August 4, 2003

Stealing The Internet

With Blessings from the FCC and Congress, the High-tech Industry
Wants to Privatize the Internet. What Happens When you Have to Pay to
Join the Information Revolution?

by Jeff Chester and Steven Rosenfeld

Ever stop to wonder what is really happening to the Internet these days?

The crackdown by the music industry on illegal downloading tells just
part of the story. Even with the dot-com bust, the digital boom is
here, as high-speed connections, faster processors and new wireless
devices increasingly become part of life. But the thousands of
lawsuits are not just about ensuring record companies and artists get
the royalties they deserve. They're part of a larger plan to
fundamentally change the way the Internet works.

 From Congress to Silicon Valley, the nation's largest communication
and entertainment conglomerates -- and software firms that want their
business -- are seeking to restructure the Internet, to charge people
for high-speed uses that are now free and to monitor content in an
unprecedented manner. This is not just to see if users are swapping
copyrighted CDs or DVDs, but to create digital dossiers for their own
marketing purposes.

All told, this is the business plan of America's handful of telecom
giants -- the phone, cable, satellite, wireless and entertainment
companies that now bring high-speed Internet access to most
Americans. Their ability to meter Internet use, monitor Internet
content and charge according to those metrics is how they are
positioning themselves for the evolving Internet revolution.

The Internet's early promise as a medium where text, audio, video and
data can be freely exchanged and the public interest can be served is
increasingly being relegated to history's dustbin. Today, the part of
the Net that is public and accessible is shrinking, while the part of
the Net tied to round-the-clock billing is poised to grow

One front in the corporate high-tech takeover of the Internet can be
seen in Congress. On July 21, the House Subcommittee on
Telecommunications and the Internet held a hearing on the "Regulatory
Status of Broadband." There, a coalition that included,
Microsoft, Yahoo, Apple, Disney and others, told Congress that
Internet service providers (ISPs) should be able to impose
volume-based fee structures, based on bits transmitted per month.
This is part of a behind-the-scenes struggle by the Net's content
providers and retailers to cut deals with the ISPs so that each
sector will have unimpaired access to consumers and can maximize

The industry coalition spoke of "tiered" service, where consumers
would be charged according to "gold, silver and bronze" levels of
bandwidth use. The days where lawmakers once spoke about eradicating
the "Digital Divide" in America has come full circle. Under the
scenario presented by the lobbyists, people on fixed incomes would
have to accept a stripped-down Internet, full of personally targeted
advertising. Other users could get a price break if they receive
bundled content -- news, music, games -- from one telecom or media
company. Anybody interested in other "non-mainstream" news, software
or higher-volume usage, could pay for the privilege. The panel's
response was warm, suggesting that the industry should work this out
with little federal intrusion. That approach has already been
embraced by the industry-friendly Federal Communications Commission.

Meanwhile, in the courts, there has been a rash of new litigation
spurred by the Recording Industry Association of America (RIAA)'s
pursuit of people who have illegally shared copyrighted music. The
music industry no doubt hopes to discourage file-swapping piracy, and
some big telecom companies, such as SBC Communications, have
counter-sued, saying they will protect their clients' privacy. While
that's good public relations, there's more to this story as well.
Telecoms, like most big corporations, don't want other businesses,
let alone the government, interfering in their operations -- so
there's plenty of reasons to counter-sue -- even if the record
companies and telecoms have parallel stakes in privatizing the Net.

But there's also a technologically insidious element to this side of
the story. The software now exists to track and monitor Internet
content on a scale and to a degree that previously hasn't been
possible. The RIAA is taking people to court because it has the
technology to track illegal Internet file swapping. This level of
content-tracking is the next-generation application of what's been
developed to keep children and teenagers from viewing porn at the
local library or home. Consider this typical bit of sales arcana from
the Web site of Allot Communications, which says its software can
track and filter Internet communications and use that analysis to
bill consumers.

"Allot Communications provides network traffic management and content
filtering solutions for enterprises, IP service providers, and
educational institutions... Allot's QoS [quality of service] and
service-level agreement enforcement solutions maximize return on
investment by managing over-subscription [unintended uses],
throttling P2P [peer-to-peer, the music piracy software] traffic and
delivering tiered classes of services."

This new world of metering, monitoring and monetizing Internet
content has prompted new business ventures, such as cable firms
exploring partnerships with the videogame industry, where there's
plenty of money to be made in high-volume interactive uses. In fact,
the reason Hollywood has delayed the deployment of next-generation
digital television -- besides their fear of digital piracy -- is they
have not yet figured out how to impose their pricing model -- to
extend their current distribution and sales monopoly.

Of course, the last concern in corporate boardrooms and Congress is
how the privatization of the Net will affect free speech and the
public interest. Just as C-Span and public broadcasting were crumbs
thrown to the public the last time new communications technologies
were developed, there's been little talk about insulating
public-interest uses from a more 'metered' Internet.

There is undoubtedly a legitimate business case to be made for having
people pay for emerging high-bandwidth uses, but whether people will
be charged to see streamed videos of political candidates or public
meetings is another matter. Moreover, users need to know what part of
the Net will be public and accessible and what part will be billed to
credit cards -- and this is unclear.

While there needs to be a balance between private sector goals and
public policy needs, that's hardly a topic of discussion on the
Internet's frontline. Currently, America's media giants are planning
the equivalent of a 19th-century land grab in cyberspace to ensure
they will profit mightily in the 21st century. Metering data
transmissions and monitoring content is how they will get there. And
the tools and political climate to achieve this are here.

This century's new media giants are now working with Congress,
Federal Communications Commission chairman Michael Powell and their
industry partners to transform the Internet. The only open question
is whether the public will influence this transformation before it's
too late.

Jeff Chester is executive director of the Center for Digital
Democracy. Steven Rosenfeld is a commentary editor and audio producer