Size of the market

When talking about virtual worlds, I am focusing on the new space created by the gaming industry that allows to create online avatars and interact with other players in a fully immersive environment. From an economic standpoint, estimates range from around 100 millions to a high of US$1.5 billion a year. These are not insignificant numbers and they point to an emerging phenomenon and potentially the rise a new industry, with its own set of marketplaces, gathers, owners, creators, and marketers.

Marketplaces

To understand virtual worlds marketplace, one must first understand what si going on in those virtual worlds. When a player sets up an account, he’s given a basic set of skills. As he or she progresses and interacts with the virtual world and its denizens, the player gains more and more skills and goods. However, this type of interaction requires time. Some people have figured that, because time is money, the amount of time spend in a virtual world could be converted into real hard currency. Thus was born the concept of Real Money Trading (aka RMT), whereas players go to specialized sites and buy virtual goods with real financial currency.

The action initially started on auction sites like Ebay, where characters or other virtual goods range in price from a few cents to several thousands of dollars. Because the trades were largely unregulated, some companies, like Sony, decided to set up their own exchange while others (Internet Game Exchange, Massive Online Gaming Sales, Tek Gaming Supplies, Swag Vault, and Gamers’ Loot) have created specialized marketplaces to cater to this new phenomenon. This, in turns has led to the rise of two new classes of activities: informational ones that provide analysis on the financial going ons in those worlds and arbitration, whereas companies use people in the developing world to build up assets they resell to people in the developed world. Let’s go deeper in those areas.

Information Sites

There is now a nascent information industry surrounding the costs of goods in virtual worlds. For example, Eyes on Mogs is a shopping search engine for virtual goods. All the attributes of other search engines are part of it, including comparison shopping, comparisons of the different vendors, pricing, delivery date, and buy it now info. GameUSD tracks the financial value of virtual currencies over time, providing price trends across not only the provider but also the alternative marketplaces. MMOfx claims to track “over 18,000 price quotes daily” and provide information on the fluctuation of virtual currencies.

Arbitration

Another type of economic activity to have arisen out of the marketplace phenomenon is the arbitration of virtual work. As the primary pursuit in these worlds is the acquisition of wealth, status or levels, an emerging market has arisen to give people with real money a chance to bypass the time investment required to acquire those things. For example, Chinese workers get paid between $75 and $250 a month to work in World Of Warcraft, in 12 hours shifts, “killing onscreen monsters and winning battles, harvesting artificial gold coins and other virtual goods. Affluent online gamers who lack the time and patience to work their way up to the higher levels of gamedom are willing to pay the young Chinese to play the early rounds for them.” Similarly, Romanian players can make a living wage (the ABC News story I linked to says that $200 is a good wage for Romania) on the same kind of activity.

Edward Castranova, the leading economist on the subject of money in virtual worlds has been quoted as saying that “They’re exploiting the wage difference between the U.S. and China for unskilled labor.” What is basically happening here is that these companies have found a niche on the global marketplace to accumulate goods at a low cost and resell them at a premium. This type of arbitrage has been the way a lot of developing markets have revolutionized industries, from the export of manufacturing capabilities in the 20th century to the export of some service jobs nowadays. It’s a natural phenomenon and shows that those marketplaces are starting to develop a high level of maturity, which should be noticed by a lot more people.

Virtual Goods Ownership

Beyond the buying and selling of virtual goods in virtual marketplaces, there is also an emerging trend in the real estate business, which can be broken down into three main groups: real-estate owners, creators and integrators, and marketers.

Second Life is a virtual world more focused on the social aspect of virtual environments than on the goal oriented aspect of missions and war-craft. Fortune Magazine reported last year about the interesting case of Anshe Chung, a character created by a German woman who has accumulated more than US$200,000 in virtual land holdings in Second Life. She rents the property out to other people, after having developed the property. Similarly, the BBC reports that a 23-year-old spent £13,770 in Project Entropia and recouped his investment in under a year. In fact, the land rush has been so strong that Second Life has build a model around land use fees, generating a nice chunk of income in the process.

While visiting this world, I’ve talked to people who had few problems paying $75 per month to Linden Labs for those fees. This is pretty incredible when you think that all they are buying is portion of disk space on a server. In a way, the real estate market presented by those virtual worlds can be seen as a hosting fee in a 3D environment and could represent a high growth market (in a future entry, I will look at the opportunities in the Virtual Spaces in more details).

The Integration Model

Another nascent portion of this new industry is the integration game. As with any new technology, developing and managing something in a virtual world is an endeavor that requires specialized skills. New companies like The electric sheep company and Space Think Dream have emerged as developers/integrators, offering their services to other companies. Their main business is to use the skills they’ve acquired to help existing companies experiment in these new worlds. This is, in a way, similar to the type of work that was done by early web design agencies, treating virtual worlds as a new interface either to existing systems or to create a new value proposition.

Other companies have emerged with the sole purpose of selling digital goods in those worlds. SLexchange is a virtual market where people can buy and sell such goods. Similarly, the Electric Sheep company has created SLBoutique as a competitor to SLexchange. What is interesting here is that there is a whole ecosystem building around Second Life, allowing other companies to prosper based on this new platform. This is similar to what has happened with Ebay and allows us to better understand SecondLife as a platform for e-commerce rather than just a game, a fact that Philip Rosedale, CEO of LindenLab and the power behind Second Life, likes to emphasize. This explains why the company has received investments from people like amazon.com CEO Jeff Bezos, Lotus founder Mitch Kapor, Ebay founder Pierre Omidyar, and Microsoft CTO Ray Ozzie. Those people understand that this a new emerging platform and could see potentially high return on their investment.

Bridging the gap

The development of virtual worlds as a new platform is starting to take shape. Companies and organizations like American Apparel, the BBC, Major League Baseball, NASA, The American Cancer Society, Amazon.com and Wells Fargo are starting to experiment in that space. Increasingly, virtual worlds are becoming not only a new way to market but also a new integration point for e-commerce.

Some of the virtual worlds (Project Entropia, for example) have even gone as far as issuing ATM cards that allow denizens of those worlds to take virtual money and trade it for real money that they can use for regular economic activity.

Conclusion

With large amounts of real currency already moving through virtual worlds, we are looking at a major new economic phenomenon that parallels the initial development of the commercial web and the rise of software as platform in the last few years.

With a new ecosystem forming around some of the virtual worlds, there is a fair amount of incentive for a lot of people to see this phenomenon succeed. SecondLife will probably be an early winner in this race, largely due to how quickly it has managed to get other companies to rely on it. A few more established companies are also early in staking ground in this new space and will probably reap rich rewards for their efforts, expanding their brand into those virtual spaces.

While it may appear that this is largely a subculture of gaming, the phenomenon is much more widespread. In my next entry, I will go through the demographic profile of denizens of those virtual spaces, showcasing a rich and varied texture to this phenomenon.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Economic Activity in Virtual Worlds. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

It all really started when, in a discussion about video, Mary Hodder mentioned the words “community standards”. For some reason, those two words launched a whole new set of thoughts in my mind. In the early 90s, when I was in journalism school, I took a class on censorship. One of the interesting things our teacher highlighted was the idea that there was a grassroot movement appearing around the country to censor certain types of books. He highlighted some basic efforts at the time to remove books about evolution from high school bookshelves in the southern United States and how those efforts seemed separate initially but seems to pop up like mushrooms in different places to represent a cohesive whole. What they were pushing for was a change in each of the communities to the community standards in terms of assessing such material. While predicting the larger political fight over evolution of a decade later, our teacher highlighted to us how community standards were formed.

In the United States, the concept of community standards was established as law in 1973 when the US Supreme Court, in a case called Miller vs. California established that speech or other form of expression could be deemed obscene if a substantial portion of the local community, considered the average member of that community, considered it though. This opened the doors for many challenges to some form of speech.

Enters the Internet

Applying this type of standard was easy when the community could easily be located within a set of geographic boundaries. However, with the rise of the Internet, the gegraphic boundaries have dropped. Theoretically, a piece of content, once put on the internet, is available to all communities around the world. I say theoretically because many countries have found ways to block certain types of content they consider objectionable by forcing users in their country to go through proxy servers. Furthermore, some countries, like China, have had enough political muscle to force companies like Google to self-censor.

However, the more technologically advanced users can find a way to get around these types of restrictions and have access to the content, whether their government wants them to or not. Where it gets interesting is when one starts dealing with a virtual world. Of late, SecondLife by LindenLabs, has been getting a lot of attention. Looking at their site, it seems they have set up their own community standards for what can and cannot happen in the world of SecondLife. The question, however, is whether any of those terms could withstand a court challenge. As I look at cases like the China and Google case, or the rise of virtual world, I am starting to wonder how laws will be established to govern the internet. The question is what legal regime should apply to the Internet as a whole. Should we look at the most restrictive standards avalaible and comply to those, thus greatly reducing the value of net content as a whole? I doubt such approach would work as it would require a global agreement on such restriction and would probably give rise to data havens, located in countries that would refuse to sign on to such standards. A lot of Internet traffic would move to those countries, depriving countries adopting a highly restrictive model from realizing revenue in terms of hosting and traffic. Alternately, the net could adopt the most open type of standard, leaving some countries to ban the net outright, for fear that their users/citizens would have access to content they find objectionable. Ultimately, I suspect that rules will fall somewhere in the middle. As far as to how close to either end, it will depend largely on what lawmakers are willing to do.

Online World = Private Spaces

In essence, the issue becomes one of frictions between governments and private interest. When a company like LindenLabs establishes community standards for their space, it is akin to a private corporation establishing what amounts to law for what sits on their servers. The next question is what physical laws can apply to those server. If, for example, you were to take a user who lives in Europe spending some time in the SecondLife universe, what laws would apply to that user? European ones? American ones (based on where the server is located) ? Or something else? Under the current regime, it appears that these types of things could generate some frictions. What if, to take a more extreme example, a user in a country were to play in a virtual world located in a country his own government considers an enemy (for example, US and North Korea). What if that user were a productive member of the community, generating money in the virtual world on the servers of a country his government bans trade with? Would the hosting government or the user government be allowed to cease those assets? Similarly, what about speech? Could a user’s speech in a virtual environment be threatened because it does not meet the requirements of that company (in a fashion similar to suppression of speech in US shopping centers because they are private properties, could we see users of myspace being banned for saying things that do not align with what NewsCorp considers proper speech?)

Because virtual worlds are largely private communities, run by corporations, it seems that those scenarios are likely. When one injects sources of revenue in those communities, the potential for lawsuit is large.

A coming crisis

As Danah Boyd pointed out in a recent paper (paper seems offline, portion of the content I’m referencing is here):

Teens have increasingly less access to public space. Classic 1950s hang out locations like the roller rink and burger joint are disappearing while malls and 7/11s are banning teens unaccompanied by parents. Hanging out around the neighborhood or in the woods has been deemed unsafe for fear of predators, drug dealers and abductors. Teens who go home after school while their parents are still working are expected to stay home and teens are mostly allowed to only gather at friends’ homes when their parents are present.Additionally, structured activities in controlled spaces are on the rise. After school activities, sports, and jobs are typical across all socio-economic classes and many teens are in controlled spaces from dawn till dusk. They are running ragged without any time to simply chill amongst friends. By going virtual, digital technologies allow youth to (re)create private and public youth space while physically in controlled spaces. IM serves as a private space while MySpace provide a public component. Online, youth can build the environments that support youth socialization.

In the early 90s, I was tuned to the addictive nature of such space, when I spent a fair amount of time on LambdaMoo, the text-only grandfather of places like SecondLife. What it did was not only get me addicted to a game but changed my purview on virtual versus physical space, making the virtual as comfortable as the physical. As I moved from location to location for work, my virtual community was always in the same place. As such environments become more immersive, a whole generation will grow up seeing little boundaries between the physical and virtual spaces. Already, word has spread of people spending large amounts of time in those virtual worlds. If the proper legal system is not in place when those people grow up, frictions between the physical and virtual worlds will become the subject of front-page articles.

Establishing a baseline

I believe that some type of global agreement or directive will have to be set in the near future to establish how laws will work in the online world. Something similar to a General Agreement on Policing Online Communities (GAPOC), which would initially follow the same type of process that was established to establish such global rules as the Berne conventions on copyright or the GATT, would probably be a good place to start. Establishing a set of agreed upon principles as to what can and can’t be done in terms of policing online communities would help different countries then modify their own legal process to deal with this emerging phenomenon. I don’t really have any particular answers as to how such things would be done and will leave it to the legal scholars to figure out but am I the only one feeling that this is an upcoming issue?

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Where Virtual and Physical meet. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Traditionally, telephone service was offered on a land line and was divided into local service, long distance, and extra features like caller ID, call forwarding, etc… The model was predicated on the concept of one device (the phone) receiving a package of services.

The mobile phone business started having an impact by untying the phone lines from the wall, making the concept of localization a relatively moot point. Once localization was broken, the differentiation between local and long distance disappeared which left a division only between connectivity and extra features. Since most of the signals going over the air became digital, the cost of delivering extra services dropped to almost nothing, destroying the competitive value of such offerings.

While mobile phone service made headway against traditional land lines, a new set of telephone offerings appeared on the Internet: Voice over IP. With VoIP, telephone just becomes a software issue, unbundling telephone from the concept of a telephone network and dropping the connectivity issue altogether. While mobile phones were tied to a particular phone network, VoIP phones are not tied to any network: they can run anywhere as long as they are running on an Internet infrastructure.

It is due to this realization that AT&T abandoned the consumer market. Since services like Vonage are redefining the concept of telephony by moving the phone away from the lines and away from the device. Vonage service runs on a number of platform including telephones, computers and will soon run on PDAs equipped with a wireless card. This means that companies which were once relying on the bundling of a line, a device, and a set of features can no longer do so. It also means that the concept of overseas long distance will eventually disappear since one could easily run a telephone service on their computer with a local number in a foreign country.

For example, I can envision a time when I will have a phone number in France that will relay my calls to my computer, phone or PDA wherever I am, making it impossible to guess whether I am in the United States, Europe or Asia at any given times. However, I may sound sleepy in the middle of the caller’s daytime because I could be in a time zone where it is the middle of the night.

With this model now in place, the challenge of telephony is no longer a local one but a global one. Telephone companies will have to fight against companies all over the globe in order to retain their customers and since the delivery of those services does not rely on the introduction of expensive networks in order to provision service, it will soon be possible for small companies to provision phone services. One can expect countries like China and India to be the recipients of such outsourcing and your telephone company could well be located in one of those countries in the future.

How does one solve this issue? By providing cheaper products, emphasizing customer service, generally doing right by the customer or getting out of the competitive space. The power base has shifted to the consumers and the only way to fight it is to serve them better than a competitor could.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Modular by Design — Telephony. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

HideAgent	rv:1.4
HideAgent	3.01
HideAgent	3.02
HideAgent	4.01
HideAgent	5.0
HideAgent	5.01
HideAgent	5.12
HideAgent	5.13
HideAgent	5.14
HideAgent	5.15
HideAgent	5.16
HideAgent	5.17
HideAgent	5.21
HideAgent	5.22
HideAgent	5.23
HideAgent	5.5
HideAgent	6.0
HideAgent	348NorthNews
HideAgent	Alcatel-
HideAgent	almaden.ibm.com/cs/crawler
HideAgent	AmphetaDesk
HideAgent	antibot
HideAgent	AppleWebKit
HideAgent	http://Ask.24x.Info/
HideAgent	ASPseek
HideAgent	aspseek
HideAgent	augurfind
HideAgent	AvantGo
HideAgent	Awasu
HideAgent	Baiduspider
HideAgent	BarraHomeCrawler
HideAgent	BBot
HideAgent	BFS_method
HideAgent	Bilbo
HideAgent	Bison
HideAgent	Blazer
HideAgent	blo.gs
HideAgent	BlogBot
HideAgent	Blogdigger
HideAgent	Blogosphere
HideAgent	BlogPulse
HideAgent	BlogShares
HideAgent	Blogwise
HideAgent	boitho.com
HideAgent	bookwatch@onfocus.com
HideAgent	books@onfocus.com
HideAgent	BorderManager
HideAgent	brainoff.com/geoblog/
HideAgent	www.business-socket.com
HideAgent	Camino
HideAgent	CE-Preload
HideAgent	Check and Get
HideAgent	china
HideAgent	China
HideAgent	CJNetworkQuality
HideAgent	cloakBrowser
HideAgent	combine
HideAgent	COMBINE
HideAgent	compatible)
HideAgent	CoolBot
HideAgent	CoologFeedSpider
HideAgent	CopyHunter
HideAgent	curl
HideAgent	DA
HideAgent	danux
HideAgent	Dattatec.com-Sitios-Top
HideAgent	daypopbot
HideAgent	DoCoMo
HideAgent	DTS
HideAgent	Ecosystem/development
HideAgent	EgotoBot
HideAgent	Elaine
HideAgent	EmailSiphon
HideAgent	Ericsson
HideAgent	ETS
HideAgent	eXactSite
HideAgent	Exalead
HideAgent	exactseek.com
HideAgent	EyeOnSite
HideAgent	fantomBrowser
HideAgent	fantomCrew
HideAgent	FAST
HideAgent	Fast
HideAgent	FavOrg
HideAgent	FeedDemon
HideAgent	Feedreader
HideAgent	FeedOnFeeds
HideAgent	Feedster
HideAgent	FeedValidator
HideAgent	Fetch
HideAgent	Finder
HideAgent	FlickBot
HideAgent	Franklin
HideAgent	Frontier
HideAgent	Gaisbot
HideAgent	GalaxyBot
HideAgent	Genome
HideAgent	GetRight
HideAgent	Gigabot
HideAgent	grub-client
HideAgent	Google*
HideAgent	gossamer-threads.com
HideAgent	htdig
HideAgent	HTTrack
HideAgent	ia_archiver
HideAgent	iaea.org
HideAgent	iCab
HideAgent	Industry
HideAgent	Indy
HideAgent	INGRID/3.0
HideAgent	InternetSeer
HideAgent	internetseer
HideAgent	IUFW
HideAgent	IUPUI
HideAgent	IXE
HideAgent	Jakarta
HideAgent	janes-blogosphere
HideAgent	Java
HideAgent	jBrowser
HideAgent	jiffe
HideAgent	junkbuster
HideAgent	k2spider
HideAgent	Lachesis
HideAgent	lachesis
HideAgent	larbin
HideAgent	Leknor.com
HideAgent	Liberate
HideAgent	libwww-perl
HideAgent	Lincoln
HideAgent	Linkbot
HideAgent	LinkHype
HideAgent	Links
HideAgent	LinksManager.com
HideAgent	LinkSweeper
HideAgent	LinkWalker
HideAgent	LNSpiderguy
HideAgent	Lynx*
HideAgent	MagpieRSS
HideAgent	Microcomputers
HideAgent	Missauga
HideAgent	Missigua
HideAgent	Mitsu
HideAgent	mogimogi
HideAgent	MOT-
HideAgent	Mozilla/3.04
HideAgent	Mozilla/3.04Gold
HideAgent	Mozilla/4.04
HideAgent	Mozilla/4.05
HideAgent	Mozilla/4.06
HideAgent	Mozilla/4.08
HideAgent	Mozilla/4.5
HideAgent	Mozilla/4.51
HideAgent	Mozilla/4.6
HideAgent	Mozilla/4.61
HideAgent	Mozilla/4.7
HideAgent	Mozilla/4.8
HideAgent	MSFrontPage
HideAgent	MSNBOT
HideAgent	MyHeadlines
HideAgent	MyWireServiceBot
HideAgent	NationalDirectory
HideAgent	NaverRobot
HideAgent	NCBrowser
HideAgent	Netcraft
HideAgent	NetNewsWire
HideAgent	NetResearchServer
HideAgent	NewsGator
HideAgent	Newz
HideAgent	NG/1.0
HideAgent	NIF
HideAgent	NITLE
HideAgent	nntp//rss
HideAgent	Nokia
HideAgent	NPBot
HideAgent	NRK-bruker
HideAgent	Openbot
HideAgent	Opera
HideAgent	Oddbot
HideAgent	Offline
HideAgent	OPWV-SDK
HideAgent	Oracle
HideAgent	Panasonic
HideAgent	PEAR
HideAgent	PHILIPS-
HideAgent	PHP
HideAgent	Pix
HideAgent	PocketFeed
HideAgent	Pompos
HideAgent	Popdexter
HideAgent	PostNuke
HideAgent	Powermarks
HideAgent	psbot
HideAgent	Python-urllib
HideAgent	QuepasaCreep
HideAgent	Radio*
HideAgent	Rainbow
HideAgent	rdflib
HideAgent	Robozilla
HideAgent	RPT-HTTPClient
HideAgent	SAGEM-
HideAgent	SAMSUNG
HideAgent	Scrubby
HideAgent	SHARP-
HideAgent	SideWinder
HideAgent	slurp@inktomi.com
HideAgent	Scooter
HideAgent	searchspider.com
HideAgent	SearchSpider.com
HideAgent	SEC-
HideAgent	semanticdiscovery
HideAgent	SIE-
HideAgent	SharpReader
HideAgent	Shareware
HideAgent	SlimBrowser
HideAgent	Snoopy
HideAgent	SOFTWING_TEAR_AGENT
HideAgent	SonyEricsson
HideAgent	spider@spider.ilab.sztaki.hu
HideAgent	SpiderKU
HideAgent	Spinne
HideAgent	SmartDownload
HideAgent	stealthBrowser
HideAgent	Steeler
HideAgent	SuperBot
HideAgent	SurveyBot
HideAgent	Sweeper
HideAgent	Syndic8
HideAgent	Syndirella
HideAgent	Syndigator
HideAgent	Tagword
HideAgent	Technoratibot
HideAgent	Teleport
HideAgent	Teoma
HideAgent	Teradex
HideAgent	Terrar
HideAgent	T-H-U-N-D-E-R-S-T-O-N-E
HideAgent	timboBot
HideAgent	TurnitinBot
HideAgent	http://www.tutorgig.com/
HideAgent	UltraLiberalFeedParser
HideAgent	Vagabondo
HideAgent	verzamelgids
HideAgent	VoilaBot
HideAgent	W3C_Validator
HideAgent	w3m
HideAgent	www.walhello.com
HideAgent	www.wapsilon.com
HideAgent	WebCapture
HideAgent	Webclipping
HideAgent	WebFilter
HideAgent	WebGather
HideAgent	WebGo
HideAgent	WebRACE
HideAgent	websitealert.net
HideAgent	WebStripper
HideAgent	WebTV
HideAgent	WebZIP
HideAgent	WEP
HideAgent	Wget
HideAgent	Wildgrape
HideAgent	WinHttp.WinHttpRequest
HideAgent	Xenu
HideAgent	Zealbot
HideAgent	ZyBorg

I will publish a webalizer.conf file soon for people who don’t want to bother with making all the changes themselves.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Webalizer.conf hacking: HideAgent. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

My personal suspicion is that the net community will route around the problem once enough people become aware of what is going on.

The rise of Linux as an alternative to deeply entrenched Windows is showing that something new is happening here. While SCO has started menacing litigation over intellectual property and Linux, the message from big companies is that they are not changing their strategy. What is important here is not the fact that companies are adopting Linux but the fact that companies are starting to look at the OS as a commodity, one that can easily be replaced at a later time. This is an important development because it lowers the potential for control. In order to fully control what consumers have access to, you need to be able to control the environment. With operating systems becoming a commodity, that control erodes.

Control of the operating system is one of the key elements behind the TCPA’s goal to lock up computers in order to give more control to content producers. However, with a commodity operating system that control becomes more difficult to gain. The next two areas in which such control can happen are at the processor level (and here, I would invoke market dynamics as a surefire way to fight this point since at least one vendor will probably want to differentiate itself from its competitors by offering non-crippled chips) and at the access level.

That last point, however, is countered by the fact that increasingly (and this is something the phone and cable companies do not want you to know), the cost of running your own access point is dropping. True, it still costs several hundreds or thousands of dollars a month to do so but I suspect that something much scarier could happen if the pipes start clamping down.

With the rise of Wi-Fi, control of the net is moving from cables to the open airspace. Granted, many will say that in order to access resources on the Internet, there is still a need for access to a land line software, even if that land line is connected to a wireless router. However, with the rise of cheap access point devices, there is a possibility for creating a new network, one that does not touch upon the rest of the net, but one that does connect computers from access point to access point. In a way, all the technology needed for this already exists. A network protocol like TCP/IP can carry content over the air, and technologies like Zero Configuration Networking make discoverability easy to do. Coupled with the explosive growth of wireless hotspots, the hold on connection lines is increasingly becoming irrelevant. What is happening here is not only a commoditization of the operating system but also a commoditization of the connectivity space.

Even in a world where the United States manages to outlaw Linux and where the big telcos manage to regulate Internet access, unfetered access to ressource beyond their control will continue. If one studies geopolitics, it is easy to see that some countries will see it in their best interest to avoid such regulation so they can offer data havens, picking up nice extra tax dollars on the sale of goods and services in those havens. Ultimately, the problem US companies have, whether they manage to regulate the Internet or not, is that the network is now largely a global one.

To date, attempts to limit Internet activities in certain parts of the world (Iraq and China for example) have only met with resistance and ultimately failure in terms of limiting what people can and cannot see. I suspect that if such limits were imposed by large corporation, they would meet the same fate as those efforts, maybe stopping activity for a little while but, eventually, someone would find a hole. And it is from such small hole that the dam would burst.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Route Around. You can follow him on twitter here or receive his weekly newsletter by subscribing here.