Tuesday, July 24, 2012

Three Myths of Internet Governance...

"Governance" is too often a concept cloaked in mystery. Internet governance, specifically, is typically either referred to in overly broad generalized terms (making it applicable to both everything and nothing at the same time) or in overly narrow technocratic terms (making it so specific to each case that lessons can't easily be applied to other areas).

Internet governance is, of course, a monster topic, but a recent book by Richard Collins, Three Myths of Internet Governance: Making Sense of Networks, Governance and Regulation, highlights a few false assumptions that are commonly made in the academic literature on the subject. His three myths are...

  1. That Internet governance works best when the market decides.

  2. That self-regulation is both pervasive and effective (national policies are only marginally important).

  3. That the Internet regulatory environment is distinct from legacy media.

None of these myths should blow anyone's minds. However, Collins' strength isn't in his offering of these myths, but in his critique of the existing literature.

He emphasizes how, despite the Internet being a global medium, most scholarship takes the United States' experience as its focus. While conceding the value of much of this work, he says, "the idiosyncrasies of the U.S. has, misleadingly, constructed a world of for-profit domain name registries, fretting about network neutrality and the like as a global experience. It is not."

He then goes on to compare U.S. Internet governance arrangements with that of the U.K., and some of the differences are striking. Just a few stark contrasts: the U.S. registry, VeriSign, versus the U.K. registry, Nominet; the U.S. power over the gTLD versus the U.K. power over the ccTLD; vastly different levels of competition among telcos and ISPs; and the functioning of the U.K.'s LINX exchange.

Also among his major contributions, he explores what type of governance is present at each of the Internet's conceptual layers. Network governance (basically, self-regulation) dominates the Control layer, a combination of hierarchical governance (government-based) and market governance (free market mechanisms) characterize the Access layer, network and market governance combine to characterize the Internet Exchange layer, hierarchical and market governance characterize the Transport layer, and hierarchical and network governance characterize the Content layer.

Overall, the book isn't what most people would consider easy-reading, and its sometimes disjointed collection of essays comes across as exactly that. But all told, there are a lot of valuable cases and fun ideas here to play with.


Monday, July 16, 2012

Lessons from Digg's Collapse...

On Friday, the once-preeminent social media giant, Digg, was sold for a sum total of $500,000. Maybe this would seem like a success to the aspiring lone individual launching a website from his basement, but Digg received approximately $45 million in venture capital funding, and was once infamously valued at $160 MILLION, landing its founder, Kevin Rose, on the cover of BusinessWeek magazine.

All things considered, it's safe to say Digg became a bust of epic proportions.

So what went wrong? How did the one-time clear leader in social news media lose its footing, lose its audience, and ultimately lose almost all of its value? Furthermore, what lessons can we draw about Digg's failure for future dot-com startups?

  1. Web startups still have no idea how to make money.

    It's been over a decade since the dot-com bust of the late 90s, and yet despite how we all laugh at the overvaluations of websites like Pets.com and Webvan, their basic problem still persists... How are they going to make money??? Then and now, websites launch with an initial idea, attract venture capital and angel investors, then spend all their efforts at attracting a large audience. That's pretty much the entire business model. As for generating revenue and actually turning a profit, the mentality of "Build your audience and brand first and we'll figure out the money-side later" still persists.

  2. Investors still don't care.

    The free market and rational-choice theory suggests that the more dot-coms fail to ever make money, the less investors will be inclined to invest in them. Clearly, that makes too much sense to coincide with reality. Investors continue to throw millions into dot-coms with no proven revenue-generating business plan, even in these tough economic times. Why? Apparently, for every exception-to-the-rule monster success story like Google, investors are eager to overlook every dot-com business plan's fatal flaw and keep going all googly-eyed (pun intended) for the miniscule, lottery-style chance of hitting it big.

    Really, other than Google, can you think of almost any other prominent pure Internet-play that's proven it can consistently turn a profit? Even Facebook raises doubts on that front.

    If it weren't for the fact that it's extremely trendy among millionaire investors and makes them feel hip and cool to talk about their e-businesses at cocktail parties, the funding for such financial black holes would dry up pretty quickly. But if the market for such dot-coms still persists, nothing's going to change. The investors are creating that market for these type of businesses, for better or worse.

  3. When your website is valued at several hundred million dollars, SELL, SELL, SELL!!!

    Mark Zuckerberg notwithstanding, Digg is only the latest cautionary tale of websites that at their peak were valued astronomically high, only to soon come crashing down. Capitalism is all about growing your business, and I'm definitely not suggesting entrepreneurs sell to the first bidder (or start a business solely to cash out at first opportunity). However, whatever your dreams of growing your business to epic proportions might be, once you're reached the $160 million mark, I've got news for you - You've made it. There's really not that much further for you to go especially considering that you don't make any money. At the very least, cash out enough to payout your original angel investors. You might need them to remember you fondly and with a sense of appreciation down the road.

  4. It's sad.

    Not to be lost in all this, Digg was actually a great website! For the everyday user, the idea that we could be made of aware of certain news stories based not on the decisions of elite editors acting as parochial gatekeepers, but based on decisions made by The People, wasn't only a democratizing idea in theory, it was something lots of us enjoyed. You felt more in touch with the cultural zeitgeist than you ever did reading the New York Times (again, for better or worse). Plus, for independent web publishers, Digg was often a boon for generating thousands of additional traffic hits - for example, this Nerfherder post about Ron Paul being censored in 2007 garnered 124 Diggs and over 12,000 page hits.

    If you overlook for a second the idea of Digg-the-business, and just focus on Digg-the-website, it's failure is pretty sad.

  5. Resources matter.

    Finally, taking all of the above into account, the greatest lesson of Digg's collapse is that resources still matter in a big way. Digg was a great idea for a website and, as a result, found its immensely large audience. If we end the story right there, that's an instructive lesson on its own. Websites based on truly novel and innovative ideas still are, and will always remain, popular. But if all you're looking to do is influence the culture and grow a popular website (overlooking the business component), your site can only grow insofar as you have the servers, the code, and the staff to support the growing technical demands that accompany growing popularity. That's the paradox... popular websites are more likely to have staying power when they don't have to adjust to the financial interests of investors, yet without at least some significant financial resources backing them, the website probably can't become very popular in the first place.

We can chicken-and-egg this paradox to death, but in the meantime, it may be worth noting how Craigslist continues to be the exception to every rule - requiring minimal resources to operate the site and consistently churning out gigantic profits. When it's all said and done, Craigslist, even more than corporate dot-com behemoths like Google and Facebook, may be the definitive example of Internet exceptionalism in our time.


Wednesday, July 11, 2012

Congressmen Edit Their Own Wikipedia Pages. Why is this Shocking?

On Tuesday, Buzzfeed broke a story about how members of Congress and their staff have been actively editing the Wikipedia pages about themselves.  Among some of the more notable edits...

  1. Rep. Mike Coffman:  Removed an incident in which he said President Obama was "in his heart, just not an American."

  2. Rep. Allen West:  Removed an incident in which he called members of the Progressive Caucus "Communists."

  3. Rep. Bennie Thompson:  Removed his entire "Controversies" section.

  4. Rep. Gregg Harper:  Removed his remark that he "hunted" "liberal, tree-hugging, Democrats."

Wikipedia has often been commended for being a democratized forum where anybody can create or edit content.  It's also come under scrutiny for the very same reason - that anybody can create or edit content.  (Just ask any college professor who bar students from citing Wikipedia as a research source.)

The one way this system maintains at least a modicum of credibility is its transparency - whenever anybody edits content, a public record is maintained of what was edited and who did the editing.  Thus, Buzzfeed's Andrew Kaczynski was able to investigate which Congressmen's pages were edited by users with the IP address that is only used by Congressmen and their staffs.

But, really, why is this so shocking?  As The Nerfherder has argued before, actively cultivating one's cyber-identity is practically a requirement in this day and age - not only for members of Congress but for all individuals and organizations.  In fact, members of Congress would be crazy NOT to try and edit their web presence on Wikipedia and other sites.  If anything, we should be encouraged that they and their staffs are tech-savvy enough to have the presence of mind to give it a shot.

Call me cynical, but not only is this not surprising, it's also sure to continue far into the future.  Maybe staffers will simply learn that when they want to make social media edits to their bosses' pages, they ought to do so from home or from a public computer, rather than from a Congressional IP address.


Cell-Phone Surveillance and Privacy Politics...

Approximately 91% of Americans use cell phones these days.  While they're convenient and it's even hard to imagine life without them anymore, they're also voluntary tracking devices.  And U.S. law enforcement agencies are increasingly obtaining that data that tracks you.

Earlier this week, Congressman Ed Markey revealed that, in 2011, nine major mobile phone companies - including the Big Four: Verizon, AT&T, Sprint, and T-Mobile - responded to a staggering 1.3 million law enforcement requests for subscriber information, including calling records, text messages, and location data.

Sometimes the companies hand over users' data when law enforcement agencies have a warrant or issue a subpoena.  Other times, they do so when there is an "exigent request", which is a sworn declaration from an officer that there’s an emergency.  And other times they do so in the form of a "tower dump", which tells police ALL of the mobile phones that pinged a tower in a given time period.

This is news that ought to concern everyone.  Pundits like Wired's David Kravets immediately called for more transparency and new requirements for companies to have to publicly report how many times a year they get such requests for users' data, and how they respond to them.

That's all well and good, but the issue is so complex that it's going to require a lot more to protect users' privacy in a meaningful way than just requiring public reporting.

For starters, the Supreme Court has already ruled that the government cannot use GPS tracking devices without a warrant.  In fact, the issue here is not government-tracking at all; it's the fact that individuals are voluntarily carrying around tracking devices with them everywhere they go, willfully agreeing to allow their mobile carriers to track all their activity.  So that information is already collected and we have all repeatedly given our consent to it.  Legally, the government can't directly track us without a warrant, but private companies can (with our consent). 

So the real question is:  Once we've agreed to allow ourselves to be tracked by private companies, to what extent can (or should) government agencies be granted access to that information that's already been collected?

What's needed is for Congress to not only require more transparency, but to also strengthen individual privacy laws by clarifying exactly under what circumstances warrants or subpoenas are needed, and exactly under what circumstances they aren't.

Politically, it seems as though there ought to be room for bipartisanship here.  Small-government conservatives and libertarians can view this issue as a potential intrusion on individual liberty.  Meanwhile, liberals and progressives can frame it in terms of strengthening consumer protection laws.

It's been clear for quite a while that the law needs to catch up with technology.  Here's an opening.