The Web behind walls: the future of Internet Ownership

Technological changes take years to diffuse through the economy. Contrary to popular wisdom, the Internet is no exception.

The recently consummated merger of America Online and Time Warner concluded a year-long struggle over the nature of monopoly power and open access in the broadband age. This battle, which pitted consumer advocates and corporate competitors alike against the twin media giants, ultimately yielded several important safeguards. Chief among these: the guarantee of open access to the cable network for rival Internet service providers, a similar provision barring discriminatory treatment of interactive television traffic, and a monitoring system to handle complaints from the new AOL Time Warner's competitors.

But despite such safeguards, another even more important battle looms on the horizon. At stake is the future and form of the Internet for millions of Americans whose access to the online world comes through the set-top portals of cable television. Instead of the multivaried pathways of the World Wide Web, these users will be provided easy access to a much smaller subset of items and options that reflect the network owner's online programming, as well as the offerings of its content partners. Dubbed "walled gardens" by supporters and skeptics alike, these new "managed-content areas" will therefore offer the illusion of online choice, while leading subscribers down well-worn paths of proprietary content and affiliated programming—in stark contrast to the great diversity of expression the Web seemed to promise in its heyday, way back in, say, 1997.

In their filings with the Federal Communications Commission during the merger-review process, AOL and Time Warner offered a chilling glimpse into this new online world by speaking rhapsodically of "next-generation branded content" and "powerful e-commerce applications." Presumably, these will be the financial fruits—for the cable networks and their content partners—of the new walled gardens.

But AOL and Time Warner were much less forthright concerning the nature of these services—because their very existence puts up walls that will separate cable subscribers from the vast expanses of the Internet (or, at the very least, discourage all but the most adventuresome users from straying too far). This is because the underlying architecture of the new cable broadband networks, offered through sophisticated set-top boxes under the guise of "interactive television," will permit network owners to favor their own online fare over that of their competitors. Menus, on-screen icons and the local caching of featured content (to speed its delivery) will all come into play, as the once-level online playing field is tilted sharply toward the network owner's interests.

It was none other than the Walt Disney Company (itself no stranger to aggressive behavior in the media marketplace) that warned of the potential abuse of this power during the AOL-Time Warner merger review. By controlling both programming and the pipes through which that programming is delivered, Disney pointed out, the merged company would have "undeniable economic incentives and opportunity...to favor its own affiliated content and to discriminate against unaffiliated content providers."

That argument worked, at least in part. The strictures ultimately imposed on AOL Time Warner by the Federal Trade Commission—forcing it to provide unrestricted access to other Internet service providers and interactive television traffic—all but precluded it from exercising such control over its competitors. But the newly formed company reaches only 20 percent of all cable households in the United States, while the rest of the vast and still-growing cable market continues to operate without these restraints. Moreover, judging from the claims of those who will actually be building new interactive TV systems—the networking hardware, software and "middleware" vendors whose products will likely establish the ground rules for the broadband future—the potential for abuse is great.

Consider, for example, ICTV, a Silicon Valley company that makes software for digital set-top boxes. In courting cable company customers, ICTV enticingly extends the walled garden metaphor to include "walled jungles" and "fenced prairies." These virtual gated communities, it unabashedly states, will reach "beyond a proprietary network to content partners on the Web, while circumscribing access to a defined range of approved Web pages."

A competing firm, Transcast, promises to create a "seamless consumer experience," in which "each component is branded with the partner's logo and identity, enabling the partner to promote their brand for the duration of the user's Internet experience." More brazen still is Cisco Systems (the largest supplier of networking hardware and software), which boasts of technology that will allow network operators to create "captive portals." These will give a cable system owner "the ability to advertise services, build its brand, and own the user experience." Not to be outdone is mighty Microsoft itself, which gets straight to the heart of the brave new online world. Promising full "walled garden support" with its new TV Server platform, Bill Gates's ever-ambitious enterprise promotes the possibilities of "whitelists, blacklists, and auto-generated cookies," the means, presumably, of determining who gets to see which programming, and under what terms.

For millions of households, therefore, the World Wide Web will be neither worldly nor wide. The real danger, of course, is that the online marketplace of ideas under cable's control will become as encumbered with gatekeepers and tollbooths as the world of cable has become. If the Internet follows that sorrowful path, what was once a vast library of information on the Web—good, bad and indifferent, certainly, but also diverse and democratic—will begin to resemble the orderly, limited shelves of a chain bookstore. Bestsellers will abound (especially those with corporate ties to the media conglomerates), but alternative and independent voices may find themselves pushed so far to the margins that we'll lose sight of them altogether.

That's just too high a price to pay for the speed and simplicity of what amounts to little more than Internet Lite. In the interests of our democracy, broadband cable companies must be held to a higher standard than that—and the carefully constructed safeguards that preside over the AOL-Time Warner merger should be applied across the board to every cable system that offers telecommunications services.