A Walled Wide Web for Nervous Autocrats

[Eugen Leitl]

http://online.wsj.com/article/SB10001424052748704415104576065641376054226.html?mod=WSJASIA_hpp_MIDDLESecondNews

A Walled Wide Web for Nervous Autocrats

Beijing and Moscow see American information technology as a threat. They want
systems of their own

By EVGENY MOROZOV

At the end of 2010, the "open-source" software movement, whose activists tend
to be fringe academics and ponytailed computer geeks, found an unusual ally:
the Russian government. Vladimir Putin signed a 20-page executive order
requiring all public institutions in Russia to replace proprietary software,
developed by companies like Microsoft and Adobe, with free open-source
alternatives by 2015.

The move will save billions of dollars in licensing fees, but Mr. Putin's
motives are not strictly economic. In all likelihood, his real fear is that
Russia's growing dependence on proprietary software, especially programs sold
by foreign vendors, has immense implications for the country's national
security. Free open-source software, by its nature, is unlikely to feature
secret back doors that lead directly to Langley, Va.


Anthony Russo

Nor is Russia alone in its distrust of commercial software from abroad. Just
two weeks after Mr. Putin's executive order, Iran's minister of information
technology, citing security concerns, announced plans for a national
open-source operating system. China has also expressed a growing interest.
When state-owned China Mobile recently joined the Linux Foundation, the
nonprofit entity behind the most famous open-source project, one of the
company's executives announcedbominously to the ears of somebthat the company
was "looking forward to contributing to Linux on a global scale."

Information technology has been rightly celebrated for flattening traditional
boundaries and borders, but there can be no doubt that its future will be
shaped decisively by geopolitics. Over the past few years, policymakers
around the world have had constant reminders of their growing dependence
onband vulnerability tobthe new technology: the uncovering of the mysterious
China-based GhostNet network, which spied on diplomatic missions around the
globe; the purported crippling of Iran's nuclear capability by the Stuxnet
virus; and, of course, the whole WikiLeaks affair. Governments are taking a
closer look at who is providing their hardware, software and servicesband
they are increasingly deciding that it is dangerous not to develop
independent national capabilities of their own.

Open-source software can allay some of these security concerns. Though such
systems are more democratic than closed ones, they are also easier to
manipulate, especially for governments with vast resources at their command.
But open-source solutions can't deal with every perceived threat. As Google
learned, the Chinese government continues to see Western search engines as a
challenge to its carefully managed presentation of controversial subjects.
Similarly, email can be read by the host government of the company offering
the service, and the transmission of sensitive data can be intercepted via
secret back doors and sent to WikiLeaks or its numerous local equivalents.

For these reasons, more governments are likely to start designating Internet
services as a strategic industry, with foreign firms precluded from competing
in politically sensitive niches. The Turkish government has emerged as the
leading proponent of such "information independence," floating the idea of
both a national search engine and a national email system. Authorities in
Russia, China and Iran have debated similar proposals.

Judging by last year's standoff between the BlackBerry maker Research in
Motion and the governments of India, Saudi Arabia and the United Arab
Emirates, questions of access also will play a growing role in shaping
technology. If a government suspects that the U.S. National Security Agency
has arranged to be able to retrieve private emails sent with BlackBerry's
secure encryption technology, it starts to wonder why it doesn't have similar
streams of intelligence data, from BlackBerry as well as from services like
Gmail and Skype. At a minimum, more governments will demand that data servers
base their operations in their own jurisdictions, inconveniencing global
Internet companies that have based their business plans on the assumption
that they could run their Indian operations from Iowa.

The real Internet trade wars will begin once Russian and Chinese technology
giants, with their poorly veiled government connections and piles of cash,
come looking for American and European acquisitions. How will officials in
Washington or Brussels react when China's Tencent (with a market
capitalization of $42 billion, almost twice that of Yahoo) or Russia's Yandex
makes a bid for AOL or Skype?

Painful decisions will need to be made soon. The Russian company Digital Sky
Technologies, owned by a Kremlin-friendly oligarch, has a nearly 10% stake in
Facebook and a 5% stakes in such hot Web properties as Zynga and Groupon.
What will happen once Russian or Chinese firms seek to purchase a stake in
companies like Google (a contractor to the National Geospatial Intelligence
Agency) or Amazon (which caters to nearly 20 U.S. government agencies through
its Web hosting services)?

The unpleasant effects of this rising nationalism are already evident in the
case of hardware exports. When Sprint Nextel began considering bids from
China's Huawei and ZTE Technologies in 2010 for a projected $5 billion
upgrade of its network, a group of American senators wrote to the company's
chief executive, expressing their concern that Huawei might be subject to
"significant influence by the Chinese military" and that communications in
the U.S. could be "disrupted, intercepted, tampered with, or purposely
misrouted." Sprint Nextel turned down the bids. The European Union recently
announced plans to create an authority similar to the U.S. Committee on
Foreign Investment to specifically vet approaches from China's technology
giants.

Even if they are spurned by the U.S. and Europe, China's tech giants are
likely to resurface elsewhere. For several years China has been using its
huge cash reserves to hand out loansbmostly to governments in Africa, but
also to neighbors like Cambodiabwith the condition that those governments
only do business with China's telecom companies. With or without secret
access to that data, the fact that China controls so much of the
communications infrastructure in the developing world gives it political
leverage.

At the same time, Yota, a partly state-owned Russian telecom provider, has
been trying to build a base in Latin America, launching its 4G service in
Nicaragua and, soon, in Peru. Other Russian companies are busy building (or
buying up) the telecom infrastructure in the former Soviet republics, perhaps
in a bid to do for the Internet what Russia's gas giant Gazprom has done for
energy: build up physical infrastructure and then use it as a tool of
political leverage.

What does all of this mean for the future of America's technology industry?
If China's expansion into Africa and Russia's into Latin America and the
former Soviet Union are any indication, Silicon Valley's ability to expand
globally will be severely limited, if only because Beijing and Moscow have no
qualms about blending politics and business.

The global triumph of American technology has been predicated on the implicit
separation between the business interests of Silicon Valley and the political
interests of Washington. In the past, foreign governments have rushed to
install the latest version of Microsoft Office or Google's Chrome browser
because it was hard to imagine that Washington would tinker with technology
to advance its strategic interests.

But just a few weeks before Mr. Putin publicly endorsed open-source software,
FBI Director Robert Mueller toured Silicon Valley's leading companies to ask
their CEOs to build back doors into their software, making it easier for
American law enforcement and intelligence gathering agencies to eavesdrop on
online conversations. The very possibility of such talks is likely to force
foreign governments to reconsider their dependence on American technology.
Whatever the outcome of Washington's engagement with the Internet, Silicon
Valley will be the one to bear the costs.

For ordinary Internet users, there is one silver lining: The embrace of
open-source technology by governments may result in more intuitive software
applications, written by a more diverse set of developers. The possible
downside is that the era of globally oriented services like Skype may soon
come to an end, as they are replaced by almost certainly less user-friendly
domestic alternatives that would provide secret back-door access. As
governments seek to assert control, companies will be providing fewer and
fewer guarantees about both data security and access by third partiesbsuch as
governments.

The irony in these developments is hard to miss. Information technology has
been one of the leading drivers of globalization, and it may also become one
of its major victims.

b Evgeny Morozov is a visiting scholar at Stanford University and a fellow at
the New America Foundation. His new book is "The Net Delusion: The Dark Side
of Internet Freedom."