1999 was a turning point in the history of the net — for the first time (and from now on) US internet users make up less than 50% of the net’s total population, marking the end of the American Internet. (1969-1999, R.I.P.) This growing internationalization will have profound effects on the growth of the internet over the next several years, as country after country gets wired. The large and growing
pressure on businesses to get the citizens of their own country online, and then to expand beyond their own borders in pursuit of further growth, will accelerate internet penetration throughout the world. Internet theorist Frances Cainrcross has called the internet “the death of distance” in her book of the same name, and as the
American internet fades and the global internet takes its place, it will finally begin to live up to that promise.

Countries do not get wired gradually. Instead, they pass through a tipping point in their internet population (somewhere around 10%) where for a sizable segment of the population network access stops being a luxury and starts being a necessity. Once this threshold is crossed, the wired population quickly grows large enough to begin affecting that country’s economics, politics, culture. The US crossed that threshold in 1995, and because of this early passage, it is very fashionable these days to assume that most of the rest of the world is still several years behind the US. This view, most recently espoused by Morgan Stanley’s star internet analyst Mary Meeker, is dead wrong. What that smug, Americ-o-centric attitude overlooks is that
internet adoption is accelerating — these days when countries cross the 1/10th tipping point, they are now growing faster then the US did. It took 4 years for the US internet population to go from 1/10th of the country to 1/3rd, 1995 to 1998. In the UK that growth took just 15 months, from fall of 1998 to now. The Chinese internet
population quadrupled in 1999. The big change in these figures is the role of business — in the US, businesses got in the way of the internet in the early years, while in the UK and elsewhere, businesses have now assumed a driving role in the internet’s growth.

In the US, the online services and ISPs created a wired population long before anyone ever heard the word e-commerce, and the early reaction of most US businesses was to ignore or fear the internet, usually in that order. As it became clear that the online audience wasn’t going away, this left the businesses playing catch up, a situation people in the US are so used to it has become almost a reflex to assume that businesses don’t “get it”. Today, however, businesses in countries at the tipping point of widespread internet adoption have learned their lesson by watching the US — once the internet comes along, businesses know they will be valued in part by their internet strategy, and generating loyal internet clients will raise their worth in the market. The results of these lessons is clear in two of todays most dynamic markets, Britain and Brazil; in both of those countries existing banks are offering free internet access for life to their clients, in order to acquire loyal e-customers, while driving up internet adoption as a side effect. The effect of businesses getting it sooner means that once a country crosses the tipping point, its market will grow faster and become net-savvy sooner than the US market did. The Mary Meekers of the world are going to be caught by surprise when they see how rapidly the industrialized world becomes synonymous with the wired world.

This change in the role of businesses — going from sitting on the sidelines to accelerating internet growth — will separate the world into 3 spheres: countries with little or no internet penetration, whether for reasons of insfrastructure or political resistance or both: think Cuba, Sierra Leone, Iraq. In the middle will be countries
with a small but rapidly growing net population, often doubling annually — countries crossing the tipping point, like Brazil, Italy, Taiwan. Finally, there will be a few countries with a large and mature net population, whose growth will have slowed to a more leisurely 25% a year or so. The first country in this group is the US, of course,
but the UK and the Scandinavian countries are joining this club as well. 1999 marks the end of businesses focussed on growing within the net population of their home countries. In the next few years, the real action is going to be between tipping point countries and mature market countries, because every business in both groups is pursuing the same thing: growth.

The cultural and economic logic of internet businesses demands constant growth — in page views, unique users, sales, transaction value, in every possible measure of success. The valuations of internet stocks are based on a climate where that growth has been easy to attain — the US from 1996-1999 — but as the US nears 50%
penetration, the growth in users is still strong but no longer breathtaking. This leaves mature market internet companies with two choices: break the news to their shareholders about lowered growth expectations, or look for customers in other markets. The usual answer has been international expansion: Yahoo is in over 20 countries, the biggest online bookstore and auction site in the UK are Amazon and
eBay respectively, and a host of other US-based internet companies, everyone from AOL to salon, are expanding aggressively overseas. All these companies are trying to hit other markets at the same moment: after they have crossed the tipping point, but before the playing field holds too many well-established competitors.

This pressure from the mature markets is in turn creating huge incentives for businesses in small but growing markets to go international as well, particularly if they can do it along linguistic lines, with Spanish-speaking businesses reaching out across Latin American, English-speaking businesses re-tracing the lines of the
British Empire, and so on. The goal of this metaphorical land grab is two-fold: first to stave off the competition from mature markets where possible and grab the growth in user base for themselves, and second to provide themselves with leverage when the inevitable partnerships and acquisition offers come in from the Yahoo’s and Amazons of the world.

The next five years are going to see several cycles of customer acquisition, consolidation through partnership or purchase, followed by a new round of customer acquisition, and only companies with a credible international strategy will be able to play that game at the highest levels. The US-based intenret companies will have an advantage in this market, but not a complete one, now that the US internet
population is in a minority, 1999 marks the point where the real work of taking the World Wide Web world wide began.

First published in FEED, 11/99.

What do the United Auto Workers, the Sierra Club, and nameless vandals in black ski masks have in common? Not much, actually, which is why it’s surprising to see them all together protesting the current round of World Trade Organization talks in Seattle. The amassed protestors represent a broad spectrum of views: The WTO should be given the power to enforce labor issues; it should have its power to lower tariffs stripped away; it should be made more transparent; it should be abolished. The central fact currently uniting these incongruent positions is the WTO’s secrecy and lack of accountability. And yet, if the protestors manage to force the WTO to become more accountable to the citizens of the countries it represents, two things will happen: The WTO will become more a part of the emerging world government, not less; and the differences between the protestors who want to improve the WTO and the protestors who
want to destroy it will break out into the open. Both of these things would strengthen, rather than weaken, the WTO.

The WTO has consistently maintained that it is not part of a world government, but that claim is just an expedient fiction. Cross-border trade is a classic governmental issue, and an organization with the power to set and enforce rules on world trade is a de facto governing body. Like the European Union and the International Olympic Committee, both of which endured crises this year occaisioned by their back-room dealings, the WTO has a crisis of legitimacy on its hands. It began life as GATT, the
General Agreement on Trade and Tariffs, with a mandate to set rules but no enforcement powers. (Unsurprisingly, laws with no cops didn’t make for much of a system.) In response, the WTO was formed, giving it both the ability to make rules and some ability to enforce them, though without any real transparency. This may be an efficient way to proceed, but of course efficiency without oversight is a recipe for pure self-interest
to carry the day. The challenge now presented in Seattle is to open the process to input from the people whose lives will be affected.

But democratizing the WTO will not provide all the protestors what they want, because they want such different things. Reformers only make common cause with revolutionaries when things are so bad that the differences between their position are blurred, and if the WTO addresses the protestors’ demands, it will quickly become clear that the central difference between the groups in Seattle is between those who accept that globalization is not going away and those who don’t. Globalization is not a program being advanced by a cabal but a by-product of changing costs. When shipping costs fall in a manufacturing economy, international trade rises because the number of suppliers is less bounded by geography; when communications costs fall in an information economy,
international trade rises even faster because geography becomes even less important. The WTO did not start this process, it does not control it, and it could not end it even if it wanted to.

International trade can only be shaped — not stopped — and arguing about what that shape should be is a task of Solomonic complexity. The protestors who want to improve the lives of Honduran workers making sneakers bound for the US are not likely to find common cause with labor unions who don’t want US sneakers (or steel, or cars) made outside the US at all. Environmental groups might not like increased popular input
into the WTO’s decisions, because most of the people affected by the WTO care more about raising wages than drowning turtles. The people talking of abolishing the WTO will be least happy of all, since reform and compromise are the enemies of revolution. The WTO is at a crossroads: If it does not open up, the rising tide of protest will strip it of its legitimacy and perhaps derail the current Millennium Round. However, if they don’t panic in the face of public expression of real grievances, and if they
find some way to give the protestors a seat at the table, the WTO will enter the Millennium Round as a strengthened institution rather than a weakened one.

First published in SAR, 10/99.

The future of post-national Europe is standing in line in London. A new
shop has opened opposite London’s Victoria rail Station, with a line out
the door from noon to night, selling the most addicitve product on
earth: connection. The shop, a cybercafe on steroids called
easyEverything, takes the traditional approach to cybercafes (“Like a
real cafe, but with terminals”) and turns it on its head (“Like a
college computer lab, but with latte.”) In return for providing
travellers with hundreds of terminals and cheap, accessible internet
access, easyEverything has been rewarded with an unexpectedly huge flow
of the under-25 set travelling across Europe, and these travellers
are all using easyEverything for one thing: HotMail. Thats it – almost
no one is surfing, buying, listenting, or any of the other things the
Web is being hyped for, just thousands of people sending tens of
thousands of emails a day, 24/7. The messages are short — ‘Here’s my
phone number, here’s my itinerary’ — and the turnover of customers is
high, but the message being sent out via these digital jungle drums is a
‘Map of Cool’, a traveller’s atlas of Europe. The subtext of the
messages is “London is good right now. Glasgow is good right now.
Frankfurt is lame, but Prague is cool…”, on and on, a vast interactive
‘Let’s Go’ produced in real time, and with far more accuracy than the
commercial travel guides. This may seem like nothing more than a
holiday pastime, but this kind of information moves markets, and is the
key to transforming the European Union from a free trade zone into a
real country.

The EU is the test case for the effects of the Internet on government.
No other multi-national region of the world has gone so far to
dismantle national broders. Within the EU there are no passport
checks, no customs checks at internal broders, and no barriers to work

• any citizen of any of the 12 EU countries can work in any other EU
  country without needing a visa. Things that Americans take for
  granted, like being able to move 3000 miles for a job, are available
  to the citizens of the EU for the first time. In other words, the EU
  has most of the trappings of a country except the citizens, and the
  citizens are being produced at places like easyEverything. The people
  sending their email there are Europe’s first post-national generation,
  its first Internet generation, the first group of people who can move
  from one country to another if they hear that life is better
  elsewhere. The willingness of this generation to ignore national
  identity is going to confound their elders, the people who have grown
  up convinced that sentiments like ‘The Germans are efficient and
  humorless, while the Italians are undisciplined and fun-loving’ have
  an almost genetic component. Nationality matters less than economics
• the Internet generation is going to behave more like customers than
  citizens.

There used to be a story in the automotive industry that went this way:
in the 1980s, American car manufacturers made expensive gas guzzlers,
while the Japanese made zippy little bundles of automotive efficency.
Lesson? Japan good, America bad. Then in the 1990s, the Japanese got
sloppy and smug, while the Americans re-tooled and re-engineered, and
the advantage switched to Detroit. New lesson? America good, Japan bad,
the opposite of the old lesson. This is the official history, anyway,
but there is another, simpler interpretation, one that doesn’t require
belief in a pair of opposite lessons in subsequent decades. That
interpretation is this: people buy the cars they like best, and don’t
care about nationality.

The reason that this simpler interpretation is not the official
history is that a global market is terrifying to people, or at least
to people who make cars for a living. Detriot’s “Buy American”
campaign was proof that producers thought that nationality could – and
should – sway consumer choice more than quality and price, but those
days are ending. Patriotism is the last refuge of an unprofitable
business. We are so used to seeing markets through the filter of
national borders that its hard to see what the emerging global market
is going to look like, but the behavior of the Internet generation in
Europe will show us its outlines.

The current cohort of European under 25s have several important
characteristics that make them immune to cheap nationalism — they are
the first generation whose parents didn’t live through WWII, and they
are richer, more mobile, and speak better English (the official second
language of the 21st century) than any generation in history. Add to
this that they are comfortable with the internet, that they can work
anywhere they like, and that places like easyEverything are springing up
to satisfy untapped demand for communications, and you get a generation
of rootless cosmopolitans, people who are unimpressed with arguments
that they should tolerate unemployment, or high prices, or limited
horizons, simply in order to defend national characteristics that boil
down to little more than a preference for different kinds of cheese.

This emerging European generation will run into a great deal of
hostility from the status quo –a continent that has erupted into war
twice in this century will give up its borders uneasily and unevenly
— but the transformation is inevitable. ‘National culture’ is just
another way of saying ‘arbitrage opportunity’. The internet has
created the biggest referendum on the ability of government to satisfy
its citizens in the history of the world, and governments that fail
the test will see their citizens vote with their feet. As the world is
increasingly divided into EU-like free trade arrangements — NAFTA,
OSEAN, OAU, MERCOSUR, CARICOM — the free flow of information about
jobs and prices across those borders will accelerate the transfer of
power to supra-national entities, and the loyalty of citizens will go
with it. This period has only just begun, and it will have a long
time to go before the post-national generation is in power, but you
can start to see what the world will look like in a 25 years while
standing in line at Victoria station.

First published in FEED, 07/99.

Britain’s Tory party’s use of ecommerce as an argument for retaining the pound is a new high-water mark in the internet’s influence on politics. Britain has been sitting on the fence for years about whether to scrap the pound in favor of the euro, and there has always been a significant block of British “euro-skeptics” who fear that economic convergence equals loss of sovereignty and national character. The Tories would love
to embrace these euro-skeptics (and their votes) by pandering to their sense that a strong pound stands for a self-sufficient Britain, but have been wary of doing so because rejecting the euro looks like a vote for economic weakness. With the rise of ecommerce, the Tories now think they can have it both ways — by mixing “new economy” optimism
with flag-waving they can embrace economic expansion while defending their cultural traditions against international dilution, a position likely to resonate well with the euro-skeptics. They are certainly right that a borderless economy could help preserve the pound, but if their aim is to defend Britain’s cultural identity, they will rue the day they ever heard the word ecommerce.

National character is driven by economic barriers. What a citizen eats, reads, drives, watches, and wears is shaped simply by what’s available, and what’s available is shaped by borders. Tariffs and customs sharply restrict the movement of both goods and services, so countries differ from one another in part because each population has different
limits on their choices in the marketplace. Any cross-border commerce — McDonald’s, Louis Vuitton, Jackie Chan movies — breaks down these cultural limits on choice to a degree, but ecommerce makes national borders so permeable that now it isn’t even necessary to open a shop in another country to start doing business with its citizens.

In an age of falling geographic barriers, culture is just another word for “arbitrage opportunity.” Until recently, geographic borders protected local businesses from serious international competition, but cross-border commerce is changing all that. Britain is currently seeing this in the form of a price war in consumer goods, precipitated by Wal-Mart’s entry into a market that has never seen a low-cost retailer before. The euro-
skeptics have grasped that joining the euro will expose Britain to far more of Wal-Mart’s style of ultra-efficient price-driven competition, but they have not grasped that keeping the pound and embracing ecommerce is no solution. Differing currencies are no longer much of a barrier — with online currency converters, foreign ecommerce companies offering cheaper goods to British citizens can switch prices from euros to pounds
instantaneously.

The Tories are relying on the pound’s symbolism as a barrier to foreign competition. But what they don’t mention is that embracing ecommerce and rejecting the euro will increase international competition faster than embracing the euro and fighting ecommerce. There are of course uniquely British products which are safe from competition — blood pudding, bagpipes, marmite — but these aren’t much of a counterweight to those products where quality and price matter far more than national origin — computers, books, cars, not to mention airline tickets and stock trades. By vastly increasing the width of choice offered to British consumers (and therefore the depth of competition faced by British producers), ecommerce will make the pound as a symbol of an aloof Britannia irrelevant through other means. No matter what currency their goods are priced in, a borderless economy will weave their island inextricably into the fabric of the world.

First published in FEED, 8/11/99.

Fritz Hollings, Senator of South Carolina, and Zhu Rongji, Premier of China, have the same problem — the internet has made their governments too small. In Mr. Hollings’ case, ecommerce is threatening to damage South Carolina’s local tax base, while Mr. Zhu is facing threats to the Chinese Communist Party from dissident web sites in other
countries. They have both decided to extend the reach of their governments past their current geographical boundaries to attack these problems. The final thing the senator and the Premier share is that their proposed solutions will accelerate the changes they are meant to postpone — you can’t fight the effects of the internet without
embracing it, and you cannot embrace it without being changed by it.

Fritz Hollings’ problem is simple — states can collect taxes on local sales but not on ecommerce, because ecommerce has no respect for locality. His proposed solution is equally simple: a 5% national ecommerce tax (the “Sales Tax Safety Net and Teacher Funding Act”) to collect money at the Federal level and funnel it into state “subsidies” for teachers salaries. Unfortunately for him, “No Taxation Without Representation” cuts both ways — education policy is one of a state’s most important functions, and a Federal education tax opens the door for a Federal education policy
as well. If Hollings is worried about loss of state power, extending the states’ reach to the level of national taxation is a good short-term solution, but in the long run it will worsen the problem — states who defend their autonomy will watch the internet erode their revenue base, but states who defend their revenues will watch the internet erode their autonomy.

Zhu Rongji’s dilemma is more complicated, but no less stark — China’s communist party is vulnerable to international dissent because political web sites have no respect for national borders. Shortly after the Chinese government banned the Falun Gong sect for “jeopardising social stability,” China’s Internet Monitoring Bureau attacked Falun Gong web servers in the US and UK. The People’s Liberation Army newspaper called this action a “struggle in the realm of thought,” indicating that China now respects no national borders in its attacks on dissent. During the Kosovo crisis, China argued loudly for non-intervention in the affairs of other countries, but these attacks on foreign web servers tell a different story — non-interference in a connected world is incompatible with a determination to stifle dissent. The Falun Gong attacks will help
protect the Communist Party in the short term, but by demonstrating to future dissidents how afraid the Party is of the web it makes them more vulnerable to the winds of change in the long haul.

Governments, like companies, are being forced to respond to the increasingly borderless movement of money and ideas, but unlike companies they have no graceful way of going out of business when they are no longer viable. In place of mergers and bankruptcy, governments have wars and violent overthrows — governments will do anything to avoid closing up shop, even if that would be better for the people they are meant to serve. This makes governments more successful than businesses in fighting change in the short term, but in the long run, governments are more brittle and therefore more at risk. Zhu Rongji and Fritz Hollings have both adopted old men’s strategies — preserve the
present at all costs — but postponing change will heighten its force when it does come. In another five years, when the internet has become truly global, the damage it will do to things like South Carolina’s tax base and the Chinese Communist Party will make it clear that Messr’s Hollings and Zhu are trying to put out fire with gasoline.

7/7/1999

The 21st Century is going to look a lot like the 19th century, thanks to the internet.
A recent study in the aftermath of the Asian financial storm (“Beyond The Crisis –
Asia’s Challenge for Recovery,” Dentsu Institute for Human Studies) found that citizens of Asian countries who speak English are far more likely to be online than those who don’t. The study, conducted in Tokyo, Beijing, Seoul, Bangkok, Singapore, and Jakarta, found that English speakers were between two and four times as likely to use the internet as their non-English speaking fellow citizens. Within each country, this is a familiar story of haves and have-nots, but in the connections between countries something altogether different is happening — the internet is creating an American version of the British Empire, with the English language playing the role of the Royal Navy.

This isn’t about TCP/IP — in an information economy the vital protocol is language,
written and spoken language. In this century, trade agreements have tended to revolve around moving physical goods across geographical borders: ASEAN, EU, OAS, NAFTA. In the next century, as countries increasingly trade more in information than hard goods, the definition of proximity changes from geographic to linguistic: two countries border one another if and only if they have a language they can use in common. The map of the world is being redrawn along these axes: traders in London are closer to their counterparts in New York than in Frankfurt, programmers in Sydney are closer to their colleagues in Vancouver than in Taipei. This isn’t an entirely English phenomenon: on the internet, Lisbon is closer to Rio than to Vienna, Dakar is closer to Paris than to Nairobi.

This linguistic map is vitally important for the wealth of nations — as the Dentsu
study suggests, the degree to which a country can plug into a “language network,”
especially the English network, will have much to do with its place in the 21st century
economy. These language networks won’t just build new connections, they’ll tear at
existing ones as well. Germany becomes a linguistic island despite its powerhouse
economy. Belgium will be rent in two as its French- and Flemish-speaking halves link
with French and Dutch networks. The Muslim world will see increasing connection among its Arabic-speaking nations — Iraq, Syria, Egypt — and decreasing connections with its non-Arabic-speaking members. (Even the translation software being developed reflects this bias: given the expense of developing translation software, only languages with millions of users — standard versions of English, French, Portuguese, Spanish, Italian, German — will make the cut.) And as we would expect of networks with different standards, gateways will arise; places where multi-lingual populations will smooth the transition between language networks. These gateways — Hong Kong, Brussels, New York, Delhi — will become economic centers in the 21st century because they were places where languages overlapped in the 19th.

There are all sorts of reasons why none of this should happen — why the Age of Empire shouldn’t be resurrected, why countries that didn’t export their language by force should suffer, why English shouldn’t become the Official Second Language of the 21st century — but none of those reasons will matter. We know from the 30-year history of the internet that when a new protocol is needed to continue internet growth, it’ll be acquired at any expense. What the internet economy demands more than anything right now is common linguistic standards. In the next 10 years, we will see the world’s languages sorted into two categories — those that form part of language networks will grow, and those that don’t will shrink, as the export of languages in the last century reshapes the map of the next one.

Published in ACM, 12/1999.

The 21st Century is going to look a lot like the 19th century, thanks to the internet. A recent study in the aftermath of the Asian financial storm (“Beyond The Crisis – Asia’s Challenge for Recovery,” Dentsu Institute for Human Studies) found that citizens of Asian countries who speak English are far more likely to be online than those who don’t. The study, conducted in Tokyo, Beijing, Seoul, Bangkok, Singapore, and Jakarta, found that English speakers were between two and four times as likely to use the internet as their non-English speaking fellow citizens. Within each country, this is a familiar story of haves and have-nots, but in the connections between countries something altogether different is happening — the internet is creating an American version of the British Empire, with the English language playing the role of the Royal Navy.

This isn’t about TCP/IP — in an information economy the vital protocol is language, written and spoken language. In this century, trade agreements have tended to revolve around moving physical goods across geographical borders: ASEAN, EU, OAS, NAFTA. In the next century, as countries increasingly trade more in information than hard goods, the definition of proximity changes from geographic to linguistic: two countries border one another if and only if they have a language they can use in common. The map of the world is being redrawn along these axes: traders in London are closer to their counterparts in New York than in Frankfurt, programmers in Sydney are closer to their colleagues in Vancouver than in Taipei. This isn’t an entirely English phenomenon: on the internet, Lisbon is closer to Rio than to Vienna, Dakar is closer to Paris than to Nairobi.

This linguistic map is vitally important for the wealth of nations — as the Dentsu study suggests, the degree to which a country can plug into a “language network,” especially the English network, will have much to do with its place in the 21st century economy. These language networks won’t just build new connections, they’ll tear at existing ones as well. Germany becomes a linguistic island despite its powerhouse economy. Belgium will be rent in two as its French- and Flemish-speaking halves link with French and Dutch networks. The Muslim world will see increasing connection among its Arabic-speaking nations — Iraq, Syria, Egypt — and decreasing connections with its non-Arabic-speaking members. (Even the translation software being developed reflects
this bias: given the expense of developing translation software, only languages with millions of users — standard versions of English, French, Portuguese, Spanish, Italian, German — will make the cut.) And as we would expect of networks with different standards, gateways will arise; places where multi-lingual populations will smooth the transition between language networks. These gateways — Hong Kong, Brussels, New York, Delhi — will become economic centers in the 21st century because they were places where languages overlapped in the 19th.

There are all sorts of reasons why none of this should happen — why the Age of Empire shouldn’t be resurrected, why countries that didn’t export their language by force should suffer, why English shouldn’t become the Official Second Language of the 21st century — but none of those reasons will matter. We know from the 30-year history of the internet that when a new protocol is needed to continue internet growth, it’ll be acquired at any expense. What the internet economy demands more than anything right now is common linguistic standards. In the next 10 years, we will see the world’s languages sorted into two categories — those that form part of language networks will grow, and those that don’t will shrink, as the export of languages in the last century reshapes the map of the next one.

First published in FEED, 7/15/99.

The United Nations released its annual Human Development Report this week, including a section concerning the distribution of Internet use among the nations of the world. It painted a picture of massively unequal distribution, showing among other things that the United States has a hundred times more Internet users per capita than the Arab States, and that Europe has 70 times more users per capita than sub-Saharan Africa.
Surveying the adoption rates detailed in this report, anyone who has any contact with the Internet can only be left with one thought — “Well, duh.” There is some advantage to quantifying what is common knowledge, but the UN has muddied the issues here rather than clarifying them.

Is there really anybody who could be surprised that the country that invented the internet has more users per capita than Qatar? Is there really anyone who can work themselves up over the lack of MyYahoo accounts in nations that also lack clean water? The truth of the matter is that internet growth is not gradual, it is a phase change — when a country crosses some threshold of readiness, demand amongst its citizens explodes. Beneath that threshold, trying to introduce the internet by force is like pushing string — its is absurd to put internet access on the same plane as access to condoms and antibiotics.

Once a country reaches that threshold, though, there is one critical resource that drives internet adoption, and the UN desperately wants that resource to be money. Among the UN’s proposals is a “bit tax” (one penny per 100 emails) to build out telecommunications infrastructure in the developing world. While improving infrastructure is an admirable goal, it fudges the real issue: among countries who are ready for rapid internet adoption, the most important resource isn’t per capita income but per
capita freedom. Massive internet adoption of the sort the UN envisions will require an equally massive increase in political freedom, and the UN is in no position to say that part out loud.

The HDR report is hamstrung by the UN’s twin goals of advancing human rights and respecting national sovereignty. Where the internet is concerned, these goals are incompatible. The United Arab Emirates has a much better telecom infrastructure than Argentina, but a lower per capita use of the internet. Saudi Arabia has a higher per capita income than Spain but lower internet penetration. What Argentina has more of
than the UAE is neither infrastructure, nor money, but the right of the citizens to get information from a wide variety of sources, and their willingness to exercise that right. Among nations of relatively equal development, it will be the freer nations and not the richer ones that adopt the internet fastest.

The report addresses this issue by suggesting a toothless campaign to “…persuade national governments not to restrict access to the internet because of its tremendous potential for human development,” avoiding mentioning that the “potential for human development” is a death sentence for many of the world’s leaders. If the UN was serious
about driving internet adoption, the section on the internet would have started with the following declaration: “Attention all dictators: internet access is the last stop for your regime. You can try to pull into the station gradually, as China and Kuwait are trying to do, or you can wait to see what happens when you plow into the wall at full speed, like North Korea and Kenya, but the one thing you can’t do is keep going full steam ahead. Enjoy your ride.”

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.