Made in the USA

Forbes ASAP , August 22, 1999

It may seem like old rhetoric--talk of anarchy and chaos on the Internet. But the notion turned up again on newsstands early this summer in the British magazine Prospect. The cover featured a picture of a bomb with the tag line "Anarchy.com:Can We Tame the Net?"

The writer, Internet consultant and former Greater London Council member John Carr, recited the usual litany about crime, pornography, data collection, encryption, and electronic commerce. In every case, the source of evil, the barrier to regulation, was the same those damned Yanks.

"In the Internet's own organization, and in the values and assumptions which underpin it, one thing stands out the Net is American"--which means it's too open and out of control. What's more, says Carr, "the lack of established mechanisms for resolving political disputes means that the status quo prevails--and that is nearly always American."

Even when some Americans want to slap on controls, the Constitution gets in the way. On censorship, "the U.S.'s First Amendment and the opinions of U.S. judges have become a de facto Internet standard." On encryption, a divided Congress {read nonparliamentary government} preserves the status quo, so "the libertarians win by default."

Such vehement anti-Americanism rarely has been seen since the end of the Cold War, at least among respectable Europeans. Nasty as it is, however, Carr's attack is on target. Despite opposition from our own technocrats, American culture and the American constitutional system have indeed thwarted most attempts to regulate the Net.

Carr-style anti-Americanism is only going to intensify as the Net grows in importance. This isn't just a matter of French gripes about the prevalence of English, or a clash between outright tyranny and free speech. The Internet's spontaneous, bottom-up nature poses both practical and ideological challenges to ideals of government planning. By combining open communication, technological innovation, and fluid international commerce, the Net undermines technocratic control. And by developing decentralized institutions based on choice and competition, it erodes the ideal of "one best way" for everyone.

The Internet's full social, cultural, economic, and political implications are just now beginning to dawn on many European technocrats. They don't like those implications--regardless of how eagerly many of their citizens may embrace them--and, in reaction, they're making America the Great Satan of the Internet age.

Internet content is only part of the European gripe. There is also too much competition from U.S. telecom providers. In a May 1999 article for Le Monde Diplomatique, Philippe Quau, director of the Information and Informatics Division of UNESCO, paints a picture of a diabolically clever American strategy to dominate global communications.

The plan, as he lays it out Deregulate at home, creating intense technical and price competition. Develop crafty schemes such as international callback to route phone calls from expensive foreign monopolies through less costly countries, thus "introducing [those monopolies] to competition at a time and according to a timetable not of their choosing." Create a huge imbalance between cheap calls going out of the United States and expensive calls coming in from countries with price-gouging monopolies. Finally, cite that imbalance to end the requirement that sending phone companies pay half the money they collect to the country on the receiving end.

A true technocrat, Quau seems unable to imagine such a process emerging spontaneously from economic competition and messy interest-group politics. He sees it as an ingenious plot to conquer the world. "The 'invisible hands' of networks and the market are naturally at work weaving a single fabric," declares Quau, and this process "has turned the geography of Europe and Asia upside down America has now become virtually the heart of these regions....A Paris-New York or London-New York link is cheaper than Paris-London or Paris-Frankfurt. Virginia has become the hub of intra-European links."

Europeans and Asians may think they're better off with cheap, technologically advancing telecom service. But they're wrong. Quau concludes his article "This Trojan Horse strategy has worked perfectly, and the U.S. can now move to the next phase control of the world's electronic commerce." Scary.