6/15/1999

All countries are different; all customers are the same. That’s the lesson to be
learned from Freeserve ISP’s meteoric rise, and the subsequent reshaping of the UK
internet industry. Prior to Freeserve, the British adoption rate of the internet was
fairly sluggish, but Freeserve figured out how to offer free internet access by
subsidizing its service with for-fee tech support and a cut of local call revenues,
and in the six months since they’ve launched (and spawned over 50 copycat services),
the UK user base has grown from 6 to 10 million. Their main advantage over the other major ISP player, British Telecom, was the contempt BT has for the British public.

Wherever technology is concerned, there are a host of nationalistic prejudices: the
Americans are early adopters, for example, while the British are nation of shopkeepers, suspicious of technology and fearful of change. BT held this latter view, behaving as if Britain’s slow adoption of the internet was just another aspect of a national reticence about technology, and therefore treating the ISP business as an expensive service for elites rather than trying to roll it out cheaply to the masses.

This idea of national differences in the use of the internet is everywhere these days,
but this idea confuses content with form. There will be Czech content on the net, but
there won’t be a “Czech Way” of using the network, or a “Chinese Way” or a “Chilean Way.” The internet’s content is culturally determined, but its form is shaped by economics. Once a country gets sufficiently wired, the economic force of the internet has little to do with ethnicity or national sentiment and much to do with the unsurprising fact that given two offers of equal value, people all over the world will take the cheaper one, no matter who is offering it to them.

Unsurprising to consumers, that is; businesses all over the world are desperate to
convince themselves that national identity matters more than quality and price. (Remember the “Buy American” campaign that tried to get Americans to pay more for inferior cars? or the suggestion that corrupt business practices were part of “Asian Values”?) Freeserve’s genius was not to be swayed by the caricature of stodgy, technophobic Brits. British reticence about the internet turned out to be about price and not about national character at all — now that internet access has come in line with ordinary incomes, the British have been as keen to get connected as Americans are.

Patriotism is the last refuge of an unprofitable business. We’ve seen the internet take
off in enough countries to have some idea of the necessary preconditions: when a
literate population has phones at home, cheap PCs, and competitive telecom businesses, the value of connecting to the internet rises continually while the cost of doing so falls. In these countries, any business that expects national identity to provide some defense against competition is merely using a flag as a fig leaf. In the end, countries with wired populations will see national differences reduced in importance to the level of the Local Dish and Colorful Garb, because once a country passes some tipping point, its population starts behaving less like citizens of a particular place and more like global customers, making the same demands made by customers everywhere. Businesses that fill those demands, regardless of nationality, will thrive, and businesses that ignore those demands, regardless of nationality, will die.