Many justifiably worry about the possibility of a balkanized Internet. Concern over this issue is legitimate but prognosticators often mischaracterize the true nature of the problem. The “Internet” is best described as having three distinct layers. At the core is the network itself, then the World Wide Web, and finally, the applications built on top of the web. Deputy Assistant Secretary of State, Daniel Sepulveda argues the core of the Internet is not in peril. No country has carried out plans to actually build an intranet that is disconnected from the rest of the world. However, the web and Internet enabled applications are at risk due to shortsighted policies. Many countries have blocked websites like Netflix due to intellectual property regulations and social media during times of crisis. The key to stopping the balkanization of the Internet is to use smart policies to ensure data flows freely across international boundaries and overcome specific barriers that threaten the web and Internet supported applications.
Forces of Balkanization
- The American Internet: There is a widely held belief that the Internet benefits the United States more than other countries. Many people in both the developed and undeveloped world falsely believe that American technology firms have a built in advantage and will crush any foreign competition.
- Regulations: Differences in regulatory regimes can also create barriers to digital trade. This includes intellectual property laws, customs requirements, and privacy protections.
- Data Localization: Laws that require companies to host files in the country where the service is used represent the biggest threat to the web. Such rules make digital services less efficient, which can limit innovation.
Ensuring the Future of the Web
- Trade Deals: Countries should use trade agreements to address barriers to digital trade including: tariffs, data localization, discriminatory treatment of products, and others. An intergovernmental organization could facilitate bilateral diplomatic arrangements when disputes connected to free data flows emerged.
- Internet Governance: Move the Internet to a multi-stakeholder model. The U.S. can help to ameliorate concern that it controls the Internet by relinquishing control of the Internet Corporation for Assigned Names and Numbers, which administers the Internet, to the international community.
- Strengthen Privacy Protections: Updating the Foreign Intelligence Surveillance Act would give other countries more confidence in the security of their data. This can decrease political support for harmful data localization laws and encourage digital trade.
For many countries especially developing nations, there is a natural tendency towards protectionist policies to build up the economy. At a recent Brookings Institution event each panelist was in agreement that restrictive Internet policies like data localization were ultimately self-defeating. The value of the Internet corresponds directly with the number of users. As the number of users rise so too does the utility for each individual user. Any restriction on the transfer of data across national boundaries also serves as a countervailing force for the value of the Internet. This is true for all people regardless of national borders. Governments must compromise on these thorny regulatory issues to ensure that the Internet continues to support economic growth and innovation.