Britain has one of the highest proportions of computer per schoolchild in the world, a deregulated telecoms industry, a new generation of net-conscious graduates flowing out of its universities and a fast growing net industry. The country is well positioned to benefit, culturally and commercially, from the expansion of the internet. But something is happening in the politics of cyberspace which may jeopardise this advantage. A battle over future control of the net is being fought between the US and Europe. And Britain has, broadly speaking, sided with the US-with potentially disastrous consequences for its ability to control its digital destiny.
Why is this happening? The internet's infrastructure is being privatised by the US government. As the net is not a single entity, its privatisation is a subtle process. The most obvious development is in the management of the infrastructure of web names and addresses (such as www.prospect-magazine.co.uk). Run by the US National Science Foundation since 1993, the system has proved lucrative for one company, Network Solutions Inc. NSI, which is de facto an arm of the US government, controls the registration of the popular domain name suffixes-.com for commercial enterprises, .org for non-profit organisations, .edu for universities and so on.
But as the internet grew, it became clear that the system was skewed towards US interests. There is no effective system of domain name resolution, so when one company claims that another has violated its trademark or copyright, the system simply defers to US law which favours US companies. Moreover, NSI's government monopoly means that all big domain registrars have to pay it a cut. The money has been piling up in a fund dedicated to "the future development of the net," in which Congress has finally taken an interest.
The US government has recognised that the system has to change, but the EU has rejected its proposals. The European commission draft response accuses the US government of keeping copyright and trademark powers in the US, and of ignoring Core, an Anglo-European consortium of domain name registrars. The commission's reply was on behalf of all member states, but behind the united front the British government takes a dim view of Core and broadly supports the US plans.
The encryption debate has exacerbated the split between Britain and the rest of Europe. The encryption of information-e-mails, credit card details, database records-is vital if the internet is to develop as a secure communications channel. Businesses need their digital products encrypted to avoid piracy. Consumers need to have faith in their banks' encryption policies to buy online. And individuals want their personal details kept secret.
But the prospect of individuals and businesses encrypting private communications, and closing out the police and security services, appalls many governments. The US solution has been to create Trusted Third Parties (TTPs). These are agencies which sit between the sender and recipient of any information, and hold a (de)encryption key that will, if necessary, decipher all information sent across the net by either party. The repercussions of this are huge. Government-mandated TTPs will create an information elite, the antithesis of the open digital economy while the TTPs themselves will become targets for hackers. How will the use of TTPs square with EU data protection laws? How easily will law enforcement services be able to access information? What legal redress will exist if consumers discover that their personal information has been misused?
In the US, a consortium of companies-including Mastercard, Visa and Microsoft-has created a $15m media fund to campaign publicly against TTP encryption which seems to be making some impact on US government policy.
Meanwhile, the British government is planning to introduce a similar TTP system despite opposition from other EU countries. The few British businesses with an understanding of the issues do want some sort of encryption authority, but not the one on offer. After issuing a consultation paper early last year, the government canvassed opinion through the DTI. This (recently extended) consultation period has not so far deterred the government from clinging to its TTP strategy.
The US claims, in effect, that as it invented the internet (and has 80m of its 120m users) it should be allowed to lay down its operating standards. Many important people in the US are convinced that the internet represents the future of world commerce and they intend to exploit their competitive advantage ruthlessly. The EU, for its part, wants to create a global organisation for the internet, which will have other transnational organisations-including the OECD and the World Intellectual Property Organisation-as its legal base.
As I write, the British government is on the brink. The pro-US policy is being reconsidered; and there appears to be open dissent from the more technically-minded ministers.
The EU has as many views on internet governance as it has member states. It needs leadership if the future of the web is not to be determined solely in the US. Britain is best placed to provide that leadership. Will it rise to the challenge?n
