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The New Internet Association's Back Story

Google, Amazon, eBay, and Facebook reportedly are launching a new Internet Association in mid-September to be "the unified voice of the Internet economy, representing the interests of America's leading Internet companies and their global community of users. The Internet Association is dedicated to advancing public policy solutions to strengthen and protect an open, innovative and free Internet."

What is the back story here? Why is it being formed? Why now? What unites these companies? What is the Internet Association's public policy agenda? What does its formation mean?

Why is the Internet Association being formed?

The main public policy catalyst was bipartisan anti-piracy legislation that was moving swiftly through Congress last year that Google, Amazon, eBay and Facebook all strenuously opposed and helped defeat with an unprecedented Internet blackout day in January.

Another public policy catalyst is concern over privacy legislation and enforcement given burgeoning online privacy scandals and problems affecting many Americans.

The original public policy catalyst that unified these companies years ago was their lobbying for preemptive net neutrality regulation of broadband companies, via the predecessor organization to the Internet Association, the Open Internet Coalition, which specifically defines net neutrality as "Internet openness," and strongly supports the FCC's Open Internet Order, which is being challenged in court as illegal and unconstitutional.

In forming a new Internet Association, the major Internet companies implicitly are communicating that existing tech associations and the rest of the technology sector are not sufficiently-aligned with their most important business model interests.

Moreover, the Internet companies top public policy concerns, anti-piracy enforcement, privacy legislation and enforcement, and net neutrality regulation, also happen to be growing fault lines between traditional hardware and software technology models and Internet-centric, "cloud computing" and online advertising-based business models.

Why now?

The pre-election timing suggests that the new association's launch, headlined with a Republican "senior Capitol Hill advisor," appears to be an attempt to politically hedge the election outcome, given that the Open Internet Coalition leadership and political focus to date has been overwhelmingly Democrat-focused. This type of political hedging routinely happens with industry representations with most every election cycle.

What business interests unite Google, Amazon, eBay and Facebook?

First, all are first-mover webopolies who effectively dominate their respective Internet global markets: Google in search advertising; Amazon in digital books; EBay in online auctions; and Facebook in social media.

At core, these web giants are about aggregating, centralizing and commoditizing information, content, private information, products and services online.

Thus these cloud-based Internet companies inherently oppose that which limits their core market advantage of globally-centralized scale and scope, i.e. limits like permission to use, or market-based payment for: content, users' private information, or bandwidth.

More specifically, it's in the business interests of these dominant companies to commoditize their core inputs as much as possible. Thus, Internet information should be free of cost and "shared" freely, it should not be viewed as content owned as property with the owner controlling use. Thus, Internet user information and data should be free to collect and use most anyway the collector deems necessary -- in order to promote innovation. Thus, Internet bandwidth should be neutral or free of discrimination so that Internet companies do not have to pay for distribution costs to their users and bandwidth does not limit Internet business models or innovation in any way.

Simply it's the Internet Association's core business interest to commoditize property, people and bandwidth.

What is the Internet Association's public policy agenda?

  • Oppose anti-piracy legislation and enforcement as censorship and breaking the Internet.
  • Oppose patents for software and reform the "broken patent system" as closed to "open" innovation.
  • Oppose copyright enforcement online as anti-sharing, anti-openness, and anti-innovation.
  • Oppose consumers having privacy choice to not be tracked online as anti-innovation.
  • Support net neutrality price regulation of broadband providers as pro-innovation and pro-freedom of speech.

What does a new Internet Association mean?

First, it signals the dominant Internet companies are feeling politically vulnerable and on the defensive. If all was ok why would they need a better or "unified" voice in Washington? And why would they take the risk of cloaking their business self-interests as the Internet's overall interest when they believe the Internet should be a public commons?

Second, this development spotlights the growing schism in the tech sector over property rights. Most tech sector hardware and software providers' have proprietary business models which are built upon the foundation of patents, copyrights, and trademarks for: rewarding and protecting innovation, competitive-differentiation, and value-creation.

However, the "open" Internet business models differentiate by: aggregating free content and private user data; achieving fastest time-to -market; leveraging frictionless scale and scope cost advantages; and asserting the "Internet freedom" to take and share others' property and privacy without their permission.

Finally, the assertion that the Internet Association is the "unified voice of the Internet economy" carries a veiled political threat to Congress.

Apparently, the Internet Association is meant to be an implicit reminder that anytime Congress considers doing something that the Internet Association might oppose, it alone has shown that it has both the power and willingness to use its online organizing power, to "go nuclear" by staging an Internet blackout and a social media tsunami like it did in killing SOPA/PIPA.