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VIDEO ENTERTAINMENT AS THE AGENT OF CHANGE FOR THE ENTIRE INTERNET SYSTEM

The past Internet was a system of interconnection and interoperability arrangements created to a large extent by computer scientists, most of them in US universities and affiliated research labs.

It enabled the linkage of individual networks and thereby the easy flow of information across such networks. It was based on a common set of values, a non-profit, sharing ideology, and a libertarian philosophy of minimal government. The decision process was one of rough consensus. This mechanism was so successful that it enabled the emergence of the key communications system around the world.

At some point, as is often the case when a revolution succeeds, it becomes orthodoxy and even theology. The Internet morphed from a technological system of data communi­cations into a belief system.

It is true that many elements of this belief system were right at a certain point (Benkler, 2006). The Internet has been an awesome and splendid force for change. But just because it was so at its dawn does not mean that it is now or will be so in its maturity. There is always dynamism - much of it unleashed by the Internet. Why should it not affect the Internet itself? Internet advocates see clearly and correctly that the Internet is a force that disrupts everything. The same logic of disruption applies to the Internet itself.

Major drivers of centrifugalism for the Internet are the numerous approaches to video that were described above, and which are proceeding to take over the Internet in terms of traffic. Many of them are pushed by large, influential, innovative, and well-funded companies. Various governments support different companies and approaches. They also promote different, greatly varying regulatory approaches. National media policies are deeply intertwined with domestic politics.

Many network operators now use the Internet Protocol for their operations.

One needs to differentiate networks running on IP from the public Internet. Companies run IP networks for their own internal uses and in order to supply services to customers. By using IP they can use widely available hardware and software. Similarly, telecom and cable TV companies create IP-based networks that are outside the public Internet. They have control over performance and quality. They can do things that they cannot do over the public Internet system. They can charge for usage, differentiate, discriminate, and block. In fact, the more the public Internet becomes regulated as ‘neutral’, the more likely it is that for their own use, network providers will migrate their core traffic to private arrangements.

The next stage then is that these private IP platforms interconnect with each other, through commercial peering arrangements. This is not the public Internet as the network of networks. It’s the private Internet of private Internets (Noam, 2014). In a way, this is not new. The Internet was not born as a public and open system but as a private system of non-profit and research-oriented networks from which commercial networks and users - that is, almost everyone without a STEM PhD - was at first excluded.

The emergence of such a system of interconnected private Internet arrangements does not negate a public Internet. To the contrary, the two arrangements supplement each other. If private Internet arrangements are too restrictive, costly, or discriminatory, the public system provides a safety valve and vice versa (Yoo, 2012). This will prevent such a system from becoming a walled garden of walled gardens, which would be unacceptable.

It is therefore inevitable that there will be a divergence of technical specifications. Company A will do things differently than company B; industry coalition C will do it differently than industry coalition D. A technical centrifugalism is unavoidable. It is espe­cially inevitable if it becomes readily possible to interoperate among the approaches.

Such interoperability across non-uniform protocols can be provided by intermediaries that supply bridging as a service. These intermediaries are likely to be the ‘cloud providers’ that are emerging. We must therefore get used to the idea that the standardized Internet is the past but not the future. And that the future is a federated Internet, not a uniform one. Even though these dynamics are often denigrated as a ‘splinternet’, it is actually a good development. The single Internet was a good system in the past but not in the future.

One of the basic tenets of the belief system is that the Internet, the fundamental system that guides the interconnectivity and interoperability of individual data networks, needs to be uniform. Without such uniformity, it would break apart and become either useless or inefficient, and all users and uses would suffer. But this position is not tenable going forward.

First, it is inevitable for different variations of Internets to emerge. As the Internet became an essential part of business and society, the interests of the different govern­ments became too big to stay out of it. And since governments around the world diverge widely, their Internet perspectives are very different.

There are earnest and well-meaning efforts to bridge these divergences (for a dis­cussion, see Brown, 2013; Mueller, 2013; Van Eeten, 2013; DeNardis, 2014; Dutton, 2014). They may succeed for a while but the reality is that the world is a multi-faceted place, and the Internet is part of the world. The divergence will grow further as the Internet system of interconnected networks becomes the platform for mass video media, where the discrepancy of interests and values of different countries and socie­ties is substantial.

So far, this discussion has been why it is inevitable that the Internet is fragmenting, and how to create bridging arrangements. But now we move on and argue that such a diversification is actually beneficial.

Of course, uniformity and standardization is helpful in some ways.

There are opera­tional reasons of technology, as well as scale and network effects of economics. But standardization also reduces competition among technologies. Such competition creates innovation, even if it might be messy. In a highly competitive world, where standards and protocols such as those of mobile or operating systems are upgraded in dizzying speed, the Internet system is slow-moving. No Moore’s Law rate of change governs here. The technical specifications are set by the Steering Group of the Internet Engineering Task Force (IETF), a small group of 15 engineers, almost all employees of big companies around the world. It is not a system of openness and discovery through competition. It is a system of a group of essentially internally self-appointed wise men and women. A bril­liant new idea must be approved in an administrative system that might have to balance the perspectives of the various major companies that sponsor their delegates.

We can see some of the positive dynamics of competitive innovation in the mobile industry. There are standards coalitions but no mandated uniformity. Without such divergence, the technically superior CDMA (code division multiple access, developed by Qualcomm) technology would not have emerged. When it comes to smartphones, corpo­rate strategies go in different directions and come up with competing products with rival operating systems. Yet they inter-operate fairly readily through intermediate connection providers. Where problems exist, regulators are a safety net.

Here, we have different coalitions emerging centered around rival products, operating systems, and proprietary app stores. Mobile operators, device makers, and app stores operate with varying degrees of openness and interoperability. Voice can operate across platforms but apps often cannot. There is much more control, segmentation, and incom­patibility than for the classic Internet. There is a loss of some openness, for sure, but also a gain of innovation and accelerated connectivity. Smartphones and tablets are in the process of adding billions of people to the Internet, broadly defined, and these people connect through proprietary apps and servers and less through the classic web.

As more online video activities take place on tablets and other mobile devices, why should it stop there? The same commercial logic of convenience, quality control, and end-to-end responsibility could apply also to proprietary ‘Internets’ that are not mobile but fixed.

And thus, what is now a uniform system would evolve into a more diverse system, a federation or confederation of interconnected systems that coexist: an Internet of Internets.

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Source: Bauer J., Latzer M. (Eds.). Handbook on the Economics of the Internet. Edward Elgar,2016. — 603 p.. 2016
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