Barrel Strength

My sentiments exactly (video).

The graph below shows how the income inequality has widened in the US, with the top 1% taking a disproportionately larger share of the income.

What caused this to happen? If you take a look at the graph, you see three periods in which the income of the top 1% took off. The starting date for these three periods is 1982, 1994 and 2002. Is it a coincidence that these periods coincide with significant changes in technology? 1982 was the start of personal computer revolution, 1994 was the start of Internet I, the first step in connecting computers together and launch of the Web, and 2002 coincided with Internet II, start of social networking and other internet application build on top of the infrastructure created in Internet I. Is it just the case that the top 1% consists of group that assiduously adopted new technology?

It does seem to be the case as the periods of accelerated income disparity coincide very well with periods of accelerated technological displacement. Surely there are other factors, such as globalization which has narrowed the gap between blue collar workers in first world and third world and led to lagging income for lowest quintile during the 80s as their income fell below the 1979 level, but the above seems to be a compelling explanation of the surge in income of top 1% with three different presidencies, Reagan, Clinton and Bush II, but one common theme.

I think Steve Jobs was an evil prick. He made the walled garden cool. He tried to return technology to the era of the old centrally directed AT&T monopoly, where all innovation from inside or outside was resisted, because it did not conform to the plan.

Most of what makes the Internet a desirable form of social organization is the ability to innovate without permission. This has been the central characteristic of the Internet, with its collaborative decision procedures, open protocols, and lack of centralized direction. But the Internet (in the sense in which I am talking here) exists at the logical layer only. There are two more layers than that, one below and one above.

The layer below is the transport layer, and it is characterized by atoms, not electrons. This is the pipe, backhoe, overhead wire level of the network. It has the cost characteristics of physical things. No matter how cheap they make the purchase of it, if you buy an anvil from China, you will pay the transport costs of moving pounds through space. The physical transport layer offers limited possibilities for competition, such as cable versus telco.

The network layer is above the logical layer, and it too can run to monopolies or near- monopolies: Google (the least harmful), Amazon, eBay, Facebook, and so forth. But the long tail of the Internet means that, with search engines, the consumer is always supplied with his choice of whatever he wants, no matter how obscure.

The particular harm that Jobs sought to achieve was to make the walled-garden, the limitation of choice and innovation, socially normal, hence “cool”. Back to the past, with a vengeance.

I recommend this appreciation of Steve Jobs which I have found at Armed and Dangerous.

U.K. Foreign Secretary William Hague tells some startling truths about the net’s capacity for on-line pillage.

The intelligence reports I see as Foreign Secretary show that just one criminal computer programme can harvest over thirty gigabytes of stolen passwords and credit card details from over a hundred countries in a matter of days, causing millions of pounds worth of fraud. Over 40,000 pieces of sensitive information and financial data are traded on the online black market every day, amounting to 13.2 million criminal transactions every year.

Read more of his speech here.

What has always impressed me about the scoundrels I have met in the Internet world is the second by second automation of fraud and theft,  and the consciouslessness of its perpetrators. They go to sleep in well feathered beds and wake up richer, thanks to your and my poor computer security.

Terence Corcoran is infuriating because he can be so right and so wrong at the same time. I think I shall invite him to dinner and endeavour to straighten out his thinking over a few bottles of wine. First, the right part.

In his editorial, Can Con, the Opera, Corcoran skewers the Canadian content industry: carriers, networks, broadcasters, filmmakers for fleecing the Canadian public for 6o years or more on behalf of “Canadian content”.

“CanCon, the Opera has been running since the early 20th century, when Canadian nationalists seized control of the radio airwaves on the grounds that there were rigid spectrum limitations. Only a couple of dozen radio stations were possible, and they should not be allowed to drift into the monopoly hands of foreigners. Today, even though spectrum and wire communication links are essentially unlimited, and ­entertainment, news, information, data and movies are literally available in limitless quantities, the opera is still running.

“Decades ago they said that because there are technical limits to broadcasting, controls are needed. Now they say that because there are no technical limits, controls are needed. Every new technology — the arrival of television, cable, digital, satellite, Internet — has become a battleground of CanCon special interests seeking to lord it over the Canadian consumer.”

You can read the entire Broadcasting Act without finding mention of the word “consumer”. In a statute with more regulatory objectives than there are letters of the alphabet, there is no mention of the consumer or user interest in communications – namely, what it costs. Consequently the regulator, being a creature of statute, has to strain to consider the impact of his decisions on the paying public.

In this instance Corcoran plays the populist, concerned for the welfare of the common man against those of the rent-seekers at the public trough. He has correctly foreseen that the purchase by the carriers (Bell, Rogers, Shaw) of the broadcasting holdings of everyone else can only be paid for by a) entrenching further the regulatory protection of the Canadian broadcasting industry and b) getting people to pay higher rates for telecommunications so that,  for instance, cellphone rates pay for broadcasting investments.

Now for the bad part of Corcoran. His views of networks are extremely “propertarian”: the owner of the network has the absolute right to determine to what uses it will be put, and to control traffic across it in his own interest exclusively. Thus he rails against the lease of telecom facilities to smaller users as the approaching the advent of communism. Carriers, in this view, should have absolute discretion to attach or not attach any rival system to their networks. Thus when Bell Canada sought to pass on a form of usage based billing onto the consumers of smaller ISPs, Corcoran thought it plain wrong that the Canadian user public rose up against it and sided, as he always does, with Bell Canada.

Let me put the argument about networks this way. They have to be built at great expense and the owners have a right to be paid for them.  No one disputes this. But to argue from metaphor, we have two ways of conceiving networks. One way likens them to railroads, and another to highways. The railroad metaphor says that they are so expensive to build that the rights of the owner to determine what traffic passes across them is near absolute. The only people who should be interconnecting are those who own other railroads, so that we do not end up with expensive duplicate facilities. But the right of the small user to attach a branch line is at the discretion of the larger railroad.

Then there is the highway metaphor. Though both driving and car ownership are highly regulated, the right of the licensed driver to back his car into the street and make use of the highways, without prior notification tothe road owner of his route,and go where he wills, is near absolute.

Moreover, the owner of the property may attach his laneway to the road according to a generally permissive policy of government.

His choice of car must meet the standards of government, not of the road-owner. A private road owner has no right to limit the tye of vehicle passing across his road; only the government does this (e.g. tracked vehicles, heavy trucks in spring).

Our collective problem with the legal theory of communications networks, at least for those concerned with profit and enterprize, is that our legal theories run directly into the public interest in free and open communications networks. In the 18th century British law said that such privately-owned facilities as toll roads and ferries were “affected with the public interest”, and that the rights of ownership were in some sense restricted.

I wish that my learned friend Corcoran, and his many allies in the economics profession, would grasp that simple idea. Networks are for users, not owners. They exist for us. They return profit to their owners. Finding the right balance between these two sets of rights is a legal and regulatory problem which will not go away by the fiat of anyone.

Ah! The power of the market! How we love to wander the shops picking out the amazing products from all over the world, laid out in attractive abundance! How efficient are thy ways, O market! As we have learned at the feet of the great Friedrich Hayek, the market conveys information by means of prices, and prices summon forth this abundance from the tea plantations of Assam and the chip fabs of Malaysia to our malls.

And we all know of places where they are still running the socialist experiment:Cuba, Syria, North Korea, and we do not want to copy their example.

So it will come as some surprise to you that we have not quite reached market nirvana in telecommunications in Canada yet, nor anywhere else in the world, for that matter.

Because the truth of the matter is this: if you had to design a communications system from the ground up, you would never build two separate wire-based systems if you had the choice. You would build one, and let everyone use it on non-discriminatory terms, set out by law and regulation. We do not have two non-interconnecting road systems, do we? You take the blue road and I’ll take the yellow road and we will see who is Toronto afore ye?

Of course not. We have two separate systems of wired communication because, before the invention of the Internet protocol, systems were adapted by analog technology to serve one purpose only: two-way telephony and one-way broadcast distribution. Our communications systems were built out under radically different assumptions of what they would or could do. Internet protocol made it possible to develop general-purpose networks that could do a variety of things. But the legal apparatus, based in ideas of railroads, switching, boxcars, and sidings, carried with the idea that the owner of the network decides what gets on his tracks. It also gave him great power over transport to integrate his business upward, to use his market power to take over grain storage and milling, for example.

These two kinds of power were thought to need regulation in the 19th century, and telecommunications regulation grew out of those legal models.

You have to be extremely conscious of what metaphor you pick when you envision a legal scheme for communications networks. If you envision “railway” – they had no other model in 1890 – you naturally assume that the right of the track owner to determine what goes in his boxcars is his business alone, and who may interconnect with his track is his business to decide. But the inefficiencies and unfairness of this arrangement led Parliament to legislate some controls over the power of owners to block traffic from other systems

And for that matter, we do not allow the people who own our roads determine what kind of cars will drive on them, beyond very general rules of construction and safety? I mean, we own the roads as taxpayers, right?

Even the corporation that owns the private toll road north of Toronto cannot deny you service because you drive a Ford, or becasue you do not drive a Ford.

Yet when we come to telecommunications (telephone and cable systems), some free-marketers lose all perspective. The foremost example of this loss of perspective is the view propagated from the Montreal Economic Institute. It never seems to lack for space in the Op ed pages of the Financial Post, since Terrence Corcoran favours their views.

The MEI sees regulation of terms of access to networks as “state economic planning.”  Martin Masse and Paul Beaudry write:

Independent ISPs survive and are able to offer unlimited plans only because they are given a privileged access to somebody else’s infrastructure

Let us consider what happens when you drive your car off your parking ramp and into the street. You as a driver  are licensed by the state. Your car is licensed by the state, part of which includes a safety check. You are legally liable for accidents. You are subject to police supervision of a rather close kind. You are subjected to heavy taxes on fuel. But you are not subjected to editorials from the Montreal Economic Institute denigrating your “right” -actually licence - to drive on a public highway as a dreadful example of state planning and incipient socialist tyranny. Why?

The answer is that we have figured out the appropriate relation of citizens to roads. By and large, they are there for us to use, however much that use is carefully licenced and taxed.

When we come to telecommunications networks, by contrast, we have not yet agreed upon the appropriate legal relationship of user to network owner. The MEI talks of networks as a kind of private property, wholly divorced from the purpose for which we have networks, which is to allow you and I to communicate. The economists hired by carriers fulminate against tinkering with networks by innovators, and allowing leased bulk access to transport facilities, as defenders of slavery fulminated against aggression towards private property by those god-damn abolitionists. We still treat seriously the notion that traffic across communications networks, things whose substrate is speech (whether spoken, visual, or any form of signification),is transported by the grace and favour of carriers, at their absolute discretion, as if we had no more rights than trespassers in a back yard.

Communications networks exist for us and our purposes. Network owners deserve profits, and we gladly supply them so that they can improve and build more capacity and functionality into their systems. But they are in business for us, and not otherwise.

The MEI people and my readership could profitably turn their attention to Tim Wu’s The Master Switch.

It is also worth noting that, in relation to the issue between the large carriers and the smaller ISPs over pricing, Bell Canada has signalled it is ready to agree with the smaller ISPs.

Nevertheless, the bad policy ideas emanating from the Montreal Economic Institute – on this issue alone – need to be skewered.

The Barrelstrengthian collective is in occasional communion with the west coast. Our correspondent Grey Goose has been doing his homework. He reports:

OpenMedia is partially funded by another Tides organization called Organize For Change.

 http://organizingforchange.org/

  Organizing For Change is funded in turn by Tides Canada.

 Here’s a link to the National Post story on how it all ties together

 http://www.nationalpost.com/TIDES+HAVE+TURNED/3859570/story.html

 This group had a major hand in determining Christy Clark’s ultimate win in the recent race within the BC Liberal Party as to who was going to be the next Premier replacing Campbell. They signed up as delegates and voted as a block.

Tides and OFC plus their PR firm FD Element were also the backers of Gregor Robertson and his Vision Vancouver council who were heavily funded to bring in social change to the city. This same group also backed Christy Clark’s campaign.

http://fairquestions.typepad.com/rethink_campaigns/2011/03/social-media-and-fd-element-in-the-bc-liberal-campaign-of-christy-clark.html

 While Vision Vancouver volunteers, and paid professionals like Don Millar, from FD Element were working on Christy’s campaign, their other organization, Organizing For Change were working against the Conservative candidate, Kevin Falcon… so offended were most people at their tactics that even the left leaning Georgia Strait came out swinging against their ethical nature of tactics. Remember, these groups are all funded from US backers.

http://www.straight.com/article-377415/vancouver/green-liberals-foiled-falcon

 The whole movement (Tides) was started by two wealthy US transplants, Joel Solomon and Carol Newell,  who moved to BC about a decade ago because they were dissatisfied with the conservative political leanings of that country.

Both are enormously wealthy, Solomon’s money coming from real estate development by his father, and newell being the heiress to the Rubbermaid fortune. They first started funding small projects out of their pocket but soon developed an appetite for bigger things (Alberta Oil Sands, banning oil tanker traffic on the west coast) and went back to the US for more money from like minded individuals who also had personal foundations.

 Their goal is to change to policies and politics of our country saving us from the fate of the United States, their home country which they chose to leave. They are using any and all means to do this including co-opting politicians and political processes to achieve their ends. They have Gregor Roberts, our mayor in their pocket having first financed his personal businesses to the tune of $430,000, paid for his entry into the BC legislature as an NDP MLA. Financed his and his parties campaign to take over Vancouver City Hall and to this day pay for staffers who surround the mayor and council.

 FD Elements was recently contracted to develop the mayors image as a social change advocate and parade his around New York’s liberal establishment as the example of how things should be done.

 They have now succeeded in co-opting Ms. Clark. 

I  put the whole thing together when I discovered that it was a Vision Vancouver counsellor that raised a motion to censure the CRTC for the UBB decision (I mean, why would a local municipal council do this?) and that was the trigger for me to start digging.

Vivian Kruase, who is a blogger, had been following this group for a few years as she had been a general manager of a fish farm company and was always fighting mysterious and well funded forces who were against fish farming and voila,there they were, Solomon and Newell. I strongly suggest you bookmark her blog site and keep checking it every few days.

 http://fairquestions.typepad.com

If you want to get a scope of how big this thing can potentially become, Krause estimates, in her recent National Post stories, that Tides has spent more than $100 million over the past 7 years against oil sands, rain forest initiatives and even recently, through another group, AncientForestAlliance managed to drag Al Jazeera out to BC to do a 1 hour documentary on unsustainable logging practices in this province.

 They have enlisted the paid assistance of a company called FD Element. This is not a small PR firm…

http://www.fd.com/en/

They are waging the battle for Tides in the oil sands, oil tanker traffic on the west coast,usage based billing issue, sustainable logging practices (they assisted Ancient Forest Alliance, another Tides creation, in getting Al Jazeera out here to expose logging practices via a documentary yet to be aired.)

Their local guy Don Millar (see above reference) was a major operative in the Christy Clark camp) and do all the communication for the City of Vancouver (all Vision Vancouver politicians) plus now have their own people on city payroll in positions like Chief of Staff for Mayor Robertson

http://www.straight.com/article-346074/vancouver/former-fd-element-employee-fingers-gregor-robertons-chief-staff-allegations-dirty-tricks
What is also offensive is Tides is a registered tax-receipt granting organization that is able to seek tax relief from the Canadian government while using US-originating funds to interfere with our politics and issues of national importance.

So why are they also targeting telecommunicatins issues, CRTC and the like? Because it is like candy to a baby when it comes to recruiting 20 and 30 something to their cause.

So now, the federal Liberals have weighed in on UBB and have taken both PIAC and OpenMedia under their wing.

http://petition.liberal.ca/crtc-ubb/

And as of a few weeks ago, even Tony Clement chose to meet with OpenMedia reps and tweeted about it…

  @TonyClement_MPTony Clement

My pleasure MT @OpenMedia_ca Thx for taking time 2 chat with us about #ubbyesterday. Hope we can work together 2 solve root cause #crtc

End of Grey Goose’s report

___________________________________

Dalwhinnie’s comment:

The fact that tens of millions of dollars are being spent by US-based foundations to influence Canadian politics is the story not being covered by the mainstream media, with the exception of the National Post. It would be scandalous of it were not business as usual.

All the rest is a quibble, in which I include controversies surrounding usage-based billing.

Canadians’ access to the Internet is a vital issue, because the traditional way we have received programming has been through tied packages whose carriage is often made mandatory and whose underlying prices are set by regulation. Usage based billing is a pricing philosphy that applies to water and elctricity, so in principle there is nothing controversial there. But when large carriers want to increase the price of reception over the Internet to make it as expensive  as cable television, the people smell a rat.

Back in the mid-1990s, the fundamental decisions about what to do with the Internet were in American hands. President Clinton’s adviser in these matters was Ira Magaziner. He spoke at the ICANN conference in San Francisco on Monday. For anyone interested in these decisions, Magaziner’s speech was highly important and informative.

>>IRA MAGAZINER: Thank you very much for inviting me. It’s the
first time I’ve been to an ICANN event since forming it. I figured
that by now it was safe and I wouldn’t have –

[ Laughter ]

— too many things thrown at me but I’m not sure.

I’m here today to talk about ancient times, when dinosaurs ruled
the earth.

It was a time before Facebook, before Twitter, before WiFi, and
even before Google.

It was a time when you could download a movie through your 56K dial-
up connection if you had a few days, when your large heavy cell phone
did not speak Internet, and when two-thirds of the people in the
world could not make a telephone call because they didn’t have a
landline coming to where they lived.

It was a time when there were more people on the Minitel in France
than on the Internet in the whole world. Okay?

And when all the people on the Internet in Korea could fit into one
small hotel room. I know because I met with them.

[ Laughter ]

And there were only a couple.

It was also a time when adults still knew more about information
technology than their 10-year-old children.

[ Laughter ]

Which has not been the case since then.

[ Laughter ]

So these ancient times that I’m talking about weren’t millions or
thousands or hundreds of years ago. They were 15 years ago, in 1996.
15 years ago.

In early 1995, then-President Clinton had asked me to head a
cabinet level group in the U.S. government to help decide what steps
he could take if he were reelected in 1996 to improve the U.S.
economy. And at our initial meeting, we listed 10 different things
to look at that we thought could be important. By the beginning of
1996 we had actually decided on a different list.

Basically, what we had decided was that there were three
technologies that had been developed recently that could offer the
potential for huge economic growth: The Internet, the sequencing of
the human genome, and advances in renewable energy. And of those
three, we thought that the Internet could move the fastest and so by
then we had decided to focus on the Internet and trying to create a
global environment where the Internet could take off and be a true
economic force.

The last escape we confronted was fraught with opportunity but also
with tremendous uncertainty.

Many entrepreneurs and companies wanted to invest huge sums to
build the Internet economy, but they were worried by the lack of a
predictable environment.

At that time, some of you may remember there were proposals in the
EU and Canada to tax every bit of transmission on the Internet, and
they were being taken seriously. There were proposals to put tariffs
in the World Trade Organization on commerce done by the Internet.

Many governments, including the U.S. government, we’re looking to
censor the Internet. Regulators in the EU and in the U.S. wanted to
have government set technical standards for the Internet, regulate
the use of digital signatures, restrict the new field of Internet
telephony, set rigid guidelines who could and couldn’t deliver
Internet services, and regulate prices for every Internet activity,
much as was done with telephony.

There were no agreed-upon ways to protect intellectual property.
That was the landscape we confronted.

Many foreign governments did not want to adopt the Internet because
they viewed it as under U.S. government control and there were a
large number of lawsuits, which I’ll talk about in a minute, working
their way through different courts around the world that would have
broken up the Internet and put jurisdictional restrictions on it that
would have prevented interoperability across countries or even
states, and many of the judges who were sitting in judgment on these
lawsuits had no clue what the Internet was.

The security of the Internet was very uncertain. Some of the root
servers were in university basements where anyone could walk in and
pull the plug. I know because I visited some of these sites
unannounced and just walked alone into rooms where they were housed.

We realized that the Internet had enormous potential to unlock
human freedom, economically, politically, and socially, because its
very designed empowered individuals by allowing them to implement
their ideas directly, without having to go through established
hierarchies and bureaucracies. The potential seemed limitless. But
we also realized that the future of the Internet was very precarious.
Balanced on a knife’s edge between two extremes that could delay its
advent or even destroy it.

On the one side, if the Internet was too anarchic with no
guidelines, it could degenerate into a constant state of
unpredictable, wild west shootouts, scaring away the decent folk who
wanted to invest and help build it.

On the other hand, if the normal forces of bureaucracy took over
with a mass of government regulations and slow intergovernmental
bodies governing the Internet, the creativity of the Internet could
be stifled.

We had to find a way to allow the Internet to operate in a constant
state of creative chaos, but with some ground rules that would give
those investing huge sums in it some degree of predictability.

There needed to be enough cooperation and rules so that the
Internet would be secure, stable, and resilient, but this had to be
done in such a way as to allow as much freedom as possible, for the
users of the Internet to create standards, content, modes of access,
and economic activity without government interference.

So we established a policy framework to try to accomplish these
goals in 1996 and ‘97. We passed an Internet tax freedom act that
allowed Internet commerce to develop free of taxes. We kept the
Federal Communications Commission in the United States and the ITU
globally away from regulating the Internet and the Internet
telephony. We got government in the World Trade Organization not to
put any tariffs on electronic commerce. We struck down attempts to
impose censorship on the Internet. Instead, empowering parents and
other consumers with controls they could exercise to block content
they did not want to see. We allowed marketplace solutions on
privacy to emerge. We allowed the Internet users to set standards.
We established a global agreement to protect intellectual property.
But in not too restrictive a way.

Finally, we recognized that there had to be some coordination of
the Internet in order to ensure its security, stability, and
resiliency.

The question we faced was how to do this in a way that could
operate with Internet speed, be representative of the wishes of the
Internet community and its various constituencies, be acceptable to
governments, and allow for the rapid growth of the Internet that we
hoped would happen.

After a two-year process of consultation with stakeholders of all
sort all over the world, we formed ICANN.

Now, for those of you who were not around then, let me talk about
what preceded ICANN.

At the time, IANA as it was called was housed in a small office at
the University of Southern California, and run by a wonderful man
named Jon Postel under a contract the university had with the U.S.
defense department which had been involved in starting the Internet.

I’m not sure this is true. There’s some of you who may remember.
But legend has it that at a meeting of the Internet Society when the
Internet had less than a thousand members, someone suggested that
they needed a person to keep track of everyone’s address and Jon
raised his hand. Jon, for those of you who remember him, had a long
scruffy beard, wore sandals and hippie clothing and was a rebel and a
free spirit at heart.

Because of his appearance, it took me hours of pleading to get him
through security at the White House when I invited him to have lunch.

[ Laughter ]

And I remember when I had the honor of speaking at his funeral, I
thought that day when he was at the White House having lunch with me
with all these self-important cabinet secretaries sitting around that
a hundred years from now, nobody would remember any of those cabinet
secretaries, but they would remember Jon Postel as one of the
inventors of the Internet.

[ Applause ]

It was Jon that decided what top-level prefixes were for countries
and who in each country should have the responsibility for
administering the Internet. And he did all this from his small
office where the piles of paper and books lying around reflected both
his brilliance and also the creativity chaos of the Internet. To get
from the door to the one visitor’s chair in his office required
agility and extraordinary balance just to navigate around the rubble
on the floor.

I often thought when I visited his office about how some of the big
corporate Titans that were about to invest billions in the Internet
would have felt if they knew that all the routing for the Internet
was taking place in that office.

The root server was run by a company called Network Solutions in
Virginia, which under a contract with the Commerce Department had a
virtual monopoly on assigning domain names. They received the
addresses from Jon and entered them. But at the time, Jon and the
leadership of Network Solutions did not really like each other, so
their rapport was a bit tenuous. I remember when the idea for ICANN
first arose, and it came after a particularly difficult week where
the following occurred.

The head of DARPA, the defense advanced research products agency
which had the contract for the IANA called me, saying that no longer
would it let the contract for IANA when it expired. They wanted out.

The president of the university of southern California called
saying that they could not take the lawsuits that were being directed
against them and wanted out of their contract. Our legal counsel
described over 50 lawsuits all over the world that could tear the
Internet apart. A delegation from the International
Telecommunication Union, after a dozen years of opposing the adoption
of the Internet protocols, approached us demanding to take over the
Internet. A delegation of U.S. Congressmen and senators insisted
that the U.S. government had created the Internet and should never
give up complete control of it. Several delegations of
representatives from over 100 leading I.T. and media companies and 10
trade associations visited saying that Internet technical
coordination and security had to be brought into a more predictable
global environment before they would invest money in it.

And the EU delegation said that they would pursue their own
relation of the Internet routing system unless the U.S. changed its
policies. Representatives from the Internet Society that I had
dinner with told us that the Internet Society controlled the Internet
and they would resist any attempts by the U.S. government or any
government to take control. And the U.S. government security task
force on the Internet delivered a report to us saying that as
currently organized, the Internet was in danger of disintegrating
from the lawsuits and lack of agreed-upon coordination mechanism.
And in addition to that, my kid caught a flu which I also caught, so
it was a wonderful week.

[ Laughter ]

So we clearly had to do something. We clearly had to do something.

Now, the idea of ICANN might have been a result of that flu, but I
hope not.

[ Laughter ]

But the idea of ICANN was unprecedented, but we felt it offered the
best chance to allow for the Internet to flourish.

If we left the coordination of the Internet DNS to an
intergovernmental body, we feared that it would get bogged down in
bureaucracy and approvals would move at a glacial place. Personally
I’m a believer that governments play an important role in societies,
and I’m a supporter of the United Nations. I work closely with U.N.
agencies in my current work, leading efforts at the Clinton
Foundation on Global Health and Climate Change, but the slow and
bureaucratic processes of government and multilateral government
bodies are not the best way to coordinate a fast-moving, creative,
chaotic medium like the Internet. They move too slowly. They’re too
risk-averse. They officially represent only governments and not
other constituencies. And just in general, they’re too cumbersome.

On the other hand, the Internet could not be coordinated by a
normal private entity. There must be public accountability to
Internet users and investors.

There also has to be accountability to governments.

The idea of setting up a private nonprofit organization that would
be organized to be a grass-roots organization of technical experts
accountable to Internet users and constituencies and be recognized by
governments but not controlled by governments was risky. That had
not been done before on a global scale. We knew it would be
difficult and somewhat messy, but we thought that it offered the best
chance of success.

It would have a government advisory group that could ensure that
the views of collective governments were at the forefront, but they
could not control it.

It would provide a strong focal point to take all of the inevitable
lawsuits that would continue to come with any decisions made about
the routing system for the Internet. It would be flexible enough to
evolve as the Internet evolved. It would be at the same time strong
but not too strong. It would have its own independent funding source
for an assessment on domain name registrations but it would never get
too big and its legitimacy would have to be renewed regularly by its
ability to persuade the various constituency groups that it remained
the best solution.

This was the idea that became ICANN.

We identified Vint Cerf as someone to lead it initially because he
had credibility with all the constituencies. I’m not sure he’s ever
forgiven us to this day, but we thought it was the best shot that the
Internet had.

[ Laughter ]

Now, not everything has gone as we had planned. ICANN has made
some mistakes as an organization. It’s far from perfect. But
overall, we think the idea has worked. The political, policy, and
technical controversies that threatened to stifle or even ruin the
Internet in its infancy in the late 1990s did not ruin the Internet.
The Internet is flourishing.

When, in the late 1990s I used to make speeches around the world
touting the future of the Internet, I was widely mocked for
predicting that by 2010, there would be 1 billion people using the
Internet, and Internet commerce would exceed a few hundred billion
dollars a year.

Experts and political leaders alike said I was wrong. It would be
impossible to go from 16 million people — which is where we were
then — to 1 billion people in just 15 years. They argued it would
be politically and technically impossible for the Internet to expand
that fast.

I was accused of being a big thinker and a dreamer.

Well, I was wrong, but not because of what the critics said. I was
wrong because I did not think or dream big enough.

Today, there are almost 2 billion Internet users. There are over
3.7 billion IP addresses. And over 129 million domain names. And
electronic commercial has grown to almost a trillion dollars per year.

The Internet has spawned a complete revolution politically,
economically, and socially, and it has all worked pretty smoothly.
The technical and diplomatic work of ICANN and IETF and other bodies
have enabled this enormous growth to occur with hardly a glitch.

Once — one has not read stories of legal or political battles or
technical difficulties bringing the Internet to a halt or preventing
it from growing. And I want to pause just to reflect on that. That
is extraordinary. If you think about this enormous growth and the
way it’s spread around the world and all the commerce being done and
so on, and even though inside of ICANN it must seem like you’re
having a controversy every week, the fact of the matter is the
Internet has flourished. It has grown and flourished.

And I can tell you sitting where we were in the late 1990s, that
was not at all a foregone conclusion. In fact, it seemed like a
likely thing that could go bad and not happen.

Now, would things have worked as well if we would not have created
ICANN and did the things we did? Maybe. You can always speculate.
But the reality is for all its shortcomings, ICANN has not prevented
this resolution; and by most accounts, it has played an important and
positive role in helping to enable it.

So the reason for my history lesson today is to remind you all that
the Internet almost broke down before it really took off in the late
1990s. And it almost broke down in legal, political and policy
disputes that could have fragmented it, inhibit its use and, the very
least, delayed it and made it more difficult to access.

While ICANN has its faults, I urge you to work actively to improve
it rather than tearing it down or allowing it to be replaced with a
more stifling bureaucratic alternative.

Now, I remember my last day at the White House. A good friend of
mine said, The good news is that for the first time in six years you
will be able to say what you really think. The bad news is that for
the first time in six years nobody will care what you really think.

[ Laughter ]

But at the risk of having that be true and having not care what I
think, let me just finish by offering a couple of suggestions. And I
offer them in the spirit of the success that I believe ICANN has been
and the greater success that it can be.

I think there are things that ICANN should do to work better and
that the reaffirmation of principles issued in September of 2009
offers a good basis for making these improvements. And I think
having talked this past few weeks to people at ICANN, people at the
U.S. government and elsewhere, I think that people are aware that
these improvements can be made and are working to do it. And I would
just give support to that effort.

One is ICANN always needs to work hard to be more international
and, in particular, to include more people in its leadership and
management from developing countries around the world. The Internet
has become much more widely distributed since we were involved 15
years ago and will become even more widely distributed still. And as
somebody who now is working on AIDS in Africa and elsewhere and
interacting a lot with governments in poorer countries, it’s crucial
that they become more and more a part of this structure as much as
possible.

Number two, ICANN must take great pains to operate in an efficient
manner. It is a public service organization with a technical mission
that should be frugal, and it must always have humility in the way it
works. Its leaders must avoid trying to build an empire. I think
you will be best served by doing what you need to be doing, to be
focused on but not build something that’s too big an empire because a
bigger empire becomes a bigger target.

Number three — (applause) — ICANN must be incorruptible and fully
transparent in what it does seeking consensus and explaining its
decisions fully. There are too many disparate interests on the
Internet to avoid controversy, okay? You are going to have
controversy. You are going to do things that are unpopular by
definition. Not only is this a very diverse community, but it is a
diverse community of people with strong personalities. That’s
something I learned very early on.

And so you are going to have lots of controversy, lots of people
shouting at each other, lots of ideas, lots of ideas. And you are
never going to be able to get full consensus. But you ought to try
to get as much as consensus as possible all the time. And where you
don’t have consensus, you need full transparency and accountability
in explaining your decisions because even that way if people disagree
with you, they can understand the logic behind what you did. So
consensus will not always be possible, but you must do the best to
seek as much consensus as possible and then explain your decisions.

Fourth, ICANN should always look to empower Internet users. Do not
make a rule that limits what people can do on the Internet unless it
is absolutely necessary for the Internet to function in a
predictable, safe and secure way.

And, finally, I will offer this to my successors in the U.S.
government, that they should exercise their role in full consultation
with other governments and in a light-handed manner.

Now, I think if those kinds of principles are followed — and I do
think there are people of goodwill at ICANN and in the U.S.
government and elsewhere interested in following those principles, I
think ICANN will continue to flourish and the Internet will flourish.

ICANN processes will always be a bit messy. Grassroots democracy
is by its nature contentious. While ICANN can and must improve, we
must all work within it to improve it rather than to try to tear it
down or replace it. With all its faults, it has worked. The
Internet has flourished.

The wonder of the Internet is that any individual in the world with
any idea is free to introduce that idea to 2 billion people without
having to ask permission. If he or she can gain a following, that
individual can build a huge business, introduce new art, music or
literature to the world, form a global social movement or improve the
way the Internet itself works.

The Internet gives anybody in the world a chance to change the
world. You as current stewards of Internet coordination and policy
have a responsibility to ensure that parochial, commercial or
political concerns and technical problems are sorted out so that the
world remains safe for the Internet and so that the human freedom and
empowerment the Internet brings can continue to flourish.

I wish for you to have the wisdom, tolerance and patience to do
your job well. Thank you.

[ Applause ]

I got an email under Ignatieff’s signature, too. The claim of non-partisanship was not just a lie but a stupid, pointless and highly visible lie that again demonstrates, if proof were needed, the mendacity of the Liberal party. Incredible? No.

It is common, it is widely believed, and it is wrong: that companies that lease facilities from larger carriers a) do no pay their full costs and that b) the tide of history will wipe them out. Nothing could be further from the truth.

As to contention (a), read Michael Garbe in today’s Financial Post.

Canada is enjoying an outburst of public outrage against the CRTC, which ruled that smaller carriers would have to pay usage-based billing (UBB). Natrually the carriers interpreted this to mean that the usage caps would apply to each customer of the ISP, rather than to the ISP as a whole. This had the effect of limiting the service offerings of the smaller ISPs to exactly same service offerings of the larger carriers, telco or cableco. And this in turn negates the creative potential of smaller carriers to offer different products and services.

Hence the outrage. It may qualify as a small instance of a black swan event: rare, extreme impact, and retrospective predictability. Or it may well be the demonstation to even the dullest minds that people are attached to the Internet like gun-owner to his guns. (Aside: and now the quiche-eaters know what it feels like when the state comes a-calling to restrict your freedoms).

I wrote yesterday about vertical integration between carriers and content. Bell wants CTV because if they do not pick it up, somneone else will. Telus complains about Bell locking it out of wireless distribution of CTV sports events. Such a concern for freedom of communications and the common carriage pricmiple becomes them; they should try it more often.

b) the tide of history will wipe them out

The fate of the smaller ISPs is precarious because there is a considerable prejudice against them in policy circles, and a failure to understand what role they play in the information ecology. One again I am going to base my thought on Tim Wu’s The Master Switch, because it is apt and because he is saying something I wish I had writen myself.

“It is industrial structure that determines the limits of free speech”.

“What if the figurative “marketplace of ideas” is lodged in the actual and less lofty markets for products of communication and culture, and those markets are closed, or so costly to enter as to admit ony a few?”

“The problem is that a “speech industry” – as we might term the information economy – once centralized, becomes an easy target for external independent actors with strong reasons of their for limiting speech. And these reasons may have nothing to do with the industry per se.”

The failure of communications policy makers is to understand that the issue is not the prices at which people communicate – though prices are vital, too. It is the ability to communicate at all. Some industrial structures facilitate this, such as blogs on the Internet. And some do not, such as Apple, or your old-fashioned newspaper, where you communicate at the pleasure of the owners of the medium.

The second major feature is the ability to innovate without permission. You could not do this in the old AT&T monopoly, with the result that magnetic recording devices (the basis of computers), inter-city microwave, long-distance competition, cell-phones and a host of immportant technologies were buried for decades in Bell Labs. No one places an app on an Apple device without permission. And if the large carriers get their way, no smaller ISP will innovate without their permission either.

The CRTC made a policy error, and it will pull back from it. But the error is deep-rooted in the thinking of many people about the role of smaller ISPs and thier indifference to open systems of communication. Viz Terence Corcoran.

On page 5 of the Financial Post today were four articles, every one of which was concerned with the vital issues of competitiveness, freedom of speech and innovation, and economic growth :

a) Apple Shuts Book on Sony’s i-Phone App

b) Telus accuses bell of hoarding content

c) Ban on user-based Internet fees risks telecom investment,by Terence Corcoran

d) time for businesses to step up, Bank of Canada says (text of speech here)

What is the link among them?

a) Apple wants to maintain the old AT&T model of closed endpoints, (”walled gardens”) so that the owner of the network can monetize the value of all transactions within it. Vertical integration.

b) Bell the telephone/satellite carrier wants content, supplied by CTV,  to drive users to its own proprietary content, and possibly to disadvantage the content supplied by others. Vertical intergation plus possible unjust discrimination against its duties as a common carrier.

c) Corcoran is right insofar as usage-based billing (UBB) has some theoretical justification. However, the bit caps and usage fees imposed by the carriers are entirely out of line with the costs of provision, and are seen as attempts to save the closed model of cable and telephony from the open Internet-based model of content delivery. They achieve this by making Internet-based delivery of content artificially expensive vis-a-vis cable and satellite. So count this as vertical integration (content and carriage) with definite aspects of anti-competitive pricing against competitive models.

d) The Bank of Canada is telling us to find “new, more efficient ways of organizing and executing production”, now that government has done its part to make Canada tax-competitive. If this is to be done, it will necessarily involve using the Internet more effectively. Hence the net result of usage-based billing – not in theory, but as it has been imposed by the carriers with the participation of the CRTC – is to diminish the utility and affordability of  the Internet.

The CRTC has got itself on the wrong side of this UBB issue. But an impetus for this policy approach has been the unbalanced policy directive it received from government a few years ago, which had the effect of reducing the commission’s ability to concern itself with common carriage – the public responsibilities of the carriers, and of focussing on competition as the panacea for all problems in communications markets.

It is worth considering the words of Tim Wu in his brilliant and comprehensive review of the rise and fall of information empires, The Master Switch.

“Among the great questions of our time is whether our approach to the power of information should be informed by a sense of that power’s political consequences, subject to our ingrained habit of balancing and checking any great power. Or should we follow our approach to economic power in general, in which we tolerate,  and even reward, aggrandizement? 

“While perhaps not immediately obvious, such questions are in fact at the heart of the ongoing struggle between the armies of open systems and closed, represented…in the battle between Google and Apple but manifest elsewhere as well and destined to outlast that rivalry….

“…The old television-as-toaster thinking that prevailed in the the late twentieth century is no longer feasible. To leave the economy of information, and power over this commodity, subject solely to the traditional ad hoc ways of dealing with concentrations of industrial power – in other words to anti-trust law – is dangerous.

“More subtly, there is the problem of taking an after-the-fact approach to a commodity so vital to our basic liberties: a farmeowrk that has worked well enough for oil and aluminum is ultimately unsuited to an industry whose substrate is speech.”

Sao Paulo is great; 30 million people or something similar.We got into town yesterday and debauched ourselves merrily. Vastly fewer street people than nine years ago. The financial centre seems to lie along Paulista Boulevard, which surmounts a long high hill which dominates the town. It is filled with business people in dark blue suits and throngs of office workers in sober shades. Bad concrete architecture of 1960s brutalist modernism. The height of Paulista Boulevard means that the skyscrapers are surmounted with cellular, microwave and television transmission towers. Incessant, dense and noisy traffic everywhere. Sao Paulo has the world’s largest market for civilian helicopters, because why waste time in traffic when you could land on the heliport on top of the building? Rather like the Los Angeles of Blade Runner, with less fog and happier people.

The night life is splendid. The girls are astounding. The city is muscular and vibrant the way Chicago is.

If you ever want a bizarre and encouraging experience, listen to a technical conference using terms like BGP (border gateway protocol), routers, sub-net masking, IP addressing, IPv6 transition, cryptography, systems back-up, in Brazilian Portuguese. The Internet is pronounced “internetch”. It is a kind of Spanish filtered through the Australian vowel tripthongator with a few consonant transformations peculiar to Portuguese.

Brazil manifestly rising from poverty. Improvement everywhere. Adam Smith should do another book on how a society formerly built on slavery and sugar now makes airplanes: from Mississippi to a would-be Massachusetts in 150 years. These people have a great future.

A scoop by Forbes magazine or idle conspiracy making?

As much as I tried to pin [CIA director Leon] Panetta down on who the culprits were, he wouldn’t name names, but indirectly hinted that the main hacker-in-chief was China. This comes on the heels of General Wesley Clark’s admission that the Chinese cleaned out the web connected mainframes at both the Pentagon and the State Department in 2007. The Bush administration kept the greatest security breach in US history secret to duck a hit in the opinion polls.

When you use the Internet, you do not need prior government permission. When you broadcast, you do, and you become subject to myriad rules regarding Canadian content. Also vast fines for broadcasting without a licence. So it is essential that the Courts not classify the activities of Internet service providers, as well as you and me, as “broadasting”.

The CRTC referred the issue to the Federal Court of Appeal for a decision. The answer came back from Mr. Justice Noel:

The answer to the reference question is as follows: Retail Internet service providers  (ISPs) do not carry on, in whole or in part, “broadcasting undertakings” subject to the Broadcasting Act, S.C. 1991, c. 11 when, in their role as ISPs, they provide access through the Internet to “broadcasting” requested by end-users.

The importance of this decision is that it makes it much more difficult for some future set of commissioners at the CRTC to decide that the Internet is “broadcasting” and thereby subject it and you, dear reader, to a vast expansion of government licencing of speech. Thank you, Mr. Justice Noel and colleagues Nadon and Dawson on the Federal Court of Appeal.

From Facebook front page today.

Help translate Facebook into English so that it can be used by people all over the world, in all languages.

Click on the Translate Facebook button to add the Translations application, developed by Facebook, so that you can be part of the community of translators.

Excuse my language, but what the fuck is this?!  A company with revenues estimated to be in the range of $1bn to $1.5bn this year is looking for free work?  A company that, according to research firm Hitwise, accounts for 7.07% of all US internet visits last week compared to 7.03% for Google is looking to freeload?  How many ways can you say fuck off to them?

Maybe a well placed ad on the Canadian Cynic blog will elicit the fools that Facebook needs.