The Political Economy of the Internet1 Korinna Patelis Dept. of Media and Communications Goldsmiths College University of London June 2000 1 This thesis was supervised by Pr. J. Curran and examined by Pr.C. Levy (internal examiner) and Pr. C. Sparks (external examiner) 1 ABSTRACT This thesis contributes to the critique of and attempts to supersede a dominant approach to the Internet which sees in the Internet the locus of mythical changes and the cure for a number of the ills besetting contemporary society. It does so by presenting and analysing empirical research which situates Internet communication squarely within socio-economic structures. The empirical research presented relocates the Internet within the current wider turn towards commercial expansion in the sphere of communication and the neo-liberal call for the deregulation of media industries. The complexity of the policy frameworks within which this latter is articulated in the US and Europe is examined. The thesis positions Internet communication at the intersection of key capitalist industries, including telecommunications, Internet service provision, on-line content provision and the software industry. Data according to which the pre-existing economic structures prevalent in these industries produce a series of structural inequalities which define Internet communication are presented. It is further argued that such structural inequalities, the boundaries within which on-line communication occurs, are the result of the interlacing of the industries in question, an interlacing defined by the cultural and industrial functions of the industries. In other words, particular industrial and cultural environments are produced by the interplay of these industries - an interplay which the thesis calls signposting. Finally, utilising the signposting hypothesis, the thesis counters the claim that there are no intermediaries in the Internet, by presenting two key case studies – America On-line and its operation and portal sites. The thesis concludes that on-line intermediaries exist and perform a vital function in structuring on-line communication. 2 To Ioli Patelis and James Curran who made me believe that the limits of my language are not the limits of my world I would like to thank Gillian Rose for teaching me how to love Adorno, read Hegel over and over and believe in myself. I also would like to thank Pr.Morley for his comments, help and intellectual stimulation, Tiziana for helping me start my research, George, Sheila and Kay for being there, Stratis Vougioucas to whom I owe Chapter 5 and 6 of this thesis since he helped me 'see' digital works. 3 Table of Contents Abstract 1 Acknowledgements 2 Table of Contents 3 Table of Figures 7 Chapter 1: Internetphilia: A Heterogeneous Ideology 9 1.1 The Nature Of Information In The Age Of The Internet 13 1.1.1 Information Is Natural 13 1.1.2 Information Is Free 16 1.1.3 Information Is Empowering 19 1.1.4 Postmodernist Internetphilia 20 1.1.5 Information Is Global 21 1.1.6 Information Is Decentralised 24 1.1.7 Information Is Unmediated And Powerful 25 1.1.8 Internetphilia’s Different Manifestations 25 1.1.9 The Confusion Of The Virtual Agora With Consumer Democracy 26 1.1.10 Is Information Property? 27 1.1.11 The Hacker Counterculture 27 1.1.12 Capitalism Leaves The Virtual World Untouched 28 1.1.13the Internet As The Perfect Market 29 1.1.14the Free Market And The Internet As Essentially Similar Entities 31 1.1.15 Pricing The Net 32 1.1.16 The Comfortable Marriage Between The Virtual Agora And A 33 Consumer Democracy 1.2 Internetphilia And Politics 34 1.2.1 Information Is Unregulated 35 1.2.2 Internetphilia And The Clinton Administration 37 1.2.3 Binary And Generalised Opposition To Internetphilia 40 Chapter 2: Internetphilia’s Philosophical Shortcomings And A Note On Methods 43 2.1 Internetphilia’s Fallacies 44 2.1.1 Technological Determinism 44 2.1.2 Abundance As A Technological Function 46 2.1.3 Naturalism 47 2.2.5. Virtual Communication Essentialism 48 2.1.4 The Market Place Metaphor 48 2.1.5 Individual Sovereignty: The Abstract Individual 49 2.1.6 The State Of Nature And Individual Freedom 50 2.1.7 Direct Democracy 51 2.1.8 History 52 2.2 Notes On Conceptualisation 55 2.2.1 The Fragmented On-Line Process 59 2.2.2 Theorising The Interface: Internet Mediation 59 4 Chapter 3: Digital Capitalism 60 3.1. What Is The Internet 61 3.2. Situating The Internet Within The Information Revolution 63 3.3. The User Is Not The Content 66 3.4. The Internet Economy; Infrastructure & Content 67 3.5. Access To The Infrastructure: 68 3.6. The Internet Is Not Hyper Geographical 72 3.7. The On-Line User: Virtual American 73 3.8. The Business Divide 74 3.9. The Virtual Agora And E-Commerce 76 3.10. The Boundaries Of Consumption And Production In The On-Line World 79 3.11. Beyond Info Have And Have Not Analysis 80 3.12. Mapping The Internet’s Architecture 81 3.13. All Subscriptions Do Not Offer The Same Activity 84 3.14. Routing Cyberspace 85 3.15. Telecommunications 85 3.16. The Primacy Of Telecommunications: Lessons From Yugoslavia 87 3.17. Hardware (Pc) Penetrations 88 3.18. Internet Service Providers 88 . 3.19 Convergence 87 Chapter 4: The State Against The Internet 95 4.1 Internet Regulation: An Agenda Of Questions 96 4.2 Telecommunications Regulation Across The Atlantic 98 4.3 Corporate Media In The Us 98 4.4 Telecommunications As Common Carriers 99 4.5 The Press And The First Amendment 100 4.6 Internet And The Us: From Extreme Involvement To Withdrawal 102 4.8 The Telecommunications Act Of 1996 104 4.10 The FCC And Internet Service Providers 108 4.11 The Us Approach To The Internet And The Global Approach 109 To Convergence 4.12. The Alternative Paradigm In Conceptualising Internet Regulation 111 4.13. The Dual Tradition Of European Telecommunications 113 4.14. The Post-War Telecommunications Science 113 4.15. The Public Service Tradition 114 4.16. The Battle Of Ideas: What Europe? 120 4.17. After Maastricht: Changes In The Audio-Visual Landscape 124 4.18. The Eu Initiative On The Net 126 4.19. Europe’s Anxiety: An American Net 127 4.20. Telecommunication Liberalisation And The Dg10 129 4.21. The Information Society And The Bangemann Vision 131 4.22 Information Society As An All-Inclusive Society 133 4.23. Existing Internet Regulation 135 4.24. Convergence And The Consolidation Of The Dual Tradition 136 4.25. The Dual Tradition In The Information Society 139 Chapter 5: On-Line Content And The Structure Of On-Line Distribution 142 5.1 Infrastructure And Content 143 5.2 The Structure Of On-Line Content And A Theory Of Signposting 144 5.3 Some Examples Of Signposting 146 5.4 The Power Of The Interface 148 5.5 Browsers 150 5.6 The Internet Explorer 152 5 5.7 Netscape Navigator 156 5.8 The Web Stalker 157 5.9 Filtering Software 159 5.10 Mass On-Line Content 159 5.11 Creating The On-Line Audience Necessary For The Commodification Of On-Line Services 161 5.12 Advertising 163 5.13 Structuring The Web 165 5.14 Portal Sites: A Survey Of Digital Structuration 166 5.15 Structuration Is Not Benign 168 5.16.The Menu: The Midwife Of On-Line Narrative 169 5.17 The Menu And The War Of Classification 171 5.18 Absence Of A Set Of Open Coherent Goals 174 5.19 Disavowing Responsibility For Content 174 5.20 Terms Of Service That Do Not Protect The User 175 5.21 Accountability And Authorship 176 5.22 Limited Sources 177 5.23 Customisation 177 5.24 Web Rings And Other Forms Of Structuration 179 5.25 Deontology On-Line And Commercial Sites 179 5.26 Search Engines 180 Chapter 6: America On-Line: A Case Study Of Signposting 184 6.1 Aol.Com: A Service That Is Synonymous To The Web Experience 185 6.1.1 Software And Browsing 187 6.1.2 The Aol.Com Site: Signposting In The First Instance 188 6.1.3 The AOL Menu 191 6.1.4 Signposting The Community With A Family Flavour 193 6.1.5 The Net Finder 194 6.1.6 AOL’s Web Centres 194 6.1.7 Advertising, Programming And Commerce 195 6.1.8 Systematic Contradictions 196 6.2 News On-Line And The Withering Away The Fourth Estate 198 6.2.1 AOL My News 200 6.2.2 Structuring My News 203 6.2.3 The structure of My News 204 6.2.4 The My News Home 209 6.2.5 The Associated Press sets the agenda for AOL. News 210 6.2.6 Two periods: same viewpoint 211 6.2.7 AOL's Impeachment Trial On-Line Coverage 212 6.2.8 The State Of The Union Address 217 6.2.9 The Second Case Study And The Agenda Setting Of On-Line News 218 6.2.10 Don’t Call Kosovo A War 219 6.2.11 Framing Kosovo Into Crisis 221 Chapter 7: Net Activism And Tactical Media 232 7.1 Net-Activism And Tactical Media 233 7.2 An Array Of Alternative Practices 234 7.3 The Internet As A Campaign Tool 235 7.4 Internet As A Weapon 236 7.5 RtMark 238 7.6 The Electronic Art Ensemble And Electronic Civil Disobedience 239 7.6 Net Activism And Terrorism 240 7.7 Mongrel 242 6 Conclusion 244 Bibliography 247 List Of Internet Resources 264 Appendixes 283 Appendix 1: Internet Host Penetration Around The World 284 Appendix 2: Africa An Un-Wired Continent 285 Appendix 3: Internet Access Tariff Basket In OECD Countries 286 Appendix 4: Internet Connections/Routes To And From Latin America 287 Appendix 5: The U.S.