The internet, and the perception of free.

August 30, 2012

Capitalism controls the internet, although to what degree the internet is free to an individual user depends on their perspective, the tools used for access and how they spend their time online. This essay will question the real cost of accessing the internet, and the economy surrounding our choices when it comes using it. It will argue that the real value of e commerce, and the individual cost to internet users, cannot be measured only in a monetary from, but by the value generated by engaged parties within the synergistic knowledge, gift and attention economies found in many online environments.

In Australia, accessing the internet costs money. As Rifkin suggests “in the new era, markets are making way for networks, and ownership is steadily being replaced by access” (Rifkin, 2001 p.4). An internet user needs access to hardware (a computer) and an account with an internet service provider just to log on. Although not all Australians have access to the internet from their home or workplace, there where 10.4 million individual internet subscribers connected in Australia at the end of December 2010, and that figure did not include mobile devices with internet capabilities (Australian Bureau of Statistics, 2011). Equitable access to the word wide web, was one of the ideals that lead to its genesis (Robots Are Taking Over the Web!, 2007) and is a key motivator of the Australian Government’s roll-out of the National Broadband Network (NBN). It is argued that the NBN will provide greater and more reliable access to a higher speed internet to a greater number of Australians across the geographic area of the nation (Productivity Commission, 2009). Beyond the taxes paid by an individual that has helped to fund the $43 billion roll out of the NBN (Productivity Commission, 2009), there will still be an arguably high cost for individual access to this new public asset, which because of its design and nature could be easily perceived as being a freely available public asset.


The NBN will operate as a governing body and will only sell access to wholesalers, not individuals (Productivity Commission, 2009). Wholesalers, organisations that are involved in the capitalist telecommunications markets, will set the price of access to the new communication infrastructure. The Australian National Productivity Commission (ANPC) states that this process of selling exclusively to wholesalers will avert current problems in delivery of services “from the vertical integration of telecommunications companies” (Productivity Commission, 2009) and would create an economy where the consumer could benefit from greater competition between wholesalers. According to the ANPC “in principle the new company would have no incentives to favour one wholesaler over another… However, policy-makers should be cognisant of the potential for conflicts of interest should a significant proportion of the NBN’s share capital be held by wholesale and retail competitors” (Productivity Commission, 2009). Murdock (2007) defines public goods in economics as “goods or services that I can use without stopping you from using them at the same time or interfering with your enjoyment, [much like public radio], everyone with the appropriate equipment can receive the same signal at the same quality at the same time” (Murdock, 2007). It is perhaps the costs of computer hardware and ongoing subscriptions to internet service providers that could alter the perception that the NBN is a public asset, which is available freely.


One instance where access to the internet in Australia could be perceived as free, is in the act of using the internet from a computer in a public library. Because of the lack of monetary transaction for this use, it could be argued that an individual using the internet in this way is doing so free of charge. But further investigation into the transactions taking place to make this free access possible , reveals that somewhere along the supply chain there is an interaction with a profit driven capitalist market. Even when an individual user accesses the internet for free in a public space in Australia, someone is paying the bill. Currently in Australia, access to the internet is most commonly though telecommunication providers (Productivity Commission, 2009). Australian public libraries cover operational costs, including the cost of their telecommunications services, through state and territory taxes and levies paid by individuals in the community that the library services (Australian Bureau of Statistics, 2011). Through this example it is easy to see that even the availability of free access is a capitalist endeavor. Although to better understand the transactions occurring, and the  cost to individual users accessing the internet, whether it be though a public terminal or though a personal account, it is important to understand the digital transactions that are occurring that can not be measured by currency and monetary economies once users begin to utilise online services.


The digital transactions within non-monetary economies occur right from the moment an individual user chooses the applications they use to view and aggregate the content delivered by the internet. When Microsoft released their internet browser to consumers for ‘free’ with every Windows95 operating system sold, they took away “more than two thirds”, of then dominate Netscape’s browser market share, which eventually lead to Netscape dramatically changing their business model (Netscape: A history, 2000).  Microsoft had effectively entered the gift economy, seemingly gifting their customers the chance to access the word wide web by giving them a ‘free’ browser. While customers did not pay any money for the use of the Internet Explorer browser, it is one example of how choices that individuals make online, even when it comes to free products, has dramatic effects on the capitalist markets invested in our online activity. However, it is when a user begins to navigate the internet, making choices in regards to the services they utilise and how much they will contribute to the world wide web, that defines individual perception.


According to Google statistics (2011) the top four sites visited by users globally are either social networking sites or services hosting user generated content.  Whether your user account carries bonafide or fake information “Every user who contributes content – and for that matter, every passive spectator who clicks on user-generated content sites (such as YouTube) or social networking sites (such as Facebook) – provides valuable information about themselves and their preferred interests”(Van Dijck, & Nieborg, 2009). Flew (2008) States that “a knowledge economy is one where ideas and intangible assets rather than tangible physical assets are increasingly the central sources of new wealth creation” (Flew, 2008 p.196). This information or meta data, become a highly valued commodity for capitalist endeavors and is often more valued by online services than the content they offer (Van Dijck, & Nieborg, 2009 p. 866) (Flew, 2008 p.196). Many services do not allow for users to control the information that is gathered about them with many individuals unaware of the information gathered while using a service they perceive as being free (Van Dijck, & Nieborg, 2009) (Flew, 2008).


Using Google as an example, many internet users could be forgiven for their perception of the service as a free search engine. However “Google is in the business of deriving commercially significant data from users and connecting these data to companies which need them for targeted advertising, marketing and sales management” (Van Dijck, & Nieborg, 2009 p. 866).


Internet users who are aware of the transactions taking place during their use of online services (and even the ones that are not) are taking part in the symbiotic online knowledge, gift and attention economies . Rifkin (2001) states that “concepts, ideas, and images – not things – are the real items of value in the new economy (Rifkin, 2001)”, he goes on further to say that “wealth is no longer vested in physical capital but rather in human imagination and creativity” (Rifkin, 2001). Users that generate content and allow their online activity to be monitored or published online are often doing so in return for attention or the gift of a free service (Murdock, 2007 p.329) and do so “out of a basic human need to communicate, gather knowledge and information or express oneself creatively” (Van Dijck, & Nieborg, 2009 p.865). Users of these services have entered the cycle of the gift economy, many with the perception that what they are being offered is free or a gift, have actually entered into a transaction of information for attention. This is the way a gift economy works, “reputations depend on how much is given away rather than how much is accumulated” (Murdock, 2007 p.329). The more you give away, or the greater the networked value of the service, the greater the value generated (Murdock, 2007 p.329, 332) (Van Dijck, & Nieborg, 2009 p. 866).


There is no such thing as a free lunch. This saying is fitting for the realities of the internet. Often economies of the internet are hidden from the user, but this cost can be balanced with the personal profit gained by the user for whom the internet has become an invaluable resource. Despite the perception that the internet can be freely and equitably accessed, the ultimate driver of participation with the resource is profit. Despite the perception that the Australian Government’s $43 billion investment in the NBN will lead to a more freely available, more reliable internet for a greater number of Australians, the new communication tool will create great profits for all who engage with it. There is a lot of profit, both monetary and non-monetary to be gained from the NBN for the wholesalers, individuals and cooperations that utilise it.



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