Thanks to Mike O’Connor for the heads up on a couple of very interesting article on global policies and the Internet.

First the idea of e-friction. ICANN funded a study on the Internet economy (Greasing the Wheels of the Internet Economy). It introduces the idea of assessing a country’s success or preparedness with using broadband as an economic tool but looking at points of friction acting against success – or e-friction. According to the report there are 4.2 trillion reasons to minimize e-friction…

By 2016, the Internet economy will have expanded to $4.2 trillion in the G-20 economies. If it were a national economy, it would rank as one of the world’s top five, behind only the U.S., China, Japan, and India, and ahead of Germany. It contributes 5 to 9 percent to total GDP in developed markets; and in developing markets, the Internet economy is growing at 15 to 25 percent per year.

There are 55 e-friction indicators that can be segmented into the following categories:

• Infrastructure:
  • Access
  • Speed
  • Price
  • Traffic Architecture
• Industry
  • Labor
  • Capital
  • Economy
  • Technology
• Individual
  • Ability
  • Access
  • Banking
  • Payments
  • Trust
• Information
  • Content
  • Data
  • Objectivity
  • Obstacles

Not all categories are created equal; infrastructure weights as heavily on the spectrum as the other three combined. And from this report I was most interested in what they said concerning infrastructure, because I think the US has some lessons to learn.

The US comes in 5^th, which isn’t bad. Although there are four categories and you have to know we nailed the information section, which to a large degree comes down to is information available online in the country’s native language. Infrastructure was our weakest area. To be fair. Infrastructure was everyone’s weak link.

They make some suggestions:

Policy Recommendations

Smart government policies can help create the kind of economic environment that facilitates greater investment for expanding access and reducing cost. For example, governments can do the following:

• Play an aggressive role in spectrum planning and spectrum usage, the fastest way to drive mass mobile-Internet adoption.

• Take a long-term view on investments in broadband infrastructure—a view based on a clear understanding of how good infrastructure helps increase education levels and drives economic growth.

• Think strategically about how and where to build scale. The natural inclination is to focus on political and financial capitals, but faster growth may result from investing in existing wired hot spots and expanding from this base.

• Regulate deftly. Governments can help kick-start use, but they should be careful not to keep the private sector from taking the ball and running with it.

They also bring up an interesting point that I think folks are feeling in Minnesota – the need for policy to keep up with technology…

Policy responses that fail to take into account how quickly technologies—and the innovations they enable—evolve can cause friction. Complicating matters further is the fact that the Internet is a global phenomenon, and many of the concerns to which it gives rise are also global in nature. They require some form of global, coordinated policymaking solution.

They speak a little bit about the Individual perspective…

From a policymaking perspective, we believe that personal data are best viewed as a tradable asset, like water, gold, or oil. And like these assets, personal data must be governed by a set of trading rules that allow for mining, sharing, and utilization. Unlike tangible assets, however, personal data are not consumed when used. Instead, use increases value: new data-mining and big-data technologies are leading to new ways to use and create value.

But this is a topic that I think is more deftly picked up by Evgeny Morozov, who has some strong views on privacy and security online. He compares two policy approaches to online privacy…

Under these circumstances, it’s understandable that anyone concerned with the future of global technology policy – and especially on the pan-European level – is in deep despair. To leave things as they stand now would be to acquiesce to NSA surveillance and accept the risk that the further integration of every single device and previously dumb object onto a smart network – currently marketed under the innocent label of “Internet of Things” – would make ubiquitous surveillance even easier. Now that Google has acquired Nest, the manufacturer of smart objects for the home, NSA might access your bedroom as easily it can currently access your inbox.

The other option is as depressing. To support the unimaginative Balkanization agenda that is being spearheaded by European technology incumbents – who, surrounded by armies of Brussels-based lobbyists, profit from the severe lack of coherence and imagination in EU-wide technology policy – is to support an option that would still leave the communications infrastructure open to national security services (even if it won’t be as easy for NSA to listen in) while impeding many non-commercial uses of the same platforms. The recent developments in France, where, with the world’s attention fixed on the NSA, the government quietly pushed for draconian surveillance legislation are a case in point.

He offers a third option one that I also heard expressed at TEDGlobal last summer…

If we were to start from scratch, we can imagine an entirely different reality. Just to take one example: Why aren’t we doing anything to promote decentralized, secure and portable digital identities that could be used to conduct business with both commercial and state institutions? If we do nothing and let “the Internet” take its course, this service will be provided by Facebook and Google, through its megalomaniac service, Google Plus. It’s possible that the digital identity system used in Germany would end up being different from the one used in Brazil – here Facebook and Google have the advantage of standardization and homogeneity – but the civic advantages of such local systems, decoupled from the commercial logics driving large technology companies, might outweigh the costs.

It’s an interesting idea. The ICANN report discusses the roadblocks for business to consumer (B2C) economy online – namely trust. In the wake of Target’s issues with credit card breaches, it’s something we are all thinking about. The same report talks about the increase in consumer to consumer (C2C) economy online. Last weekend I led a class on buying and selling online – we discussed the importance of reading reviews of buyers and sellers. The C2C economy is built on trust and reputation. And where there’s trust economic transactions increase.

As trust in B2C transactions diminish, the C2C picks up. We see this online and off – in the power of the informal economy or System D. While the informal economy exists in the US, I think it’s more prevalent in other countries. (At least I have seen more of it in other places.) As those informal economies go online and existing online C2C continue to grow, it will be interesting to see if there is a greater push away from giving power over a personal digital footprint to companies (such as Facebook and Google) and if applications are developed that help individual control, manage and monetize their own digital footprint.