6
The Economy and the Future of the Internet

6.1. Building a national network

The initial establishment of a national communications network is never guided by key economic principles. Just as past actions permeate the present, so do they also influence the future. Networks are built according to the different pressures (political, financial, normative, customer oriented) that they face and their construction should be forward looking. The various theories built around network growth do not permit the formulation of formal laws, in correlation with compelling economic evidence. Furthermore, countries with liberal economies, such as socialist economies, have, after experiments of varying lengths, abandoned the principle of planned interventionism, a Colbertist or Marxist tendency. There are also few rules able to assist network managers in carrying out their duties. Building a network consequently responds to the simplest criteria possible in the liberal world: taking the best decision guided by the available technical achievements, with the selection being made by network operators and validated by the good will of business and residential users. If no basic rule can be provided to assist in constructing or developing a network, economists will be frustrated. They will then turn, by default, toward establishing indexes relating to the use of digital services, which will allow them to observe the degree of user satisfaction in all countries over the course of a day.

6.2. Internet network structures

In 2016, as previously, a national communications network consists of a call collection network and a transport network. Traditional fixed networks and new mobile networks, which are experiencing very strong growth, are connected on the basis of IP protocols, through digital technology, and both have access to the global Internet. This group forms the NGN. More often than not, users forget about this recent architecture, built by connecting several networks, and they remember only that they can access the Internet through numerous applications available on computers, smartphones and mobile tablets.

There are three possible modes of operation on the Internet: the widely used client–server mode, which operates through questions and answers exchanged using a specialized server; the P2P mode, which makes a peer-to-peer connection in isolation; and the Darkweb for those users who like to visit its hidden world of mystery and danger. The number of applications and intermediary actors on these digital network structures is increasing. The rapid development of technology surprises even experienced actors and it makes short-term provision difficult. New network architecture provides more than predicted, pleasing NGN designers and shifting the center of interest of most applications toward mobile devices.

Overall, the majority of traffic is generated by outsiders to the world of network operation (OTT), which currently acquire their revenue through advertising and by reselling client profiles. Not only is the major profitability of the network eluding established operators, but the content and volume of the traffic actually being exchanged is not being monitored by anyone. The supervision of structures and the quality of service have been abandoned to the extent that further questions are beginning to be asked about the technical governance of the Internet. Universal interconnection undoubtedly requires a review of the principle of non-hierarchization of the networks that make up the Internet.

6.3. Network regulations and pricing systems

In much of the world, network operation is included under the services regulation system, which complies with the agreements concluded between various international bodies and states, in the spirit of the “Washington Consensus”. Respect for shared technical standards effectively facilitates communication.

The regulatory and pricing framework of communications services has been adapted to NGN structures and favors players specializing in innovative applications, OTT, and companies that bypass established and new network operators. The regulatory authorities take action to avoid positions of dominance developing between operators in the wholesale market, but it is highly sensitive for them to intervene in the retail market.

The number of subscribers and the volumes of traffic exchanged have increased considerably in a relatively short space of time. The operating margin is decreasing while network expansions are becoming necessary. Existing regulations, which focus too much on a policy of low tariffs, establish strong competition between operators, favor OTT, weaken network operators and reduce their flexibility.

6.4. The issue of supply and demand

Following a long period of shortages in methods of communication, businesses and the general public currently have a wide choice of ways to communicate, born of technological advances and the efforts of skilled commercial businesses, including OTT. The latter aim to respond to the real or implied needs of potential customers and they sometimes suggest playful innovative services to their customers as experiments. Businesses specializing in distance selling and banks continue to play close attention to these developments and the related security levels.

One of the most important features of the global structure of the Internet network relates to its capacity to receive a very small number or a very wide range of simultaneous calls per day on its server platforms. While this network flexibility has its own limitations, it offers information providers immense opportunities at very low prices. In particular, all Internet actors have the opportunity to respond to demand from very different parts of the market, such as the “long tail” segments shown in Figure 4.1, which minimize management costs.

Remote computing has been developing for around 50 years, and today the numerous digital activities that it has brought about surprise users with their originality and their rapid and silent growth, in both fixed-line and mobile networks and for all audiences and in most fields.

While innovation at all costs stimulates the development of many new applications, it also encourages the potential risks related to transaction security with Blockchain, still poorly understood, and the approved (and free) traffic on the Darknet. This abundance of new, seemingly uncoordinated, proposals casts serious doubts on the success of projects related to the Internet of Things, and on the quality of service and good level of security in digital communications.

6.5. The Internet and the economy

The existence of a global network as widespread as the Internet, with its three billion users, naturally has a significant cultural and economic impact with no historical precedent. Information is transmitted from one part of the planet to another in a very short time, accelerating all kinds of responses in the modern world. There can no longer be a question of the “network economy” when 70,000 networks are interconnected under the same protocol and are able to transmit multimedia messages to disparate terminals. The cost of a network is nothing compared to the economic and cultural benefits provided by these interconnections. For a marginal cost, essential information can produce phenomenal results. Who could evaluate the unit cost of a kilobyte for a service provided? Even experts refuse to pass judgment. Eloi Laurent, a researcher at Stanford, declared on this subject that “there are no truths in economics. There are only assumptions ahead and choices behind” [LAU 16].

Yet the press, which was one of the historic originators of this global network 60 years ago, has still not managed to master the digital technologies at its heart and reduce its own distribution costs. The transition to digital is indeed also difficult for businesses and, even more so it seems, for administrations.

However, it is clear that the roles of actors who participate in this network and services architecture are quite badly assigned, as the operators take on message conveyance to the great benefit of OTT, who largely avoid taxation in the countries where they operate. The economic downturn favors the entry into e-commerce of intermediaries (the Barbarians) that overturn traditions and call national professional regulations into question. At the same time, the very fast growth of ICT and the electronic components sector have sparked fears of a risk of serious technological disruption. Will we be able to accommodate all challenges related to the development of the Internet?

The global impact of the Internet is so important that the question arises as to whether it could become an instrument imposed in international trade to serve the interests of a specific country. While some question the role played by the logic of digital technology in relation to the foundations of capitalism and free trade, others are interested in the potential consequences of short-term developments. If the growth of the Internet is related to developments in globalization, then is this network not also an instrument intended to change the basis of capitalism and reduce cultural diversity?

6.6. An Internet of optimists

In any case, with NGN being the Internet’s carrier, the whole world has at least basic knowledge of the global, multiservice and multilingual network, available in fixed and mobile situations. Everyone can understand its advantages and disadvantages. Solutions to resolve the various technical issues mentioned previously are being researched and there is a growing clamor to amend the “Washington consensus”. OTT, which are beginning to participate in ITU-T standardization work, must learn to cooperate with network operators. Private companies are already proposing to co-finance some network structures in the most disadvantaged countries. In order to be able to extend its growth with new offers, the Internet needs more appropriate regulations and financing.

On the Internet, it is difficult to reconcile innovation, freedom of expression and respect for personal data while at the same time protecting Internet users against malicious attacks, deviant eavesdropping, incivilities and aggressive commercial dynamics. Tim Berners-Lee recently made a plea for a universal Internet charter, which would aim to protect both human rights and innovation. The paradox of the Internet is that, while it is possible to encrypt messages, they can then most often only be read by specialists. If the content remains inaccessible, then it is the State that opposes this form of communication. Freedom of expression is caught up with this mystifying box. If the Internet’s official structures are unable to provide a solution that satisfies all parties, the fallout will gradually be felt in the least developed countries that, rightly, believe that they have more to lose than to gain in this unbalanced exchange. Nothing will be able to prevent these countries from simultaneously having two Internets, one closed and the other open.

Since the First World War, the potential collapse of our society has been repeatedly evoked. The 1972 Meadows report pointed to the physical limitations of the humanity’s resources and the 2014 Intergovernmental Panel on Climate Change (IPCC) report focuses on the climate problems facing us in the 21st Century. Unbridled growth defines itself by its own limitations. Dialog between states should allow new rules to be determined worldwide and priorities to be set. Ecology should guide the economy, which, using the means available, will determine the social norms to be respected through the fairest possible distributions, while avoiding the use of “blood minerals”, respecting the environment and appropriately managing rare resources. Would it therefore be possible, without doubts and in a more stable world, to draft reasonable and justified “economic laws” on the topic of communications networks which are consistent with individual freedoms?

To conclude this essay on a note both more concrete and more scientific, let us observe that the recent expansion in telecommunications has been behind large discoveries made in the exploration of our planet. Alongside space exploration, the positioning of communications satellites has given us the opportunity to study the makeup of the upper levels of the Earth’s atmosphere. Similarly, the requirements associated with positioning submarine cables have enabled the biological community to learn about the wonders of the deep. The constraints associated with coordinating its former colonial empire obliged France to set up various submarine connections and obtain, over the past 40 years, some deep-sea knowledge. France has also taken on the responsibility of managing the world’s second largest exclusive economic zone (11 million km2) that spans three oceans, a task that can only be carried out using the international legal and technical framework for coordination. The potential shortages of some critical metals justify the diversification of supply sources and the research of their potential. Utilizing these shared deep-sea assets requires the abilities to monitor aquatic surfaces, make use of the biological resources in their depths and determine how to manage aspects such as food potential, the presence of fish or radioactivity and respect for the environment [DES 10, IEE 15].

In some ways, the Internet conjures up an image of its potential that continues to obscure the depths and responsibilities related to its operation. All states are at once users of the Internet and responsible for managing it. The principal global economic powers have sought to take stock of the available land and sea resources and make use of them, and, since 1945, the United States has been one of the main drivers behind this policy, developed by the United Nations with the assistance of relevant financial bodies, within the framework of a large humanitarian mission. China, for its part, has constructed a mass interventionist capitalism based around a reduced set of standards and actors, including operators and manufacturers. A reduced economy of focused and effective means gives rise to low-cost services. The union of these two types of dynamics should allow the pressing questions currently being posed to be answered, namely:

  • – improving the network of networks so that it ceases to be a source of profit for a small number of preferred companies;
  • – making full use of deep-sea resources by no longer viewing the oceans as a shared dumping ground;
  • – combining our efforts in all areas in order to save the planet.
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