Explosion of two-way Internet usage creating major policy, regulatory challenges

It's called the participative web (P-web) or Web 2.0, but regardless of its title the explosion of two-way Internet communications is emerging as one of the most critical strategy and policy challenges for government and industry alike. A host of new enabling technologies and social behaviours undermine current regulatory, science and business practices in ways unforeseen just a few years ago, spawning a range of web-enabled activity from virtual worlds and gaming to community spaces such as You Tube and Facebook.

Web 2.0 was the focus of a major Ottawa conference sponsored by the Organization for Economic Co-operation and Development (OECD) and Industry Canada. The conference was held as a preparatory session to next year's ministerial briefing on the Future of the Internet Economy. That event will be held June 17-18 in Seoul, Korea and Industry Canada DM Richard Dicerni has been invited to serve as co-chair.

Speakers and attendees from more than 30 countries attended the Ottawa event on October 3rd to discuss the implications of P-web for science and research, business and innovation and their impact on public policy and regulation.

Jonathan Taplin, a professor at Univ of California's Annenberg School for Communication and a former entertainment executive, says the shift from a device- to a subscriber-centric world that is location independent is placing considerable strain on the networks of many nations and challenging businesses to find ways in which the the P-web can be utilized profitably. Taplin notes that Japan and Korea are confronting exploding bandwidth usage by rapidly deploying fibre-to-the-home, placing them far ahead of any other countries.

"They make the rest of us look like pikers," says Taplin. "All countries have to catch up as we enter a video world"

implications for science

While most of the discussion focused on the social and business aspects of the P-web, its impact on science was also discussed. Bill St Arnaud, CANARIE's senior director of advanced networks outlined a series of research programs that are using the P-web to link researchers, facilitate access to large science facilities such as telescopes and engage the public in scientific discovery. He pointed to new web-based tools such as Amazon Elastic Compute Cloud (Amazon EC2) — designed to make web-scale computing easier for developers — as critical facilitators of P-web science by driving down the cost and enabling more effective use of distributed infrastructure. St Arnaud added that new technologies are underpinning a grassroots movement towards the democratization of science which has prompted innovative firms and research institutes to tap into the population at large for new technological breakthroughs.

"Technologies for content creation and diffusion are increasingly R&D-intensive (faster networks, new platforms, content-intensive products, database management) and the challenge is to establish business settings, policies and approaches that encourage innovation. Governments have an ongoing role encouraging R&D and innovation." — OECD Study: Participative Web and User-Created Content

But the quantum shift in the nature of scientific activity and learning is not without challenges. One is the sheer volume of knowledge being generated by computers and delivered through the Internet. There's also the ongoing issues of interoperability, (closed versus open systems, authentication) and constraints on intellectual property.

To deal with these challenges, the US National Science Foundation has launched a massive Cyber-enabled Discovery and Innovation initiative to explore new concepts, approaches and tools at the intersection of computational and physical or biological worlds.With first-year funding of US$52 million and $50 million annually thereafter, the five-year project will focus on knowledge extraction, interacting elements (improving the ability to predict and deduce interactions in complex systems to better understand, design and control them), computational experimentation, virtual environments and the education of researchers and students in computational discovery.

Diana Rhoten, program director of the NSF's Office of Cyberinfrastructure, says the results of the project will "help overcome the challenges of science 2.0", adding that virtual environments are among the defining features of future scientific endeavour.

business challenges

For the business sector, meeting customer needs and generating profits are driving much of their response to the P-web revolution. Those drivers are clashing with the evolution of the web, however, creating major policy and regulatory challenges with no easy answers.

Business models that actually turn a profit are running up against the growing movement towards network neutrality and most Web 2.0 users are reluctant to pay more for services than they already pay. The development of new web-based technologies and services is expensive and many fear a repeat of the Internet bubble of the late 1990s.

Last year in the US, venture capital invested US$895 million in Web 2.0, and another $464 million was invested in the first two quarters of 2007. Merger and acquisition activity is also on the rise, with two of the best known community web companies — You Tube and Facebook — recently sold to larger players.

Cyrus Beagley, associate principal in New York-based McKinsey & Company's media and entertainment practice, says audience traffic is quickly becoming monetized but it must grow even faster for companies to develop viable business cases. He suggested that companies need to go beyond advertising and use the two-way web to gauge response to pilot products and save on production costs.

Michael Hennessy, VP broadband and video policy with Vancouver-based Telus Corp, says industry needs to close the broadband gap in terms of investment. Video consumption is exploding and the move to a consumption-based pricing model is undermining content models.

"We need a model of cost recovery for Web 2.0 without discrimination or domination by a few big Hollywood players," he says.

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