The future of internet governance

Citation

Van Audenhove, L., Donders, K. and Constantelou, A. (2012), "The future of internet governance", info, Vol. 14 No. 6. https://doi.org/10.1108/info.2012.27214faa.001

The future of internet governance

Article Type: Introduction From: info, Volume 14, Issue 6

“Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather. We have no elected government, nor are we likely to have one, so I address you with no greater authority than that with which liberty itself always speaks. I declare the global social space we are building to be naturally independent of the tyrannies you seek to impose on us. You have no moral right to rule us nor do you possess any methods of enforcement we have true reason to fear (John Perry Barlow, 1996).

In 1996 John Perry Barlow, one of the founders of the Electronic Freedom Foundation, wrote his famous Declaration of the Independence of Cyberspace. The text is a glorification of the free and open internet. A space in which citizens can access the internet anonymously, can express themselves freely, and can share digital content widely, without the interference of governments. However, the fact that the text was written, signals that this space was fundamentally changing at the time of writing.

First, the culture of the internet was starting to move away from the “freedom oriented, cultural social movements of the late 1960s and early 1970s” in which it had been born (Castells, 2004). Within this culture the internet was governed on a participatory basis, by the community who “owned” the network. When the internet became more mainstream and more global, more formal structures of governance were introduced with the establishment of the Internet Corporation for Assignment of Names and Numbers (ICANN) under US law in 1998. Since then global internet governance has been a contested issue that has been heavily debated during the World Summit on the Information Society in 2003 and 2005 and during the yearly Internet Governance Forum (Mueller, 2010).

Second, the internet rapidly became a vibrant economic space in which both small and large companies operate at local and global levels, at all layers of the internet ecosystem. Over the last ten to 15 years the whole content industry has moved online in search of new markets and business models. What John Perry Barlow largely overlooked is that – apart from government regulation he so loathes – markets and private players have become an important and often invisible source of the regulation of cyberspace, either through standardization, the use of technical means of control and user surveillance, the use and misuse of dominant market power, etc.

In the meantime different authors have tried to come to grips with these evolutions in terms of regulation. One central author is Lawrence Lessig, who argues that all electronic systems are regulated by four forms of regulation: government regulation, markets, social norms and code. With code he refers to the architecture and software of technical systems such as the internet. Code regulates in that it can allow or restrict what users can do or not do on the internet. In his first version of Code and other Laws of Cyberspace, Lessig (1999) predicted that, as the internet was becoming more important throughout society, both government and business would attempt to gain a stronger hold over its regulation using code.

Whereas Lessig’s analysis points more to the architectural and software components of the internet system, Zittrain’s (2008) more recent analysis points more to the applications and devices we are connecting to the internet. The central argument in Zittrain’s book, The Future of the Internet and How to Stop It, is that we are fast replacing generative computers as access devices to the internet, with more closed devices such as the iPhone, iPad, Xbox, Wii and mobile devices. These devices are more closed as manufacturers more easily control what applications can be installed and what services used. Both authors contend that control is tightening and that the generative end-to-end nature of the internet might disappear in the longer run.

This is closely related to the concept of platformization put forward by Pieter Ballon (2009), who examines this phenomenon in the mobile services industry. Platforms – as defined in literature on two-sided networks literature – is a mediated space where agents operate on different sides of the markets. Its utility is affected and enhanced by the operation of the agents on the different sides of the platform (e.g. Armstrong, 2004). Given the young nature of the concept, fairly little attention has been devoted to the specific characteristics of, and differences between, several types of platforms. Ballon identifies various platform types based on the question whether control over assets is linked to control over customers. As some examples from the mobile services industry demonstrate, to control some crucial value adding roles does not necessarily mean that the platform owner also has control over the customer (i.e. end-user) relationship, or has control over all, or even most, assets needed to “create” the value proposition (Walravens et al., 2010). Based on these variables, Ballon identifies four different types of platform: an enabler, integrator, neutral and broker platform, a distinction which can also be applied to mobile services and more general to online business models.

An important question therefore remains as to who has the power to control the internet and how the different forms of regulation interact. Moreover it is important to ask where on the internet regulation is taking place in terms of the internet chain: at the level of the server, the cloud, the local router, the ISP, the last mile or the home computer. Depending on the place in this chain, different regulatory regimes – at the global, regional or local level – might apply. Although many authors have claimed that the internet should be regulated at the global level and that the internet is not regulatable at the local level, Goldsmith and Wu (2006) argue in their Who Controls the Internet? Illusions of a Borderless World that the nation state has become the central locus of regulation on the internet. This is an evolution we certainly experience at the European level. Over the last ten years the policies for the future internet, be it around technical standards, competition dynamics, innovation, the role of intermediaries or the protection of public interest goals have been intensely discussed. There remains a manifest difference between the dynamics of technological change and the dynamics of proactive regulation. The search after and development of policies for the future internet illustrates the persistent and critical gap between technological artifacts and their implications in actual market behavior and the regulatory process.

The twenty-sixth euroCPR Conference focused on policy and regulatory issues related to the future internet. We invited the EuroCPR community to reflect critically on the lessons learned over the past ten years, and to contribute constructively to ongoing debates about policy and regulation for the future internet. More specifically, we invited discussion on the following central themes:

Platform policies for platform economics: Although the internet is not an isolated platform, the internet protocol allows for a much stronger convergence of platforms, services and markets. Policy and regulation are often tilted towards one platform ignoring the reality of converging communications markets. An important area of investigation for the future internet policies is whether there is a possibility of adopting regulation for different platforms and if so, whether such an approach is desirable by all parties concerned (service producers, platform operators, intermediaries, etc.). Also, one could critically reflect on the pros and cons of the choice between regulation of platforms vs. regulation of devices or applications.

Competition policies and regulatory issues: There are many debates on competition and access issues at the intersection between networks, platforms and content. How are competition policies applied to inherently global internet markets? Are there any relevant experiences in Europe, the United States, or other parts of the world? How is dominance on the internet defined? What are the remedies proposed by competition authorities to trigger more competition in internet-related markets and, is there indeed evidence that proposed remedies are closely tied to expected outcomes? Furthermore, the recent network neutrality debate stems from the expressed desire by ISPs and other stakeholders to seek additional and/or variable compensation for carrying valuable digital services to end consumers. Compensation might depend on, among others, the size of data transferred and the type of content provider served. ISPs and broadband access providers argue that some network management, already used for some exchange of traffic, is more and more necessary to manage traffic and to ensure quality of service for their clients beyond “best effort”. Questions on whose legitimate responsibility it is to manage networks, how to do it and under what circumstances deserve scholarly attention, as do questions related to the impact of network neutrality regulation on the innovative performance of the various stakeholders.

Internet of things: The “Internet of Things” (IoT) – i.e. seamlessly integrated physical and virtual objects that exchange data about their identities, their physical properties and information sensed about their environment – is said to form an important part of the future internet, with RFID technologies paving the way. IoT raises a large number of policy challenges including: governance issues; privacy and data protection; security issues; standardization; R&D and innovation; awareness and education; spectrum policy; and environmental policy. Interesting questions for scholarly research arise in this respect: Are the policy challenges of IoT different from those discussed for the internet over the past decade? How will standardization affect the development of the IoT? What is the role of regulators to help ensure that critical resources in the context of IoT are available? What is the impact of the move to IPv6 and what are the challenges associated with a parallel running of IPv4 and Ipv6?

Traditional media policies and the internet: Traditional media policies are usually characterized by more interventionist government policies to promote societal objectives such as freedom of speech, pluralism, cultural diversity, or protection of minors. Mass media such as broadcasting have been heavily regulated with regard to advertising, local content, and diversity. As more content is available on the internet questions are emerging about the right regulatory model to be adopted for the future of the media sector (e.g. extension of legacy regimes, novel or converged models).

Intellectual property rights and enforcement policies: The internet allows new distribution channels for rights holders. Some see this as an opportunity for new business models, others as a threat to the protection of intellectual property rights. Several countries are looking at the efficacy of current enforcement frameworks. The EC is also planning a major revamping of the current copyright framework. Assessments of these policies and innovative rights management relating to information and communication rights, proportionality in terms of economic benefit, citizen rights and effectiveness, are needed.

Contributors to EuroCPR 2012 responded to the depth and wealth of the themes proposed and approached several issues of interest in their papers. The selection of papers presented in this special issue is based on the papers’ quality and relevance to the core themes of the conference, as outlined above, as well as on the authors’ willingness and availability to contribute their work for this purpose. A total of six papers were selected to be included in the special issue, each of which spans across two or more of the themes originally proposed.

The first paper by Bruno Soria, Inmaculada de la Cruz and Isabel Campos opens the scene by raising the question of the economic impact that regulatory asymmetries have upon internet-based firms’ profitability. Their starting point is that although companies may originate from different playing fields in the communications market, they are increasingly considered as direct competitors in a unified and enlarged market driven by the internet value chain. When considering regulation, they normally refer to the restriction imposed by public authorities upon the free and unconstrained use of firms’ assets that allow them to conduct their business. For their analysis they selected top performers across the internet value chain and came up with a qualitative index to measure the level of regulation in the market. Their statistical analysis verifies the expected inverse relationship between regulation and firms’ profitability. In other words the more regulated a firm is, the lower will the return on its assets be. Their findings raise important implications for European regulators, which are called to implement more targeted measures instead of horizontal regulatory measures, and protect European companies against their American counterparts that seem to benefit more from these regulatory imbalances.

The second paper by Natali Helberger and Lucia Guibault draws upon the Intellectual property rights theme outlined above and seeks to explore the clash of cultures when copyright law has to be considered in line with consumer law. This blending is deemed necessary as it favors the interests of consumers of copyright protected content. The authors outline the specific principles that govern each area and identify grey areas where the consumer is either left unprotected or remains lost when trying to interpret the coverage he is supposed to receive from each area of the law. For example, the authors argue that copyright law allows the rights holders to control the consumption and distribution of their work, and this sometimes raises problems to consumers of that work who wish to enjoy unconstrained access to the digital content they paid for. The authors conclude that consumers’ interests should be put at the top of the Commission’s priority agenda, where either through judicial action or through a legislative initiative, more work needs to be done to bring the two areas of law closer to each other.

The third paper by Heritiana Ranaivoson and Anne-Catherine Lorrain provides an in-depth analysis of graduated response, more specifically they focus on the case of the French HADOPI Law. The HADOPI (Haute Autorité pour la Diffusion des Oeuvres et la Protection des droits sur Internet) law was one of the first legislations to introduce graduated response into national law. It is considered a landmark in the global trend of copyright enforcement policy. The authors’ premise is that graduated response has changed the approach to enforce copyrights by targeting the individual citizen. They argue that for the first time graduated response starts to tip the balance in favor of the copyright holders. This has significant consequences for innovation in content-related industries and for the protection of fundamental rights. The authors warn that graduated response, together with other laws and policies related to enforce copyright, may instill a rejection of copyright in society.

The fourth paper by Pieter Nooren, Andra Leurdijk and Nico Van Eijk relates to the theme of competition policies and regulatory issues and examines the effects that net neutrality policy measures may have on businesses involved in video distribution over the internet. The authors propose a value chain perspective to the net neutrality debate arguing that assets in each part in the chain can potentially act as control points for the open access to content and applications by the end users. Thus, by taking into account the entirety of the video distribution value chain, the authors argue that the policy measures and regulatory interventions that aim to promote net neutrality, such as transparency, no blocking/throttling and no ISP tariffing of Over the Top (OTT) services, focus mainly on the public internet lane portion of the distribution part of the chain. At the same time, they make it less attractive for network operators as they introduce a number of obligations and restrictions in network management and business models. As these players try to compensate the loss of influence or revenue streams by rearranging the ways in which they exploit their assets, the authors argue that a measure aimed at one part of the chain may impact other parts of the chain. It is exactly these intended and unintended effects in the value chain that national law makers and regulators should consider and study in order to promote uniformity in net neutrality at the European level.

The fifth paper by Qian Tao goes beyond the European borders and focuses on online intermediaries’ liability in China. The paper offers a rare Chinese legal view on this issue. The paper outlines the legal framework with regards to the civil liability of online intermediaries in relation to users’ misconduct on the internet. The analysis focuses on recent efforts from the State Council, the Supreme People’s Court and the legislation combating misconduct. The author argues that the State has moved to proactively promote industry self-regulation, together with public supervision in order to ensure that existing rules are better enforced. It further explains that the recent clarifications by the Supreme Court, lead to a more consistent framework for the intermediaries as to how to interpret the existing legal rules and regulations.

The last paper by Paschal Preston and Jim Rogers has a dual focus and pulls the whole discussion on the future of the internet to a more macro perspective related to innovation and innovation systems. The article examines the notion of crisis in the context of recent developments in the media and cultural services sector, more specifically the music industry and news media. The authors claim that by stressing the level of disruption (read crisis) taking place in these sectors, the discourse and the understanding of what is happening is seriously restricted and favours specific strategic stakes and regulatory solutions. Therefore, the authors contend that the widespread adoption and appropriation of radical technological innovations must be understood as accompanied and facilitated by a diverse set of matching innovations, which must be considered as relatively autonomous from any inherent technical considerations, characteristics or trajectories. These include organizational, industrial, social and institutional (including policy) innovations. In doing so they attempt to construct a more comprehensive and realistic scenario for digital media industries at the current moment.

Leo Van Audenhove, Karen Donders, Anastasia Constantelou