» Business » The Great War, online

The Great War, online

By Ajit Balakrishnan
December 30, 2014 09:26 IST
Get Rediff News in your Inbox:

The telecom, the internet, the media industry worldwide is currently organised not that differently from 1914 Europe, says Ajit Balakrishnan.

It is possible that we will all look back a year from now and say that Airtel's decision to charge a higher tariff for their subscribers who use Skype and Skype-like services was an act like the one that happened exactly a 100 years and six months ago, when a young Serbian nationalist challenged the existing European state system by assassinating the heir to the throne of the Austro-Hungarian empire.

I am not exaggerating.

The telecom, the internet, the media industry worldwide is currently organised not that differently from 1914 Europe.

Europe then had its Great Powers - Great Britain, France, Russia - not unlike the Great Powers of the world internet - Google, Facebook, Amazon and Microsoft, who dominate every country in the world, with the exception of China.

Facebook owns WhatsApp and Microsoft owns Skype, the two services that are at the centre of the current "net neutrality battle".

Just as all other countries in the 1914 era had to make peace and pay tribute to the Great Powers, so also in today's internet world all other players must pay "fees" of some form or the other to get access rights or alternatively provide free access to these Powers to be part of their world.

Looking on with increasing anger at the disproportionate share of the takes that the internet Great Powers are taking of the internet economy are a collection of former Great Powers.

These are media conglomerates like News Corp, Time Warner, Disney and Bertelsmann (you can add the dominant newspaper and TV company of each country to this list).

In the early days of the internet, Time Warner bought AOL and that was supposed to be a sure-shot way to dominate the internet: a dizzying array of famous magazines combined with the leading internet access provider in the world's largest market. Later, News Corp bought MySpace, another "sure-shot" deal to dominate the internet: the owner of stellar newspapers combining with the leading social networking site of the day. But these titans have then seen their internet dreams vanish.

Then there are the telecom access providers who dominate each country and some who straddle entire world regions, Great Powers of the past era threatened by decline.

Some of them operate landline-based voice and internet services, others operate wireless versions or both - but all are increasingly irate at what they see as free-riders: the likes of Skype and WhatsApp, who are offering free or nearly free options to talk and message without having to spend on infrastructure or pay spectrum and licence fees to governments.

The telecom companies want to charge a special toll to those of their customers who use these free or nearly free services.

But whenever they attempt to, cries that they are "violating" net neutrality are raised against them. Some of this skirmishing around net neutrality is shadow boxing as the MIT Technology Review points out (

Google and Facebook have struck deals with mobile-phone carriers from the Philippines to Kenya, which give people free access to text-only version of things like Facebook news feeds, Gmail and the first page of search results.

This kind of subsidisation of internet charges in developing countries where internet access charges are high in comparison to incomes make these sites then the automatic preference for users there.

Beyond these skirmishes, there is the existential struggle that the so-called "cultural industries" are going through - those players who create the text, music, television, film, books and advertising.

In an unexpected mutation, says Bernand Miege of Stendhal University in Grenoble, France, over the past decade or so, the market capitalisation of hardware manufacturers, telecom firms, access providers, web players and the software industries who distribute creative output has grown to become many times that of the cultural industries that create the content.

This, as he points out, creates growing pressures on the livelihood of the large number of artists, writers, designers and producers within the various branches of the cultural industries.

It was Apple who first established the new reality, he says, by binding music content and related services to its technical tools like the iPod music player and the iTunes service.

Apple, and others in the hardware and telecom industries like it, takes a dominant share of the profits of the music industry without actively participating in the creation of music.

The Great Powers of the world in 1914 had already spent the past decade creating alliances and skirmishing over their colonies and over unresolved territorial disputes in Europe; many European leaders believed in "social Darwinism", the notion that survival of the fittest was the natural way of the world - similar to the beliefs of today's business world - and, in that sense, viewed war as inevitable.

The empires of the day, most notably the Austro-Hungarian Empire (made up of present-day Austria, Hungary, Czech Republic, parts of Yugoslavia) and the Ottoman Empire (made up of present-day Serbia, Bosnia, Romania, Greece, Ukraine, Iraq, Syria, Israel, Egypt and Algeria) fought to preserve their transnational empires in the face of a rising new force, the autonomous nation-state.

By the end of World War I, these transnational empires were gone and independent nation-states had taken their place.

Will a similar change in the internet world order be the end result of the skirmishes around net neutrality?


Ajit Balakrishnan, founder and chief executive of, is the author of The Wave Rider, A Chronicle of the Information Age

Get Rediff News in your Inbox:
Ajit Balakrishnan /
Source: source

Moneywiz Live!