The Internet: Australia’s Role and Opportunities – Paul Twomey

Issue 3 | 20 July 2009

Dr Paul Twomey is President and Chief Executive Officer of Internet Corporation for Assigned Names and Numbers ([ICANN]) and currently Senior President of ICAN. Before joining ICANN, Paul was the founder of ArgoP@acific, a prominent international consultancy and investment firm. He was also the founding CEO of the National Office for the Information Economy and the Australian federal government’s special advisor for the Information Economy and Technology. On Monday 20 July 2009, Paul Twomey addressed The Sydney Institute to outline the opportunities for Australia engaging with the internet and global technology.

THE INTERNET AND ITS GLOBALSIING REVOLUTION: AUSTRALIA’S ROLE AND OPPORTUNITIES

PAUL TWOMEY

The Internet is the only global technology. That is both its radical and fundamental nature. From India to Indiana, Marrakesh to Melbourne, the Internet’s deployment also reflects regional characteristics and priorities. But, wherever it is, this global communication platform exhibits foundational principles, based on its technological origins.

From the pioneering efforts of, among others, J.C.R. Licklider, Barry Leiner, Vint Cerf, David Clark, Paul Baran, Frank Heart, Bob Kahn, Leonard Kleinrock, Daniel Lynch, Jon Postel, Lawrence Roberts, Thomas Merrill, Ivan Sutherland, Bob Taylor, Donald Davies, Roger Scantlebury, Stephen Wolff, and Steve Crocker, the Internet’s evolution was guided by a group of technologists and research administrators and funders.  The first manifestation of the network that we now call the Internet was the ARPANET initiated in 1969.  The true Internet evolved four years later.

In the pursuit of a broad goal of enabling the Internet to grow soundly yet quickly the Internet technical community operated under a number of common values.  An incomplete list of these values, at least as I see them, includes:

• Ensuring a single, end-to-end interoperable Internet
• Bottom-up technical policy making and decision making
• Participation open to all who wish to do so
• Legitimacy determined by open participation and the value of the contribution to the joint effort, rather than power – meritocracy. (It should be noted that interpretation of this value created later tensions when other disciplines and interests emerged as part of the community, e.g. legal, policy and even consumer interests.)
• Consensus based decision making, but not full “census based” consensus
• Cooperation, Coordination and Consultation among participants and groups pushing forward initiatives
• Yet, very spirited and blunt public debate
• Swift decision making, if possible
• Private agreement or contract approach to creating and managing linkages among and to the network
• Global efficiency in the allocation of resources, such as Internet Protocol addresses
• Encouraging innovation, particularly at the edge of the network
• Using a layers approach to development and respecting these layers.
• Building on layers of protocols to ensure the stability of the whole construct Very importantly, turning evolving thinking into “Running Code” This was the engineering equivalent “Walk the walk, not just talk the talk”, and was the key to the successful “guerrilla” development of the Internet, in contrast to the heavy discussion auras of such standard development as, X.25 and the OSI model.
• Standards are to be respected until obsolete – reflected in the Request for Comment process

These technical values have become the underlying DNA for the development of content and applications which run the Internet. As a consequence, I would argue that the Internet at the moment is the strongest vehicle for the projection of Western soft power in the World today. It pales Hollywood in terms of the projection of values and ideas and empowerment – both in the very structure of the end-to-end network and in the content it carries. But the Internet is also changing its nature. Its centre of gravity is moving to Asia, and this poses a number of challenges, but also a number of very important opportunities for Australia.

Some five years ago, I had the first of a number of meetings with Kofi Annan, through a process which was called the UN World Summit for Information Society. I was faced with the challenge of first meeting him for about ten minutes – that was all he had available in his diary – and trying to explain this issue of the Internet. There were member states of the UN who were pushing very strongly to change the UN’s agenda and take over the running of the Internet as one of its core functions. So I was confronted with how do you actually talk to the Secretary General of the United Nations in ten minutes and make an important point?

I went in with three maps; the first one I put down before him and told him this was the standard nation-state map of the globe: the world according to politics. Annan looked at his chief-of-staff as if to say, “Who let this idiot into the room?” Then I demonstrated a telecommunications cable and satellite map: what the world was according to telecoms regulators, the big Telcos, Siemens, Alcatel, Nokia, and those sort of people; the world of cables, co-ownership, accounting rates arrangements for sharing of transit payments, and lots of government regulation.

And then I showed him a map of the Internet: a global topological map which looks like a spider’s web on steroids.  With the Internet, there’s no geography – no boundaries of the nation state. Networks are defined by Internet Protocol (IP) address blocks not national codes.  Then Kofi Annan got what I was trying to say.

The challenge that he and I both faced at the World Summit for Information Society – the challenge that many political systems will continue to have – is that the world of the Internet does not equate well with the geographical world we know. The Internet has no geographical boundaries.

At the end of the World Summit for the information Society, at a summit in Tunis in November 2005, the UN member states agreed on a set of principles, which essentially did not try to restructure the way the Internet was coordinated.  Kofi Annan went out of his way to make certain he and I had a media conference. He brought the TV crews in because he wanted to send a message that the UN was not trying to take over the Internet.  As he wrote in the Washington Post prior to Tunis: “One mistaken notion is that the United Nations wants to “take over”, police or otherwise control the Internet. Nothing could be farther from the truth.”

So what do I mean by the Internet? Essentially there are three layers of the Internet. The first layer is the telecommunications infrastructure, some 300,000+ Internet service providers who offer the wireless, and the fibre and the copper wires over which the photons and electrons run. Sitting on top of that are the protocols and standards, which essentially are the mathematical overlay, which help those 300,000 Internet service providers all operate as one single global operable Internet. Uniquely, every computer can find every other computer on the Internet only once. This is what’s called the Internet system of unique identifiers; it is what ICANN and its community coordinates worldwide.

Sitting above all this, are the applications. Many people think that the Internet is their screen, and if it is not the screen it is Google. Well, that is only one of millions of applications that sit on top of a system of coordination, which sits on top of 300,000+ ISPs – an incredibly powerful ecosystem.

So, how is the Internet different from old-style telecommunications? It is essential to understand both in terms of the politics of the Internet and its impact. As I have already pointed out, the Internet is a topological network, not a geographical network. What does that mean to the average user? A landline has a geographical number. You can’t pick your phone up and go elsewhere with it. The network only operates to that number. So we have country codes for telephones.

The Internet, on the other hand, is wherever you connect to it. Wherever you connect you get access. Your mobile phone is mobile, but not always when you are overseas. The phone call comes here (to Australia) first, and then the network passes the call around the world and tries to find me. But the Internet allocates my IP address wherever I connect, in whatever hotel I am in or wherever I am. More importantly, I can quite literally change ISPs; I can change boxes, I can change IP addresses for that, and keep the same domain name and make it move anywhere in the world.

In another sense, this network does not recognise geography. There are two things that Bob Kahn and Vinton Cerf did when they invented the TCP/IP Protocol, the Internet Protocol. They didn’t put geography in it, and they made it “dumb”. It was not like the existing telecoms and computer protocols, which were very proprietary. It is a little bit like having a train with an engine and a caboose and, in between, flat trucks. The consequence of which is you can put anything on it, and the Internet Protocol will carry anything – voice, data, image, television etc. Those older telecoms protocols, in contrast, were very service specific.

You may remember that every half a decade a big Telco would decide that we would get a new product – we would get ISDN, or we would get fax, or we would get whatever the big central switch manufacturers and Telco management decided we needed to have. But the Internet protocol will carry any form of data – voice, image – so it is the people on the ends of the network who create the content, and who then carry it across the Internet using this one non-service specific protocol. You can have Internet television; you can have Skype that appears out of nowhere; you can have Google that is not yet ten years old. You can put any combination of data in this protocol – it is a universal protocol and applies across the whole globe. That is one of its greatest geniuses.

Therefore, innovation is driven at the edge of the network. In the old telecoms world, innovation was driven at the centre of the network – by large-scale capital, decided by large-scale companies, driven by senior management. With the Internet, innovation is out of any one person’s control. It is a world for entrepreneurs at the edge of the network. It is globally coordinated, while most telephone markets are nationally regulated. Take the ACCC’s role here and the FCC’s role in the United States. They regulate the telecoms’ environment, but the Internet’s unique identifiers are coordinated by bottom-up organisations like ICANN and the Regional Internet Registries. With the Internet, it is global, open, multi-stakeholder (involving governmental, technical, business and civil society participants) coordination whereas the telecoms area is full of national governmental regulation.

The key to the explosion of the Internet is its economics. Its massive impact is in reducing transaction costs. At the heart of transaction costs is the cost of storing, collecting and transmitting information, and the Internet has driven those costs down enormously. An e-ticket for an airline costs less than one per cent of a paper ticket in total costs. As a consequence of its innovation model, it reduces barriers to entry, particularly in the services sector. There are some four million new websites that have come online this year worldwide, and the process continues, with new people constantly adding new material for use globally. When we write the history of the twentieth and twenty-first centuries, the Internet will easily be as important as the introduction of electricity or steam.

The challenge I put to you today is to recalibrate your thinking – your paradigm of political decision making. There are two comparisons here. There is the world according to CNN, and the world according to the Internet. CNN thinks presidents are really important, and the Internet thinks that communications ministers are more important.  CNN talks of generals.  The Internet considers Operator Groups as important because it is the bottom-up nature of how the technology was developed, and is coordinated, which is revolutionary and has changed the way a globalised technology shifts the ground rules on which all parts of the global economy operate.  Increasingly, a globalised meritocratic elite at the technical and coordination level play a role in how the world is evolving; and in ways, I’d argue, that presidents and many prime ministers barely comprehend.

So recalibrate your sense of politics. Some of the most important ministers in the Middle East are not the defence ministers or prime ministers but people like Minister Tarek Kamel in Egypt, who has done a brilliant job to keep an open Internet expanding in Egypt and promoting Egypt as a source of Internet and software expertise. The Syrian Minister of Communication and Technology Imad Sabouniin is a well-known member of the Internet community.  Mme Lamia Chaffai Sghaier, Secretary of State for IT, Internet and Open Source, in Tunisia, is also a member of the Internet Society.

In very interesting environments, individuals are playing an important role in promoting Internet values and the way that communications work in those countries. Hualin Qian, one of the quiet heroes of the Internet, and his successors at the Chinese Network Information Centre are some of the key architects of the long-term infrastructure of the Chinese economy and society. They have made a long-term commitment to the way in which the core addressing and routing systems work within the Chinese Internet, and how that interacts with the global Internet.

You should also recalibrate your sense of what the Internet is used for. In Japan and Korea and, to a degree, in Europe, there are sophisticated services on mobile phones. In Japan, in particular, there is television on mobile phones. In Africa and India, it is a matter of simpler services on rapidly growing mobile phone networks. India is putting some eight to nine million new handsets in service every month. Ninety five per cent of the African population is presently covered by mobile telephone signal, and the penetration rate of mobile telephones in Africa is approaching one in three. It is an incredible growth story.

In Singapore, Japan and Korea, on the other hand, we are moving to a one-gigabit per second fibre to the premises network, a completely different sort of environment. And, obviously, that’s also the case with the Australian government’s announcements on a National Broadband Network, and a vision of 100 megabit per second.  Minister Conroy has spoken of eventually moving to a1 gigabit per second network, which you are seeing presently in Korea and Japan and which the Singaporeans put out to tender in February.

In Korea last year the big-ticket item in family entertainment was not television; it was families who competed against each other in online computer games during prime time. That was the big thing. It wasn’t watching TV programs. In the US, Facebook is used for organising parties; in the Middle East it’s used for organising strikes. In China, I would argue quite strongly that the Internet has become the main platform for social dialogue, including with the government. Many of you are aware that there is quite a comprehensive system of surveillance on the Internet in China, as there is in other countries. But you’ve only got to see the experience of the Sichuan earthquake to understand the degree to which the Chinese government was aware of the Internet as a mechanism for understanding the feedback loop inside the society.

The feedback loops the Internet represents – economic, social and political – are one of its key transformative aspects. It’s not like broadcasting; it’s not like telecommunications; it’s not like newspapers, which struggle with letters to the editor. This is a real-time feedback mechanism, a feedback loop that is consistent with economic theory going back to Adam Smith. We’ve seen in politics what it’s meant for election campaigns. All through the modern political process, there’s a series of social dialogues that the Internet empowers. In the way it works, the Internet is founded on and reflects essential Western economic and political values.

It’s a rising tide that floats all boats. But I make the point, often, to American audiences – they are not all American clippers. There’s a tendency in the United States to see the Internet as purely an American experience. The very nature of Internet protocols empowers global social dialogue. That’s a key aspect of it.

You could almost argue that one person’s surveillance is another person’s town hall – that these feedback loops that you see the political and economic classes in various countries accessing, involve a new insight into what’s going on in society.  The Internet is a global force that allows all sorts of communities of interest and new forms of personal identity and self-alignment. We’ve seen that with the social networks, Twitter, Facebook, MySpace, LinkedIn, and these other social networks. What essentially they are about is realignment of people’s sense of identity, a realignment of social allegiance, not so much limited by geography anymore.

It’s the access to knowledge from the Internet that is one of the most empowering individual experiences. One of the reasons I’m so involved in this area – why I’m passionate about it personally – is that I worked in refugee camps in the mid 1980s on the Thai-Kampuchean border and witnessed how people could be so disempowered because they didn’t have a voice. Where they were reliant on a handful of NGO workers to be a conduit – someone who was not going to get arrested at the gate of a camp, who could go to an embassy in Bangkok and speak for them. These technologies, particularly the Internet are an amazing empowerment of individuals. Today I still receive weekly, up-to-date information on the status of refugees in many world hot spots – the dispossessed now have a global voice.

If a Ugandan widow in Lake Victoria now sets up a Bed and Breakfast, every backpacker from Norway to New Zealand can access her website. In the Democratic Republic of Congo people can access the best medical advice, from wherever, if there’s a breakout of some virus. We should never underestimate the empowerment mechanism of this vastly growing network and its connection to human knowledge.

And where does it come from? To a large degree, it comes from is a set of technical decisions and communities over the last 30 years, many of them based in North America, Europe, Japan and some here in Australia. The values of these people are built into the network protocols. Its bottom-up nature is a big collision with the traditional forms of economic control by big government and big business, especially in the media and telecommunications.  If you go to the Internet Engineering Taskforce and see the process they go through to finalise what’s called an RFC or Request for Comment, or a meeting of one of the regional Internet Registries to decide on allocation of IP addresses, or an ICANN meeting discussing Top Level Domains, you would be struck by the breadth and diversity of the bottom up search for rough consensus.  It is very different from working in the UN system and trying to get consensus. There, it is a census of everybody and if one party’s not happy, you don’t have consensus. The Internet consensus model is a much more a “get on with it” model.

There’s no membership requirement. It’s a very open process. Legitimacy is determined by open participation and the value to the contribution to the joint effort, rather than power. In the Internet there are people in Cisco who’re considered to be really important. They’re not necessarily the board or the executives. They’re often the engineers who are the people you want to talk to. I could go company-by-company, ministry-by-ministry and give the same illustration. In this technical community it’s about your participation and the value of your ideas, not what your business card says. Cooperation, coordination, and consultation among participants and groups pushing forward initiatives are a key set of values. It’s a very spirited and very blunt public debate.

One of the key points we tend to make to policy makers, when we think about this single global technology, is that the Internet’s addressing and routing system are separable from the issues arising from the content carried in that system. Why is that important? Because we don’t want political concerns to kill the goose that laid the golden egg; because everyone has a content issue. Even the US, which often quotes its First Amendment. Just mention Internet gambling and you suddenly find out they’re got a content issue. Thailand, Europe, and Australia haves spam policies and other proposals: everybody has a content issue. The key question is about how we manage content issues – and, while people manage content issues on the Internet, we don’t use the addressing and routing systems as a mechanism or a way in which we try and control content.

Transit policy matters. In Europe, Japan, Australia, New Zealand, we have focussed a lot, to lesser and greater extents of success, about having a local loop competition, competition and access markets. The US has probably had less success in competition at the local loop level. Latin America, the Middle East and Africa have a different experience. They’ve tended to privatise or hold on to their networks and leave their telecommunications environment in areas of monopoly for quite a long period of time. Often, regulatory frameworks did not precede privatisation. Liberalisation started later, after they had already privatised, which made it more difficult.

In Asia there are now some 680 million users of the Internet. Europe has around 400 million, North America has 250 million. Australia and Oceania have 21 million. In North America participation is about 74 per cent and Australia about the same. In Asia the number is 17 per cent. So that’s 680 million users of the Internet and that’s only 17 per cent penetration rate. And, it’s about the third highest growth rate. That’s something that we need to get our heads around. It’s a very significant issue for Australia, and also a great opportunity for Australia.

It’s a tectonic shift in two ways; it is an amazing empowerment impact. India is a classic example. There are changes in that society we’ve never before seen because of mobile telecommunications and mobile Internet. The other side of it is that the way in which the Internet will be used, who works it and how it works is shifting from the Atlantic to the Pacific from the West to East. Not only is it shifting in usage but also in terms of some of its most advanced usage. For example, average broadband prices at 100 kilobits per second in Japan are US 6 cents but the US number is much higher. Korea is US 8 cents. The speed of the Internet connectivity on copper DSL in Japan and Korea are about 48 megabits per second. They’ve got both the fastest networks and also the cheapest.

This is where the core experience of the growth of the Internet is taking place. Not in Europe, and not in North America – they’re in catch-up mode. In Japan, their expectation is – and this is government policy – that broadband (20 or 30 megabits per second or more) will cover 98 per cent of the population by 2008, and ultra high speed to reach 90 per cent of premises by 2010.  We’re talking in Australia today about putting fibre to the home over the next eight years, and Japan is already there, in terms of its policy expectations.

In South Asia there is a massive change in growth. The Indian government has a policy to put fibre into 600,000 villages and because of that their move is to bring the next 400 million users onto the Internet online. They have to do it in Roman script and, because a billion people in India don’t use that, there’s a move towards having 22 languages of Indian being reflected fully on the Internet.

China continues to be one of the fastest growing. I spoke to the Deputy Governor of Henan Province in Zhengzhou, in October 2006.  He was half way through a three-year plan. In the previous three year plan, he’d put all the villages in that province on telephones. In the second three year plan he’d put fibre to every village in the province. So, in a six-year period, they went from having a quite low telephone penetration rate, to having fibre in the ground. That’s quite phenomenal.

Other East Asian markets have become sophisticated, particularly in their use of mobile Internet. The race for bandwidth supremacy is really with Japan and Korea.

The Pacific Islands are a completely different space. Their concerns are all about capacity and capability, and they are an interesting microcosm for developing countries. They’re concerned with the disruptive impacts of the Internet, and what it means for them not having skills. But they’re also very concerned by the negative social impacts of the misuse of the media and how content might be regulated to keep peace within multi tribal, religiously conservative communities. It’s easy for others to criticize that, but I think it’s a very important consideration and it’s important in other parts of the world.

The Internet, and what is happening with its usage, not only gives us challenges, but also gives the Australian community and our economy enormous advantages. We should consider those. There are in the Western Pacific only three cities which speak all the languages of the Western Pacific – they are Brisbane, Sydney and Melbourne.

In Sydney alone we had the following populations in 2006 speaking these languages at home:

• Arabic 161,226
• Cantonese 125,749
• Mandarin 96,669
• Other Chinese 12,682
• Filipino (excludes Tagalog) 16,897
• Hindi 37,003
• Indonesian 18,285
• Iranic (includes Persian and Dari) 19,285
• Japanese 11,226
• Korean 35,911
• Tagalog (excludes Filipino) 27,388
• Tamil 15,211
• Turkish 18,970
• Vietnamese 72,423

You can’t go to Singapore and get that language skill-set. You can’t go to Hong Kong and get that language skill set. One third of the population of Sydney speaks another language apart from English at home. That is a benefit, and not something to be overcome. In a new, networked world, our experience of immigration, our experience of new ethnic groups, our experience of immigration is very different from the ship-based experience of earlier generations.

Australia spends a lot of resources pursuing free trade objectives, including for the services sector.  But somehow we don’t seem to fully appreciate how the Internet is already largely a free trade zone now.  Because of the values and protocols under which it operates, Australian companies can access the fastest growing online markets at the mere click of a mouse.  And more importantly we have one major competitive advantage on the twenty-first century Internet.

We have the cultural and language diversity, married to political stability and the rule of law, which make this country a natural home for the Asian-facing Internet businesses of the future.  We need to see our strengths in a regional and global context.  And have the courage of imagination to make these opportunities realities.