Cleland served as Deputy United States Coordinator for Communications and Information Policy in the George H. W. Bush Administration. Eight Congressional subcommittees have sought Cleland’s expert testimony and Institutional Investor twice ranked him the #1 independent analyst in his field. Scott Cleland has been profiled in Fortune, National Journal, Barrons, WSJ’s Smart Money, and Investors Business Daily. Ten publications have featured his op-eds. For a full bio see: www.ScottCleland.com.
Latest posts by Scott Cleland (see all)
- Ajit Pai Will Return Pro-Consumer Focus at FCC - February 15, 2017
- Outdated Telecom Laws Pose a Challenge for Ajit Pai’s FCC - February 11, 2017
- FCC Should Sunset Set-Top Box Provision Because Market is Fully Competitive - January 30, 2017
America’s creation of the Internet, and the phenomenal innovation and benefits it has spawned, has changed the world. However, now that the Internet is maturing, the world is changing the Internet.
Many fear this natural evolution as the “balkanization” of the free and open Internet. Some warn it’s a “splinter net” caused by the NSA-Snowden effect. Others in Congress call it classic “protectionism” against American Internet companies.
Something big is going on. At core, it’s the de-Americanization of the Internet.
The rest of the world is vigorously asserting itself in most every aspect of the Internet: governance, oversight, operation, and benefits, in order to make the Internet more global and rest-of-world balanced, rather than American-dominated.
Consider some percentages to appreciate this very real dynamic. Americans make up ~4% of world population and ~10% of the world’s Internet users. America produces ~21% of the world’s GDP and spends ~39% of the world’s military expenditures.
American Internet companies dominate most all Internet market segments: search, online advertising, social media, apps, ecommerce, mobile, cloud computing, cloud storage, email, video streaming, video conferencing, maps, books, translation, etc.
An estimated ~50-70% of global Internet revenues and profits are American depending on the segment. 8 of the top 10 sites worldwide by traffic are American. Essentially the “cloud” means the rest-of-world largely stores and processes its private data on American soil.
Finally, the accumulative Snowden revelations have exposed America’s most dominant aspect of the Internet, that the NSA can inspect most all Internet traffic.
Simply, these Internet numbers are powerfully in America’s interests, but not necessarily in the interests of the rest-of-world.
In other words, the Internet largely has been an American one-way street for governing control, access to private information, and profitability. Now the ongoing waves of Snowden revelations have catalyzed the rest-of-world to seek a more two-way global Internet street.
Several high profile American actions have catalyzed and accelerated the de-Americanization of the Internet.
The biggest and most obvious has been the Snowden Effect. Repeated blockbuster Snowden revelations of the ubiquity, totality, and boundlessness of the NSA’s Internet surveillance have had the effect of largely isolating the U.S. on Internet matters, while largely uniting the rest-of-world.
Compounding the damage of the illegal NSA leaks, the Administration mishandled the public explanation by assuring just Americans that the NSA was not spying on them. Unfortunately, what the citizens of the rest-of-world heard was that the NSA was spying on them.
This is highly problematic for America because the vast majority of users of American Internet services are rest-of-world, and roughly half of America’s Internet companies’ profits come from rest-of-world.
Exacerbating this real and perceived Internet economic imbalance, has been the aggressive and effective avoidance of paying hardly any sovereign taxes on the high profits American Internet companies have earned outside of the U.S.
On privacy and data protection, American companies, led by Google and Facebook, have aggressively pushed the rest-of-world to acquiesce to their insatiable appetite for private information on their citizens, and to store that private data outside of their sovereign control in American data centers.
On intellectual property, some American Internet companies’ open disrespect for copyrights and patents have seriously undermined America’s moral case for generating indignation against China’s continuous, massive, and systematic theft of American intellectual property and trade secrets.
So how is the de-Americanization of the Internet manifesting itself?
For national reasons, China, Russia and South Korea have long fostered their own sovereign domestic industries for search, online advertising, and ecommerce.
Increasingly countries are requiring Google, Facebook, and Twitter, to route their traffic through the sovereign country’s domain extension, not their American dot.com addresses. That enables better sovereign control of that traffic and facilitates enforcement of their sovereign laws.
Last December in Dubai, the U.N.’s ITU overwhelming out-voted America’s free and open Internet governance position. That lop-sided vote presages a new long-term consensus to give the rest-of-world much more say going forward in how the Internet is operated and regulated.
Interestingly, that seminal ITU vote was orchestrated by China, Russia and the Arab states. So it should be no surprise that ICANN, the U.S.-created overseer of Internet top level domains, just built into the Internet new language character sets for Chinese, Russian and Arabic.
These and other coming language character sets will accelerate the de-Americanization of the America’s dot.com Internet to more sovereign-controlled, native language, sub-Internets.
Maybe the biggest precursor of increased Internet de-Americanization was a recent public statement to accelerate globalization of Internet governance, which all major Internet organizations endorsed.
In addition to ICANN, the groups effectively calling for the de-Americanization of the Internet included: the Internet Society; the World Wide Web Consortium; the Internet Engineering Task Force; and the Internet Architecture Board.
Sovereign groups and nations are piling on too.
The EU is pushing for a Euro cloud that would keep European data on European soil, and that could upend the longstanding US-EU data safe harbor. France is pushing for much stronger data protection. Germany wants to end EU-US data sharing. And Switzerland is building a Swiss cloud service.
Brazil plans to build fiber optic networks to bypass America and to store Brazilian data in Brazil. India plans to prohibit government officials from using American email services.
What does all this mean?
To better understand this big picture dynamic, think of America’s Internet as a clear bay window to the world, where one can freely and openly see through sovereign borders, because of the Internet’s largely unfettered free flow of information across most all sovereign borders.
Then think of how the world is changing the Internet as sovereign nations increasingly enforce respect for their sovereign borders.
Metaphorically they are putting sovereign window pane borders on America’s bay window and adding varying shades of opaqueness to their sovereign window pane to achieve their different desired sovereign goals.
The implications of this for trade agreements could be immense. Right now it practically is as good as it gets for America’s Internet. Data largely flows freely while America largely controls most of the data and its monetization.
It’s hard to imagine post Snowden, that the rest-of-world will memorialize in future trade agreements that most all control and value from the Internet always stays American.
Besides big upcoming trade fights, there will be another big Internet fight over ultimate control of the Internet’s operations.
Here America’s dominance is threatened but may be more secure because America effectively owns the most essential element to the operation of the Internet.
Few appreciate that ICANN is essentially the U.S. Department of Commerce’s contractor to manage the Internet’s Domain Name System.
Even fewer appreciate that America still indefinitely retains contractual rights to the Internet’s authoritative “root zone file,” the essential core addressing database that the Internet depends upon to ensure that any Internet addressed device can link to any other Internet-addressed device.
Ultimately how America and the world resolve control over the Internet’s authoritative “root zone file” could determine just how far the de-Americanization of the Internet goes.