Esther Dyson on the Internet, ICANN and Doing Business AbroadPublished: April 10, 2002 in Knowledge@Wharton
Back in the heyday of the Internet in the late 1990s, Esther Dyson was often referred to as the chief guru of the tech world, a reputation enhanced by the publication of her 1997 book, Release 2.0: A Design for Living in the Digital Age.
But during a recent talk at Wharton, Dyson, chairwoman of EDventure Holdings, admitted embarrassment at several of her Release 2.0 predictions and worried about some of the fallout from the coming of that digital age. She cited, among other concerns, the treatment of personal data on the Internet and frustration with the Internet Corporation for Assigned Names and Numbers (ICANN), the independent agency in charge of managing policy for the Internet’s name and address systems.
"ICANN has become a real cesspool," said Dyson, who served for two years as chairwoman of the agency. As Dyson sees it, ICANN – whose activities have grown to include not just approving new extensions for Internet domain names but also resolving disputes and setting policy – is itself mired in disputes about authority, accountability and openness.
Acknowledging the controversy it has generated almost since its inception in 1998, ICANN issued a report at the end of February calling for major reforms in its operations. After a comment period, the ICANN board plans to issue recommendations for change at the end of May. Already, according to news articles, the ICANN report has caused a stir among consumer groups, members of Congress and policy makers in the U.S. Commerce Department (which had a large role in creating ICANN), all of whom have their own strong opinions about how ICANN should be run.
"Ira Magaziner was an idealist," commented Dyson, referring to the Clinton administration’s Internet policy czar who advocated ICANN as an agency without direct government control. "He said that the domain name system operates worldwide and he wanted the Internet community to take care of it … But there really is no single Internet community. We had engineers who thought ICANN was a plot to [give] certain companies control of the Internet, U.S. Congressmen figuring it was a plot to [give] foreigners control, public interest people saying it should be run by a group of wise men, and people from Latin America and Africa who just assumed they would be left out again."
According to Dyson, ICANN’s original mandate, mainly a technical one, was carried out by Jonathan B. Postel, one of the founders of the Arpanet, the precursor of the Internet, and a professor at the University of Southern California. "He was a real techie … and everyone trusted him. He was not interested in making money or in politics, so everyone allowed him to settle disputes." But Postel died suddenly in 1998, just as ICANN was getting off the ground.
Although Dyson applauds the theory behind ICANN, she said the organization is bogged down in politics. It used to meet in secrecy and still carries the bad reputation caused by that. And because ICANN is in charge of approving top-level domains, such as .info and .biz, "some people worry about whether it is trying to control content on the Internet, too … When I was a young student, I thought grown-ups would come and make things work. Now I realize that grown-ups are just kids with wrinkles. [Today] I only see juvenile behavior at ICANN."
Dyson takes a generally libertarian – or at least hands-off – view of government control. She recognizes the important role the U.S. Department of Commerce plays in allowing ICANN to go forward (under a contract due to expire or be renewed in September), and suggests that Commerce make it clear that the ICANN board and staff need to solve their own problems establishing better relations with the ’at-large’ (public) memberships of ICANN and with the ’country-code’ top-level domains. "They (ICANN) need to invite them to help make policy, not just ask them to submit to ICANN’s policy without being part of determining it." Reflecting on her 1997 book, Release 2.0, she admits she might have missed the mark in her contention back then that getting consensus on a body such as ICANN would not be a problem.
One other issue that worries Dyson is the management of personal data on the Internet. "In my book, I was way too optimistic about how consumers would be [aware of the need] to safeguard their own data," she said, noting that surveys all show that people want to protect personal information from third parties, "but the moment McDonalds offers 20 cents off a hamburger, [consumers] are quite willing to give up data about themselves." Young people tend to be more sophisticated about Internet privacy issues while older people are more shocked to learn how much personal data they unwittingly provide through their day-to-day activities on the Internet, she added.
As time goes on, more and more data is being collected through a variety of sources. "Microsoft and other companies are talking about being digital data banks," Dyson noted. These companies compare themselves to regular banks. "Banks manage your money. It is still your money, but because of rules and laws that are set up, you can reasonably believe that they will not, for example, give your money to Enron without your approval … Digital data banks say that they will keep your data. It will still be yours, but they will manage it. But there have to be rules about this. It’s a concern that we need to [address]."
Of late, Dyson – an investor and commentator who focuses on emerging technologies and business models – has been concentrating on investing in new technology businesses, often in Eastern Europe and particularly in Russia. She said what she has learned most is that business strategies and plans – of great importance in business schools – make up only about five percent of what counts in actual businesses. "It’s all about people. You have to find a sales manager who will motivate sales people. You have to have a marketing guy who knows what is going on. You have to have a CEO who will look reality in the face and fire people, or at least get someone to react to change."
She said the working environment in Russia is completely different than in the developed Western markets. "In Russia, if you walked into a store, the sales people would ignore you. They didn’t want to have to wait on you. If the phone rang, they didn’t answer it, because surely it would be someone with a problem, not an opportunity. The market there was absent all the rules we take for granted in business here."
That said, according to Dyson, it is still easier to do business in Eastern Europe than in Africa, where she is involved in fostering development through the use of IT, but on a not-for-profit basis now. "In Eastern Europe, the technology is easy. The challenge is the market. In Africa, there is virtually no technological infrastructure. Even in Ghana, a relatively well-off country, telephone coverage is about one-tenth that of Eastern Europe, which is about one-tenth that of the West."
In Africa, the organizations she works with are trying to find businesses that are small and can spread over time. She said the approach is for non-profits to basically donate the technology – examples she gave are designs for irrigation pumps or presses to make oil out of sunflower seeds – so that the foundation of a long-term business might develop. "In the U.S., you have a good idea, raise $10 million and people will come to your product," she said. "You get a good idea in Africa, it doesn’t just spread like that. You have to develop the infrastructure there."
But through all the change and turmoil, including the downturn in the digital-business market, Dyson remains optimistic. "I think good ideas should spread quickly," she said. "But this I feel strongly about: The benefit of Internet technology should not be to the stockholder, but to the employees and most of all to the individuals."