There is an conflict between the openness of the Internet and government imposed control and regulation. This is nothing new, the Internet is being used everywhere as a tool to break monopolies, and introduce new, more cost-effective ways to do a great number of things.

It shifts telecommunication industry for phone operators that can not overcharge for calls when VoIP companies can connect the calls for much less and still make good profits. The matter of fact is that the Internet drives the cost per byte transfered down significantly, and thus making phone calls not cheaper by the new competition of new players alone but also drives the underlying costs down (the amount of data transfered for 1 dollar is increasing faster than the capacity of CPU’s as per Moore’s law).

It shifts retail industry, where the biggest margin costs are in the outlets.

It shifts any industry dominated by distribution power and costs such as Music and Movies (the long tail).

It creates new opportunities not previously even imaginable. 10 years ago something like FaceBook was not conceivable for most people in this world, today it’s part of everyday lives.

The openness of the Internet opens for innovation, transparency and disruption.

But the conflict lies where states that are used to having a heavy control and influence in their countries, when all of a sudden companies and people are setting up websites and offering services across borders.

We have seen what happens in a totalitarian government such as China, that have absolute control. Some websites are blocked by the “great firewall of China”.

What happens when or democratic countries in Europe want to impose new laws to regulate and control what happens over the Internet?

What happens when the monopoly is owned by the government?

We have seen this in the online gaming industry in France and Italy, where french police have seized official from companies (BWin) in other countries (Austria), while the company had no presence in france, and there were no real legal basis for the arrest. Italy have handled the competition to the government controlled companies by filtering all traffic in and out of Italy (which the EU did not approve of so the filtering was removed).

Now this is coming to the telecommunications industry, where many countries in europe is starting to require telecommunication and Internet operators to store information about all traffic in the persuit if terrorists and other criminal elements.

This is of course necessary, and law enforcement need to be able to go after the criminal, but what happens when these laws will start to apply on the “application” level of Internet traffic?

– Voice over IP is an application over the Internet.
– E-mail is an application over the Internet.
– Facebook is a application on the Internet that allows users to send messages.
– Instant messaging, such as GoogleTalk, MSN and others is a messaging service.

What happens when the local government impose restriction and requirements on these services. One example is the new laws in European countries such as Sweden, that require all teleco and Internet operators to store all information about communication (e-mail, SMS and phone calls).

A US company offering voice services over the Internet, can offer services to people anywhere in the world. If a user happens to sign up from Sweden, will the US company be required to actively store information about that users activities and forward them to Swedish authorities?

Or will the US company be deemed illegal in Sweden?

How will the local government control or impose this? Swedish law will never apply for US companies, but Sweden can of course instate laws about filtering unlawful traffic.

There is an inherent problem in this development, that will either lead to ineffective laws and legal systems or a locked up Internet with toll-gates between each country.

I guess that this is hardly the direction really intended by the European governments in the process implementing these laws, and this post is not personal reflection of political values, but my view of the effect of the current development with my 19 years of Internet experience (I started using the Internet, in 1989, before there was a web browser…). I know that law enforcement needs new tools to pursue criminals elements that exploit the Internet for their purpose, but the current development and law making is not looking to good for the Internet’s ability to foster new innovation or the law enforcement.

I suspect that a combination of lack of understanding of the Internet technology among lawmakers and perhaps a too strong belief in a government ability to impose control in this environment. The Internet is global and thus very hard to impose control, with-out the chinese model.

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