Where is the digital revolution taking us?

By Peter Griffin In Current Affairs

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It’s the kind of moment that makes you wonder about the massive technology-driven changes the world is going through. Youths wait in line all night in the freezing cold outside an Apple store in Beijing’s upmarket Sanlitun area for the new iPhone 4S smartphone to go on sale. Just before dawn, the orderly queue fractures apart as anticipation gets the better of Apple fans willing to pay upwards of US$800 for a gadget that may be designed in California but is actually made in China.

The plaza outside the store fills with the surging crowd. Police respond by ordering the Apple staff not to open the store’s doors. Enraged shoppers jostle security guards and pelt the store’s distinctive elongated windows with eggs before police move in to drag away unruly shoppers. Images of the disastrous launch hit Chinese microblogging sites and quickly go viral. Apple temporarily suspends store launches of the new iPhone in China, fearing repeat scenes at its other stores, but makes it available online where buyers can calmly place credit-card orders.

“That’s the bit that gets me,” says John Naughton with a chuckle. The British engineer, professor and Observer columnist has just published From Gutenberg to Zuckerberg: What You Really Need to Know About the Internet, the culmination of 40 years of watching the internet develop from a few dusty nodes in academic institutions to an all-pervasive network that has transformed our lives. “We jump like lemmings over the cliff,” says Naughton by phone from Cambridge, reflecting on the Beijing debacle. “Aldous Huxley was spot on: it is easier to control people by delighting them. It’s more effective than fear.”

In the never-ending debate over what our networked future holds, the contrasting visions of two English writers are often referenced. George Orwell coined the term “Big Brother” and argued we will be destroyed by the things we fear. Aldous Huxley instead suggested the things we enjoy will be our undoing. Naughton favours the latter scenario, but is more interested in making sense of the “good arguments either way” that are being put forward as a fight for control of the internet intensifies.

“Most of the established order – the big corporations, governments – what they really hate is the idea of this network as an enabler of permissionless innovation,” says Naughton. Hence the move to rein in the openness of the internet, and a battle by Google, Microsoft, Amazon and Facebook to dominate the web services that rely on it.

Two things happen when a disruptive technology is introduced, says Naughton – and we are witnessing both right now. First, there is a battle to control the technology itself, with each new one the object of competing interests. This has been true from Johannes Gutenberg’s movable-type printing press – which was quickly recognised by the Church as a powerful tool that could be harnessed to spread the “authorised” word of God – to radio, the telephone networks and television in the 20th century, which governments moved to regulate.

“Then, along comes the charismatic entrepreneur who offers consumers a much better deal,” says Naughton. These disrupters are dotted through history and have a profound impact on our lives. Take film mogul Adolph Zukor, the man who invented the Hollywood studio system, which continues to dominate popular culture.

“Film was a wonderful medium in its early days. It was fantastically anarchic,” says Naughton. But the films, silent and black-and-white at that stage, weren’t shown in many theatres across the US and the quality was uneven. “Along comes this guy who says, ‘We’ll do the whole thing. We have the stars, we have the studios, we’ll own the theatres. We’ll give you a seamless experience.’ That was the start of the Hollywood studio system.”

Naughton sees a lot of Zukor in the current batch of charismatic technology entrepreneurs. “Steve Jobs was the same kind of guy. He said, ‘We can do this better. It will be beautiful and you’ll love it.’ It was and people did.” Facebook founder Mark Zuckerberg, with a social network that has amassed 800 million users in eight years, is cut from the same cloth, although Naughton admits to not fully understanding the initial driver behind Facebook, which Zuckerberg created in his Harvard dorm room in 2004.

“In elite universities in the United States, the only thing they seem to have on their minds is sex. They want to get laid. And ‘The Facebook’, at Harvard initially and then these other elite universities, was basically about that. To some extent it still is. Zuckerberg understood that.”

Also earning a spot on the list of digital disrupters is, arguably, Kim Dotcom, the heavyset German with a weakness for luxury cars and lavish parties who founded the cyber locker service Megaupload.com. Preparing to celebrate his 38th birthday at the $30 million mansion he rents north of Auckland last week, Dotcom, or Kim Schmitz as he is also known, was rudely interrupted by the police, who raided his mansion at the behest of the FBI. The US agency is seeking his extradition on a host of charges, ranging from racketeering and money-laundering to comparatively innocuous copyright infringement.

John Naughton

Dotcom made a fortune from Megaupload, which conveniently allowed users to store and share files on the web for legitimate purposes. But as it also played host to a voluminous trade in pirated movies, music, books and software, the Megaupload saga goes to the heart of the creative-destructive force of the internet. Yes, it can be two things at once. Dotcom and his co-accused deny the charges and claim to be developing a new business model for music publishing and distribution that “dinosaurs” in the music industry don’t understand. “They are in denial about the new realities and opportunities,” vented Dotcom in a December editorial on the website Torrentfreak.com.

Peer-to-peer file-sharing, streaming media, social media, e-commerce – they have changed forever the way we work, interact and are entertained. But all are dependent on and the result of a network that by design has no central control and is neutral towards the traffic that passes over it. That’s the way the internet has been since the early days of ARPANET through to the 1980s when British computer scientist Tim Berners-Lee came up with clickable hypertext links, the key method we use to find and share information on the world wide web to this day.

Web companies will come and go – no one can predict what the next dotcom sensation will be. MySpace was the social network of choice a few years ago, before it was marginalised by Facebook. Google is the dominant search engine today, accounting for about two-thirds of searches – but could be gone within five years.

“The network is much bigger and far more important than anything that runs on it. Understand that and you are halfway to wisdom,” says Naughton, who describes the net as “a global machine for springing surprises”. The crucial characteristic of the internet is the way it enables innovation that is permissionless and disruptive. In that respect it shares fundamental traits with Johannes Gutenberg’s printing press. The proliferation of printing presses in the centuries after Gutenberg’s invention and the books that came from them changed scholarship, science and organised religion forever and created a reading culture that largely didn’t exist before. “What Gutenberg shows is that the technology had a profound impact on human society,” says Naughton.

The power of the printed word was quickly recognised. “The Church tried to head off the threat posed by Gutenberg by, for example, insisting on approving ‘authorised’ versions of the Bible and creating an index of prescribed books”. The lesson from Gutenberg, Naughton adds, is that in the early days of the digital revolution, it is impossible to predict what changes lie ahead. But one thing is for sure: we are “sleepwalking into the future” if we take the internet for granted and allow its openness to be compromised. “It might lead us to allow clueless or malevolent legislators to screw it up, and it might lead us, as consumers, to destroy it.”

Digital utopians aren’t hard to find. Take Jeff Jarvis, an associate professor at New York’s Graduate School of Journalism, who last year published Public Parts, in which he advocates living an open digital life – and fighting to retain the openness of the net. “I am a utopian and a populist, and fool enough to trust a public empowered by these new tools, which I hope to see us all protect,” writes Jarvis, who blogged in eye-watering detail about his battle with prostate cancer and the support he gained from Twitter contacts.

The dystopians are just as vocal. In 2007, British writer Andrew Keen, in his book The Cult of the Amateur, described Wikipedia as “the blind leading the blind – infinite monkeys providing infinite information for infinite readers, perpetuating the cycle of misinformation and ignorance”. Keen saw Wikipedia, YouTube and the proliferation of social media as eroding culture and the economic model underpinning the culture industry. Five years on, has his view changed?

“Not much,” says Keen whose next book, Digital Vertigo, to be published in May, will take aim at what he sees as the destructive influence of social media. “I think Amateur has actually aged better than utopian texts like The Long Tail. It’s getting harder and harder to make money selling content as a creative artist or journalist. The internet is great, but it hasn’t been very helpful to selling newspapers, books or music.”

Kim Dotcom in court, photo Greg Bowker/NZH

Dotcom’s arrest, ironically, came two days after numerous popular websites, including the online crowd-sourced encyclopedia Wikipedia, blacked themselves out in protest at two pieces of legislation before the US Congress, aimed at making it easier to take out operators exactly like Dotcom and Megaupload. The Stop Online Piracy Act and related Protect Intellectual Property Act – SOPA and PIPA – have lost crucial support from US politicians in the wake of the protest, but they reflect persistent legislative moves worldwide, including in New Zealand, to crack down on internet piracy.

“The three-strikes stuff is like the reflex twitching of a corpse,” says Naughton of the law passed here last year that could see internet users face a $15,000 fine for copyright infringement after receiving three notices alleging illegal file-sharing. “We are facing a situation where large numbers of our fellow citizens are effectively being criminalised by unenforceable laws. Nobody wants to admit they are waging an unwinnable war,” says Naughton, who claims not to be anti-copy­right, but argues that our approach to it was forged in a pre-internet age and needs to be radically overhauled to work in one, where, for instance, remix culture flourishes.

Again, he argues, history points to a possible outcome of attempts to crack down on piracy – just look at the prohibition years of the 20s and 30s in the US. “Is there any reason to suppose that the results will be any different?”

The main message of From Gutenberg to Zuckerberg is to take the long view. Disruption is a feature of the internet, not a bug, and we are in the early stages of this technology’s development. We can expect much more change to come, more complexity, more innovation and, yes, more uncertainty. That’s not likely to give much comfort to retailers trying to shore up business in the face of competition from online stores or media executives facing declining circulation as readers go online for free news.

We shouldn’t get hung up about “endism”, says Naughton. Things we love will disappear as a result of the internet, but great things will emerge that we will grow to love. Companies using the internet to tantalise us with game-changing new services will come and go, but the important thing is that the internet itself remain open, so the innovation can continue.

Naughton also argues we should be cautious about jumping to too many conclusions about the impact of the internet on the Arab Spring or last year’s “recreational looting” in British cities, where social networking services and the BlackBerry messaging system were quickly blamed for the speed with which unrest spread. “It’s the kind of idea that journalists love,” says Naughton, but the impact of the web on recent social and political events has been under-analysed. “Let’s stop being awestruck by the scale and speed with which things happen. That’s what the thing was designed to do.”

What we don’t know is where the internet will take humanity. Naughton gives cautious credence to the idea that the internet is changing how we are wired. “Our brains seem to be quite plastic. The great experiment in this area is reading. We know that reading changes the brain. The structure of the brain in illiterates is different to the structure of brains of people who can read and write. We know there are differences in the brains of, for instance, Chinese speakers and others.

“Reading is not a natural, innate thing. The brain has to restructure itself in order to master it. And it does. I’d say it is very unlikely that something similar is not happening to us in relation to the internet. We have to acquire different skills and that changes the structure of our brains. That doesn’t mean that we stop being human. It might change the ways that we think, but it might not change what we think about. We don’t know the extent of it yet and we don’t know what its long-term implications are, just as we didn’t know that for Gutenberg.”

Which leaves Naughton to pose an intriguing question. “Are we embarking on the evolution of Homo interneticus?”



Imagine that the year is 1473. That’s 18 years after 1455 – when the invention by Johannes Gutenberg of movable-type printing in the German city of Mainz was marked by the arrival of the first printed Bibles. Now pretend you’re the medieval equivalent of a pollster, standing on the bridge in Mainz and asking pedestrians this question: How likely do you think it is that Herr Gutenberg’s invention will:

a) undermine the authority of the Catholic Church?
b) trigger a Protestant Reformation?
c) enable the rise of modern science?
d) create entirely new social classes?
e) change our conceptions of childhood?

It is clearly fatuous to even ask the question. Printing did indeed have all these effects but no one in 1473 would have predicted them. Similarly, if we were asked now, 18 years after the web went mainstream, about the likely impact of the internet on society, the honest answer would have to be that “we haven’t a clue”. And yet, the invention of printing brought about radical transformations ± the concept of childhood being just one of them. Cultural critic Neil Postman has pointed out that “in a pre-print age, adulthood began at the point where a young person had attained communicative competence”. And in a society based on oral communication, that point was reached at age seven. But in a print-based culture, where reading competence matters, that point was pushed back – to around 12. Over five centuries later, we’re going through another radical transformation.

Source: From Gutenberg to Zuckerberg, by John Naughton


Several young Kiwi entrepreneurs are at the forefront of the next big thing.

Ponoko founders Derek Elley and David ten Have

The IT revolution and globalisation have caused the United States to lose its edge, Pulitzer Prize-winning journalist Thomas Friedman says. In That Used To Be Us, his lament at the economic, political and social ill-health of the US, Friedman argues that in every­thing from electronics to automobiles, developing giants China and India and thousands of nimble companies across the globe are cannibalising the business of what used to be considered the most innovative country in the world.

Symbolic of the levelling power of globalisation and technology is the rise of the “app”: a small package of software that runs on smartphones, tablets and, increasingly, on conventional computers. These apps – available from online stores hosted by the likes of Apple, Google and Microsoft – typically sell for a few dollars or are given away, and cover everything from business productivity to games such as the phenomenally successful Angry Birds. Hundreds of thousands of them are available, representing an industry for software that Forrester Research last year estimated would be worth US$38 billion globally by 2015.

“The potential for individuals today to globalise their talents, hobbies and passions into applications with a worldwide market is without precedent in history and unbounded in potential,” writes Friedman.

A handful of young New Zealand entrepreneurs are at the front of the app wave. Christchurch app developer Polar Bear Farm was started in 2007 specifically in response to the arrival of the iPhone. Layton Duncan and colleagues initially developed features missing from the iPhone and released them as free add-ons that could run on “jail-broken” iPhones. “Search” let you search your contacts by keyword. “Showtime” let you record video using the iPhone’s camera – something not possible on the original iPhone out of the box. These apps didn’t have the endorsement of Apple, which frowns on software developers tampering with its operating system.

“In large part, it was a handful of people like us who forced this whole thing into existence from the get-go,” says Duncan. “Even in a market of a million or so jail-broken phones, it was clear to me there was a genuine sustainable business there.” Apple saw the potential, too, and soon opened up the phone to external developers, which whom it shares revenue on all apps sold. Polar Bear Farm now deals in utility software. Its best-selling app is Air Forms, which lets businesses display their database information on the iPad, iPhone and iPod Touch.

“Apps clearly changed the way people interact on the internet. It’s enabled unbelievable changes in the speed and distribution of information,” says Duncan. Also arriving on the scene in 2007 was Wellington start-up Ponoko. Just as iTunes exists as a market for digital music and YouTube is the go-to place for video clips, Ponoko trades in digital blueprints for products. It also helps customers have their products made using laser cutters and 3D printers. Everything from jewellery to furniture has featured in the Ponoko online store. The most recent breakthrough hit was a folding ukulele.

Co-founder David ten Have says the speed with which ideas flow through the digital market is also changing creators’ approaches to intellectual property. “As more software people get into the space, they are forgoing the intellectual-property part of the picture with their own designs, because it’s expensive, clumsy and most importantly they’re iterating so fast that it simply doesn’t make sense,” he says. Ponoko will this year release apps in a bid to make it easier for people to join the maker movement, whipping up designs on devices like the iPad.

Another New Zealand entrepreneur, Derek Handley, is also tapping into the popularity of apps with his new venture Booktrack, which extends the e-book concept by providing book soundtracks that incorporate the dramatic twists and turns of the material and advance at the pace of the reader. The brainchild of software developers and brothers Mark and Paul Cameron, Booktrack was launched last year with financial backing from famed Silicon Valley investor Peter Thiel. Handley, who with his brother Geoffrey spent a decade building The Hyperfactory, a mobile-phone advertising and marketing company, before selling it to US marketing leader Meredith in 2010, says Booktrack is a transformative technology. A handful of books have so far been made available through Apple’s App Store, although the concept has divided commentators.

“Unlike the vast swathe of most tech companies today that are solving very small problems with very little genuine innovation, Booktrack is legitimate and true innovation that often polarises people,” says Handley. “When I first heard about the concept, I, too, thought it was one of the most stupid ideas of recent history – until I tried it.” Still involved in The Hyperfactory as chairman, Handley says the arrival of the iPhone was a game-changer for his industry. “Until then, players in mobile advertising such as me were having to tout shitty Nokia phones as one day ‘changing your life’. Even today, those phones fall well short of the whole new paradigm of touch-screen interactivity.”

Click here for in-depth interviews with the entrepreneurs in this article.


1969: US Defense Department commissions the ARPANET to promote networking research, initially connecting Stanford Research Institute, UCLA, UC Santa Barbara and the University of Utah. Compu-Serve computer-resource sharing service is founded.

1970-73: The ARPANET is a success as scientists access remote computers, collaborate and share data. Email quickly gains popularity.

1971: Project Gutenberg, an effort to digitise books and documents in the public domain and make them freely available, is launched.

1978: First spam messages sent out to several hundred California ARPANET users by Gary Thuerk.

1983: Apple starts selling the Lisa, a desktop computer for businesses with a graphical user interface, the system most users are familiar with today.

1988: One of the first major internet worms is released. Referred to as the Morris Worm, it was written by Robert Tappan Morris and caused major interruptions across large parts of the internet.

Tim Burners-Lee, photo Getty Images

1989: Tim Berners-Lee and the team at CERN invent the world wide web to make information easier to publish and access on the internet.

1993: Mosaic, the first graphics-based web browser, is developed.

1995: AltaVista, the first major internet search engine, is born.

1998: The Google search engine is launched – and quickly becomes dominant.

1999: Napster’s audio file-sharing service goes online.

2001: Apple introduces the iPod.

2003: The iTunes Store opens, allowing users to buy and download music, audiobooks, movies and TV shows online.

2004: Social networking service Facebook is launched at Harvard University.

2005: Video-sharing website YouTube is launched.

2007: Apple introduces the iPhone, which revolutionises the smartphone market.

2008: Apple opens its App Store as an update to iTunes.

2010: Apple begins selling the iPad, a 10-inch touchscreen tablet, and has an 84% share of the tablet market by year’s end.


Secret negotiations could affect how we use the internet.

Getty Images

Watching the January 18 blackout of websites such as Wikipedia and Reddit in January in protest at the proposed US anti-piracy legislation was Wellington artist Bronwyn Holloway-Smith, half of the husband and wife team that leads the Creative Freedom Foundation. In February 2009, they staged their own mini-blackout in protest at the now-infamous “section 92A” amendment to the Copyright Act that proposed to introduce a three-strikes law for those downloading or uploading content illegally in New Zealand, and ultimately, the termination of the internet connections of repeat offenders.

Twitter avatars and websites blacked out, first locally and then around the world, as notable internet celebrities such as Stephen Fry, Cory Doctorow and Leo Laporte lent their support. A march on our Parliament one sunny February afternoon culminated in a petition bearing the signatures of netizens against the so-called “guilt upon accusation” bill being presented to United Future MP Peter Dunne, an ally of the cause. Eventually, 17,000 people signed the petition online.

The media took notice – as did the Prime Minister. Within weeks, the legislation had been shelved and a lengthy redrafting process saw the Copyright (Infringing Filesharing) Amendment Act 2011 finally passed under urgency in April, coming into effect on October 1. This didn’t affect the downloading of material from websites; what became illegal is the unauthorised downloading or uploading of copyrighted material over file-sharing networks, where files are stored on users’ computers rather than on a web server.

The legislation now features an independent copyright tribunal that will hear complaints against internet users lodged by copyright holders. The internet-connection termination provisions remain lurking in the text, but will not be activated – unless the Cabinet deems them necessary. But the guilt-on-accusation aspect of the law – which sees internet users singled out by rights-holders based on their alleged internet activity and sent infringement notices – remains.

Despite that, Holloway-Smith says the efforts of the Creative Freedom Foundation and its supporters led to a “hugely improved” law being passed. “The original in practice would have seen people having their internet cut off based on an accusation. The law left it up to internet service providers and rights holders to define how they were going to reasonably implement the law.”

The real test of the effectiveness of the law will come in the next few months, when the first of the three-strike offenders are called before the Copyright Tribunal to face a fine of up to $15,000. A review of the law next month is likely to see the rights holders pushing for a reduction in the cost of issuing infringement notices, currently set at $25 a notice, says Holloway-Smith.

“It could be that there’s a private agreement struck between ISPs and copyright holders to issue the notices for less. That’s allowed within the law. It would be in their best interests to control the whole process.” The bigger issue looming, however, is the potential impact of New Zealand signing up to international agreements and trade deals that may require tightening of copyright law to reflect the desires of larger trading partners.

“The point of no return is when we start to get locked into these inter­national trade agreements. We’ve signed up to the Bern Convention, to the World Intellectual Property Organisation. These are no-turn zones,” says Holloway-Smith. “John Key himself has said that we are going to need something like the original section 92A to get a free-trade agreement with the US.”

In the Creative Freedom Foundation’s sights, then, is the Trans-Pacific Partnership Agreement (TPPA), a “comprehensive, next-generation trade agreement” being negotiated between New Zealand and eight other countries, including Australia and the US. Member countries completed a 10th round of negotiations in Kuala Lumpur in December, and leaders have undertaken to finalise an agreement this year. Intellectual property and copyright are among the numerous issues covered by the TPPA, but the details of the negotiations remain confidential for the time being – bar the odd leak.

That, says Holloway-Smith, is cause for major concern. “The TPPA is secret; we don’t really know what is in it. It’s making sure we aren’t selling ourselves short just so we can get some milk powder into the United States.” With three-strikes laws passing around the world and the shadow of SOPA and PIPA online piracy legislation looming large in the US, Holloway-Smith says the work of the Creative Freedom Foundation is more important than ever.

“Copyright was founded on the premise of giving artists rights to make money, to have a temporary monopoly where they can control their work and to try to monetise it so they can make more work,” she acknowledges. “But the second half of copyright is about enabling public rights. As long as that pressure is coming from copyright holders to expand rights in their direction, we are going to need to keep up the pressure to maintain the public rights.”

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