Monopoly Machine: Understanding the System That Shapes the Internet

The internet’s commercialization has left us at the whim of large corporations that are often unaccountable and indifferent.

André Wee

The internet is a vast, intricate system of interlocking protocols, hardware, and software. As we go about our lives online, few of us have an idea of what really occurs behind the scenes when we enter a URL, send an email, or use an app. A dizzyingly complex chain of reactions is triggered in the material internet as data travels through privately owned pieces of equipment — cables, data centers, routers — in a matter of milliseconds.

This infrastructure is the focus of journalist James Ball’s The System: Who Owns the Internet, and How It Owns Us, which demonstrates that it’s as much of a battleground as the network’s more visible manifestations, and just as colonized by private companies and governments vying for control. Published amid increased public scrutiny of the internet’s power dynamics, Ball’s book, appearing in the US as The Tangled Web We Weave: Inside the Shadow System that Shapes the Internet, seems particularly timely.

A growing spectacle of high-profile tech conflicts — Congress versus Big Tech, Trump versus TikTok, Apple versus developers, and so on — shows how much things have changed in the half-century since the internet began. When ARPANET, the core antecedent to today’s global network, launched in 1969, it was funded entirely by the US agency ARPA (the Advanced Research Projects Agency, which later added “Defense” to its name and became DARPA). The researchers who developed ARPANET saw it as a tool to access and share information more efficiently; as Ball puts it, the agency saw the project as “a low-risk space to test networking technologies before it unleashed them on national security infrastructure.”

The effort created a set of protocols, TCP/IP, that allowed ARPANET to evolve into an open “internetwork” of different networks. Then in 1989, Tim Berners-Lee started developing the World Wide Web, which helped organize and distribute information online. It was soon in the public domain, creating the basis of the consumer internet. Over recent decades, of course, almost everything about the internet has been aggressively commercialized. Because the web’s core technologies don’t store data on users, cookies and other tools were introduced to monitor online behavior. “Tracking has become the business model of the web,” Ball writes. “Through the creation of large databases tied to those cookies, tracking on the internet is controlled by private companies, instead of a public body or by the users themselves.”

The internet, left unchecked, is a monopoly-making machine, an engine designed to concentrate power, attention and more in the hands of those who already have it.

Ball focuses on this business model’s two symbiotic mechanisms: venture capital and programmatic advertising. Venture financing tends to enrich company insiders and incentivize companies to move fast (and often sell out) in pursuit of quick profits. Programmatic advertising was originally meant to make the buying and selling of ad inventory more efficient, but quickly spawned a dizzying array of sub-industries to monetize all of the data that’s collected as we browse the web. The VC model directly incentivizes intrusive data collection and analysis, which one of Ball’s venture capitalist sources describes as the “fastest solution” to the problem of monetizing a business quickly. 

“The internet, left unchecked, is a monopoly-making machine, an engine designed to concentrate power, attention and more in the hands of those who already have it,” Ball writes. This applies to the layer of the internet where corporate giants like Facebook and Google leverage massive network effects and buy out competition by gobbling up venture-backed startups, as well as to the industry that governs the network’s most fundamental infrastructure: the undersea cables that carry traffic between continents and the fiber and wireless networks that bring the internet to homes and devices. There is also increasing overlap between these layers; the number of undersea cables owned by Google, Facebook, Microsoft, and Amazon has surged over the last decade. Google alone plans to lay more than 3,000 miles of transatlantic undersea cable by 2022.

In the US, many local markets for internet service are monopolized by one cable company, leaving more than 80 million Americans with no choice of broadband provider — which negatively affects prices and service quality for consumers. A new and alarming variation on the monopoly problem is quietly taking shape, Ball warns: companies overtaking both infrastructure and content, creating conflicts of interest when it comes to service and content delivery. “Comcast doesn’t just run networks of cables: it’s a huge producer of content, as owner of both NBC, and its movie division, Universal Studios,” Ball writes. (He doesn’t mention that some non-ISPs are exploring the ISP space, such as Google’s foray into high-speed fiber internet.)

To observers like Tom Wheeler, the Obama-era Federal Communications Commission chairman who figures prominently in Ball’s chapter on regulators, this corporate consolidation is a dangerous anti-competitive trend over which the FCC, with its limited mandate, has little authority. “As the gap between the content companies, who make entertainment, and the cable companies, who transmit it, becomes smaller and smaller, something will have to be able to tackle both,” Ball writes. But it’s unclear what that regulatory body will be, especially when you factor in how corporate lobbyists influence the FCC and Congress, which oversees the agency. Under Trump-appointed chairman Ajit Pai, the FCC has consistently pandered to industry interests at consumer expense by, among other things, repealing net neutrality rules that protected equal access to internet communication and prohibited broadband providers from favoring particular streams of internet traffic.

Ball argues that several decades of privatization and monetization have left the internet’s end users at the whim of large corporations that are often unaccountable and indifferent, primarily because a lack of regulation has allowed industries like online advertising to develop without necessary restraint. The most logical remedy, as he sees it, is government intervention. Though vague on specific measures, he lays out a sweeping, cross-sector wish list. These include labor laws to protect the workforces behind Amazon’s warehouses and the services that power the web; vague restrictions on the commercial use of personal data; closing tax loopholes that allow companies to pay less than they should; and independently vetting algorithms for systemic bias.

“Technology companies often coach us to expect one big fix,” Ball writes. “History tells us to look for lots of smaller ones, if we actually want sustainable change.”

But at a time when the internet and civil society both seem to be fragmenting before our eyes, Ball’s calls for patience and small steps ring rather hollow. His suggestions rely on the premise, not supported by facts inside or outside of the book, that the US government is capable of agreeing on and implementing reforms that truly work in the public’s favor, and that they can act soon. If lawmakers who often struggle to understand basic technological concepts can’t even agree on what the internet’s problems are, can they really be expected to solve those problems? There are reasons to doubt their willingness to do so, not least the skill with which tech companies have learned to play politics, shape media coverage, and influence academic research. As Emily Bell, director of the Tow Center for Digital Journalism at Columbia University, remarks to Ball, “I think that big tech companies buy out dissent.”

Ball himself suggests that the data-driven advertising model “has served to replace the military-industrial complex with a military-informational complex, where the needs of advertising, now one of the world’s most important and lucrative sectors, fuels and services the needs of government.” Governments have benefited from the explosion of new tracking technologies onto the internet, he writes, as well as from “the rapidly established norm that every site on the internet would obsessively track its users across the internet as an essential part of its business model.”

This points to a fundamental question about government regulation of the internet: can officials who have consistently demonstrated an eagerness to exploit it for surveillance really be considered qualified to reform it for the better? It’s unfortunate that Ball doesn’t explore this question further, particularly given his own journalistic background. A one-time WikiLeaks staffer, he co-authored a 2012 book on the organization, and later, while at The Guardian, he reported on National Security Agency contractor Edward Snowden’s leaks.

A growing international community of developers, technologists, and finance professionals is working to reform the internet by using blockchain protocols and open-source technologies to build a new internet system altogether — one that redistributes data and power back to users.

Perhaps the most vital question about government regulation of technology is, can it work? Can regulation keep up with the pace of technological innovation, or is the private sector progressing too fast for slow-moving democratic institutions to keep up? “The final great challenge for the rulemakers,” Ball writes, “is that the internet is continuing to change so fast that even the rules that we do have and can enforce rapidly go out of date.” But this isn’t just a challenge for the rulemakers — it’s a challenge for the entire regulatory paradigm.

As a collection of essays about different aspects of the internet, The System provides an accessible introduction to the topic for uninitiated readers, who are clearly the target audience. But it’s a shame that the book concludes with a hasty pitch for regulation, particularly since it’s entirely possible to conclude that conventional regulation isn’t capable of fixing the internet. Earlier in the book, Cindy Cohn, who directs the Electronic Frontier Foundation, warns that the public shouldn’t assume that all regulation is good. “It really depends on who’s in charge and what kind of rules they want to push,” she says. “That’s why we tend to point toward trying to figure out what are the ways that we can prop up competition instead of should we regulate or not.”

One of the most curious features of mainstream discourse about the internet today is an apparent blind spot for the potential of decentralized technologies such as public blockchains to help counter the excesses of tech corporations. Ball only makes brief mention of blockchains, acknowledging how advocates hope that their potential “to allow databases to be widely distributed, impossible to alter and publicly verifiable, could lead to a change in the power structure of the internet” — but then he drops the subject.

A growing international community of developers, technologists, and finance professionals is working to reform the internet by using blockchain protocols and open-source technologies to build a new internet system altogether — one that redistributes data and power back to users. In this view, the internet’s fundamental power struggle is not between governments and traditional companies, but between the principles of centralization and decentralization. Centralization, which has overtaken web services, enables the consolidation of control over proprietary platforms and data storehouses. Decentralization amounts to a structural intervention, creating secure and private networks that users control.

Decentralization advocates (including web creator Tim Berners-Lee) hope that most of today’s internet services can eventually be replaced by technologies that fulfill the same functions but don’t rely on central authorities, allow for censorship and surveillance, or use tracking-based business models. This competitive approach to reform stands in stark contrast to Ball’s hope for incremental regulations. In some ways, it’s more ambitious. What’s more, the decentralized web is actually being built. Many of the basic technologies are already in place, and the outlines of fully decentralized web infrastructures are slowly but steadily taking shape. 

Time will tell if these efforts can mature quickly enough to save us from the worst effects of the chaotic “system” that Ball describes — just as time will tell if there’s reason to hope for meaningful regulatory progress. In the meantime, both options are worth exploring.

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André Wee

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