Felix Stalder on 23 Jan 2001 00:26:48 -0000

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[Nettime-bold] The End of an Era: the Internet Hits Ground

[A slightly different version was published on Telepolis
(http://www.heise.de/tp) a few days ago. Posted here with friendly

The End of an Era: the Internet Hits Ground

The crash of the dot-com sector in the US and in Europe has ultimately
brought to an end the first period in the history of the Internet as a mass
medium. The decline of the tech-heavy stock market indexes such as NASDAQ
or NEMAX stands for much more than simply the failure of a few
Internet-companies. It is the final indicator that many of the most popular
assumptions about the Internet typical for the thinking and much of the
action of this entire period turned out to be plain wrong.

Epitomized in John Gilmore's [1] famous dictum that "the Internet treats
censorship as damage and routes around it" and John Perry Barlow's 1996
"Declaration of Independence"[2] was the belief, or hope, of many of the
pioneers of the various shades of cyberculture in the "distinctiveness" of
the Internet. The Internet - immaterial, instantaneous and global - was
thought to be fundamentally and inherently different from the material
world as we knew it. How different was a matter of taste. Everyone could
see what s/he cherished most dearly but couldn't find in the real world.

For political activist, the Internet held the power to rekindle the fire of
democracy and direct citizen involvement at a time when cynicism about the
actual institutions of the liberal democracies had reached unprecedented
levels. The Digital City Amsterdam became a model for participatory on-line
democracy through which the gap between the political class and the
citizens was hoped to be closed.

For (neo)libertarians the Internet promised nothing less than the end of
the nation state because of its intrinsic global and transnational nature.
National legislation seemed to be irrelevant when entire websites could be
relocated into more welcoming jurisdictions within seconds. When a book
about the Francois Mitterand's illness was banned in France it appeared
almost immediately on foreign Internet-servers.[3] Even taxpaying seemed to
loose its inevitability due to anonymous electronic cash and off-shore

Many progressive artists envisioned possibilities of bypassing the dreaded
arts business and the control of the cultural institutions as every artist
could speak to the audience without needing the traditional mediators such
as galleries and museums. Perhaps even more profound, the interactive and
participatory nature of on-line art works seemed to erode distinction
between artist and audience and offer a model for what some called the rise
of the "prosumer": the consumer who is also a producer.

There was hardly any problem to which the Internet, due to its intrinsic
distinctiveness, was not offering the best hope in a generation for a
radical solution. Of course, for most people, these visions remained
esoteric until the Internet also promised to change the rules of the
economy. Out were the rules of cautious long-term investment and of
evaluating the fundamentals of  company and in were the new rules for the
new economy, symbolized by Kevin Kelly's paradoxical ruminations "that the
most valuable things of all should be those that are given away."[4]
Because the Internet was so different from and superior to the material
world even the most far-fetched e-commerce business plan seemed better than
a well-established conventional company. Thanks to Internet-day trading and
IPO mania, anyone who was only visionary enough to see the future could get
very rich, very quickly. Seeing this future didn't require that much vision
anyway during the incessant fire of media propaganda on-line and off-line,
electronic and print.

In the year 2000, almost fitting for a historic date change, most of those
hopes that were based on the Internet being altogether a different place
hit ground rather roughly. The Digital City Amsterdam nearly collapsed
under internal and external pressures of operating in an increasingly
commercial environment, as two recent posts here on nettime reminded us
again. [5], [6] In the most recent elections in the US, arguably the
technologically most advanced country in the world, the Internet played
hardly any role, particularly not in shaking up the old-school political

Last year, national governments began in earnest to regulate the Internet.
In Britain, the Regulation of Investigatory Powers Act extended
significantly the rights of the police to access to e-mail and other online
communications. South Korea outlawed access to gambling websites. The
United States has passed a law requiring schools and libraries that receive
federal funds for Internet connections to install filtering software to
block material somehow considered harmful to minors. Rather than eroding
the reach of national legislation, the Internet suddenly appears to extend
it. On Nov. 20th, a French judge ordered Yahoo! to comply with French laws
prohibiting the sale of Nazi memorabilia to French customers, even though
Yahoo! operates in the US. While Yahoo! vowed to fight the verdict, it
stopped the controversial auctions anyway. Under the provisions of the
Hague Convention an on-line store could be liable under laws in any of the
48 member-countries which are set to ratify the treaty later this year
(though there is some opposition from the US).

For all its technical feasibility, anonymous electronic cash remains as
elusive as it did 5 years ago, not the least because governments have made
it clear that they would not allow any financial institution operating
within their jurisdiction to issue such a currency.

The art world seems to fall back into its traditional patterns. Museums
have regained their high-ground on the Internet as they received their own
top-level domain .museum [7] to create a separated space of approved High

Most drastically, of course, the crash of the dot-com sector has
demonstrated that even the new economy is still above all, an economy, and
that the much laughed at old-style companies have little problems
establishing themselves also on the Internet. The problems of eToys
(forgetting the legendary Toywar for the moment) in the face of the
competition of Toys'R'Us are quite typical: the Internet-only pioneer is
pushed aside by an established "bricks and mortar" store that simply added
an on-line interface to its well established distribution infrastructure:
the new buzzword of this unimaginative convergence  of old and new: "clicks
and mortar."

What all of these events have in common, and why it is justified to think
of them as closing a specific period in the history of the Internet, is
that they all force us to recognize that the Internet is not a space
separate from society. On the contrary, as the Internet becomes more and
more integrated into everyday life, it starts to resemble, well, everyday
life. As established institutions recognize the value of the Internet in
expanding their activities, they are throwing in their entire wait to make
the technology adapt to them.

How poorly founded those early visions of the Internet as a distinct entity
were is revealed by the fact that hardly anyone of the early visionaries
even tries to defend their views. Where is Barlow now? What happened to
Kevin Kelly? What is even more revealing is that none of the investors who
got burned by the decline of the tech-stocks has been complaining publicly.
Somehow, it seems, everyone knew that all the promises were too good to be
true and those who lost money are, perhaps, too ashamed to admit it. Or
would you admit that you bought priceline.com shares when they were $104
1/2  in last March now that they are worth only $3 1/2?

However, as they Internet hits the ground, two things happen. First, what
we have seen in the last year, the Internet looses its utopian
distinctiveness. At the same time, however, the Internet begins indeed to
transform the ground it has landed on. Now that it becomes clear that many
of the first cultural and economic models do not work, I would not be
surprised to see a second wave of innovation taking place. As venture
capital has dried up a little bit and the dreams of getting rich over night
at the stock market have been shattered, room is opening again for real
experiments that are aimed at solving real, practical problems and that
might, or might not, lead to something really nice, big or small. The end
of dot-com madness creates the space in which new thinking about what is
useful rather than simply what is profitable can develop.

1 http://www.toad.com/gnu/
2 http://www.eff.org/pub/Publications/John_Perry_Barlow/barlow_0296.declaration
4 http://www.wirednews.com/wired/archive/5.09/newrules_pr.html
5 http://www.nettime.org/nettime.w3archive/200101/msg00079.html
6 http://www.nettime.org/nettime.w3archive/200101/msg00085.html
7 http://www.icann.org/tlds/mus1/

Les faits sont faits.

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