Communication & Media Return to the Centre of the Sociological Imagination: An Interview with Jeffrey Pooley

Recently I read Jeff Pooley and John Durham Peters’ chapter, “Media and Communications”, in the new Wiley-Blackwell Companion to Sociology. It’s a really great piece of work that is sweeping in its synthesis and provocative in some of its points and the criticism it offers to those in communication and media studies.

For those who want a tightly knit overview of how the field has developed since the inception of contemporary sociology in the late-19th century, and some of its main currents and preoccupations today, this is a great place to start. As I have done in the past with communication and media scholars Christian Fuchs, Michael Stamm and Robin Mansell, I got in touch with Jeff, who is associate professor of Media & Communication at Muhlenberg College in Allentown, PA, to see if he’d be interested in talking about the Media and Communications chapter with an eye to publishing our talk on my blog.

I am delighted that he agreed. Our conversation follows.

Dwayne: I’ve been reading your work for the last, I guess, five years, and Peters’ since the late-1990s. We met at the International Communication Association (ICA) conference in Chicago a few years back (2009). In the session, Sue Curry Jansen and Michael Schudson, amongst a few others, made compelling arguments about the need to revisit how Walter Lippmann has been set up in our field, especially by critics such as Noam Chomsky and Edward Herman, as a bogeyman, an architect and advocate of “manufacturing consent” as a necessary mode of governing in modern democracies.

Jansen and Schudson offered a compelling argument that Lippmann was nothing of the sort, at least not until later in his life, but rather a public intellectual who charted and criticized the use of propaganda techniques that had been forged in wartime (WWI) in the years after the war. That’s an aside, but the fact that you helped organize the panel on Lippmann’s legacy at ICA reflects well your position as an intellectual historian of the field and member of a new group of scholars revisiting, reviving and rewriting media history. Can you give us a quick sense of how you arrived where you’re at, where you teach and perhaps some of why you see media history as being so important?

Jeff: Thanks for setting this up, Dwayne. That was a great panel at ICA in 2009, packed to the gills. Schudson’s paper was later published in IJOC, as was Kurt and Gladys Lang’s contribution. Jansen’s paper on Lippmann was an instant classic, since published in Communication and Critical/Cultural Studies. Together with her brilliant 2008 chapter on Lippmann as “Straw Man of Communication Research” and a forthcoming book (Walter Lippmann) from Peter Lang, Jansen has exposed the Lippmann we all came to know through James Carey, Chomsky, and Stuart Ewen as an utter caricature.

She happens to be my colleague and mentor at Muhlenberg College–and the reason I joined the faculty in the first place. When I applied to Muhlenberg a decade ago, I was a Ph.D. candidate with a half-finished dissertation on the origins of the powerful-to-limited-effects storyline of American mass communication research. I had contacted Jansen when I had come across an abstract for a paper on the field’s history–a paper, I believe, that she never delivered for some reason or another. She invited me to talk to one of her classes. When a job listing at the Allentown, Pennsylvania college opened up, I canceled the class visit and wrote Jansen that I was planning to apply.

Jansen’s presence there, my own interest in teaching at a liberal arts college, and the department’s unusual and longstanding critical orientation (with an explicit social-justice mission) all attracted me to the place. Jansen is not well-known in the wider field, mostly because of her profound humility and resistance to self-promotion of any kind. As anyone who has read her scholarship (or her astonishingly rich book reviews) knows, she is among the most thoughtful and learned figures in our field. She deserves to be much more widely read.

My own interest in the history of media research grew out of undergraduate activism. I was puzzled by student apathy at Harvard, where protest gatherings during my time there in the mid- to late 1990s would attract only a handful of students. I became interested in a loose tradition of work–including the chastened writings of Western Marxists like Gramsci and Lukacs that argued, more or less, that media and culture help snuff out the revolutionary zeal of the masses.

As a graduate student at Columbia I wanted to write a history of this kind of thinking–a history, really, of an argument about culture and quiescence. So far so good. But when I started to read the published work on the field’s history, I got caught up in that literature. Many existing histories struck me then as Whiggish, doing legitimacy work for a vulnerable discipline. In the same vein, many histories were narrated to establish originality, to discredit a contemporary disputant, or to mine for a usable past. I quickly set aside the history of leftist media thought.

My project shifted to looking at the history of the field’s history–the history, in a way, of its origin myths. I have been writing on these topics ever since. Of course the chapter with John Durham Peters–which is really a modest update of an earlier version that he authored–ties in with this interest.

To more directly answer your question, I do think we need more and better work on the history of media research. For one thing, there really is buried treasure in the archives that could inform and challenge current research. (As it is, there is a lot of wheel reinvention going on, just because we’re so ahistorical as a field.) More important to me is the work that disciplinary memory is or isn’t doing in graduate pedgagogy and the field’s self-understanding.

As I’ve argued in a pair of chapters (here and here) and a more recent polemic, the U.S. field of communication research depends on a set of remembered stories, as well as amnesia regarding its messy institutional roots. These stories are often worse than misleading. And the institutional forgetting prevents us from confronting the institutional sources of intellectual poverty in the field, to paraphrase the title of a classic 1986 Peters article. These are some of the reasons I’ve recently started the Project on the History of Communication Research .

Dwayne: The chapter you and John wrote opens up with this amazing sweeping synthesis of the place of communication in the last one hundred and twenty- five years or so of sociology. You tick off names from the sociological cannon–Tonnies, Tarde, Durkheim, Weber, Marx, Mead–and contemporary sociologist such as Pierre Bourdieu, Jurgen Habermas, Manuel Castells and Barry Wellman. The argument is bold: “sociology has been the study of communication” or at least made that a primary axis of social organization (and integration) — by another name. You and Peters, however, argue that sociologists now mention communication only in passing, if at all. Likewise, communication and media scholars have demoted sociology. You seem to be arguing that this ought not be the case, while also, at the end of the chapter, suggesting that the recent work of Castells and Wellman may be helping to restore the historical connection between the two fields: sociology as well as communication and media studies. Q2. Does that capture reasonably well some of your ideas and arguments?

Jeff: Yes, we do argue that mass communication was bound up in, and often central to, sociologists’ attempts to make sense of modern life, from the beginning of “classical” sociology in the late 19th century. And sociologists were among the most numerous, and arguably the most important, investigators of media on through the post-World War II years. Among American sociologists, John’s great reader (edited with Pete Simonson) makes this case directly, through excerpts: Mass Communication and American Social Thought: Key Texts, 1919–1968.

In the American case at least, sociologists more or less abandoned the study of mass communication in the 1960s. The whole thing is complicated, but I think two overlapping factors do most of the explanatory heavy lifting.

The first is a major change in foundation and government funding for social science, and the second is new mass comm doctoral programs in journalism schools around the same time. In the early Cold War, the dollars for social science came mostly from foundations like Ford and military agencies like the Office of Naval Research. In this first funding system, the focus was on problem-based, interdisciplinary research teams, and decisions about who and what to fund were greatly influenced by a few key “brokers” like Paul Lazarsfeld and Herbert Simon. After Sputnik in 1957–as Hunter Heyck has shown in a brilliant study–a second pattern of social science funding emerged, overlapping with the first for a few years.

This second system was characterized by civilian agencies like the National Science Foundation and, notable for communication research especially, the National Institute of Mental Health. By the early 1960s the whole interdiscipilnary “behavioral sciences” milieu that Ford and the military agencies had helped to incubate had weakened. And the newer system favored medical sociology–drawing some would-be media sociologists like Eliot Freidson away–while in the realm of media more often funding psychological work.

So when Bernard Berelson claimed the field was “withering away” in 1959 he was, in a way, correct: his world of cross-disciplinary media research was dissipating. But waiting in the wings were Wilbur Schramm and his fellow J-school colonizers. Schramm, the consummate academic entrepreneur, had already in the late 1940s started a doctoral program at Iowa in mass communication, within its J-school. With help from Bleyer children—students of Wisconsin journalism educator Willard Bleyer–Schramm’s J-school model spread around state universities in the Midwest in the 1950s. Thus, even as Berelson’s field was dying Schramm’s J-school alternative was thriving.

And it was much more psychological in its intellectual orientation. The result of all this was that U.S. sociologists stopped studying media, or if they continued they were drawn into student-rich, high-paying communication programs. There were, of course, bursts of sociology of media, like the newsroom sociology of the mid- to late 1970s and early 1980s.

It has only been in the last 10 years, however, with the rise of the internet and digital culture, that sociologists returned in great numbers to the study of media. One index of the new interest is the fact that, in 2002, the “Sociology and Computers” section of the American Sociological Association changed its name (and focus) to “Communication and Information Technologies“. Elihu Katz and I have told this fall-and-rise story at greater length in a 2008 article.

Q3 (Dwayne) Why Wellman and Castells’ work? To me, there seems to be two reasons set out in your chapter. First, their emphasis on communication as the sinews of social interaction recovers a sense of Cooley and other late–19th and early 20th scholars. Second, I may be wrong, but early in the chapter you say that the study of communication has long been a garbled mixture of descriptive and normative views, from Tonnies, Tarde and Dewey in the 19th and early–20th centuries to Habermas more recently.

In that passage I sense something of a lament, or at least a sense that the normative dimension has swamped the descriptive elements. Is there a lament for the commingling of descriptive and value-laden judgments? Are Wellman and Castell singled out not just because they bring communication back home to sociology, but also because they somehow get past this “facts” and “norms” problem, or get the balance better?

Jeff: That’s a really interesting question. You are right, first off, that the late-essay appearance of Castells and Wellman is a narrative device–a tie-back to the opening discussion of Cooley, Dewey and others. In different ways, Castells and Wellman look to social networks (online or otherwise) as constitutive of social order; hence the echo of Cooley’s communicative sinew. It’s also interesting that both really come out of urban sociology, so that their work, like early sociologists’, places media in a wider social context.

Still, Wellman and Castells are merely prominent stand-ins for a happy trend: the return of sociologists to media questions. Why now? The main reason, I think, is the unmistakeable, society-wide disruption brought on by the internet and digital culture.

As to the blending of fact and norm in the early works, John and I do claim that sociologists (especially in the U.S.) have tended to reassure, to minimize fears of media power. (Some of the figures we write about stress, of course, just the opposite, that media power operates to prop up an unjust status quo.) Perhaps you mean that some sociologists–Cooley, Dewey, Katz, Carey and, in a much more complicated way, Habermas–substitute their hopes for hard-nosed description. That’s there in the chapter, for sure. Pete Simonson has a great paper [pdf] on what he calls “communication hope” in that tradition.

Still, we did not intend for Wellman and Castells to count as late arrivals with a refreshing focus on description, over normative claims. I hesitate to speak for John, but my own view is that a neat separation isn’t possible, and that claims for value-freedom end up masking smuggled-in normative agendas. Castells is far more critical than the more-or-less upbeat Wellman, but both scholars mix the normative and the descriptive. What is your read on the two?

Q4 (Dwayne) Early in the synthesis that opens the chapter you and Peters also point to some of the trans-Atlantic/trans-national links between German political economy and evolutionary philosophy, on one hand, and the communication-centric approach to sociology, on the other, that developed in the U.S., again in the late–19th to the early–20th centuries mostly, by the likes of Cooley, Dewey, Mead, etc., mostly with the ladder [LATTER] learning at the feet of German and French sociologists such as George Simmel, Gabriel Tarde, and so on. Could you tell me a bit more, first, about the links between political economy and American sociology that you have in mind, and second about the transnational links?

Jeff: Our mention of the German connection is just to repeat the fact that many prominent turn-of-the-century U.S. sociologists–Park, Small, Mead, Ellwood, etc–studied in Germany. The Germans really established the modern research university, and the earliest US examples–Clark, Chicago, Johns Hopkins–modeled themselves on the German.

Up until very late in the nineteenth century, though, sociology didn’t really have a distinct identity, in Germany or the US. “Political economy” was, in effect, a catch-all term for the pre-discipinary social sciences as a whole. So when we write about political economy here, we really have in mind something like “social science”– and in this period the direction of influence was from Europe to the U.S.

Did you have in mind something closer to what gets called “political economy” today, or the British tradition that Marx is critiquing? Certainly the influence of German and French scholars on U.S. media sociologists has been completely understudied.

Q5 (Dwayne) I think this is an interesting phenomenon that has not been explored enough. The only communication scholar that I know of who has looked at Anglo-German ties with much depth is the late-Hanno Hardt (here and here). I also see this as the tip of a potentially bigger iceberg related to what I would call the “methodological nationalism” (Beck) that frames the intellectual history of our field and our ‘objects of analysis’ that, if properly addressed, could lead to a deeper and more significant global frame of reference for both of these considerations. Others have talked about a broader trans-Atlantic intellectual culture that took shape in the same time that you are talking about.

I’m not well-versed in this literature, but D.T. Rodgers’ book, Atlantic Crossings: Social Politics in the Progressive Age (1998), makes a similar case for the social sciences generally. Alexander Badenoch and Andreas Fickers in Materializing Europe: Transnational Infrastructures and the Project of Europe (2010), are also trying to write media history in a more trans-European framework. Your chapter opens some interesting possibilities along these lines in the first couple of pages when you discuss the work of Franklin Giddings in the same breadth as you refer to John Dewey, George Herbert Mead, etc..

I agree with this move because Giddings, like the others, emphasizes, as you note in the chapter, that the movement of goods and ideas are the lifeblood of modern society, and serve as forms of integration amidst a backdrop of increasingly differentiated and complex modern societies. I wonder if your introduction of Giddings might be usefully developed further in relation to your discussion about the cross-pollenization of ideas between U.S. and European sociologists? In particular, I’m thinking that there might be even deeper links between sociology and communication on both sides of the Atlantic, and between them and a broader set of developments that led to the formalization of political science, international relations and law, also in the late–19th and early 20th centuries?

I am not an expert on Giddings but in previous work I have found him to be part of another group of American political sociologists including Woodrow Wilson (the subsequent two-term president, 1912 “ 1920) and Paul Reinsh who served as founders of political science and international relations in the U.S. These scholars interacted a lot with French (Jean Luc Renaud, German, Dutch (Tobias Asser) and a few other European scholars in relation to global politics, multilateral institutions, international law, etc. They saw the modern world much in the same way that you describe European and American sociologists as doing: as a system tied together through flows and structures built out of a lattice-work of technologies, law, money, power and public opinion.

Like the scholars you focus on, this latter group (Wilson, Reinsch, Giddings) also placed great emphasis on, as you and Peters call them, the “material’ (technologies, institutions, etc.) and “symbolic’ aspects of communication, and the need to create mechanisms fit for the scale, pace and complexity of the modern world. Giddings expresses this view, for instance, in Democracy and Empire (1900), while Wilson put communication and public opinion alongside economic and technological integration and the rule of law as the basis of the “modern world system’ (instead of such things being just idealistic patter hiding the ambitions of ascendant U.S. economic, military and foreign policy power). Sorry, this is a rather long wind up.

My point is that while you and John peel back the veil, you don’t really develop the “transnational/global’ aspect as fully as you might. As a result, we get a kind of thin trans-Atlantic culture and when it comes to media, while questions about globalization emerge at the end of your chapter as a really just a recent phenomenon. Do you see what I’m getting at, or am I reading something into these ties I shouldn’t be?

I also wonder if part of the reason for this outcome might be due to the snug coupling between the media and the nation-state that has typified our field? Your chapter draws this out in the section on “the national frame” (pp. 407–409). And you do so by pointing to the work of Benedict Anderson, who sees the “imagined community’ of the nation-state as emerging co- terminously with the rise of the “big five’ modern media since the 15th century: newspapers, magazines, movies, radio and television. You also point to how broadcasting was, and in some developing areas of the world, still is, tied to a project of fostering national integration. The media/nation- state coupling, as you and Peters note, was clearly advertised by the names of radio broadcasters since the 1920s: e.g. Canadian Broadcasting Corporation (CBC), National Broadcasting Company (NBC), Columbia Broadcasting System (CBS), American Broadcasting System (ABC), etc. Clearly the media/nation-state coupling exists, but I wonder if you obscure the more global, or transnational dimensions of (a) media history proper and (b) the intellectual cross-fertilization that shaped the development of communication and media studies as a field of inquiry by over-inflating that aspect? Any thoughts?

Jeff: That is a huge and important question. Yes, the transnational gets short shrift in the chapter, both–as you say–in the history of media proper and in the field’s intellectual history. It is bracingly true that disciplinary histories have overwhelmingly focused on self-incapsulated national traditions. Dave Park and I, in a forthcoming survey of work on the field’s history, found this to be overwhelmingly the case. (We also found stunning North-South imbalances in the published work.)

Some of this reflects the insularity of national traditions, but a great deal derives from the limits of the historians drafting the history–including, in this case, John and me. The only pre-World War II literature I know reasonably well involving trans-Atlantic intellectual exchange is on public opinion and communication, which you also allude to.

From the 1870s on, systematic study of public opinion and its relation to social order was underway in Germany (e.g., Schaffle), France (e.g., Tarde, Le Bon), Britain (e.g., Bryce, Wallas), and by the early 1900s American figures (like Wilson, but also Lowell, Ross, Lippmann) were part of a trans-Atlantic conversation of just the kind you describe. I wasn’t aware of Giddings’ role in this discussion–so great, though, that books like Democracy and Empire are now in the public domain–but instead his fascinating journey through the social sciences as they were differentiating: an erstwhile economist in the late 19th century, then on to a primary identity as a highly influential sociologist at Columbia University through the 1920s. Robert Bannister’s Sociology and Scientism has the only extended treatment of Giddings that I know of–though this great recent article by Cristobal Young on the relationship of sociology and economics during this period uses Giddings as a case in point.

But you make a really good point about the chapter, that it over-emphasizes the national at the expense of cross-national intellectual exchange. No doubt you’re right too about media history proper. This stuff–the translational–is so damn hard to do well. Plus the sociology of academic translation and exchange is fascinating in its own right. I’d love to hear more about the political science/IR trans-Atlantic ferment you’ve touched on above.

The Significant Impact of the Bell Astral Deal on Media & Internet Concentration in Canada

Today was a good day. An unbelievably frantic one, but a good day nonetheless. I’ve been pouring blood, sweat and tears into a submission to the CRTC’s hearings on Bell’s bid to buy Astral Media to be held in Montreal next month. Today was the deadline for submissions to the CRTC.

My submission is part of an intervention by the Public Interest Advocacy Centre, Consumers’ Association of Canada, Canada Without Poverty, and Council of Senior Citizens’ Organizations of British Columbia opposing the Bell/Astral deal. The documents were filed with the CRTC today.  All submissions to the CRTC can be found on its website here.  

Bell claims in its application to the CRTC that a combined Bell/Astral “will not exercise market dominance in any sector of the broadcasting industry” (emphasis added, Bell, Reply, A14c). My submission on behalf of PIAC et. al. argues otherwise and that the transaction deserves very close scrutiny, and that key elements of it should be stopped dead in their tracks.

The key findings in the submission can be summarized as follows:

1. a successful bid by Bell to acquire Astral would catapult it to the top of the ranks in radio, with revenues of $500 million, 106 radio stations, just under 29 percent of the market – twice the size of its nearest competitors: Rogers, CBC and Shaw (Corus). Notwithstanding such an outcome, this would not trigger regulatory intervention under the CRTC’s new ownership rules or its Common Ownership Policy. Consolidation in radio increased in the early 2000s before drifting downwards in recent years. Radio is unconcentrated by conventional measures. The Bell/Astral deal, however, would reverse the tide and result in the highest levels of concentration in the past twenty-five years
2. there would be no direct impact on traditional television broadcasting.
3. in the specialty and pay television market, Bell’s market share would rise sharply from 28% in 2011 to over 42%. This gives the CRTC ample grounds to intervene.
4. across the total television universe, Bell’s position would be reinforced, rising sharply from 27% in 2011 to 35%. This, too, provides grounds for intervention.
5. television markets worldwide tend to be more concentrated than often assumed. Canada is, at best, a middle-of-the-road performer on this measure, and often at the high-end of the scale. While concentration is slowly declining elsewhere, in Canada it is rising sharply; the Bell – Astral deal will compound the trend.
6. Canada currently has the second highest level of cross media ownership and vertical integration among thirty-two countries studied by researchers in the International Media Concentration Research Project (Columbia University). It will be the highest amongst these countries if the CRTC does not pull the plug on the Bell — Astral deal.

The following figure shows the story.

Crossmedia Ownership/Vertical Integration Ratios — Canada # 1 amongst 32 Countries Surveyed Worldwide

Source: International Media Concentration Research Project with updates for 2011-2012 for Canada by author

Conclusions Drawn

Ultimately, the submission concludes:

1. The CRTC probably has no choice but to give a pass to Bell with respect to its take-over of Astral’s radio assets. Bell meets the Commission’s requirements under the Common Ownership Policy, or at least will once it divests itself of ten stations in Vancouver, Calgary, Winnipeg, Toronto and Ottawa-Gatineau. This is unfortunate because, until now, radio has been one of the least concentrated and most diverse media in the country. The Bell-Astral deal will increase concentration significantly, whereas in most countries covered by the IMCR study, it is declining.
2. Television is a different matter. There will be no direct effects on broadcast television. There will, however, be large and significant effects on the specialty and pay television and “total television” markets. Concentration levels in all of these areas are already very high by the CRTC’s own standards, historical norms, global standards and by CR and HHI standards used to measure media concentration in this submission.
3. The impact will be most extreme in the specialty and pay tv market, where Bell will increase its share of the market from 26.6% to 42.2% — well in excess of every other major player in the market: Shaw (32.3%), Rogers (10.7%), CBC (4.1%) and QMI (3.2%). Together, these five companies will control 92.5% of this market. Out of the eighteen countries for which adequate data is available, Canada currently is the 11th most concentrated market. If the Bell – Astral deal is approved, we’ll fall down another notch to 12th place.
4. The trend is similar with respect to the “total television” market, but not quite as pronounced. On the basis of the CR, it is already more concentrated than it has ever been in the last twenty-five years. In terms of the HHI, things could soon be right back where they were in 1984, when the HHI score was 2307.5 and the VCR all the rage. By my calculation, the HHI score is presently 1918, up significantly from three years earlier when it was 1,481. Should the Bell deal go through, it will have 35% of the market and the HHI score will be higher still at 2308.8 – one point more than twenty five years ago. The CRTC’s own concentration rules permit it to intervene actively in the face of such levels, and it should.
5. Lastly, Canada already has the second highest levels of cross-media ownership consolidation and vertical integration in the 32 countries examined by the IMCR project. We don’t need to be first. The CRTC ought to oppose this venture on this ground alone, although it is unclear whether it even as the power, let alone the will, to do so. Concentration within and across the network media industries –  demonstrably and empirically – has been extremely high, and is set to get higher yet.

It is time to reverse the tide.

Weak Links and Wikileaks: How Control of Critical Internet Resources and Social Media Companies’ Business Models Undermine the Networked Free Press

I’ve written several times on Wikileaks over the past year-and-half. In this piece I draw together and update my thoughts on Wikileaks in light of recent developments, with a focus on how concentration of ownership and control over critical internet resources (internet access, domain name registries, webhosting sites, payment services, etc.) and the business models of social media companies such as Twitter compromise freedom of expression and the press on the Internet, with Wikileaks serving to illustrate the point.

What follows is a first draft of a chapter that I have written for a forthcoming book edited by Benedetta Brevini, Arne Hintz and Patrick McCurdy. Beyond Wikileaks: Implications for the Future of Communications, Journalism and Society. I would be delighted to hear any constructive comments and criticisms you might have.

In his seminal piece on Wikileaks, Yochai Benkler (2011) makes a compelling case for why Wikileaks is a vital element of the networked fourth estate, and why we should view its harsh treatment by the U.S. government as a threat to the free press. As he says, the case embodies a struggle for the soul of the internet, a battle that is being waged through both legal and extralegal means, with major corporate actors – Apple, Amazon, eBay (Paypal), Bank of America (Visa), Mastercard, etc. – using their control over critical internet resources to lean in heavily on the side of the state and against Wikileaks.

This piece reviews Benkler’s case for seeing Wikileaks as an crucial element of the networked free press, adds a few details to it, then presents an important new element to the story: the role that Twitter, the social media site, has played in what I will call the Twitter – Wikileaks cases. In contrast to the pliant commercial interests that Benkler discusses, Twitter fought hard in a series of legal cases during the last year-and-a-half to avoid having to turn over subscriber account information for several people of interest to the U.S. Department of Justice’s ongoing Wikileaks investigation: Birgitta Jónsdóttir, an Icelandic MP and co-producer of the Collateral Murder video whose distribution over the internet by Wikileaks put it, and her, on a collision course with the U.S. to begin with, Wikileaks’ volunteer and Tor developer, Jacob Applebaum, and the Dutch hacktivist Rop Gongrijp.

The DoJ’s “secret orders” raise urgent questions about state secrets and transparency, the rule of law, internet users’ communication rights, and the role of commercial entities that control critical internet resources. The Twitter – Wikileaks cases also cut to the heart of journalism in light of how journalists routinely use social media such as Twitter and Facebook, but also search engines and internet access services, to access sources, share information, and generally to create and circulate the news.

Wikileaks and the Emergence of Next Generation Internet Controls

Information filtering, blocking and censorship have been the hallmark of China’s model of the internet since the 1990s. Now, however, we are at critical juncture in the evolution of the Internet, with the United States government’s anti-Wikileaks campaign showcasing how such methods are being augmented by a wide range of legal and extra-legal methods in capitalist democracies. Indeed, governments the world over now rely on multidimensional approaches that use technical tools to filter and block access to certain kinds of content while normalizing internet control through legislation and by out-sourcing or privatizing such controls to commercial internet companies (Deibert & Rohozinski, 2011, pp. 4-7). Among other things, the Wikileaks case shows that such actors are often all-too-willing to serve the state on bended knees, albeit with some important exceptions to the rule as the Twitter – Wikileaks cases discussed later in this chapter illustrate.

Three intertwined tendencies are stoking the shift to a more controlled and regulable internet. First, the concentration of ownership and control over critical internet resources is increasing: incumbent cable and telecom firms’ dominate internet access, while a few internet giants do the same with respect to search (Google), social media platforms (Facebook, Twitter), over-the-top services (Apple, Netflix), webhosting and data storage sites (Amazon) and payment services (Visa, Master Card, Paypal), among others. Simply put, more concentrated media are more easily regulable than many players operating in a more heterogeneous environment. Second, the media and entertainment industries have scored victories in Australia, UK, NZ, US, Taiwan, South Korea, France and a handful of other countries for three-strikes rules that require Internet Service Providers (ISPs) to cut-off internet users who repeatedly run afoul of copyright laws. A 2011 UN report condemned these measures as disproportionate and at odds with the internet’s status under the right to communication set out in Article 19 of the Universal Declaration of Human Rights (1948), but they remain operative nonetheless (La Rue, 2011). Lastly, the internet is being steadily integrated into national security and military doctrines, with thirty or so countries, notably the US, Russia and China, leading the push (U.S. Congressional Research Service, 2004). The U.S. Department of Defense’s revised “information operations” doctrine in 2003, for instance, defines the internet (cyberspace) as the fifth frontier of warfare, after land, sea, air and space (United States, Department of Defense, 2003). National security and law enforcement interests are also central in new laws currently being considered in the US (CISPA), Canada (Bill C-30) and the UK (Communications Data Bill).

These trends are increasing the pressure to turn Internet Service Providers (ISPs) and digital intermediaries into gate-keepers working on behalf of other interests, whether of the copyright industries or law enforcement and national security. This drift of events is already bending the relatively open internet, with its decentralized architecture pushing control to the ends of the network and into users’ hands, into a more closed and controlled model. Such trends are not new, but they are becoming more intense and firmly entrenched in authoritarian countries and liberal capitalist democracies alike. This is the big context within which the anti-Wikileaks campaign led by the U.S. government has unfolded.

Wikileaks and the Networked Free Press

There are counter-currents to these trends as well, and one of those is the rise of Wikileaks in the heart of the networked free press, just at a time when the press is struggling to find a sturdy footing in the internet-centric media ecology. While it is common to bemoan the crisis of journalism, Benkler (2011) strikes a cautiously optimistic note, laying the blame for the ongoing turmoil among traditional news outlets on their own self-inflicted wounds that have festered since the 1980s. The rise of the internet and the changing technological and economic basis of the media magnifies these problems, he argues, but the internet is not responsible for them. In fact, nascent forms of non-profit, crowd-sourced and investigative journalism may be improving the quality of journalism.

Wikileaks is part and parcel of these trends. In the events that put it on a collision course with the U.S. government, the whistle-blowing site burnished its journalistic credentials by working hand-in-glove, at least after the “collateral murder” video, with The Guardian, the New York Times, Der Speigel, Le Monde and El Pais to select, edit and publish the Afghan and Iraq war logs and embassy cables. By cooperating with respected journalistic organizations, Wikileaks material was selected, edited and published according to professional news values rather than driven solely by the logic of hactivism or being an indiscriminate and irresponsible dump of sensitive state secrets into the public domain. The collaboration between traditional news outlets and Wikileaks also demonstrated that gaining access to large audiences in a cluttered media environment still requires ‘big media’. Altogether, these efforts set the global news agenda four times in 2010. For its efforts, Wikileaks chalked up a bevy of presitgious awards for its significant contributions to access to information, transparency and journalism, adding to the long list of honours that it had already won from press and human rights organizations, including from British-based Index on Censorship, Amnesty International and Time Magazine, among many others, since its inception (see Wikileaks Press, nd).

Interestingly, while Wikileaks had been offering journalists free access to the war logs and embassy cables for some time, it was only after it offered exclusive national rights to The Guardian, New York Times, and other major newspapers around the world that journalists showed much of an interest. Rights, money, and market power are still important lures, and are cornerstones of market-based media, with or without the internet – although it is important that Wikileaks certainly does not follow the conventional commercial model, and offers an alternative to it.

The more important point for now, however, is that investigative journalism is not the exclusive preserve of the traditional press, but it is the signature feature of what Wikileaks does. That the interjection of Wikileaks into the journalistic process led to outcomes that are probably better than the ‘good ole days’ is underscored by the fact that while the New York Times consulted with the Obama Administration before publishing the war logs and diplomatic cables, it did not withhold the material for a year. Indeed, this is a big and important difference from its behaviour in 2005 when, at the behest of the Bush Administration, the New York Times delayed James Risen and Eric Lichtblau’s (2006) expose of unauthorized, secret wiretaps conducted by the National Security Agency in cooperation with AT&T, Verizon and almost all of the other major telecom-ISPs in the U.S. (Calame, 2006). The war logs and embassy cables stories likely became headline news in 2010 faster than would otherwise have been the case because of Wikileaks role in these events, and its strategy of playing news organizations’ competitive commercial interests off of one another. Moreover, with little need to maintain good standing with the centres of political, military and corporate power, Wikileaks never assumed levels of deference similar to the New York Times and other established news sources.

All-in-all, Wikileaks is emblematic of a broader set of changes that, once the dust settles, will likely stabilize around a new model of the networked fourth estate, an assemblage of elements consisting of (1) a core group of strong traditional media companies; (2) many small commercial media (Huffington Post, the Tyee, Drudge Report, Global Journalist, etc.), (3) non-profit media (WikiLeaks, Wikipedia), (4) partisan media outlets (Rabble.ca, Daily Kos, TalkingPointsMemo), (5) hybrids that mix features of all the others and (6) networked individuals (Benkler, 2009). The fact that WikiLeaks is so central to these developments, and so solidly at one with journalistic and free press traditions, helps to explain why neither it nor any of the newspaper organizations it partnered with have faced direct efforts by the U.S. to suppress the publication of WikiLeaks’ documents (Benkler, 2011). If the story ended here, it would be a happy one, a triumph of a plucky, determined watchdog willing to take on the powers-that-be, without fear or favour, a testimony to the power of the internet to contribute to freedom of expression, the free press and the public’s right to know – in other words, democracy.

Using Ownership and Control of Critical Internet Resources to Cripple Wikileaks

Unfortunately, however, the story does not end there. The problem, as Benkler (2011) states, is that what the U.S. was not able to obtain by legal measures, it gained with remarkable ease from private corporations and market forces. Thus, buckling under the slightest of pressure, Amazon banished Wikileaks’ content from its servers the same day (December 1, 2010) that Senator and Senate Committee on Homeland Security and Governmental Affairs Chair, Joe Lieberman (2010), called on any “company or organization that is hosting Wikeleaks to immediately terminate its relationship with them”. Wikileaks quickly found a new home at webserver firm OVH in France but lost access to those resources after France’s Industry Minister warned companies on December 4 that there would be “consequences” for helping keep Wikileaks online. A day later, the Swedish-based Pirate Party stepped in to host the “cablegate” directory after they were taken off line in France and the US.

Yet, Wikileaks’ troubles didn’t end there because just a day before it was kicked out of France, the U.S. company everyDNS delisted it from its domain name registry. As a result, Internet users who typed wikileaks.org into their browser or clicked on links pointing to that domain came up with a page indicating that the site was no longer available (Benkler, 2011; Arthur, 2011). The Swedish DNS provider, Switch, faced similar pressure, but refused to buckle. It continues to maintain the WikiLeaks.ch address that Internet users still use to access the site, but has faced a barrage of Distributed Denial of Service (DDoS) attacks for doing so.

As Amazon, OVD and everyDNS took out part of WikiLeaks technical infrastructure, several other companies moved into to disable is financial underpinnings. Over the course of four days, Paypal (eBay) (December 4), MasterCard and the Swiss Postal Office’s PostFinance (December 6), and Visa (December 7) suspended payment services for donors to the site. Two weeks later, Apple removed a Wikileaks app from the iTunes store (Apple removes Wikileaks, 2010). Thus, within a remarkably short period of time, a range of private actors cut-off Wikileaks’ access to critical internet resources. The actions did not kill the organization, but the financial blockade did contribute mightily to the fact that Wikileaks funding plummeted by an estimated 95 percent (Wikileaks, 2011).

Privacy Rights Online and Internet Companies’ Business Models: Weak Foundations for the Networked Fourth Estate and Communication Rights

One important entity has stood outside this state-corporate triste on the outskirts of the law: Twitter. Indeed, it has stood alone among big American corporate internet media brands in refusing to assist the United States’ anti-Wikileaks campaign. Faced with a court order to secretly disclose subscriber information for three of its users, it said no.

In December 2010, at the same times as Wikileaks was being cut-off from critical internet resources, the US Department of Justice demanded that Twitter turn over subscriber account information for Birgitta Jónsdóttir, Jacob Applebaum and Rop Gongrijp as part of its ongoing Wikileaks investigation. The information sought was not innocuous and general, but intimate and extensive: i.e. subscriber registration pages, connection records, length of service, Internet device identification number, source and destination Internet protocol addresses, and more (United States, 2011a, pp. 7-8). Twitter was also told not to disclose the request to the people concerned, and to stay quiet about the whole thing. It did none of this.

Instead, the company mounted a serious legal challenge to the Justice Department’s “secret orders” and pushed the envelope in interpreting what it could do to protect its subscribers’ information (McCullagh, 2011). In Twitter – Wikileaks Case #1, the social media site won a small victory by gaining the right to at least tell Jónsdóttir, Applebaum and Gongrijp that the DoJ was seeking information about their accounts (United States, 2010). They were given 10 days to respond before it was compelled to comply with the DoJ order. It also took the extra step of recommending that they seek legal help from the Electronic Frontier Foundation (EFF), a public interest law watchdog on all matters digital and about internet/cyberspace governance (a copy of Twitter’s letter to Gongrijp is available at Gongrijp, 2011).

The EFF has represented Josdottir on the matter since, while Twitter’s lead counsel, Alex MacGillvray, has stood for the company. Interestingly, Iceland has also weighed in by strongly criticizing the US over Jónsdóttir, while a group of 85 European Union Parliamentarians condemned the United States’ pursuit of Wikileaks. They were especially critical about how the US was harnessing internet giants to its campaign. They “failed to see” how, among other things, the Twitter Order could be squared with Article 19 of the Universal Declaration of Human Rights. More to the point, they worried the United States’ actions were contributing to the rise of a

“national and international legal framework concerning the use of . . . social media . . . [that] does not appear to provide sufficient . . . respect for freedom of expression, access to information and the right to privacy” (Intra-Parliamentary Union, 2011).

The first Twitter – Wikileaks case, or “Twitter Order”, was a shallow victory. It allowed the company to inform Jónsdóttir, Applebaum and Gongrijp that they were of interest in the DoJ’s ongoing Wikileaks investigation, but did not prevent the disclosure. Yet, even this shallow victory looks positive relative to how easily Amazon, Apple, eBay (Paypal), Mastercard, Bank of America (Visa), everyDNS, etc. enlisted in the United States’ campaign against Wikileaks. Twitter staked out a decidedly different position that insisted upon the rule-of-law, speaking out in public and going beyond what was necessary to help its subscribers ensure that their rights, and personal information, are respected.

The full perversity of these circumstancs only came fully into light in the Twitter – Wikileaks Case #2, when Jónsdóttir, Applebaum and Gongrijp appealed part of the first case to overturn, and thus prevent, the requirement that Twitter hand over their account details to the DoJ (United States, 2011a). The U.S. District Court‘s decision in the case in November 2011 had direct results and some potentially far sweeping implications.

The first direct result, as we have seen, is that Twitter had to hand over Jónsdóttir, Applebaum and Gongrijp’s subscriber information. Another, however, is that they have no right to know whether the DoJ has approached Facebook, Google or other Internet companies with secret orders, and if so, for what kinds of information, and with what results (p. 52). The courts seem to believe that neither they nor the public-at-large have the right to know the answers to these questions. For their part, Google, Facebook and Microsoft (Skype) have stayed silent on the affair despite their frequent pontification about internet freedom in a generic sense and mostly in relation to ‘axis of internet evil’ countries, such as Saudi Arabia, China, Russia and Iran, among a rotating cast of others.

If these results are not discouraging enough, more sweeping implications flow from two other directions in the second Twitter – Wikileaks ruling. The first is the poor analogy the court draws between the internet and banks to ground its decision as to why companies of the former type must hand over subscribers’ information just as readily as the latter do when served with a court order. There is a lot of potential discussion in this point alone, but for now it suffices to say that thinking about social media in terms of banking, insurance and clients is a long way from comprehending the internet as a public communications space.

Of more interest for here is the mind-boggling claim that internet users forfeit any expectation of privacy – and hence, privacy rights – once they click to accept internet companies’ terms of service policy. As the court put it, Jónsdóttir, Applebaum and Gongrijp “voluntarily relinquished any reasonable expectation of privacy” as soon as they clicked on Twitter’s terms of service (United States, 2011a, p. 28). Thus, instead of constitutional values, law or social norms governing the situation, the court ruled that privacy rights are creatures of social media companies’ business models. Social media users, according to the court, would have to be woefully naive to expect that privacy is a priority value for advertising-driven online media, given that almost the entire business model of major Internet companies is about collecting and selling as much information about audiences as possible.

But this is ridiculous because Twitter, Facebook and Google’s terms of service policies are about maximizing the collection, retention, use and commodification of personal data, not privacy. It is as if the ruling is intentionally out of whack with the political economy of the internet so as to give the state carte blanche to do with digital intermediaries as it pleases. Christopher Soghoian (2011) captures the crux of the issue in relation to Google, but his comments apply to Internet companies in general:

Google’s services are not secure by default, and, because the company’s business model depends upon the monetizaton of user data, the company keeps as much data as possible about the activities of its users. These detailed records are not just useful to Google’s engineers and advertising teams, but are also a juicy target for law enforcement agencies.

Conclusions and Implications: Wikileaks, the Networked Fourth Estate and the Internet on Imperiled Ground

Things don’t have to be this way. The idea that privacy rights turn on the terms of service policies of commercial internet companies rests upon a peculiarly squinty-eyed view of things and leverages the mass production and storage of personal data enabled by Twitter, Facebook, Google and so forth for the advantage of the state. But even if we took corporate behaviour as our moral compass, Twitter has occasionally distinguished itself, as it did during the London riots/uprising in August 2011 by refusing to comply with the UK government’s requests to shutdown its service and handover users’ information, while Facebook complied. Thus, even by the standards of corporate behaviour, Twitter’s behaviour could cultivate a higher sense of privacy amongst its users.

Concentrated Internet Markets and Small Details: Changing the business model of internet companies to minimize the collection, retention and disclosure of personal information, as the EFF recommends and as some non-commercial sites such as IndyMedia sources do, would be helpful. Sonic.net, a small ISP with 45,000 internet subscribers in the San Francisco area, and which is also implicated in the Wikileaks case because Jacob Applebaum, a key figure in the Twitter – Wikileaks case, as we saw above, has been one of its subscribers, does just this. Most ISPs, in contrast, take the opposite view, as a cursory review of the terms of service policies from AT&T, Comcast. Verizon and Time Warner – the big four ISPs in the U.S. that account for just over 60% of internet access revenues (Noam, 2012) – illustrates. While Sonic.net may offer a model of a free and open internet that maximizes its users’ privacy by minimizing data collection and retention, the fact of the matter is that with less than .05 percent of the US internet subscriber base, it is easily ignored.

Ultimately, the relevant measuring rod of communication rights is not corporate behaviour or the market, but legal and international norms. Social norms govern how we disclose personal information in complex, negotiated and contingent ways, as well (Nissenbaum, 2011). Internet companies’ terms of service policies and the Twitter – Wikileaks cases largely ignore these realities, and thus are out of touch. These issues as well as the fact that the vast majority of people do not even read online terms of service policies — and those who do more often than not do not fully understand them — were brought to the court’s attention, but brushed aside. The decision at least makes it clear that the hyper-commercialized ‘free lunch’ model of the Internet comes with a steep price: our privacy rights and an entire industrial arrangement poised to serve as the handmaiden of the national security state.

The Virtues and Vices of Twitter: It is against this backdrop that the significance of what Twitter has done is clear. It has not flouted the law, but has been hoisted upon its own petard on account of its “business model”. But this is an irreconcilable contradiction of capitalism, to use a marxist formulation, and won’t be solved by simply changing Twitter’s business model. Nonetheless, Twitter went beyond just complying with the law to afford as much respect for users’ rights as circumstances allowed. We might also ask if Twitter’s recent adoption of a “transparency report” chronicling government requests for user information and to take-down certain content reflect lessons learned by the company in the midst of the anti-Wikileaks campaign as well?

There is no need to pretend that Twitter is the epitome of virtue, because it is not. While Google, WordPress and others have all signed on to the broad statements of principles regarding privacy and online free speech rights in the Global Network Initiative, for example, Twitter, along with Facebook, has not. But in this area, pontificating is rife, and while Google preaches transparency and open information absolutism, it has said nothing direct or substantial about the U.S.’s treatment of Wikileaks, or even if it has been implicated in the campaign.

Deepening National Security Imperatives: The U.S. governments’ campaign against Wikileaks further entrenches the post 9-11 securitization of the telecom-internet infrastructure, in the U.S. and globally, given the reach of the most well-known US telecom and internet giants (Risen & Lichtblau, 2006; Calame, 2006). Some courts have condemned expansive claims of state secrets and unbound executive powers when it comes to national security matters, but others seem to grant the state a blank cheque (United States, 2006; United States, 2011b). When the law has not proved serviceable, as the earlier discussion suggests, important U.S. government figures have tip-toed around its edges, compliant private companies in tow, to get what it wants. Congress has also stepped in occasionally to make legal what before was not, as in the passage of the much revised and expanded Foreign Intelligence Services Act (FISA) in 2008, which is now up for renewal again and set to pass with little opposition in Congress (United States, 2008).

The Global Dimension: The campaign against Wikileaks cannot be kept to narrow confines and readily spills over into wide ranging areas, including diplomatic and global internet policy angles, too. Nation-States, and the US in particular, are flexing their muscles and attempting to assert their sovereignty over cyberspace – a point that defines the Wikileaks case. Scholars such as Lawrence Lessig, Ropald Diebert, Jonathan Zittrain, Jack Goldsmith and Timothy Wu, among many others, have long shown that cyberspace is no more immune to government intervention than you or are I are immune to the laws of gravity. Struggles over the Internet Corporation for the Assignment of Names and Numbers (ICANN), the rift between Google and China, and the United State’s campaign against Wikileaks clearly expose that fallacy for what it is. Legitimate criticisms of U.S. dominance of critical internet resources has been a staple of global internet politics since the ITU’s tussles with ICANN in the late 1990s, through WSIS I & II (2001 – 2005), to the creation of the Internet Governance Forum (2005), and back again to the ITU in 2012 (Mueller, 2010). The Wikileaks case offers a rational basis for such concerns. Criticisms of the U.S. in the Wikileaks case by EU parliamentarians, for instance, are of this kind.  The Guardian newspaper in the UK made the same point, too, by choosing Jónsdóttir, Assange, Applebaum and Twitter’s chief legal counsel, Alex MacGillvray, for its list of twenty “champions of the open internet” in April 2012 (Ball, 2012). Many of the awards bestowed upon Wikileaks by respectable human rights and free press organizations before and after the organization’s Collateral Murder video, war logs and Embassy Cables trilogy in 2010 are of a similar kind.

The problem, however, is that legitimate criticism are often mangled when mixed with attempts by strong states in authoritarian countries to use them as a Trojan Horse to smuggle in even less appealing attempts to dominate their own sovereign slices of the internet. A balkanized collection of Web 3.0, nationally-integrated internet media spaces is the result.  To the extent that the anti-Wikileaks campaign feeds such a pretext and fuels the ‘clash of sovereigns’ on the internet, it is unhelpful.

At the opposite end of the spectrum, the Twitter-Wikileaks rulings may serve the U.S. government’s bid to drive Wikileaks out of business well, but they have also lit a fire in the belly of hactivist groups like Anonymous and LulzSec, for whom such things are their raison d’etre. It may not be too much to suggest that the whiff of the anti-Wikileaks campaign fresh in the air helped to bring about the demise of recent attempts to strengthen national and international copyright laws – e.g. SOPA, PIPA and ACTA — given that, like the campaign against Wikileaks, each sought to leverage critical internet resources to control content and further restrict what people can do with their internet connections. If that, in fact, is the case, perhaps the battering of Wikileaks may have unintentionally served a noble cause.

Perhaps we can take solace in that and the fact that the distributed nature of the Internet means complete copies of Wikileaks files have been scattered across the planet, beyond the reach of any single state, no matter how powerful: the ultimate free speech trump card in a way. Yet, the fact that Wikileaks is now floundering, one of its founding figures on the lamb, and its funding down to a tenth of what it once was means that we ought not be so sanguine in our views. Happy stories about digital democracy should not deter us from the harsh reality that important open media principles have already been badly compromised, and more are at stake yet. Indeed, the deep ecology of the Internet is at stake, and so too is how we will conduct our lives in this highly contested place.

The ITU and the Real Threats to the Internet, Part IV: the Triumph of State Security and Proposed Changes to the ITRs

This is the fourth in a series of posts on the potential implications of proposed changes and additions to the ITU’s international telecommunications regulations (ITRs) on the internet (earlier posts are here, here and here).

As we assess these potential implications it is necessary to sort out charges that are, in my view, overblown and alarmist versus those that have merit based on a close reading of the relevant ITU texts. I want to be clear that while I think that many of the charges being leveled at the ITU are trumped up baloney, there are actually many reasons to be concerned. I’ll briefly reprise what I see as the over blown claims (OBCs), then set out the most important real areas of concern.

Over Blown Claims (OBC)

(OBC1): The ITU & the Net: The claim that new rules being proposed for the WCIT this December could give the ITU authority over the internet, when currently it has none, is one OBC (see here, here and here), as I laid out in blog post two.

(OBC2) The Global Internet Tax: This is the claim that some countries want to meter internet traffic at their borders, a kind of tax that Facebook, Google, Apple, Netflix and other internet content companies would supposedly be forced to pay to reach users on the other side of the toll – simultaneously serving to fund broadband internet upgrades in foreign countries, constricting the free flow of info, and keeping people sealed off behind the closed and controlled Web 3.0 national internet spaces that are being built in Russia, China, Saudi Arabia, Iran and other repressive states (see here and here).

The kernal of truth in this matter is that European telecom operators have proposed to establish a “fee-for-carriage” model – like cable tv – that would allow them to charge big internet content companies according to the volume of traffic they generate. I don’t like it at all. It is a full-scale assault on network neutrality. Google hates it too (Ryan & Glick, Cerf NYT, Cerf Congress). Net neutrality folks should be up in arms, and some are.

The problem at the root of the critics’ assertions, however, is that the proposal by ETNO is not unusual but embodies the same “fee-for-carriage” model that telecom carriers such as AT&T, Comcast, Bell, Telecom NZ, and others have pursued for the past decade (see post 3). It is wrong to construe the demand to make internet companies pay for carriage as a tax, let alone a diabolical scheme by authoritarian governments to take-over the internet.

In addition, the idea of an internet metered at the border overlooks possible additions to Art. 3.7 of the ITRs that, as discussed in the last post, “enabl[e] direct international internet connections” between countries. “Special Arrangements” set out in Art. 9 of the constitution also means that telecom and internet companies can strike whatever deals they want to create end-to-end connectivity, so long as both countries on either end agree. Again, markets and contracts rule, not some kind of cyber-wall of Berlin.

(OBC3) Spam, Spam, Spam: The third, mostly bogus claim is that proposals to add references to spam in several places in the ITRs are the thin edge of a wedge that could lead to internet content regulation (Article 2.13; Art. 4.3a; and proposed new Art. 8A.5 and 8B). The proposal, however, urges countries to adopt “national legislation” covering spam – as many already do – and “to cooperate to take actions to counter spam” and “to exchange information on national findings/actions to counter spam”. This hardly seems like the thin of a wedge and, moreover, Article 2.13 explicitly excludes content as well as “meaningful . . . information of any type”.

Still, the U.S. is strongly opposed to such measures on the grounds that technological solutions are better suited to the problem than international law. Overkill, it says, and at odds with technological neutrality. Australia calls it too broad, Canada doesn’t like it either, and Portugal is still looking to see how it meshes with EU law. This is hardly an endorsement for the ‘global regulation of spam’ by the supposed axis of internet evil offering it, but the proposal is hardly tantamount to Armageddon, either (for annotated notes outlining countries’ views of proposed changes and additions, see here).

State Security, Splinternet and the Pending Death of the Open Global Internet: the Real Threats to the Internet

Now if you think I’m simply lining up as an apologist for the ITU, you’d be wrong, as the rest of this post makes clear.  Several proposals now on the table (see below) would cast a devastating blow to the internet by blessing the efforts of individual countries to build their own closed and controlled national Web 3.0 internet spaces today. In fact, many countries, including Anglo-European countries, are doing just that, although to a degree and of a kind that is demonstrably different than what is being built in the list of ‘rogue states’ that are often identified with such projects: Russia, China, Saudi Arabia, Iran, etc.

In fact, several sections of the ITU’s current framework already allow these kinds of projects, before any changes. Proposals to change or add new elements to the ITRs could make matters even worse, however.

Intercepting, Suspending and Blocking the Flow of Information since the 1850s: the Dark Side of the ITU

To see how, we need only to realize that nation-states have always claimed unbridled power to control national communication spaces, and to intercept, suspend and block the cross-border flow of information. The authority to inspect, suspend and cut-off communications that “appear dangerous to the security of the State or contrary to its laws, to public order or to decency” was first asserted by European governments in the 1850s during their drive to squelch popular rebellions. That authority was acknowledged by the Austro-German Telegraph Union and Western European Telegraph Union at the time, before being folded into the ITU when these organizations merged in 1865 (see Constitution, Article 34). That legacy hangs over the current WCIT talks like a dark cloud.

The supremacy of national security has been retained ever since and forms the basis of Articles 34, 35 and 37 in the ITU’s current Constitution, as the extracts below illustrate:

“Member States reserve the right to stop . . . the transmission of any private telegram which may appear dangerous to the security of the State or contrary to its laws, to public order or to decency” (Art. 34(1), Stoppage of Telecommunications, emphasis added).

“Member States also reserve the right to cut off, in accordance with their national law, any other private telecommunications which may appear dangerous to the security of the State or contrary to its laws, to public order or to decency” (Art. 34(2) Stoppage of Telecommunications, emphasis added).

“Each Member State reserves the right to suspend the international telecommunication service, either generally or only for certain relations and/or for certain kinds of correspondence” (Art. 35, Suspension of Services, emphasis added).

“Member States agree to take all possible measures . . . to ensur[e] the secrecy of international correspondence[, but] . . . reserve the right to communicate such corre­spondence to the competent authorities in order to ensure the application of their national laws or the execution of international conventions to which they are parties” (Art. 37, Secrecy of Telecommunications).

One proposal by the United Arab Emirates aims to replicate these measures in three new clauses to be added to the ITRs (Art. 7.3, 7.5 and 7.6, respectively), allowing such norms to do double-duty as high-level principles and day-to-day regulatory guidelines. The U.S. opposes the move, not because it sees telecoms and internet as a kind of global commons beyond the reach of harsh geopolitical concerns, but likely because the ITU already reflects the fact that national security concerns trump everything, and because it would not be unduly constrained by global norms anyway.  The US response to the UAE proposal is clear on the point: “We support retaining these provisions in the CS [constitution] and do not agree with . . . duplicating them in the ITRs”.

Cyberwar and the Fifth Domain of Battle: Militarization of the Internet versus Global Commons

The U.S. also refuses to be drawn into the proposals bandied about by Russia (mostly), China and a few other powerful military states over the past decade, this time to add a sprawling new section to the ITRs covering cybercrime, national security and cyberwar issues (Article 8A). The U.S. has rebuffed these moves for the same reasons mentioned above and, more to the point, because behind the veil of its global-internet-freedom-as- foreign-policy rhetoric is its more pressing conviction that the internet is now the fifth domain of war, alongside land, sea, air and space, a terrain where it grandiosely seeks to assert total infosphere dominance.

Seen in this context, overtures to “network defense and response to cyberattacks” (Article 8A.1) have no chance of adoption, even if setting aside the internet as a global commons under ITU protection outside the field of war might be a good idea. Moreover, and however, that rubicon has already been crossed with Russia believed to have been behind cyber-attacks against Georgia in 2008 and the Obama Administration’s recent admission that it played a role in the Stuxnet attacks against Iranian nuclear facilities.

Bearing those points in mind, Russian proposals to carve out new rules of cyberwar are hypocrisy, while the acknowledged facts of U.S. military policy means that it will dismiss such notions out of hand. Based on this, worries that additions to the ITRs intended to deal with such matters could serve as a Trojan horse for repressive controls over the internet can probably be safely tossed aside. It is worth noting, however, that amidst all the hand-wringing over the ITU threat to the internet, no one, as far as I know, touches upon how the hard realities of military power shape global telecom and internet policy, instead settling into numbing nostrums that pit the state against the individual.

A Laundry List of Many Items with Potentially Really Big Implications

Beyond the stance of the U.S. on the above matters, and questions of network defense and cyberwar, Article 8A starts off innocently enough, but quickly opens into a chamber house of horrors. It blandly refers to “confidence and security” in the title and the need to garner trust in online spaces (true enough), followed by a list of technical-sounding proposals about network security, data retention, data protection, fraud, spam, and so on.

Some of these principles are worthy of discussion, but the way they have been teed up for WCIT utterly fails to inspire confidence or hope. The measures are spearheaded by Russia and supported by China, with the latter telling us in the notes accompanying the proposals that new tools and rules are needed to:

“. . . protect the security of ICT infrastructure, misuse of ICTs, respect and protection of user information, build a fair, secure and trustworthy cyberspace . . . [with] new articles on network security in the ITRs”.

There is also a sundry list of other items included in the proposed new Article 8A as well as others drawn from recommendations at past conferences that deal with child online protection, fraud, user identity, etc.  One by one, most of these measures are reasonable, and most countries are dealing, on their own and in cooperation with one another, with all of them already.

Looking across all these proposals, however, reveals a raft of threats that, in their entirety, would usher in the foundation of controlled and closed national internet spaces that are subordinate to the unbound power of the state in every way:

• Anonymity and Online Identity are implicated in repeated references to the need for users to have a recognized identity. This comports well with laws in countries such as China that require internet users to tie their online identity to the ‘real-name’ identity but if identifiability is the first step to regulability, as Lawrence Lessig claimed a decade ago, than this raft of references insisting on the need for online identity is a problem (e.g. proposed new Art. 3.6, 6.10, 8A.7, 8A.8). As ISOC states, such moves entail a “very active and inappropriate role in patrolling newly defined standards of behaviour on telecommunication and internet networks and in services”. I agree;

• Privacy as well as Data Collection, Retention and Disclosure are mentioned as being critically important values several times (Articles 3.6, 8A.1, 8A.3, 8A.4) but are hemmed in by the repressive national security norms described above. While the wave of telecom and web monitoring bills currently under consideration just in the US (CISPA), Canada (Bill C-30) and the UK (Communications Data Bill) suggests that there is a need to reign in governments’ strong inclination to apply new surveillance and security measures to the internet, proposed changes to the ITRs would likely pressure telecom providers and ISPs to maximize rather than minimize the amount of personal data they collect, retain and disclose to state authorities.

• Internet content regulation is seen as a threat scattered across many proposed changes to the ITRs but I think most of these claims are, as noted above, overblown. This threat, however, does loom large, but is mostly concentrated in a proposal to add the new Article 8A to the ITRs. Focusing our attention there, I agree with ISOC that the new rules could speed along and legitimate the development of national internet content regulation.

The worst examples of this come in two places in the new Article 8A.4 put forward by Russia. The first appears in a passage that reaffirms people’s “unrestricted” right to use international telecom services but immediately clips such rights with the caveat: “except in cases where . . . telecommunication services are used [to] . . . interfer[e] in the internal affairs or undermin[e] the sovereignty, national security, territorial integrity and public safety of other states”. One can only imagine how such measures might steel the hand of governments intent to interrupt the flow of tweets, Facebook updates, and other social media interactions that have played an important role, for example, in Arab Spring, the Occupy Wall Street protests, Wikileaks, etc. This is an effort to replicate the national security values already found in the Constitution in the ITRs, similar to the proposals of the UAE outlined above, and should be opposed for the same reasons.

Things are made worse yet by including what we might call the ‘anti-Wikileaks’ clause immediately afterwards, a provision that would trump people’s right to communicate when telecom-internet facilities are used “to divulge information of a sensitive nature” (Art. 8A.4). Leaking ‘sensitive information’, however, is not a crime and the idea that the “sensitive nature” of info will serve as a standard has no reference in free speech/press law and ideals. It also assumes an unbound conception of the state’s security interests, and gives it carte blanche to do as it pleases.

It is impossible to reconcile such prohibitions against info disclosure/publishing/leaking with the goal of furthering the development of a global and open internet or the right to communicate and of the free press. Accepting such a standard would be a much more potent Wikileaks killer than the heavy-handed measures that have already been used by the U.S. because it would give a legal sheen to what the U.S. has had to do so far by skirting around the edge of its on laws. Through such a clause, states would have free reign to crackdown on whistle-blowers with impunity and without limits.

A Few Final Thoughts

This exercise has forced me to change my views. The proposed additions and changes to the ITRs are worse than I thought. It is important that proposals now on the table for discussion at the upcoming WCIT get as much critical scrutiny as they can, and seen in that light, the WCITleaks site created by the folks at the Technology Liberation Front is a very useful tool.

That said, the analysis of the ITU and the proposed changes afoot have been largely strained through the prism of ideology, indiscriminately jumbling together overblown claims with real insights. As far as I can see, it is not the myriad of small changes to one section of the ITRs after another that constitute the major problem, but rather a set of issues that are mostly clustered in proposals by Russia, and supported by China, to add new sections to Article 8.  The damage such proposals could do to unsettled internet policy issues related to anonymity and online identity, privacy and personal data protection, as well as internet content regulation are enormous and can hardly be exaggerated.

On a more modest note, I understand that there is a battle over language that will occur in other sections, notably in Articles 1 and 2 over the definition of telecoms, with those who believe that the ITU does not cover the internet rejecting at every turn proposals by those who do to pepper the ITRs with explicit references to the internet. I believe the ITU’s authority already covers the internet, but understand that the politics of language will play a big role as countries stake out their turf on the matter.

I see no new global internet tax on the horizon and do not believe that references to spam are the thin of the wedge that will lead to national internet content regulations being imposed in one country after another. The truly awesome power of the state over communications, including the internet, however, comes into view as soon as we realize how stilted the existing ITU framework is in favour of national security imperatives.

Indeed, national security appears to trump everything, including the right to communicate and the free press. The fact that such norms are derived from a history of suppressing popular uprisings in Europe ought to make us think long and hard about their continued role amidst the political uprisings and revolts sweeping the world. Attempts by the UAE and Russia (with the support of China) to replicate repressive national security values in the ITRs through additions to Articles 7 and 8, respectively, do pose a threat to an open internet and political protest the world over.

This is important, too, because while I doubt that such measures have much chance of succeeding, they mesh with certain trends that define our times, with moves aplenty to impose comprehensive telecom and web monitoring plans in one country after another, as well as the copyright maximalist agenda that is turning telecom-ISPs across the world into internet cops on behalf of the media and entertainment industries. Such initiatives will continue with or without changes to the ITRs, which also highlights the reality that the ITU’s influence in these affairs is limited and not omnipotent.

Even if the most repressive aspects of proposed changes and additions to the ITRs were approved, this would not bind the whole world to implementing a single internet model. It would, however, bless the national Web 3.0 spaces that are already being built on the basis of three layers of control: (1) the systematic use of filtering and blocking to deny access to restricted websites and the recognition of such measures in national law; (2) dominance of national internet-media spaces by national champions (Baidu, Tencent, Yandex, Vkontakte, Facebook, Google, Apple, etc.) and (3) the active use of government-driven internet-media-communication campaigns (propaganda) to shape the total information environment (See Deibert & Rohozinski, ch. 2). The changes to the ITRs being sought by some countries, notably Russia and China, would add a fourth layer – international norms steeped in 19th century models of state security – that would further entrench the web 3.0 model and further lay waste to more important international norms associated with the right to communicate and free press.

Rearview Mirrors & the Rule of Markets: The ITU’s Supposed Big New Global Threat to the Internet, Part III

This is the third in a series of posts on the supposed threat of an ITU/UN take-over of the internet. As I’ve already said in two previous posts (here and here), I think the charges are vastly overblown, although there are interesting things to argue about and legitimate worries to be had.

Facts and Norms

There might also be victories for global internet governance to be had, if we take the ITU’s role seriously and that it, in turn, adopts only regulatory guiding principles that meet a minimum standard of liberal norms governing markets, human rights, a free press and freedom of expression.

To some extent, it already does by anchoring its own operations to Article 19 in the Universal Declaration of Human Rights (1948) (Constitution, Article 33; DRR Res. 71 (1998) & Rec. 2 (1994).[i]Article 19 stakes out a bold international right to communicate and for the free flow of information. The right to communicate includes the internet as well, as a UN report explicitly stated last year – an ideal the ITU duly embraced, although its commitment to it, as we will see, is badly compromised elsewhere by its own rules and regulations (see below and next post).

Some Canadians might be interested to know that legal scholar and McGill University professor, John Humphrey, helped to write the UNDHR as part of a bigger mission to remake the world at Bretton Woods so that peace, capitalism and democracy might survive after having been blown to smithereens by not one but two World Wars in the first half of the 20th century. C. B. McPherson, a renowned political philosopher and incidentally a Canadian as well, saw the UNDHR as elevating and institutionalizing a minimal set of norms that people worldwide saw as their own, and aspired to live by.

Of course, there are technolibertarian and free market, no government fantasists who argue three things against this rose-tinted view of the ITU and global institutions: (1) such things are irrelevant, a fog of rhetoric that (2) obscures practices that are 180° opposite to the values claimed and/or (3) a license for state-controlled telecom-run monopolies to rule telecoms and the internet, and thus impede the global free flow of information.

The ITU is not Irrelevant

I actually agree with point two, and in the next post will lay out a long list of contradictions, hypocrisy and problematic aspects of the ITU’s ITRs, Constitution, Decisions, Resolutions and Recommendations, etc., that I think are at odds with the right to communicate. Articles 34 and 37 in the Constitution, and 7 and 8 in the ITRs that set out governments’ rights to stop or suspend communication, and that address cybercrime, personal data, national security and public decency, in particular, are impossible in my mind to reconcile with the ITU’s commitments to the international right to freedom of the press and freedom of expression. The proposed addition of a whole new clause in Article 8 of the ITRs covering similar matters in an even more expansive ways will only compound the problem in the unlikely chance that they are approved.

While I am onside with critics on these points, I think their argument that the ITU is irrelevant, or a “state-run telecom monopoly club”, misses the mark. If it was irrelevant, we wouldn’t be talking about it. And talk isn’t just cheap fluff, either. Vint Cerf, Google’s “chief internet evangelist”, for instance, felt compelled enough by the UN’s statement on the right to communicate covering the internet that he wrote a column for the New York Times telling the world why he thought such a move was a mistake.

In addition, copyright lawyers and politicians refer to Article 19 constantly to legitimize their actions, laws, and litigation. They say, for instance, that the notice-and-take-down regimes requiring ISPs to act as copyright cops, and to cut-off internet users who have repeatedly used their connections to infringe copyright laws, are consistent with Article 19. Many telecom equipment makers and operators disagree. The same UN report that asserted that the right to communicate includes the internet also sees the notice-and-take-down and internet cut-off rules as running afoul of people’s right to communicate as well.

Of course, academics and rights monitoring groups like Article 19, Index on Censorship, Freedom House, Reporters Without Borders, and so on, use it to rank order countries through annual freedom of expression beauty pageants, with criteria specific to the internet playing a large part in their assessments. In sum, the language and actions of the ITU and UN help constitute the terrain upon which the politics of the internet takes place. High-flying rhetoric reflects not just high-minded words, but values and those values, in turn, make a mark on the real world.

The Market Rules at the ITU

For the rest of this post, I want to consider the idea that the ITU is a club beholden to state-run telecom monopolies. To be sure, this statement probably captured the ITU’s main tendencies in the past, when only nation-states were entitled to be members. Yet, even so, deep in the bowels of national delegations of countries with telecom networks that were mostly privately-owned in part or the whole of the 19th and 20th centuries – the UK, US, Canada, etc. – were representatives from the private companies that built and ran those networks: AT&T, Bell Canada, Northern Electric, Bell Labs, Cable and Wireless, etc. Governments did not act without their approval.

To be sure, national governments were to the fore and, at least until the 1980s and 1990s, most of the world was ruled by national telecom monopolies, and the private sector did take a back seat. Yet, that configuration of power and authority has since been undone.

In fact, the great battle between the market and the state was fought and won decisively in favour of “the market” in the 1980s, notably during the last revisions to the ITRs in 1988 and the Plenipot the year after. More than twenty years on, therefore, it is odd to see so many critics looking in the rearview mirror as they fight new battles over the internet.

The current composition of ITU membership reinforces the point. Today there are “193 countries and over 700 private-sector entities” (544 are telecom companies, with the rest made up of 166 associate members (i.e. ISOC, W3C, etc) and 38 academics).

The U.S. delegation to the ITU consists of a whose who of the telecom-media-internet giants: i.e. AT&T, Cisco, Comcast, Google, Intel, Microsoft, News Corp., Oracle, Telefonica, Time Warner Cable, Verisign and Verizon. Clearly its not only “the market” that rules, but some of the biggest telecom-media-internet companies on the planet.

Furthermore, it is not just that the composition of the ITU changed in the 1980s, but its ITRs and constitution, too. Some changes were subtle but crucial nonetheless, as in the recognition, for the first time, of “private operating agencies” – code for private telecom carriers — in the first Article of the ITRs.

A new Article 9 was included permitting ‘special arrangements’ between countries for whatever kinds of set-ups they wanted to permit. This was the ‘private networks clause’ the US had fought for decades in order to bring about at the international level similar conditions that it had been fostering at home since the 1950s (see last post). Article 9 also sanctioned international bypass arrangements that permitted competitive telecoms operators to skirt around national telecom monopolies, if the countries at both ends of the connection agreed.

In perhaps the clearest statement that the “market rules”, by 1998, the ITU baldly stated “that the development of the Internet is essentially market-led and driven by private and government initiatives” (emphasis added, Res. 102).  NGOs active in the ITU and whose guidance it sought were also called out by name (ICANN, IETF, ISOC, W3C, etc.), not just once in the text and a footnote, but several times and in the main text (see Res. 101-103 & 133) on pages 408, 412, 415-6, 475 & 478. Cooperation with these non-state actors was put on a formal footing at this time, and expanded thereafter, especially with the WSIS processes that gave rise to the Internet Governance Forum (IGF), as I indicated in the second post in this series.

To claim, therefore, as Ryan and Patrick and almost all of those who appeared before the U.S. congressional hearings on “International Proposals to Regulate the Internet” did, that the ITU is a state-dominated, telegraph-era dinosaur is to be either willfully blind or seriously misleading. Of course, there are still undoubtedly many points of conflict, but for better or worse the notion that development of the internet will be market-driven is not one of them.

Four Reasons Why Proposed Changes to the ITRs are Mainly about Economics and Interconnection versus Internet Censorship and Control.

As Mueller observes, proposed changes to the ITRs are mainly about economics and interconnection rather than internet censorship and control. I agree, and in this regard I think four things stand out: (1) Article 9 of the ITRs allowing “special arrangements”; (2) the ETNO proposals to change Articles 2 through 4 in the ITRs in ways that would drive a stake through the heart of network neutrality principles; (3) clauses that add language to deal with anti-trust issues, competition authorities, and ‘alternative dispute resolution’ mechanisms; and (4) proposed new sections to Article 6 (6.12-6.18) that amount to a nascent ‘global consumer bill of rights’ for mobile services.

1) Article 9: Special Arrangements: Article 9 is crucial because it allows companies to build, lease or otherwise cobble together connections outside the ITU rules, so long as countries on both ends of the link agree. Some technolibertian, free marketeer, no government-types misrepresent this as an escape hatch through which “90 percent + of global comms” skirts around the ITU’s rules and regs, but this is not true.

The majority of traffic still runs across the networks of legacy telecom companies, and they are fighting tooth-and-nail to keep things that way. However, and this is where the importance of Article 9 rests, internet companies and over-the-top services (e.g. Netflix, Google, Facebook, Steam, Apple, etc.) are building content distribution networks (CDNs), or leasing them from providers like Akamai, Amazon Web Services, Limelight, etc., that bypass the incumbents’ long-distance and middle-mile connections, while still depending on their last mile links to subscribers’ premises — where monopolies and duopolies still rule.

Internet companies also cross-connect with one another at global internet exchanges and data centres around the world (e.g. Google links directly too Facebook), wherever governments permit ‘special arrangements’ allowing them to do so. Netflix, for instance, recently announced plans to build its own CDN – Open Connect – that will hand-off it’s massive flow of video “at no cost to the locations the ISP desires, . . . [or] at common internet exchanges”. No changes or additions to Article 9 in the ITRs have so far been proposed, so these arrangements will not be directly affected. Here, then, the market and contracts rule.

(2) A proposal to add a new section to the ITRS (Article 3.7) and a similar one by the European Telecommunications Network Operators (ETNO), however, appear to work against these arrangements. The language proposed for a new Article 3.7 directs Administrations (government regulators) to

  . . .  take appropriate measures nationally to ensure that all parties . . . involved in the provision of international Internet connections negotiate and agree to bilateral commercial arrangements . . . that take into account the possible need for compensation between them for the value of elements such as traffic flow, number of routes, geographical coverage and cost of international transmission, and the possible application of network externalities, amongst others (emphasis added).

The ETNO proposal speaks about the need “to ensure an adequate return on investment in high bandwidth infrastructures”, and directs telecom-ISPs “to negotiate commercial agreements to achieve a sustainable system of fair compensation for telecommunications services and, where appropriate, respecting the principle of sending party network pays (emphasis added). As Mueller points out, this is blatantly protectionist language for the benefit of incumbents and has little place in the ITRs. I agree.

This stuff is complicated, but for simplicity sake, let’s say that if you agree with network neutrality, and I do, this is one of the worst additions to the ITRs being proposed. It comes not so much from heavy-handed governments, however, but tracks moves by the incumbent telecom-ISPs in many countries to charge online video, gaming, search and social media platforms for carriage, and at more expensive rates than they charge their own comparable services. At its essence, this is bid to take the “fee-for-carriage” regime from broadcasting and super-impose on the internet, while trying to justify such a move in the name of a ‘higher principle’: paying for the construction of next generation broadband networks built and owned by legacy telecom-internet service providers.

The response to this amongst some critics has been the silliest, with Cnet and others calling this a bid by bad Europeans to impose a tax on Facebook and Google to pay for their own grandiose broadband internet projects. It is nothing of the sort. In fact, proposed additions to the ITRs (Art. 6.1.3a) rule out that prospect.

NZ – Aussie Imperialism?

The ETNO/Art. 3.7 proposals embody a creeping tendency to require Netflix, Google, Facebook, Apple and other heavy bandwidth services to pay for carriage. The trend seems to be flourishing the most in Australia and New Zealand, while gaining momentum in Canada, the U.S. and Europe. I call it the pay-per internet. Such practices allow telecom-ISPs to selectively impose bandwidth caps and heavier charges on some services while lifting the caps and charges for their own or allied services. In other words, some services chosen by the telecom-ISP get an open pipe while the rest are given something less. Call this a proposal for tolls on the global internet.

In New Zealand and Australia, these practices are nearly universal and impose severe burdens on internet users while throttling rivals and eroding the diversity of services.  Dominant players across the telecom-media-internet ecology are typically reinforced because the selective use of bandwidth caps and heavy charges are lifted for them while imposed on others. The basic principle at stake from the incumbents’ perspective was articulated a decade ago by then CEO of internet services at the ‘old AT&T’, who snorted that “AT&T didn’t spend $56 billion to get into the cable business to have the blood sucked out of our veins” (quoted in Lessig, 2000, p. 995).

Old attitudes don’t die easy and the same disparaging view of rival internet services ‘free-riding’ on the incumbent carriers’ pipes was once again expressed by the ‘new’ AT&T in 2005 after it had been brought back from the brink of a debt-addled death by SBC. The ‘new’ AT&T’s CEO Ed Whitacre put the matter this way:

 How do you think they’re [Google, MSN, Vonage, others] going to get to customers? Through a broadband pipe . . . . Now what they would like to do is use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it. So there’s going to have to be some mechanism for these people who use these pipes to pay for the portion they’re using. Why should they be allowed to use my pipes?

Adding Article 3.7, or some variation of it, as found in the ETNO proposal, would be just the “mechanism” Whitacre was seeking. If adopted, it could accelerate a practice that has already been gaining momentum by giving it the ITU’s seal of approval.

For those with minds like an elephant, this might look like the “to-the-wall” debates about ‘international bypass’ that was suppose to have been put to rest in 1998 when the ITU embraced the hegemony of market rule. They’d be right, but this version of ‘old wine in new bottles’ would now neuter network neutrality.

Supporters of that principle might want to work hard to kill the ETNO/Article 3.7 proposals, because, as I said at the outset of this post, the words of the ITU matter in the global politics of the internet. For the technolibertarian, free marketeer crowd, the hypocrisy of calling out the ITU as a threat to the internet while remaining silent on telcos’ plans to foist the pay-per model on the global internet is stunning.

(3) Anti-trust issues, Competition Authorities, and ‘Alternative Dispute Resolution’ mechanisms: Consolidating the “Market-State”

Perhaps the fact that the proposals to enshrine the pay-per internet model through additions to Article 3 are at war with Article 9 (Special Arrangements) is the reason behind other proposals to add new language on anti-trust issues, competition authorities, and ‘alternative dispute resolution’ mechanisms in Article 6.8:

“When evaluating significant market power and its abuse, national competition authorities should also take into account international market share and international market power”.

Such language might come as a surprise to the self-annointed vanguard of the technology liberation front, but for those whose heads are in the real world rather than some idealized fantasy of perfect markets, its not surprising at all. In fact, at the same time that the market in telecoms and internet were being expanded by the ITU in the 1980s and 1990s, a significant new actor, the World Trade Organization, also emerged to galvanize the marketization push through two telecom agreements.

The market builders also turned to the nation state for help in droves. In 1990, there were 14 national telecom regulators worldwide, by 2000 there were 90; today there are 155 – most of which were built according to specs spelt in the regulatory annex to the WTO 1997 telecoms agreement.

(4) New Additions to Article 6 (6.12-6.18) hint at a ‘global consumer bill of rights’ for mobile services

Political economists like Karl Polanyi and Charles Linblom have long focused on the role of the state and regulation in constructing and shaping the contours of markets. The peculiar qualities of telecoms and internet communication means that such processes are especially evident in this domain.  While most of the expanded regulatory apparatus just referred to was all about constructing viable markets, they were mostly silent with respect to things like freedom of expression and consumer rights.  They were market-building exercises and only indirectly, if at all, concerned with freedom of expression issues and democracy.

Some of the proposed additions to the ITRs take a tentative step to filling in a few gaps on the consumer protection side of things by sketching ever so gently some guidelines with respect to international roaming charges for mobile services. In some respects, the language is familiar from the 1980s, with the emphasis on “cost-based pricing”, “pricing transparency”, etc., but it also reaches a bit further to add new language about the need to avoid the well-documented issue of billing shock and sky-high international roaming charges in many countries, not least in Canada, the U.S. and UK.

Indeed, Canadians are saddled with some of the highest international mobile roaming rates in the world, and that has recently been parlayed into a consensus proposal from regulators, industry and advocacy groups for a new ‘national code’ for wireless services.  The proposed additions to the ITRs, thus, are swimming with the tide.

Seen in this light, whatever moral suasion that these suggested additions to the ITRs might have might just be welcome by many people, especially in light of the mobile internet explosion.

Next Post: Really Scary Proposed Changes to the ITRs

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[i] The basic texts of the ITU can be found here: http://www.itu.int/pub/S-CONF-PLEN-2011.

Big New Global Threat to the Internet or Paper Tiger?, Part II: Is the Internet Telecoms?

This is the second in a series of posts that takes a critical look at claims that proposed changes to the international telecommunications regulations (ITRs) at the WCIT meeting later this year could see the ITU establish “international control over the internet”.

My previous post described some of the background to the issues, and three key claims that are being made: (1) the ITU currently has no role with respect to the Internet but is hell-bent on changing this at WCIT; (2) the ITU is a state-run telecom club; (3) that it is a Trojan Horse for a plot by authoritarian states and legacy telcos to impose a new Web 3.0 Model – Controlled National Internet–Media Spaces – over the open global internet.

I think the claims are overblown. I do not believe that the ITU is intending to, or capable of, taking over the internet.  I mostly agree with Milton Mueller that most of the changes being discussed are mainly about economics and interconnection rather than internet censorship and control. An article in the New York Times today expressed a similar view as well.

In contrast to Mueller, though, I think that the ITU already has a legitimate claim to having a say with respect to the internet, and more to the point, it has already been playing such a role through the last dozen years of active participation in the multi-stakeholder model of internet governance.

Mueller argues that the ITU’s most important efforts to stake a claim to the internet terrain — domain name system (1996), the two phases of WSIS (2002-2005), IP address management (2009-2010), suggestions for a UN Committee on Internet Related Policies (2011) – have all been mostly failures, not least because they have all been staunchly resisted by the U.S. government. As he says, the U.S. Government ”squashed” an early campaign by the ITU and ISOC to wrestle control of the international domain name system from the U.S. “like a bug”.

Two years later, ICANN – a California-based non-profit still dependent on the US government today and increasingly embroiled in high-stakes battles over copyright worldwide (i.e. MegaUpload, Rojadirecta) – was created. Mueller is happy about this state-of-affairs. I am less so, but am under no illusions that the best path to choose is obvious.

If Professor Mueller is right, however, we might not have to choose. The ITU has no jurisdiction over the internet, he argues, just telecommunications. According to him, this is because, beginning fifty years ago during the FCC’s Computer I, II and III inquiries (c. 1965-2002), the U.S. drew a clear, bright line between telecom-based services (pipes and carriage) and computer-based information services (content and the internet).

The Computer II rules formalized the distinction between “basic” telecoms and “enhanced” information services after protracted struggles over key questions about market concentration in the telecom and information industries as well as the range of services to be delivered by the market versus those considered public goods. Many argue that the new rules were wildly successful, not least in terms of fueling the growth of the Internet. I am inclined to agree but would ratchet down the superlatives, without losing focus on issues of market concentration and the public goods nature of telecom, media and internet goods.

The rules were never straight-forward, and have been mired in political and legal mud ever since their adoption. The Supreme Court’s Brand X ruling in 2005 re-affirmed the rule, but in doing so basically set the enhanced service designation up as a near insurmountable barrier to formal net neutrality rules that can be applied to all carriers and ISPs.

The problem that I see with this argument is three-fold. First, it takes U.S. law as the world’s law. U.S. telecom policy, however, is not global internet policy, nor should it be. Moreover, if the basic/enhanced dichotomy has been mired in controversy in the U.S. for a half-century, just imagine its fate at the global level.

Second, the U.S. can slice and dice the definition of telecoms any way it sees fit, but other countries do things differently, and the ITU defines telecommunication very broadly as: “Any transmission, emission or reception of signs, signals, writing, images and sounds or intelligence of any nature by wire, radio, optical or other electromagnetic systems” (Constitution, Annex; ITR, Article 2.1). A plain reading of the definitions suggests that it includes the internet, which in fact is the view that the ITU and many of its member-states take.

Clearly, though, there is a debate over the scope of that definition and things will not be solved by recourse to formal definitions, however, but by the politics of language. Those opposed will stand firm against any formal references to the internet in the text of the ITRs, while those on the opposite side will pepper the rules with as many explicit references to the internet as possible. The fact that various members have proposed modifications or additions to at least a half-dozen sections of the ITRs that explicitly refer to the internet have brought these issues to a head.

The most important change to the ITRs is probably the proposal to include a reference to “internet traffic termination” to the existing definition of “International Telecommunications Services” in Article 2.2. Other proposed modifications refer to “VoIP” (Article 3.1, International Network), “Internet traffic and data transmission” as well as to “Internet and Internet Protocol” (Articles 4.2 and 4.3a, International Telecommunications Services, respectively).

Some proposals would also add new references to ”international Internet connections” (Art. 3.7), the “internet” in a proposed new section 6.7 related to competition and interconnection issues and “measures to insure Internet stability and security” in 8.4.A (see Mueller on this point as well). References to  ”cybercrime”, “data preservation, retention, protection”, “spam”, “identification”, “personal data protection” in new sections of Article 8 also have the internet clearly in their sights. I will examine some of the potential implications of these proposed changes and additions in more detail in the next two posts.

For now, however, my third argument is that things will not turn on the politics of language alone but the historical and contemporary practices of the ITU as well. In this regard, one things stands out that I think is determinative: the ITU has taken a broad, evolutionary view of its mandate and morphed with the times since its inception in 1865 (after the merger of two predecessor organizations — the Austro-German Telegraph Union (est. 1850) and the West European Telegraph Unioin (est. 1855), a point that will become important in the fourth post in this series) (see Drake, Introduction).

Originally called the International Telegraph Union, the ITU added telephones to its remit in the 1880s, radio in the early-1900s, and other new telecom technologies as they evolved. Its name was changed to the International Telecommunication Union in 1932 to reflect it broad and evolutionary view of the terrain. It’s Constitution, Decisions, Resolutions and Recommendations (DRRs) and the ITRs make a virtue out of the development and use of new telecom technologies, so it would be a real mystery to find a line drawn in the sand between telecoms before the internet and after, with the ITU confined strictly to the stuff that came in the past.

More recently, the ITU has been keen to carve out a distinct role for itself in regard to the internet since, at least, 1996, arguably earlier if we look back to the 1970s and 80s infatuation with ‘super-pipe’ models of integrated broadband media, even if the internet had not yet become a household name.  Its guts were nonetheless being put into place. And it is important to note that even the technical guts of the internet were not all made in America, as the paper by Google’s lawyers Patrick Ryan and Jacob Glick states. The UK, France and other parts of Europe were also involved, and the ITU was part of those efforts (Abbate, 1999; Mansell, 1993).

Yet, let’s take 1996 as the starting point because that is when the ITU and ISOC worked hand-in-glove in a bid to shift control over the domain name system from the U.S. to the ITU.  “The U.S. squashed that effort like a bug”, as Mueller states. Two years later, in 1998, the U.S. government created ICANN, where things have rested ever since.

Whereas Mueller sees just a long line of losses confirming that the ITU has no business in the internets of the world, I look past whether or not it has ‘won’ or ‘lost’ vis-a-vis the U.S. to see a long track record of practices that have evolved with the times. Thus, in the case of the internet, two years after the dispute over DNS, the ITU reaffirmed its commitment to cooperating with ISOC and IETF on global internet policy issues (DDR, Res. 102). It staked out matter-of-factly that it has a role to play “with regard to international public policy issues pertaining to the Internet and the management of Internet resources, including domain names and addresses” (DRR, Res. 102).

The two phases of WSIS between 2002 and 2005 also saw unprecedented participation by academics and civil society groups with the ITU in trying to imagine and map the frontiers of global internet policy. At the end of the three year process a new entity was born, the Internet Governance Forum (IGF), loosely under the direction of the United Nations, and with the ITU firmly within it alongside the rest of the ‘multi-stakeholder internet governance’ interests (ISOC, IETC, ICANN).

The IGF’s initial five year experimental period was renewed for another five years in 2010. All of this is important, too, because even if the ITRs do not currently refer to the internet, the ITU’s record of Decisions, Resolutions and Recommendations is chok-a-blok full of explicit and expansive references to the internet (see, for example, Resolutions 101, 133 & 179). Looking beyond the ITRs, therefore, we find a track-record of language on the internet that maps onto the ITU’s historical involvement with this domain since the late-1990s.

If the ITU has been such a loser with respect to global internet policy, and really has no place in it, as so many have argued (or just assumed) (Ryan & Glick; all but ISOC panellist Sally Wentworth at  U.S. congressional hearings on the so-called “International Proposals to Regulate the Internet” last month, etc.), it has been hiding in plain site. I think a better view of the matter is that, by dint of definition and a long history of evolution as well as contemporary practices, the ITU has a legitimate role to play in global internet policy.

Whether it exercises this role wisely or badly, however, is a different matter altogether, and which we will turn to in the next post.

Next Post: The ITU has been a business and market-dominated institution, not State-controlled, since the 1980s, maybe forever.

Big New Global Threat to the Internet or Paper Tiger?: the ITU and Global Internet Regulation, Part I

Over the past few weeks, a mounting number of commentators in the U.S. have pushed a supposed new threat to an open internet into the spotlight: the International Telecommunications Union (ITU).

According to those raising the alarms, preparations to revise the ITU’s international telecommunications regulations (ITRs) at a meeting this December are being hijacked by a motley assortment of authoritarian countries, legacy telecoms operators, as well as the BRIC (Brazil, Russia, India and China) and other developing countries. Their goal? To establish “international control over the internet”. Indeed, the issue is deemed so serious that congressional hearings on “International Proposals to Regulate the Internet” were held in the U.S. at the end of last month.

There seem to be three main claims behind the charge.

The first is that the ITU currently has jurisdiction over telecommunications, but not the Internet. As a paper by Patrick Ryan and Jacob Glick, two lawyers at Google, asserts, “modifications to the . . . ITRs are required before the ITU can become active in the Internet space”.  Vint Cerf, Google’s “chief internet evangelist”, similarly chastised the ITU’s “aims to expand its regulatory authority to the Internet” in an op-ed piece for the New York Times, and in front of the just-mentioned congressional hearings a week later.

Indeed, according to FCC Commissioner Robert McDowell, the idea that the ITU already has any role with respect to the internet is just nuts. Only pariah governments such as “Iran argue[] that the current definition already includes the Internet”, he asserts.

Milton Mueller more sensibly argues that the line between basic telecom and enhanced information services like the internet developed in the U.S. over the past half-century and subsequently trampolined onto the global stage during the 1990s leads to the same conclusion: so far as the ITU’s authority is concerned, basic telecoms are within its orbit, enhanced information services like the internet are out.

Indeed, as one of the critics leading the charge, Eli Dourado told me from his perch at the Mercatus Centre/Technoliberation Front/Cato Institute in a Twitter exchange the other day, nobody was thinking about the internet back in 1988 when the ITRs were last revised and updated. As a result, he says, “no internet traffic is governed under the original treaty.  Right now, 90% plus of global communications are not governed by the ITRs. This would change that”.

In sum, if the critics are right, the ITU’s gambit to draw the internet into its orbit would be a huge change from the status quo. But are they right? I do not think so and will come back to why further below after laying out the two other main criticisms.

The second key focus of critics is that the “ITU is a “closed organization” beholden to “state-run telecom monopolies”, as Ryan and Glick say. Fowler calls the proposed changes to the ITRs an attempt to impose “a top-down, centralized, international regulatory overlay [that] is antithetical to the architecture of the Net, which is a global network of networks without borders”.

According to this view, the ITU is a government dominated, telegraph-era dinosaur that is ill-suited for global internet policy, where markets, private actors and contracts and a variety of multi-stakeholder interests, including ISOC, ICANN, IETF, W3C, and other civil society groups work in ways that are open, consensus oriented, and inclusive.  The same point was made by David Gross, former Coordinator for International Communications and Information Policy, U.S. Department of State, and now head of the WCIT Ad Hoc Working Group made up of a whose who of telecom, media and internet titans: AT&T, Cisco, Comcast, Google, Intel, Microsoft, News Corp., Oracle, Telefonica, Time Warner Cable, Verisign and Verizon.

The secrecy and lack of transparency and civil society participation is the main concern of open internet advocacy stalwarts such as Public Knowledge, EFF, Centre for Democracy and Technology, and ISOC. A letter form CDT and thirty-two other internet advocacy groups calls on the ITU to “Remove restrictions on the sharing of WCIT documents and release all preparatory materials. . . . Open the preparatory process to meaningful participation by civil society . . .; and for Member States, open public processes at the national level to solicit input on proposed amendments to the International Telecommunications Regulations . . .”.

To help speed along this process, a new Wikileaks-style site, WCITLeaks.org, has also been set up to collect and make available documents leaked by ITU insiders, with some good results already in just the first few days.

The third argument is the “Trojan Horse” argument. From this angle, an ‘axis of evil’ authoritarian states – Russia, China, Iran, Saudi Arabia, Syria — are using the ITU as a vehicle to turn their closed models of national internet spaces into a global standard.  One paper after another points to a smoking gun that supposedly reveals the ITU’s end-game: a transcript of a conversation between the head of the ITU and Russian President, Vladimir Putin in which the latter waxes on about the need to establish “international control of the internet through the ITU”.

The model supposedly being ushered onto the world stage through the ITU is not the well-known Chinese model of internet filtering and website blocking, but a new “Trusted Web 3.O”. In the Web 3.0 model, authoritarian states use filtering and blocking techniques to deny access and (1) establish national laws that put such methods on a firm legal footing, (2) carve out a distinctive national internet-media space dominated by national champions (Baidu, Tencent, Yandex, Vkontakte) instead of Google, Facebook and Apple, within which (3) the state actively uses ‘internet-media-communication’ campaigns (propaganda) to shape the total information environment (See Deibert & Rohozinski, ch. 2).

Obviously, if the critics are right, there’s a lot more at stake in the WCIT than just bringing rules last revised in 1988 before the internet was even well-known up-to-date. There is, indeed, much at stake with the proposed revisions and much that is quite nasty within the rules themselves and how the ITU itself approaches global telecom and internet policy. Yet, as Mueller notes, while the critics’ focus on internet control and censorship by nasty governments might play well to their base, their claims are overblown and misrepresent the nature of the problems at hand. I agree with Mueller on this point, but also disagree with him on a few significant points as well, as we will see.

Over the next few posts I will offer, first, a post that lays out my criticism of the critics and, second, another that hones in on both proposed changes to the ITRs and elements that look like they will be retained and perhaps expanded on that I think are deeply problematic and genuinely a threat if not to the global internet, to the people living within countries whose practices would obtain the imprimatur of legitimacy from the ITU if they are accepted at the WCIT in December. Finally, I’ll offer an argument as to why the ITU should be reformed and retained rather than scrapped.

The crux of my criticisms are as follows: (1) that the ITU has always had a role with respect to the internet by dint of the expansive definition of telecommunications governing its operations; (2) that the battle over whether the ITU’s approach to global telecom and internet policy would be driven by the state or the market was settled decisively in favour of “the market” in the 1980s and 90s; (3) that while the ITU has a role in telecom and internet policy, its role has been increasingly neutered by the shift to the WTO and the ‘multi-stakeholder internet governance model’ since the 1990s; and finally (4) that the non-binding nature of ITU rules and principle of national sovereignty underpinning them means that the ‘axis of internet evil’ cannot use the ITU as a Trojan Horse to impose their Web 3.0 model on the rest of the world.

After I lay out these criticisms, in the next post I intend to dig deeper into the details of the ITU’s Constitution, Decisions, Resolutions, Recommendations as well as the ITRs and proposed changes to them. I will do so in order to reveal that, in fact, there are aspects of the ITUs global telecom and internet policy regime that are deeply problematic and, indeed, wholly unworthy of whatever legitimacy might be brought their way by being associated with the ITU and, by extension, the UN.

In this respect, I will hone in on: (1) how people’s right to communicate (Art. 33) clashes with rules that allow the state to cut off and/or intercept communication in cases that “appear dangerous to the security of the State or . . . to public order or to decency” (Arts. 34&37); (2) proposed changes to ITRs by the European Telecommunications Network Operators (ETNO) that legitimize the pay-per model of the internet and thus threaten network neutrality (Art. 3); (3) existing aspects of Article 8 of the ITRs and proposed changes relating to cybercrime, national security, whistle-blowing, user identities and anonymity that are odds with privacy norms outlined elsewhere in the ITU framework (e.g. Article 37 on the Secrecy of Telecommunications) and which put the interests of the state well above those of the individual.

Finally, I will make an argument as to why the ITU, after thorough-going reforms, is still a useful and desirable organization, building on the following arguments:

(1) it is already working within the ‘multi-stakeholder internet governance regime’ through the Internet Governance Forum established in 2005 and serious questions exist about U.S. hegemony over, in particular, ICANN (as illustrated by the U.S. government’s targeting of domain name resources to cripple Wikileaks, take-down foreign websites accused of violating U.S. copyright laws (see Rojadirecta case) and recent legislative proposals to formalize such tactics in SOPA);

(2) proposed changes adding elements of consumer protection with respect to mobile roaming charges and contracts as well as with respect to evaluating concentration in telecom and internet markets at the global and national level are worthwhile; and

(3) it’s broader remit reconciles global markets and technology on the one hand with broader norms related to the right to communicate, development and other important human rights and freedoms, on the other, that are entirely absent from the one-sided, market-driven model of globalization represented by the ITU’s closest counterpart, the WTO.

Newspaper Killers and the “Death of Journalism”: Postmedia’s Attempts to Slash and Burn its way to Excess Profits

This has been another week of bad news about newspapers in Canada.

The largest newspaper group in the country, Postmedia, announced a set of deep cuts across its chain of ten major city daily newspapers and the National Post. The Montreal Gazette and Ottawa Citizen currently have about 105 staff each; after the cuts both will have twenty less. Three weeks ago, the company closed its national news wire service, shedding twenty-five news workers as a result. No foreign news bureaus were closed because other than the two it has in Jerusalem and Washington, there are none.

Postmedia’s CEO Paul Godfrey also announced that the company will no longer publish the Sunday edition of the Ottawa Citizen, Edmonton Journal and Calgary Herald, or print the National Post on Mondays. Production will be centralized at Postmedia Editorial Services in Hamilton, a company subsidiary shorn of pesky unions, where layout, editorial decisions and some printing functions will now reside. It’s the model pioneered in Canada by Quebecor in 2006.

Paywalls will be going up sooner rather than later, building on those already put into place last year at the Montreal Gazette and the Victoria Times Colonist (before the latter was sold last October), and already planned for the Ottawa Citizen and Vancouver Sun. While focusing on getting people to pay for news online, Postmedia will also focus on “reducing unprofitable circulation” – that is, shedding less well-off readers – states a memo from Montreal Gazette editor-in-chief Alan Allnutt.

Godfrey also railed against “foreign-owned and controlled 
digital companies who, without any regulation, are accessing Canadian
 audiences and eroding Canadian media revenues”. He was referring to Google, Facebook, eBay, Apple, Amazon, and others of this kind.

Godfrey may have legitimate concerns about these internet giants’ capacity to parlay their dominant positions in search, social and online retail and publishing into the ability to set the terms for the distribution of news and advertising revenue online. However, the claim that they are cannibalizing newspapers revenues is wrong (see below) and his not so thinly-veiled call for regulation smacks of the same tactics that commercial broadcasters in Canada have been pitching for years with little to show for their efforts.

The current round of retrenchment and cuts represent a continuation of woes that have beset Postmedia since it took over the troubled newspaper chain from bankrupt Canwest in July 2010. Immediately after taking-over the newspapers, Postmedia eliminated 750 jobs and has maintained standing buy-out offers for journalists across the chain ever since. Add the sixty-five jobs axed this month, and approximately 1,800 jobs have been eliminated since 2008.

To be sure, Postmedia is faced with tough times. Daily newspaper circulation in Canada fell to 3.8 million or so in 2011, a far cry from peak levels reached in 2000 when 5 million copies a day were sold. Industry-wide revenues have swooned as well, dropping from $5.7 billion in 2000 to an estimated $4.1 billion (in inflation adjusted “real dollars”) today. People are still reluctant to pay for news.

Nonetheless, Postmedia’s internet revenues are growing and last year they accounted for 9 percent of its revenues (p. 71), a respectable amount compared to Torstar (10.8%) and the U.S. average (11.7%). The problem, however, is that it only earns a single ‘digital dollar’ for every $4 it loses in traditional print revenue. While this is considerably better than trends in the U.S., where the ratio is $7.50 to $1, it is still not nearly enough.

Perhaps reflecting these uncertain prospects, the company’s stock market capitalization has plunged from an all-time high of $685.4 million in June of 2011 to roughly 1/10th that amount ($70.6 million) today. So maybe Godfrey is right? Perhaps there is no choice but to swallow bitter medicine in order to set things aright?

That times are tough for Postmedia and newspapers in general is beyond dispute, but there are a few surprising facts amidst this portrait of doom and gloom that have not received the attention they deserve. The two most important facts relate to profits and debt, and when we look at these factors, the consensus view of things begins to unravel.

You might be surprised, but Postmedia is a profitable company.  It operating profits in 2011 were 7.6%, just below the average for all industries in Canada (8.7%). In fact, over the past twenty years, the company has been very profitable, except for one year (2010), and well above the average for industry as a whole. The following figure illustrates operating profit levels at Postmedia and its predecessors in relation to Torstar and Quebecor as well as the average for all industries since 1995.

Postmedia Operating Profits vs. Torstar, Quebecor and Average for All Industries, 1995 – 2010  (%)

Source: Company Annual Reports;  Statistics Canada. (various years). Financial and taxation statistics for enterprises. Cat. no. 61 219-x. URL: http://www.statcan.gc.ca/pub/61-219-x/61-219-x2008000-eng.pdf

Given that Postmedia is actually profitable, why the insistence on the slash and burn approach?

While respectable by economy wide standards, and especially in light of the fact that the world of journalism is being turned topsy-turvy by digitization and the internet, profit levels at Postmedia are not high enough for one decisive set of interests: its owners. The hedge fund holding a 28% ownership stake in the company, Golden Tree Asset Management, illustrates the point, gloating on its website that its “philosophy” is that “double-digit returns can be compounded over market cycles”.

Double-digit returns in the newspaper industry, however, are the stuff of the last half of the 20th century, when newspaper monopolies held sway in one city after another and the overall media environment was a lot less cluttered than it is today. Those days are gone, and we ought not shed a tear, except for the fact that Postmedia’s owners are laying waste to scores of journalists and journalism in their pursuit of monopoly-era profits in the 21st century. In other words, excessive expectations regarding acceptable profits, not tough economic times for newspapers on their own, are behind the current round of slash and burn at the largest stable of newspapers in Canada.

That debt is an equally pressing problem can be seen in the fact that Postmedia paid out almost as much in interest on its massive debt in 2011 as it made in profit (see here, p. 71). Moreover, a great deal of that debt is held by Golden Tree Asseet Management, and paid at high levels of interest.

Some of the $663 million debt that the company assumed when it took over the Canwest newspapers in 2010 has been reduced, but remains stubbornly high: $544 million at the end of 2011, and about $516 million today. The mountain of debt is a legacy of a decade-and-a-half of consolidation, a period when the newspaper chain switched hands from Southam to Conrad Black’s fraud-riddled Hollinger Corporation (1996) and then to the vainglorious Aspers in 2000 for $3.2 billion at the height of the media empire building age.

Bloated on debt and hubris, the latter crashed and burned in 2009-2010, even though it too was profitable (12.7%) – but not enough to pay its bankers while staying within their rules on acceptable debt levels. That legacy still hangs like a dark cloud over Postmedia, and it is that reality, coupled with excessive profit expectations – and that profits and interest payments on debt both flow into the pockets of Golden Tree Asset Management — that is hammering away at the company.

That these factors deserve greater weight in explanations of Postmedia’s woes is also put into sharper relief once we realize that advertising markets are not shrinking, as Godfrey asserts, but have been growing at a quick clip for most of the past decade. To be sure, the pace has been slower for newspapers and might be best described as mostly staying flat over the past decade. Phases of contraction have been modest, not calamitous, as the figure below shows.

Advertising Revenues in Canada, 2001 – 2011 (millions $)

Source: TVB/IABCanada, 2011.

If newspaper revenue was being cannibalized by Google et. al, as Godfrey claims, we should see the size of the total advertising pie staying constant, and a fall in newspaper advertising as revenues are diverted to those entities. That has not happened.

Of course, the fact that newspaper advertising revenues remain essentially flat in absolute terms while total advertising revenues expand means that the relative place of newspapers in the overall mix is on the wane. Still, however, the growth of internet advertising in Canada as part of the mix pales in comparison to trends in the UK, Denmark, Norway, Sweden and Germany, for instance, as the following figure illustrates.

Source: IABCanada, 2011

The upshot is that whatever blows have accompanied the declining place of newspapers relative to the internet, they have been gentler than elsewhere, giving newspapers in Canada more time and room to adapt to the realities of journalism in the 21st century. That Postmedia has failed to do so says more about its own self-inflicted wounds under three different owners in the past decade-and-a-half than a death sentence imposed by the economic crisis, slumping advertising or the rise of formidable new players like Google, Facebook, Amazon, Apple, etc.

Other newspaper publishers in Canada have pursued a similar course, but Postmedia is only matched by Quebecor in the severity of the slash and burn approach that they have taken thus far. The Globe and Mail and Torstar – undoubtedly struggling at times as well – have been able to pare things back with a scalpel rather than a hatchet.

Ultimately, the days of newspaper owners reaping double-digit returns are gone. In addition, other than high-end business and financial intelligence, people have never been willing to pay for news, and this is still the case. Just how to return the press to a stable footing is still the million-dollar question. However, rather than trying to raze their way to the promised land, Postmedia’s owners must temper their desire for excessive profits and bring the legacy of debt — a problem that was created in just such an illusory pursuit over the past fifteen years — to heel.

Only then is it likely that the largest chain of newspapers in Canada will be able to regain its footing and contribute to professional journalism alongside new players such as The Mark, the Tyee, Huffington Post, the Dominion and so on that are beginning to make their mark on journalism in this country.

The Twitter – Wikileaks Cases and the Battle for the Network Free Press, Now its Personal: an Afternoon with Birgitta Jónsdóttir

A week-and-a-half ago I met up with Birgitta Jónsdóttir, an activist Icelandic MP and central figure in the Twitter-Wikileaks cases (see earlier posts on the topic here, here, here and here). Passing time on Twitter, I saw she was in Ottawa, sent her a tweet, quickly received a reply and presto, we met on a Sunday afternoon with a fellow professor from Ottawa University, Patrick McCurdy.

Jónsdóttir came to our attention after becoming a target of the U.S. Justice Department’s ongoing investigation of Wikileaks because of her role as co-producer of the video Collateral Murder. The video documents a U.S. Apache helicopter gunning down two Reuters journalists and several others in Baghdad and was released by whistle-blowing website Wikileaks in April 2010. It marked the beginning of the site’s campaign to release what would be the largest cache of US classified material the world has ever seen.

Over the course of 2010, Wikileaks teamed up with five of the world’s most respected news outlets — New York Times, The Guardian, Der Speigel, Le Monde and El Pais – to release material that wreaked havoc with the routine conventions of journalism and to set the global news agenda not once, but three more times: (2) the release of the Afghan and (3) Iraq war logs in July and October, respectively, and (4) a cache of diplomatic cables starting in late November.

The response from the U.S. Government was ferocious. The search to find the source of the leaks quickly led to the arrest of U.S. Army intelligence analyst, Bradley Manning, in May 2010, and his detention in solitary confinement ever since. Simultaneously, it began shaking down popular U.S. search and social media sites such as Twitter, Facebook, Skype and Google in a bid to gain access to information about people of interest in the Wikileaks investigation.

Birgitta is one of those people, along with Wikileaks front man Julian Assange, Tor developer, activist and Wikileaks volunteer, Jacob Applebaum, as well as Dutch hactivist Ron Gongrijp. Let’s call them the “Twitter –Wikileaks Four”.

Entering this murky world of state secrets, blacked out documents and unnamed internet companies cooperating with electronic surveillance efforts by the state offers a rude slap to anyone who sees the U.S. as a beacon of democracy, human rights and the free press. In fact, such values seem to have wilted with alarming ease in the face of the national security claims surrounding Wikileaks, and Birgitta Jónsdóttir specifically.

Talking to Jónsdóttir gave us a personal look behind the cool, technical view found in legal briefs and court rulings. And one of the first things she told us is that she no longer sets foot on U.S. soil on the advice of her lawyers and Iceland’s State Department, despite having diplomatic immunity on account of being a Member of Parliament in Iceland. Still embroiled in the Wikileaks cases, she has recently joined a lawsuit launched by Noam Chomsky, Noami Wolfe, Christopher Hedges, Daniel Ellsberg, and others to overturn the National Defense Authorization Act on the basis that its vague definition of terrorists threatens to sweep up dissidents into its maw, thereby threatening their ability to travel freely in the US and worldwide without fear of being arrested.

That we know much at all about how internet companies have been dragooned into the crackdown on Wikileaks is due to the fact that Birgitta, Applebaum and Gongrijp have led the fight with legal support from the American Civil Liberties Union and Electronic Frontier Foundation against such activities in the courts of law and public opinion (Assange has kept his focus elsewhere). And it is for this reason that The Guardian newspaper last month put Birgitta, Applebaum, Twitter’s chief lawyer, Alex MacGillivray, and Assange on its list of twenty “champions of the open internet”.

MacGillivray made the list primarily because only Twitter had the spine to challenge the Justice Department’s “secret orders” (not “court authorized warrants”), whereas all of the other search and social media companies rolled-over and shut-up. This was not just a one-time stance, either. This week Twitter was at it again, pushing to have a court order forcing it to hand-over information about an Occupy Wall Street activist to New York Police over-turned.

Twitter won a modest victory in January 2011 in the first Twitter – Wikileak case when it obtained a court order allowing it to tell Jónsdóttir and the others that the Justice Department was demanding information about their accounts as part of its Wikileaks investigation. The victory also opened a bigger opportunity to discover what other internet companies may have received the Justice Department’s secret orders.

Whatever hope was raised by the first Twitter – Wikileaks ruling was dashed by a District Court ruling in the second case last November, however. The ruling was blunt: users of corporate-owned, social media platforms have no privacy rights.

Using the same logic subsequently used in the “Occupy Wall Street” case, the court argued that Jónsdóttir et. al. had no privacy rights because Twitter, Skype, Facebook and Google’s business models are based on maximizing the collection and sale of subscriber information. Under such conditions, users alienate whatever privacy rights they might otherwise claim. As the ruling put it, Jónsdóttir and her co-defendants “voluntarily relinquished any reasonable expectation of privacy” by clicking on Twitter’s terms of service (p. 28).

With privacy reduced to the measuring rod of corporate business models and a perverse interpretation of its terms of service, Twitter was forced to hand over Jónsdóttir, Applebaum and Gongrijp’s account information to the Justice Department: registration pages, connection records, length of service, internet device number, and more.

A last ditch appeal was made by lawyers at the ACLU and EFF last January to reveal which other internet companies had received “secret orders” from the Justice Department. While no one knows for certain who they are, all eyes are on Google, Facebook and Skype (Microsoft). A decision is expected by the end of June, but Jónsdóttir isn’t holding her breath.

Pausing to reflect on the personal affects of the Twitter – Wikileaks cases overall, however, she remains upbeat rather than down-trodden.

“You have to completely alter your lifestyle. It’s not pleasant, but I don’t really care. . . . It’s just insults my sense of justice . . . . I would not put anything on social media sites that . . . I don’t want on the front pages of the press.”

Rather than dwelling on the costs to her personally, however, Jónsdóttir is quick to tie these events into a larger, more daunting picture. In doing so, she wants to prick the fantasy of Obama as a great liberal president and the illusion that the U.S. turned a corner after he replaced Bush as President.

As she reminds us, the Twitter – Wikileaks cases occurred on Obama’s watch. The Obama Administration has charged more whistle-blowers (six) than all past presidents combined (three), she offers (also here).

To this, we can add that revisions to the Foreign Intelligence Security Amendments Act in 2008 gave retroactive immunity to companies and ISPs such as AT&T and Verizon for the illegal network surveillance activities they conducted under the Bush regime, with few barriers now standing in the way of their continuing in that role under Obama (see here and here).

These concerns are crystallized in the latest Reporters Without Borders’ Press Freedom Index showing that press freedom in the U.S. plummeted from 20th to 47th place between 2010 and 2011. In short, the national security state after 9/11 has not been rolled back but kept intact. Jónsdóttir experience, she wants us to know, is not a fluke.

Glenn Greenwald has made a similar case that positions Wikileaks as being part and parcel of a new kind of journalism that mixes crowd sourcing, the internet and professional journalism. After a recent talk in Ottawa co-hosted by the National Press Club, he also mentioned that Wikileaks had invited journalists to use its material long before all hell broke loose in 2010, but it was the lure of exclusive access in their respective home markets that finally enticed The Guardian, New York Times, Der Speigel, Le Monde and El Pais to the table.

In other words, it was the pull of exclusive rights and private profit, not a good story, that brought the press to Wikileaks’ table, and it into the journalistic fold. And seen in that light, Wikileaks serves as a much-needed corrective to lazy and cautious journalism.

Harvard University law professor Yochai Benkler makes a similar case but in a much more systematic and constitutionally grounded way. He also shines a light on how the network free press is being subject to death by a thousand legal and extra-legal cuts when what we need is a strong press to counter the power of the strong state if democracy has a hope in hell of surviving, let alone thriving.

Benkler argues that attempts to bring Wikileaks to heal have involved a dangerous end run around Constitutional protections for the networked fourth estate, i.e. the First Amendment. Pressure from Senator Joe Lieberman, Chair of the Senate Committee on Homeland Security and Governmental Affairs, for instance, led webhosting provider Amazon, domain name supplier everyDNS and financial payment providers (Paypal, Visa, Mastercard) in December 2010 to withdraw internet and financial resources that are essential to Wikileaks’ operations to exemplify the point.

While government actors are prevented from such actions by First Amendment protections for the press, Lieberman used commercial actors who were, Twitter aside, all-too-willing to serve the state on bended knees, and a campaign to denigrate Wikileaks journalistic standing, to do an end run around such Constitutional restraints. Such actions eliminated the routine financial channels (Paypal, Visa, Mastercard) through which an estimated 90 percent of Wikileaks donor funding flows, and to scramble to find a new domain name provider and webhosting site.

Now of course, some argue that Wikileaks has nothing to do with journalism and the free press. They are wrong.

Remember, it set the global news agenda repeatedly in 2010, mostly by working hand-in-glove with the world’s leading newspapers to edit and publish stories. It has won oodles of journalist awards before and after these events, as the following partial list shows: Economist – Index on Censorship Freedom of Expression award 2008; Amnesty International human rights reporting award (New Media), UK 2010; Human Rights Film Festival of Barcelona Award for International Journalism & Human Rights, 2010; International Piero Passetti Journalism Prize of the National Union of Italian Journalists, Italy 2011; Voltaire Award of the Victorian Council for Civil Liberties, Australia 2011; Readers’ Choice in Time magazine’s Person of the Year (Julian Assange) 2011. The honorifics bestowed on the “Twitter Wikileaks Four” by The Guardian, also referred to earlier, adds yet another.

Awards are nice, and the recognition helps to bestow legitimacy, Jónsdóttir observes, but the real key is to keep pushing the envelope. To that end, she updated us on the Icelandic Modern Media Initiative (IMMI) that she and others have spearheaded since the initiative’s birth in the Icelandic Parliament in July 2010. IMMI is, in short, a “dream big” project designed to make Iceland a digital free media haven where whistle-blowers are protected by the highest legal standards in the world and the value Net Neutrality formally incorporated into the country’s new Constitution that now awaits Parliamentary ratification.

Thus, as she rails against powerful forces on the global stage, Jónsdóttir is helping to build in Iceland a model of information rights, privacy and free speech for the world.

These are important things, she says, because they are all about our history and about making democracy fit for our times. In terms of history, and reaching for the right words, she points to the importance of Wikileaks as

“part of the alchemy of what is going on in the world. . . . The Iraq and Afghan war logs changed how people talk about the wars. It has provided us with a very important part of our record, our history”.

As for democracy, “voting every four years is absolutely not democracy, it is just a transfer of power”, Jónsdóttir exclaims as our conversation draws to a close. Of course, the rule of law, an open internet, and fighting against the strong state are essential, but these are abstractions unless they are made personal and concrete.

Hmmm, the battle for the open internet and network free press, now its personal. That seems like a great way to think of Birgitta, and our long afternoon together last week.

Open Data and Open Internet Dogma: Sergey Brin’s Guardian Interview and the Political Economy of Google

The Guardian ran a great set of articles last week, the “Battle for the Internet”.  It included essays, video-shorts and interviews with the A-list of the Twitterati, bloggers, pundits, and OSPs (other smart people), from Clay Shirky, dayna boyd, Evgeny Morozov, Emily Bell, and more.

Sergey Brin, Google’s co-founder, director and major shareholder kicked things off with an interview on Monday with a full-throated defense of “open data” and an “open Internet”. “Web freedom faces the greatest threat ever”, he warned.

Brin skewered governments, Facebook and Apple, and the copyright grab by the entertainment industries in uncharacteristically blunt terms for the mounting threats. He condemned authoritarian regimes such as China, Saudi Arabia and Iran, of course. And he chastised the steady creep of complex, costly and unpredictable government regulation and national security pressures in all countries.

Facebook and Apple’s walled garden approaches were singled out because, Brin argued, they “risked stifling innovation and balkanising the web”. “All the information in apps – that data is not crawlable by web crawlers. You can’t search it . . . . There’s a lot to be lost,” he continued.

Finally, Brin lambasted the entertainment industries’ push to turn ISPs, search engines and other digital intermediaries into copyright cops through bills such as SOPA and PIPA in the United States, and their equivalents elsewhere. It is a checklist of some of the most important forces bearing down on the internet that others have identified for more than a decade, starting notably with Lawrence Lessig’s Code in 1999.

Most of what Brin says in the Guardian interview is not new, however, and can be found in the company’s latest annual report. When your Promethean mission is to “organize all the world’s information and make it universally accessible and useful”, as the ”about” page of Google’s corporate website and in its annual report (p. 3) boasts, government imposed web blockades and surveillance, exclusive walled gardens and excessive copyright are a threat to your business.

Probably the most surprising thing that Brin told the Guardian is that he no longer believes the internet is an uncontrollable technology.  Five years ago “I thought there was no way to put the genie back in the bottle, but now . . . “, he says, “it seems in certain areas the genie has been put back in the bottle”.

It is the end of a dream. For those who still cling to the idea that the internet cannot be regulated, Brin’s disillusioned conversion will come as a needed surprise.

Brin quickly recanted from his denunciation of the digital feudalism represented by Apple and Facebook’s walled garden strategies in the face of criticism. In a blog post two days after the Guardian interview, he “clarified” that he actually deeply admires Facebook and Apple. And of course, the power of the state is wholly different than the search for profit and power through the market, he reassured everyone. And peace returned to the kingdom . . . .

That may be so, but Google’s annual report does single out social media companies as threats to the searchable web and as a risk to the company’s advertising business from which 96% of its $38 billion in revenue last year came (see p. 9). Indeed, a comprehensive and universally searchable web is the engine of the Google machine, responsible for cranking out profits in excess of 25 percent per year. There is no doubt that walled gardens and tethered apps could obliterate Google’s bottom-line by putting more and more of the internet beyond the reach of search and undermining the hyper-linking structure that has made the internet what it is.

A searchable web is a navigable web and this is not just in Google’s self-interest, however, but everybody who uses it. As Google states in its annual report, the company is fully committed to making “the internet a more useful and enjoyable experience for our users” (p. 9). Of this, I have little doubt. The problem is not the neglect of users, but rather the potential for over coddling and cocooning them in a web of their own information — a ‘filter bubble’ (Pariser).

Searching and linking really are useful and in this case what is good for Google, is good for us. These functions help to filter the potential disorder of a million voices all clamouring at once for attention — the Babble Effect — into a meaningful and intelligible shape (see Benkler; van Couvering). Searching and linking are also good for democracy, according to Yochai Benkler, although that does not mean that they eliminate social, political, economic, media and cultural power. They do not. In fact, they can and do concentrate attention while also reproducing and reinforcing hierarchies of power just like in the ‘real world’ (Hindman, Davis, ch. 7, Baker, Shirky).

Openness and transparency, searching and linking without limits are in many instances desirable things, but not always. However, Google’s appeal to them is one-sided, flat and selective, even if seductive. This is not to say that it’s appeals to these values are false. They are not and I think that there is no doubt that Google has more than just a shallow commitment to values that go beyond its corporate bottom line.

Indeed, even critics acknowledge this. Siva Vaidhyanathan, for instance, in The Googlization of Everything, sees Google’s commitment to making all the world’s information accessible as embodying something deeply desirable — a Digital Alexandria for the 21st Century, perhaps — but which is also a messianic and technocratic project driven by the mindset of engineers, and ego centric ones at that. Evgeny Morozov, in The Net Delusion refers to the “Google Doctrine”, the notion that the alchemy of Silicon Valley capital mixed with internet and enlightened State policies by the governments of the west will solve all the world’s problems and universal peace will settle in over all its peoples.

To its admirers, Google’s motto is not just rhetoric, but a whole way of being — an ontology — that dazzles and forces us in the face of challenges to ask, WWGD? (“What Would Google do?“, as Jeff Jarvis fawningly puts it in his homage to Brin, Page and Schmitt at Google & Co). Brin encourages a similar kind of view by linking his own personal biography with Google’s values in the opening pages of the company’s annual report.

Google’s rhetoric and what others have to say about it are also matched by several real initiatives that go beyond the corporate bottom line. Take, for example, the Measurement Lab (MLab) created by Google, the New America Foundation and the PlanetLab Consortium in 2008 and operated ever since.  The M-Lab allows internet users across the planet “to test whether their ISP is blocking or throttling BitTorrent and other protocols” free of charge.

Canadians, for instance, learn that they have one of the most throttled internet systems amongst the forty countries monitored by the MLab Project.  We also learn that Rogers has the dubious distinction of being the heaviest throttler of BitTorrent of all ISPs surveyed. The chart below shows levels of BitTorrent throttling in Canada relative to the US, UK, Finland, Australia and New Zealand.

Table 2: Network Throttling in Select Countries, 2008 – 2010

	2008		2009		2010
	AVG	RNG	AVG	RNG	AVG	RNG
Canada	10	26	29	87	20	75
US	17	47	14	60	6	14
UK	16	23	26	44	13	21
Finland	6	5	5	3	6	3
Australia	11	16	21	29	9	16
New Zealand	19	23	32	37	10	1

Source: M-Labs.

This is useful data to have, indeed.

Google also created and maintains the Transparency Project, which documents the number of requests that governments make to Google to take down or block access to specific content, or websites. The number of requests from government sources in Canada are comparatively low. In the U.S., they are comparatively high. The Transparency Project also maps internet traffic patterns around the world to detect barriers to the free flow of information, whether that is coming from government restrictions, broken cables or other obstructions in the internet plumbing.

Google’s participation in the Global Network Initiative, an effort set up in 2008 on the 60th anniversary of the United Nations Universal Declaration of Human Rights as a forum for commercial internet companies to wrestle with the rights, responsibilities and ethics of freedom of expression and privacy online, is yet another good example.  To be sure, there is much to be desired with respect to the GNI and questions about what it has accomplished, if anything. Nonetheless, it does bring together several major internet companies with leading scholars and public interest groups that have solid track-records on these issues, such as the Berkman Centre for Internet and Society at Harvard, Centre for Democracy and Technology (CDT), Index on Censorship, Electronic Frontier Foundation, World Press Freedom Committee, and so forth. Facebook and Twitter, in contrast, are missing in action.

At the same time that Google’s commitment to transparency, open data and the open internet are in many ways laudable, its’ conception of these things are simplistic, one sided and selective. As the company itself notes in its annual report, its own business relies on “confidential procedures” (p. 6). The detailed mechanics of the company’s Page Rank system that it uses to index the web and serve up search results are also shrouded in mystery. Only a very select view have seen behind the curtain.

The company’s ownership structure is also based on tight control. Sergey Brin, Larry Page and Eric Schmidt control two-thirds of Google’s voting shares and use this to make decisions from the top. It keeps the rest of the commoners at bay, and it is not the most open way to do business. The company’s own Annual Report states, “this concentrated control could discourage others from initiating any potential merger, takeover, or other change of control transaction that other stockholders may view as beneficial”. It appears that openness has it limits.

When it comes to the ownership and control of our personal information online, however, Google’s stance is that there are no such limits and not surprisingly so, since openness removes any impediments to the unlimited, systematic and comprehensive collection of user-generated information that are the foundation of its business. As Christian Fuchs notes in his A Contribution to the Critique of the Political Economy of Google, internet users produce reams of information without pay for the likes not just of Google but Facebook, Twitter, LinkedIn, and the rest of the social media platforms whose businesses depend almost entirely on the limitless collection of personal data and the hyper-exploitation of our ‘free labour’. This unlimited collection and analysis of personal information, remember, is the foundation of Google’s revenues of roughly $38 billion last year.

The debate is not whether or not Google, Facebook and Apple dominate their respective spaces, but whether that dominance will prove relatively immovable or transitory (also here and here). There are only a few countries where Google is not the dominant force in search and online advertising: China, Russia, Korea. In the U.S., Google’s revenues of approximately $17.5 billion in 2011 accounted for well over half of all online advertising revenues, which emarketer put at roughly $32 billion last year.

	Google Share of Search
USA	66
Germany	93
UK	80
France	90
Italy	88
Canada	81
Australia	92.5
New Zealand	76
S. Korea	9
China	13
Japan	48
Avg	Google (67)

Source:  Comscore, 2010a, Data Passport – 1st Half 2010; Comscore, 2010b, Data Passport – 2nd Half 2010; Alexa.com Top 50

Google’s dominant position means that its own standards with respect to data collection, retention and use also serve as defacto standards of what we can expect when it comes to online privacy. The flipside of Google’s full-throated defense of transparency is that any limits to the collection of personal data are a threat to the ‘free flow of information’. Indeed, EU moves to enhance personal data protection have been branded in exactly such terms, an affront to the ‘open Internet’.

Yet such a view is simplistic, and an opportunistic manipulation of the language and values associated with the internet that are worthwhile when pursued in a less hamfisted way. As scholars such as Helen Nissenbaum have long noted, the idea of privacy is not simply the desire to be left alone but our capacity to set the conditions for how information about ourselves is disclosed and used. And those decisions do not hinge on dogmatic adherance to values in the abstract but notions of trust forged with an eye to the quality of the relationship that we are involved in at a given moment and the contingent, contextual features in which our activities and relationships with others are couched. In short, the more intimate the relationship, the more we are likely to disclose. That is why it’s okay to get naked with a lover, but not in the streets or with Google.

Openness can also be a threat in dangerous situations, whether that’s being gay in a small town or during revolutionary times when confronting repressive states armed to the teeth. That, unfortunately, was a lesson learned the hard way by several people in North Africa and the Middle East during Arab Spring as well as the London Riots last summer when their posts to Facebook were used by the military and police, respectively, to track people down.

So, come to think of it, perhaps it’s a good idea that Facebook is walled off from search. Maybe people don’t want their activities on Facebook to be open and searchable by the whole world? There are already serious issues with Facebook’s own unbridled exploitation of personal data that it would be unwise to permit Google to open it even further to search and disclosure on the basis of its own blind adherence to “making all the world’s information universally available and accessible”.

Ultimately, dogmatic adherence to ‘open data’ and the open internet serve no one well. Recent U.S. court cases have also made it clear that  businesses built upon maximizing collection of personal information also makes such services easy targets for State surveillance.

Who owns your personal information? Not you, according to the courts, when the terms of service policies of Google, Facebook and Twitter baldly state that their business depends on the open and unlimited collection of user data as the foundation of their own businesses (see here, here and here).

Seen from this angle, then, openness is not just a license for Google to exploit the collection of user generated content/data for its own promethean pursuits, but a recipe for turning the digital media behemoths that now straddle many of the key cross-roads of cyberspace into functionaries serving the interests of the State and others. Indeed, this is exactly why Google, social media sites (Facebook and Twitter), music downloading sites (Apple) and payment providers (Paypal) and so forth are being targeted for inclusion into the apparatus of copyright enforcement, law enforcement and national security.

In other words, blind allegiance to the ‘open data, open internet’ mantra gives rise to several of the problems that Brin railed about in the Guardian interview to begin with. Only once we abandon one-sided and dogmatic notions of openness will we be able to achieve the kind of internet fit for free citizens in a democratic society.

Open Letter: An Apology to Sheila Copps and the Bright Future of the National Press Club

Dear All,

In this letter I want to offer my sincerest apology to Sheila Copps, the President of the National Press Club, for comments made in my open letter to the members and directors of the NPC two weeks ago.

For those of you who read the letter, you will recall that I was deeply concerned about governance issues at the NPC and especially about the relationship between the executive committee and the rest of the board of directors.

At the same time, however, I realize that while my intentions were good, and the stakes important, I cast the net of my criticism too wide. Moreover, some additional facts have been brought to my attention that require that I set the record straight in terms of some of the points raised in the letter.

The most important of these matters relates to Sheila Copps, the President of the NPC. Since my letter, several people have reminded me that long before she established herself as a formidable force on the Canadian political scene, Sheila made a mark for herself as a journalist. I agree. She worked as a journalist for the Hamilton Spectator and the Ottawa Citizen before her political career took off and again as a columnist, at various times, for the National Post, Toronto Sun and other newspapers since leaving Parliament in 2004.

Regrettably, I did not delve into her background, and as a result let her role as a leading Parliamentarian and political figure in the past eclipse her past and current status as a journalist. I should not have and for this I apologize. Befitting the position of president of the NPC, Sheila has lent her formidable skills to the organization at a turning point in its history and has, like all members on the executive committee and board of directors, done so in good faith, voluntarily and without pay of any kind.

Several important steps have been taken in recent days to consider, among other things, the governance concerns that I outlined in my letter. A new committee has been struck to thoroughly review the rules and procedures that will guide the NPC into the future. The NPC co-hosted an event featuring the award-winning U.S. journalist and Wikileaks chronicler, Glenn Greenwald, this past week.

The NPC is now regaining its footing as a central institution in the practice of journalism and public life in Canada. In addition to Ms. Copps, the board of directors now boasts amidst its ranks a senior national journalist, a film producer, another who serves as the NPC’s institutional memory, an artist, a television reporter, a diplomatic statesman, a good financial manager, an academic and a few other talented people.

With these people and the recent steps taken, the NPC has turned a corner and the future of the organization is bright. In the next few months, further renewal will occur as a few spots on the board of directors that have recently opened up will be filled by election. For journalists, media practitioners or anybody else who wants to help chart the NPC’s role at the heart of journalism and public affairs in Canada, now is a great time to step forward.

All-in-all, I hope that this sincere apology to Sheila Copps and any other member of the board of directors who may have felt besmirched by my open letter will help to assuage hurt feelings. I also hope that it reinforces our ability to work hand-in-hand for common goals.

Sincerely,

Dwayne Winseck

Ask the Wrong Questions and . . . : the CRTC’s Review of Wireless Competition

In the middle of last week the CRTC began to solicit views on whether or not a national code for wireless services is necessary. The CRTC had received several applications, it said, suggesting that such a code might be needed.

Who might want such a code?  The big wireless providers, Rogers, Bell and Telus, that’s who, and their lobby group, the Canadian Wireless Telecommunications Association.

Why? Because they’ve been facing mounting efforts at the provincial level to more strictly regulate their pricing and service packaging. Ontario, Manitoba and Quebec have been leading the way (see here).  Rabble rousing Openmedia also has the wireless industry in its sights with its “stop the squeeze” campaign (also see the Open Media/CIPPIC study here). A standard code generated by the industry could help dampen the clamour.

In its notice, the CRTC wondered aloud about whether its reliance on competition to the maximum extent possible in wireless, and its decision way back in 1994 to not regulate the sector, might be misguided in light of stubbornly low levels of competition.  Anybody who thinks the regulator should actually do something has to (a) show the circumstances have in fact changed and (b) that this change represents a turn for the worse. Only then will the CRTC intervene.

And if does intervene, what can we expect? Not real regulation, but rather a “national code for wireless services” designed by and mostly for the industry.

So, have things changed? Well, yes, of course: 2G, 3G, now 4G and LTE. Smart phones are increasingly making their ways into the palms of Canadians across the land. The internet of devices is highly wifi dependent, and mobile data and video use is growing fast. The industry has also grown from a $3.7 billion industry in 1996 to $18 billion in 2010.

However, one thing that has stayed constant is the fact that the wireless services have never been truly competitive and likely never will be. Nor, however, is it necessary that we expect them to be. But the CRTC said that it would need evidence to indicate that market forces are not working before it would act.

Let me introduce two such indicators: one, the empirical evidence on the state of competition and concentration in the wireless sector between 2000 and 2011 and, two, some indicators of price and quality drawn from relevant global standards.

1. Competition and Concentration: In 2000, the big three wireless providers — Bell, Rogers and Telus — accounted for just over 87% of the industry. Today, they account for just over 93%. The “big three” control more of the sector than ever, and besides that Rogers and Bell now straddle every other significant segment of the telecom-media-internet industries. What they do in any one of these areas affects the developments elsewhere, and broadband wireless services in particular.

The wireless industry was already highly concentrated in 1994 when the CRTC decided that the market was competitive enough to stop doing what it’s suppose to do: regulate. Competition did increase modestly during those early years, with two new rivals – Clearnet and Microcell — snatching away 12 percent of the market away from the incumbent telcos and Rogers by 2000. The two rivals were short-lived, taken over by Telus and Rogers in 2000 and 2004, respectively.

Competition peaked in 2000, then the sector became sharply more concentrated by 2004, before falling slightly and staying relatively flat ever since. Whether recent newcomers — Mobilicity, Wind Mobile, Public and Quebecor – will fare any better, it is still too early to tell. With only 2.7% of the market as of 2011, they are far off the mark set at the high-point of competition in 2000.

The graph below charts the trend between 2000 and 2010 using the  Herfindhahl – Hirschman Index (HHI). Remember, the basic rule with the HHI is that scores under 1000 indicate reasonable competition, 1000-1,800 moderate levels of concentration and anything over that, high levels of concentration. They’ve been over 3000 for most of the decade.

HHI scores for the Wireless Sector, 2000 – 2010

Sources: CRTC’s Communications Monitoring Report for 2008 and 2010, and the Telecommunications Monitoring Report from from 2000 to 2007,  Canadian Wireless Telecommunications Association’s Wireless Phone Subscribers in Canada.

While there’s room for interpretation, the bottom line is that the wireless sector is and always has been highly concentrated. It is less competitive now than it was in 2000, when ‘market forces’ peaked.  The CRTC is right that after this length of time, and in the face of the immovable reality of high levels of concentration, yes, maybe it is time to temper the ‘maximum reliance on market forces’ mantra.  A code may just be in order, although one might go even stronger and ask for proper regulation, i.e. for the CRTC to do its job versus playing overseer to an industry-developed code.

2. What about Prices and Quality?

In terms of prices, we can look at things charitably and not so charitably. First, we can look at the CRTC’s data for information on pricing for wireless services, but we’d look in vain. The best I can see is a combined price index for wired and wireless telephone service in comparison to the cost of cable and satellite services as well as Internet access services.  The figure shows the trend below.

Source: CRTC (2011). Navigating Convergence, p. 65.

Seen from this angle, things look not too bad, at least between 2002 and 2007, when prices were falling below the level of the general consumer price index. The situation reversed after that, however, with the price of wireless services rising relative to the cpi since 2007. Prices have not risen as fast as in cable and satellite subscriptions, but they have not fallen to nearly the extent as they have for Internet access.

We can also look at this relative to seven other countries that can be meaningfully compared with Canada.  As the following figure drawn from the UK regulator, Ofcom, shows, the amount that Canadians pay to their wireless provider each month is at the high end of the scale and always has been throughout the period covered. Also note that prices in every other country surveyed, except Australia, have been falling, while in Canada they’ve been on the rise.

Source: Ofcom (2011). International Communication Monitoring Report, p. 256.

We can also look to the OECD for some guidance.  In terms of wireless broadband access per 100 people, Canada ranks 26th out of 34 countries.  The following chart shows the comparison.

Source:  OECD (2011). Broadband Portal.

Of course, there’s much more that could be said, but just from a cursory glance, all is not right in the wireless kingdom. Of course, many seem to think that opening up foreign investment is the way to go. As I’ve said before, I’m not so sure. Now is not exactly the high-tide of foreign investment in mobile services, at least in the Euro-American economies. And many of those same sources seem to have the US in mind when they hope that big foreign investors will come in to save us from the rapacious grip of Rogers, Bell and Telus. I’m afraid, however, as Susan Crawford, amongst others observe, the US is no better than here, and even more of a basket case on some measures.

The upshot of all this: wireless will likely never be competitive. The CRTC needs to regulate versus oversee an industry-developed code. Lastly, instead of auctioning off all the spectrum, Industry Canada should look to develop an open wireless model.

An Open Letter: Press, Politics and the National Press Club

Sometimes you work hard on things, throw your all into it, and hope that good things come as a result. For the last several months I’ve been doing this with the National Press Club, after being elected as member of the board of directors of the Club in October last year.

The National Press Club of Canada, as it is formally known, was at one time an illustrious organization, created in 1928 and serving journalists and other media professionals from its headquarters opposite Parliament in Ottawa until falling under bad leadership and hard times recently.

Some believe that in today’s context of relentless upheaval in the media world, and journalism in particular, that it is a good time to resurrect the moribund institution and put it back on the map. I agree, and this is why I decided to stand for election to the board of directors after being approached by one of my former students.

Part of putting the organization back on the map is good stewardship and carving out events that illustrate that the National Press Club has its finger on the pulse of important issues of our time. To this end I have been working with a few others in the Press Club to put a couple of events on the agenda

The first of which was intended to be held on the eve of the Government’s re-introduction of Bill C-30, you know, the internet surveillance bill notoriously pitched by the Government as the Child Online Predators Act (Bill C-30) and that was scathingly lampooned by Rick Mercer in one of his famous rants and loathed by people all across the country and all across the political spectrum before being yanked by the government, at least for the time being. Despite some good efforts, the NPC missed the boat on this one.

For the last month I’ve been working on another event that would feature Glenn Greenwald, a renowned journalist in the U.S. whose work appears regularly in the New York Times, L.A. Times, Washington Post and Slate and whose work on Wikileaks not only won him important awards for investigative journalism but also made him the target of a Bank of America-led dirty tricks campaign aimed at those seen to be overly sympathetic to Wikileaks and Julian Assange.

The first event was never held, a missed opportunity, let’s say. It is still too early for the final word on what role the NPC will play in the second event. Earlier this week, the ‘executive committee’ approved our sponsorship of it; yesterday, the same committee apparently reversed itself. None of the reasons for why the event was first approved then rejected have been given, and who was involved in both decisions remains unknown.

One thing is for sure, however: Greenwald’s talk will go ahead on April 12th at St. Paul University in Ottawa, with or without the NPC, at an event organized by Bill Owen, and sponsored by the School of Journalism and Communication, Carleton University.

While the NPC does embarrassing flip flops in the dark, Greenwald has been booked to appear on the Power and Politics show with Evan Solomon just prior to his speaking engagement. Other journalists are lining up for interviews while he is in town. Clearly, as other journalists’ indicate, the subject matter and the speaker are important and, shall we say, newsworthy. Why doesn’t the NPC see this?

Now I have relayed some of this stuff to you because in the hurly-burly of new boards we find a clash of visions between those striving to revive and restore the NPC to some of its former glory but in the context of the realities of journalism in the 21st century while others see opportunities for self-promotion and to shore up their own declining place in the sun.

That the NPC is in disarray, there can be no doubt. Two board of directors have resigned in the past two weeks. Another member who has served for decades and decades was unceremoniously thrown overboard by the President and so-called ‘executive committee’. No reason was given for such actions; inquiries as to the justification and basis for such actions have elicited no response among either the President or her hand-picked appointees that occupy most of the so-called ‘executive committee’.

Several other directors stand on the precipice, waiting to see how all this plays out. I am one of them.

However, rather than standing idly by, I have decided that the NPC is probably something worth fighting for. Hence this “open letter” to the current President of the NPC, the Honourable Shiela Copps.

This is indeed a struggle for the soul of the NPC. It will either be left to become the plaything of the President and her handmaidens or they will be removed and a new directors elected.

There are important first principles at stake. And one of those important stakes is that the President and her self-appointed members of the executive were not elected but appointed. The NPC is currently ruled as if this is a tinpot dictatorship, where board members are suppose to sit idly by waiting for edicts to come down from on high.

There are several problems in all of this, three of which I’ll outline before turning to the ‘open letter’ that I’ve sent to the rest of the NPC this morning.

First, as just indicated, without having been elected, the President and her self-appointed ‘executive committee’ lack legitimacy. These unelected positions are being used to create and fund new positions without proper quorum from a majority of the directors.

Second, given her far better known status as a key figure in the Liberal Party, and having just lost the leadership race for that Party, Copps’ position as un-elected president of the NPC stands at odds with the tenets of a free press which mandates, at a minimum, a separation of political parties and government, on the one side, from the press on the other.

I have criticized the extent to which former Cabinet Ministers, Prime Ministers and other politicos occupy places across the boards of directors at the major telecom-media-internet companies in Canada. I’ve called this crony capitalism and an affront to the ideals of the press.

That a representative journalistic organization like the National Press Club would similarly provide sinecure for a party stalwart who now dabbles in journalism is likewise problematic. Tell me if I’m wrong, but “the Honourable Sheila Copps” as a signature on NPC letterhead creates the wrong optics for a press organization that is in the early throes of revival.

Third, it is not just that the optics are bad, but the actual practices within the so-called leadership. The actions of the President and her ‘executive committee’ are opaque, lack the guidance of rules, procedures and principles consistently applied – the Constitution notwithstanding. Meetings are held without notice, minutes, or indication of who participated, etc. and decisions dispensed from on high. Such practices are not acceptable on any board, least not that of an organization that purports to representat the interests of media workers and journalists committed to a well-functioning free press within a democratic society.

As things currently stand, the NPC – at the direction of the President and the so-called executive committee – sells access to ‘newsmakers’ to the NPC platform. Got $650? Well, line up behind the NPC podium to have your say.

The upshot is that it is those who pay and have interests to flog rather than any sense of newsworthiness and journalistic or public values that determines what events will be held. This makes the NPC look like a shill for monied interests versus a platform for intelligent discussion of the issues that now face us, as journalists and as Canadians

With these points in mind, please have a look at the following letter, and feel free to let me, the NPC or the President and her select members of the executive committee know what you think.

Stepping outside the board of directors like this is neither easy or fun. However, once I decided to accept my position on the board, I committed to doing the best I could and “the right thing”.

In the face of intransigent stone-walling for several public events that had strong backing from a majority of the board versus the ‘NPC as paid shill for monied interests’ events that have been held, and in the face of an executive hell-bent on not addressing such questions and ruling by fiat instead of open conversation and a sense of democratic decision-making, I felt that this ‘open letter’ was the best way to accomplish what needs to be done.

I offered to tender to my resignation should the majority of the board so desire two weeks ago.  The offer still stands.

Dwayne

Dear Honourable Sheila Copps,

How unusual that you would convene a second meeting of the “executive committee” yesterday on the matter of the Glenn Greenwald event when one was just held on Tuesday by two other members of said committee to deal with the same matter. That two versions of the executive committee appear to have come to opposite conclusions is very odd.

May I also remind you that the executive comittee acting unilaterally to reverse the approval of what other of its members have approved is not only untoward, but it makes the NPC look amateurish and silly.  Glenn Greenwald is a renowned journalist in the U.S. whose work appears regularly in the New York Times, L.A. Times, Washington Post and Slate and whose work on Wikileaks not only won him important awards for investigative journalism but also made him the target of a Bank of America-led dirty tricks campaign directed at those seen to be overly sympathetic to Wikileaks and Julian Assange.

The significance of Greenwald speaking in Ottawa is obvious and so it was not hard at all to drum up sponsorship for the event. Notably, the School of Journalism and Communication at Carleton University — one of Canada’s leading schools of its kind in Canada, if not the leading school — has enthusiastically lined up as a sponsor of the event. The CBC’s Power and Politics have also lined up an appearance by Greenwald on the show prior to his speaking engagement at St. Paul University on April 12th. Other journalists have lined up for interviews as well. Do you have special journalistic insights unavailable to these entities?

The approach taken to this event by myself and others who have supported me is more legitimate than the model the executive is trying to foist on the NPC as the only model: i.e. the NPC sells access to its platform for $650, a model which is outrageously out of step with what a serious journalistic organization is about but which makes the NPC look like a shill for whoever has the coin to promote their interests. In our alternative model, we invite people based on their merit and newsworthiness, then figure out how to raise sponsorship and other funding for the event once the majority of directors have agreed on it in principle.

Back to the Greenwald event: there were no grounds given for the approval of the event after last Tuesday’s meeting and none given for yesterday’s reversal of that decision. Indeed, there was no notice given to others on the board of either meeting, or any attempt to canvas members views, despite the fact that 9 of 16 directors approved an earlier iteration of the event that would have seen it as a stand-alone venture organized by the NPC.

Please explain how it is that the so-called executive of the NPC can meet twice in one week with no prior notice given to other board directors, come to completely opposite conclusions, and all without any announcement afterwards of the results, minutes from the meeting, etc.  Also, pray tell, how it is that an illustrious institution that has been central to journalism in Canada for the last six decades — the School of Journalism and Communication — could see this as an event worthy of sponsorship, while the President of the NPC and a few of her hand picked nominees cannot?

May I remind you that you were appointed rather than elected as President of the NPC at the end of last year when the last person stood down, while many of the rest of us who are working our best to advance the rejuvenation and significance of the press club among journalists and other media professionals were elected. The National Press Club is not the plaything of either an unelected president or her handpicked appointees on the so-called executive committee.

The opaque means by which meetings are called, matters dispensed with and indeed who even attended such meetings is completely at odds with the values of an open press in an open society.  A National Press Club unable to embody those values in its own operations is a travesty and a farce.

It is problematic enough that a person of high rank in one of the central political parties of this country — the Liberal Party in this case — occupies the position of President within a press club, an obvious violation of the basic liberal principle that a free press should stand independent of the political powers that be.

That you ply the dark arts of party politics in the matters of the press is completely unacceptable. That you and your hand-picked maidens on the so-called executive are abrogating to yourselves the authority to make and pronounce decisions from on high as if the rest of the board should fall in line underscores the wisdom of the Party/Press separation principle. And what strikes me as especially unseemly is the way in new which new positions have been created and funds allocated to those whose main credentials appear to be some kind of connection to the President and her executive.

In your previous, very limited correspondence on this matter you have pointed to the need for internal discipline and suggested that the two recent resignations from the board are a consequence of ‘email overload’. Nothing can be further from the truth. Instead, when you try to rule from the top without legitimacy, rules or procedure, you will beget backlash amongst those who care. Some directors will understandably want to avoid cross-fire between a President and appointed executive bent on dictating things from the top, on the one side, and those who think there are values, principles and potential future for a reconstituted NPC worth fighting for, on the other.

You have called these kinds of things upon yourself and the NPC. I act in the best interests of the NPC and in my capacity as an elected and independent director.

I call for a meeting of all the directors to be held as soon as possible and to address the following matters:

1. The need for all members of the NPC board of directors to be elected;
2. The need, if any, for an ‘executive committee’ and, if there is to be one, the relationship between the executive and the rest of the board;
3. Determining the proper procedures for nominating, selecting and holding events under NPC auspices.

Sincerely,

Dwayne Winseck

Comcast versus Common Sense: New Frontiers for Net Neutrality?

A new brouhaha has broken out in the U.S. over actions taken by Comcast that give its television and video services delivered via Microsoft’s Xbox a free pass, while still applying bandwidth caps to rival over-the-top television services such as Netflix, Apple TV, HBO Go, etc. It’s the latest frontier in the network neutrality disputes in the US.

The act may not breach the formal rules of network neutrality set out by the FCC in 2010, states Stacey Higginbotham, but it certainly seems to breach the spirit of network neutrality, she implies. Others such as Public Knowledge and the Free Press are much more forthright in the condemnation of the move, but are still holding fire while building a legal and regulatory case.

Higginbotham argues that, technically speaking, the FCC’s 2010 Network Neutrality rules allow Comcast to set aside portions of its networks for managed services, and therefore Comcast’s deal with Microsoft to stream tv and video to the Xbox without caps while applying them to everybody else is probably just fine.  She may be right.

The argument is not unusual. It is part of the incumbents’ arsenal. It is exactly the argument that Mirko Bibic, Bell’s chief regulatory pitbull, used last year when justifying why Bell’s IPTV services won’t count to the infinitely more tight-fisted bandwidth caps in Canada while for everybody else distributing video online it would.

But to get back to the Comcast/Microsoft Xbox case presently at issue, I wonder if the governing set of rules is not the 2010 Open Internet order, as some seem to be fixing on, but rather the “Comcast Network Neutrality Rules” that were fleshed out with much greater precision and sense of specificity when the FCC approved the Comcast-NBC Universal take-over last year?

While many, including then commissioner Michael Copps, have argued that the deal was a travesty and a sop to the new integrated corporate media titan, looked at from a Canadian and international comparative vantage point, the Comcast NBC-Universal deal was actually quite a big thing. The FCC (2011a) and Department of Justice asked for, and got, quite a lot.

The regulator made it crystal clear that it thought that “the harms that could result [from the take-over] are substantial” (p. 3). Among the conditions of approval, Comcast accepted several fairly tough demands that are directly relevant to the case at hand.

According to the “Comcast rules”, any Comcast service involving “caps, tiers, metering, or other usage-based pricing shall . . .”:
1. “. . . not treat affiliated network traffic differently from unaffiliated network traffic” (p. 38).

2. offer the same facilities and capabilities to others on commercially equivalent terms(p. 38);

3. insure that even its set-top boxes adhere to the “broadband Internet access service rules” (pp. 38-40).

Arguments over whether or not ‘managed services’ can be usefully and fairly segregated from the rest of an integrated broadband network media ecology can be a bottomless pit of contention and strategic manipulation, and it is indeed true that the FCC’s Open Internet rules of two years ago side stepped the quagmier.

The Comcast decision, however, was dealing with the specifics of a monumental corporate transaction and in that more circumscribed context, the specifics of network neutrality rules were brought more sharply into focus. Thus, even if having been battered in the courts for the past decade and the FCC’s own prevarication, the network neutrality rules are not dead.

Tales from New Zealand — the Ultrafast Broadband Internet: Digital Public Works for the 21st Century vs. Incumbent Interests?

Last month I visited Auckland, New Zealand to give a talk at the The Future with High Speed Broadband Conference organized by the Competition Commission (full paper here).

The aim was to assess the factors that might encourage or hobble the country’s plan to make ultrafast, broadband internet service available to all. The Ultrafast Broadband Initiative, and its counterpart for rural areas, looks like a digital public works project for the 21st century, with the government forcing a restructuring of the country’s backwards incumbent telecoms players and investing nearly $2 billion in rolling out a combination of fibre-optic and wireless connections to over 90 percent of New Zealanders in the next six- to eight years. However, as I discovered, there are several factors that significantly stand in the way of such ambitions.

New Zealand shares several things in common with Canada that could turn this project into a big ‘white elephant’. The most important similarities are (1) extremely high levels of media concentration (higher in NZ than Canada); (2) powerful and recalcitrant incumbents; and (3) being two of just four countries worldwide where bandwidth caps are nearly universal and set at exceeding low levels (Iceland and Australia are the other two, see OECD).

As luck would have it, the British comedian and actor Steven Fry was in New Zealand working on Peter Jackson’s new film The Hobbit at the same time I was in town. He set things up perfectly a day before my talk by lambasting the pathetic state of New Zealand’s internet service after his attempts to upload recently completed film footage were throttled and thwarted by the ridiculously low bandwidth caps of between 2 to 5 GB per month that come standard with most telecom-ISP plans.

New Zealand has “probably the worst broadband I’ve ever encountered”, Fry railed on Twitter. Turns itself off, slows to a crawl. Pathetic!”

Media, ministers, Telecom NZ spokespeople and the island was abuzz with a basic fact of life in the country that everybody knows, but which takes an outsider to cast a bright light on in none-too-polite terms: the country’s internet service sucks. That was my role too: the outsider who can say things that local industry-regulatory-political insiders cannot.

With attention on high alert, the attendance at my talk was likely higher than it might have been. Media coverage was good from day one, too, with ComputerWorld catching the gist of my talk as follows: “Get real on data caps, peering and Sky TV dominance, says Canadian professor”. A video of the talk is below.

The Minister responded the next day by trying to squelch any idea that things were as bad as I painted, or that new approaches to regulation are needed. The New Zealand Herald and ComputerWorld, however, have drawn directly on my paper since then to counter such a do nothing attitude.  We’ll know better next month how all this will play out when the Competition Commission publishes its much anticipated final report on the matter.

The New Zealand situation is interesting and important beyond its own inhabitants for several reasons. For one, for much of the last quarter-of-a-century, it has been the outpost of a ‘free market fantasy’. To supporters of such a view, deregulation would liberate telcos from the heavy hand of government intervention and competition, innovation and lower prices for better service would flourish for all as a result.

That never happened. The “free market fantasy” years were nothing short of a disaster.

More recently, however, the country has embarked on a series of seemingly forceful steps that would leave the free market fantasy years behind in favour of something altogether different. The four key steps in this process include the development of telecoms specific regulation and functional separation at Telecom NZ in 2006, followed by the launch of the Ultrafast Broadband (UFB) initiative by the right-of-centre, conservative National government after its election in 2008, and finally what some call the ‘nuclear option’ in telecoms regulation — structural separation — earlier this year.

According to many observers, such steps and a strong regulator are necessary to counter incumbents intent on thwarting the rise of real competition and open networks. The UK regulatory, Ofcom, for instance, argues that only once it stiffened its spine and required British Telecom to break itself into two parts —  one for wholesale, and one for retail — under the Openreach framework did telecoms and Internet development significantly improve in that country.

The new regime led to a huge influx of service-based competition, new investment, cheaper broadband prices and more internet providers, while broadband use increased significantly as a result. Prices for residential broadband services fell 16% per year between 2005 and 2007.

With an eye on the UK experience, New Zealand followed suit in 2006. The results to many observers have been impressive. As the Berkman study (2010) concludes, “in the two earliest instances where functional separation was introduced [UK and New Zealand], it had rapid effects on competitive entry, penetration, prices, and/or speeds” (Benkler, et. al, 2010, p. 84).

New Zealand’s Ultrafast Broadband (UFB) initiative charts new ground as well, both as a way out of a legacy of a muddling market and as a forceful response to the financial crisis of 2007-8. The scale and hefty investment in commercial and state-owned companies involved is unique, but several other countries have also begun to follow suit, not just for legacy networks, but for ‘next generation access’ (NGA) networks based on a combination of fibre optics and wireless, too, including: Australia, Italy and Sweden (see the OECD’s study on Next Generation Access Networks).

The state of telecom and internet development in New Zealand has indeed improved since these changes were implemented. There is a modest increase in competition in some telecom markets and an improved regulatory environment.

Nonetheless, the country still sits at the bottom of the pack when it comes to broadband internet development. Moreover, its rank has actually fallen relative to other countries. Thus, where the Berkman study ranked New Zealand 22nd out of 30 countries based on 2008 data, my ranking puts it at 28th out of 34 OECD countries based on 2010 data. The following table shows the results.

Table 1: Country Ranks Based on Weighted Averages for Broadband Penetration, Price and Speed (2010 Data)

Country	Penetration	Speed	Price	Overall Weighted Avg Rank
1 Sweden	5.3	1	8.7	5.0
2 Japan	11.3	3	2	5.4
3 Finland	8.3	6.5	4.7	6.5
4 Korea	2	6	15	7.7
5 Denmark	4.7	11	10.3	8.7
6 France	15.7	5	10	10.2
7 Netherlands	8.3	6.5	17.7	10.8
8 Norway	4.3	4.5	23.7	10.8
9 UK	14	11	9	11.3
10 Estonia	18	11.5	7.3	12.3
11 Slovak Rep	22.3	3.5	12.3	12.7
12 Australia	17	9	12.3	12.8
13 Iceland	7.7	12.5	18.3	12.8
14 Austria	19.7	10.5	8.3	12.8
15 Italy	25	8.5	8.3	13.9
16 Germany	15	15.5	12.3	14.3
17 Switz.	13	14	18	15.0
18 Belgium	18	11.5	17.3	15.6
19 Portugal	22	1.5	24	15.8
20 Slovenia	24.3	3	20.7	16.0
21 Czech Rep.	22	10.5	15.7	16.1
22 Poland	23.7	11.5	13.7	16.3
23 US	12	17.5	21.3	16.9
24 Hungary	23.7	14	14.3	17.3
25 Canada	16	13.5	24.7	18.1
26 Greece	26	18	10.3	18.1
27 Israel	18.7	16.5	21.7	19.0
28 New Zealand	16.3	15	28.3	19.9
29 Lux	13.3	20	31.3	21.5
30 Ireland	20.7	20.5	26.3	22.5
31 Spain	22	19	27	22.7
32 Turkey	33.3	15.5	23.3	24.0
33 Chile	32.7	22.5	30	28.4
34 Mexico	33	23.5	32	29.5

Note: Prices in USD PPP and include line charges (where applicable). Penetration is a composite of fixed broadband subs/100, households and mobile broadband; Speed is based on average advertised download speed plus fastest speed; Price on low, mid and high-end offerings. Source: OECD (2011). Broadband Portal.

The significant decline in New Zealand’s broadband conditions relative to other countries, slipping from 22nd to 28th, reflects the fact that other countries are also pushing similar initiatives, too, seemingly faster than New Zealand.

Ultimately, the UFB could be the great national digital public works project of the 21^stcentury, but if New Zealanders are to realize its full benefits, they must confront several realities head on: (1) high levels of media concentration; (2) restrictive bandwidth caps, (3) low levels of media and internet use, (4) a regulator that is not yet accepted as an essential element in an open, competitive and pluralistic media environment, and (5) strong incumbents intent on bending new technologies and possibilities to their ends.

The last point is particularly important because whilst all the policies and indeed the UFB initiative itself is based on an open Internet model that places as much of the capabilities and resources of these networks at the ends of the network and on to the desktops and into the hands of as many online service providers and users as possible (Saltzer, Reed, & Clark, 1981; Isenberg, 1996; Benkler, 2006), New Zealand’s telecom and broadcasting industry incumbents are hell-bent on creating a supplier-driven walled garden model, circa 1999, where power and resources reside in the core of the network, owned and controlled by network operators and their business partners.

A series of unregulated deals struck between Sky TV — the local monopoly provider of pay-tv services delivered by satellite and local arm of the global behemoth, News Corp. — and all of the key telecom and ISP players (except Orcon) since late-2009 reveal a full-court press by the incumbents to simply graft the ultrafast broadband Internet now being built out mostly at government expense onto their current business models. If they succeed, the media economy will not expand as much as it could; nor will it be as pluralistic. Media and internet use will also likely remain low, because uninspired. Competition, diversity and an open Internet, in short, will be crushed in the name of preserving incumbent interests.

For those who are fans of structural separation, the New Zealand case shows how even that form of regulation can be subverted. It also shows that strong measures are needed to enhance not just network neutrality but also to deter alignments between network and content providers alike designed to throttle competitors and to maintain their own position at the centre of the network media universe.

This is particularly problematic in the context of the UFB because, left unaddressed, one gets the impression that the government is financing the roll-out of a state-of-the-art broadband Internet for incumbents in the telecoms and media industries. Perhaps that’s how we can square the  decidedly right-of-centre government’s decision to publicly-fund such a project to begin with?