TELECOM Digest OnLine - Sorted: Who Really Controls the Internet?

Who Really Controls the Internet?

BBC Feature Writers (
Tue, 10 Oct 2006 14:05:15 -0500

Who is really in charge of the internet?

US laws to clamp down on online gaming show that the internet can be
controlled, argues Bill Thompson.

The myth of the borderless internet, never very credible to those who
had any real understanding of the interplay between politics and
technology that underpins the network, took another hit last week when
the US Congress voted to ban bank and credit card payments to gambling

If President Bush signs the Unlawful Internet Gambling Enforcement Act
into law, as he is expected to do, then within months US credit card
companies and banks will be forced to check for and refuse payment for
most forms of online gambling.

This has already had a catastrophic effect on UK-based companies like
Sportingbet and PartyGaming, who face the loss of a major part of
their market. Share prices are tumbling, directors are worried and
revenue projections are being hastily scaled down.

Whether or not you approve of gambling or online gambling, and whether
or not you think that this move smacks of hypocrisy or is a blatant
attempt to protect the US gaming industry from overseas competition,
the law provides a good example of how governments can control the

Instead of trying to manage the technology by banning poker-playing
software or insisting that service providers block online gaming sites
- neither of which would be effective anyway - the law puts pressure
on the banks who actually move the money around.

The internet has always been a bordered network, and we ignore this
geopolitical reality at our peril

It's a method discussed in some detail by Jack Goldsmith and Tim Wu in
their recent book Who Controls the Internet?. They point out that "the
rise of networking did not eliminate intermediaries, but rather
changed who they are", and governments can pass laws which control

Whenever people use the network to act there are always local
intermediaries, especially where money is changing hands. And that
means there is no way that a company that wants to trade in a
territory can do so and remain immune from local laws and practices.

Clamped down

We've seen this before. In 2005 the US government clamped down on the
sale of cigarettes over the net by using the same strategy,
successfully restricting people from buying from states that had lower

It does not stop the trade completely, but makes it much harder work
and so effectively deters most people.

It's the same in the People's Republic of China, where the government
knows that the vast expenditure on its 'Great Firewall' and apparatus
of censorship and control can never be completely effective but still
thinks it worth doing.

There may be ways around the law and the technical measures, but they
are too complex or risky for most people to use them.

It's interesting to note that none of the online gaming companies is
proposing to commission gambling anonymisers or cloaked poker games
that would allow people to use their services without being observed
by the authorities.

Falling foul

Nor are UK credit companies stepping forward to offer oppressed US
gamblers a way of paying for their flutters without falling foul of
the law.

Perhaps this is because these companies, many of them listed on the
Stock Exchange, want to remain respectable, or perhaps it is because
they know that such techniques would not work.

Perhaps they fear that if pushed US lawmakers might follow the path
taken by the music industry and go after the users directly.

Instead we hear of threats to take the US to the World Trade
Organisation, the WTO, on the grounds that the new law is an attempt
to protect the US gambling industry from foreign competition rather
than anything to do with morality.

The government of Antigua, host to many offshore gambling companies,
has successfully challenged the US on the issue in the past, and is
reported to be considering further action.

Expensive lobbying

One aspect of the new law that would seem to support the claim of
protectionism is that betting on horses is explicitly permitted, a
reflection of the intense and expensive lobbying that the National
Thoroughbred Racing Association (NTRA) has undertaken over the years.

Unlike online poker, the NTRA has friends in high places and they have
ensured that it will not be affected by the restrictions, so online
betting on horse races will still be allowed.

Of course this just makes it even clearer that the issue is one of
politics, not technology. The banks were targeted because companies
offering financial services need to look honest.

Deliberately flouting the law is bad for customer and investor
confidence, so they can be relied on to follow even unreasonable

Whether or not they are effective in the long term, the new laws
highlight the point made by Jack Goldsmith and Tim Wu when they say
that the "dream of self-governing cyber-communities that would escape
geography forever" has been replaced by "a bordered network where
territorial law, government power and international relations matter
as much as technological invention".

The "dream" sounds more like a nightmare to me, so I can't say that I
regret its passing.

The internet has always been a bordered network, and we ignore this
geopolitical reality at our peril.

If we want to make the network free, open and accessible to all we
need to engage with it on these terms instead of resorting to virtual

The US Congress may have done us all a service by drawing our
attention the reality of today's internet and the ease with which it
can be controlled.

Bill Thompson is a regular commentator on the BBC World Service
programme Digital Planet.

Story from BBC NEWS:

Copyright BBC 2006.

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