is to be congratulated for stepping into the battlefield with its “Traffic Jam” the other night. I was a late addition to the panel. You can skip my brief contribution – and I’ve raised most of these points before – by turning the page to see how the discussion unfolded.

Given seven minutes I opted to make four brief points. Firstly, I noted with dismay the tendancy to focus on the Web. The terms “Net” and “Web” had become interchangeable – but this is more than a semantic discussion. Pinching a phrase from our (first) Adam Curtis interview, I reckoned this was because the media preferred to fantasise about the world rather than report. And the politicians (and bogo-academics who advise them) simply followed suit.

Secondly, it was really important to look at where money was being generated. It sure wasn’t being generated in abundance on the web by anyone except Google, which now has 85 per cent of the web advertising business. Profitable sites like the one you’re reading are exceptions, not the norm. And while “data doesn’t pay” is an oversimplification, it’s generally true – and we should face up to it. Which means that network operators needed to think about new services we actually want to pay for – or face up to a future where net services cross-subsidised by something (like TV or voice minutes) that is reliable.

I noted two forms of escapism in this debate that I thought were just plain weird.

There’s Net Neutrality, which is an issue that’s been described as “Intelligent Design for the Left”, for one. It’s basically legislation based on technical ignorance that requires people to be nice. But Net Neut legislation tabled before Congress two years ago would have outlawed entire classes of applications, such as real-time video, and forbidden operators offering you a QoS service – something quite a few of our readers want and are happy to pay for. The Neutralists don’t understand how the internet works – and would effectively freeze innovation at the 1993 state. Not a very smart thing to do. They’re Luddites, really, and it’s a static (and even nostalgic) view of the world.

Finally, I noted how angry Reg readers are with the whole broadband business here. But bashing the ISPs – while understandable – was really a misdirection. It simply avoided laying the blame where it should be laid: on the cosy backroom deal between the regulator and BT Wholesale, a decision which created a “market” that was designed to fail.

What intrigues me is that this anger is a consequence of the Web 2.0-topians idea of what a consumer should be able to do. How many times have you heard a web evangelist say that because we’re venting on the web – we “were in control”? (The BBC and New Labour seem particularly keen on this, for some reason, perhaps because they both spend more on web consultants than anyone else.)

But this view makes caricatures of us, and leaves us powerless. We should be able to look at where power is really exercised, and be able to change it. The idea we’re changing anything by getting angry and punching the first thing we see is a notion that turns democratic engagement into therapy – and leaves things as they are. That point always seems to go down well, and did here.

Now onto the debate.

Rob Killick had written a provocative piece trailing the debate, where he described all the moaning about British broadband as an example of Digital Malthusianism. Science could invent its way out of our troubles. Look closer, he said, and you saw special-interest pleading:

“What seems to be driving today’s panic about an internet crunch is the needs of ISPs and media competitors, who have an interest in stoking up fear about the BBC and others causing an internet collapse, and also a general sense of cultural pessimism.”

Legal academic Chris Marsden, a policy advisor on regulation, had some thoughtful points on the nuances between British and European regulation. He also had one suggestion that may make Reg readers choke: we should think about Phorm as an evil necessity that helped pay for better network infrastructure.

(Ahem.)

Journalist David Crow said that more pricing flexibility was needed, and thought it was absurd that heavy users, such as “Pete” who downloaded video and music all day, should pay the same as light users. Pete was to haunt the debate to the very end.

David added that he didn’t think most people were Petes – and most people on the internet paid for their content. Now the very fact that there’s a pejorative word for David – “Paytard” – tells you that a few people will disagree.

Write to him, not me.

The questions reflected the diffuse nature of the debate – the topic is so broad that we could barely skim the surface (or even mention many things). One questioner wanted government intervention in the market – while most people opposed government regulation. There was also some concern about “private networks”, but as Keith McMahon pointed out from the floor – the intertubes is almost all private networks. There’s Google’s, there’s Akamai’s… even the BBC is up for it.

While I admire the Spiked crew’s optimism and faith that we can invent our way out of almost any problem, we’re not in a broadband pickle because of a lack of optimism or invention. How long has IPv6 been embedded in routers, and supported by the clients? Ten and five years, I reckon. Getting innovations from the lab to the market, so they’re actually useful to us, is what characterises this business. Most of the players have no incentive to invest in better infrastructure, something the regulator hadn’t bargained for when it “designed” the British broadband market.

So a few more shoes had to drop – I mentioned legal P2P services as an example of something that may increase demand and investment. But to be honest, I can’t think of many more.

Only after the discussion closed did I realise that no one had mentioned municipal fibre. Unlike Muni WiFi, which has crashed and burned because there’s no business case for it, Muni fibre projects are commercially justifiable – if they follow a cross-subsidy model. Maybe that’s another debate?