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Posted by on May 16, 2010 in Science & Technology | 0 comments

Facebook, Monopoly, The Open Web & The Walled Garden

AOL, the internet on training wheels, made the early internet manageable through its subscription only “Walled Garden.” Once we no longer needed training, It was killed off by the Open Web.

So what’s Facebook?

The service started off as a friends-only space for college students. Now it’s trying to have it both ways — a private club that anyone can join (and search) owned by a natural monopolist eager to reap a monopoly fortune. And happy to sell its users out for that profit.

Randall Stross:

ON its Web site, Facebook says it’s “giving people the power to share and make the world more open and connected.”

But the online world outside of Facebook is already a very open and connected place, thank you very much. Densely interlinked Web pages, blogs, news articles and Tweets are all visible to anyone and everyone. Instead of contributing to this interconnected, open Web world, the growing popularity of Facebook is draining it of attention, energy and posts that are in public view.

Every link found on the open Web, inviting a user to click and go somewhere else, is in essence a recommendation from the person who authored the page, posted it or broadcast it in a Tweet. It says, “I’ve taken the trouble to insert this link because I believe it will be worth your while to take a look.”

On its website Facebook also says it is a social utility. Not just a utility, but a “utility that helps people communicate more efficiently with their friends, family and coworkers.” Facebook says its technologies “facilitate the sharing of a trusted environment. Facebook is a part of millions of people’s lives all around the world.”

A pretty nifty accomplishment for a privately-held company with an obligation only to make a profit for its shareholders. Danah Boyd follows up yesterday’s rant with the observation that, yes, Facebook is a utility. The “trusted environment” part, not so much. She says utilities get regulated:

Your gut reaction might be to tell me that Facebook is not a utility. You’re wrong. People’s language reflects that people are depending on Facebook just like they depended on the Internet a decade ago. Facebook may not be at the scale of the Internet (or the Internet at the scale of electricity), but that doesn’t mean that it’s not angling to be a utility or quickly becoming one. Don’t forget: we spent how many years being told that the Internet wasn’t a utility, wasn’t a necessity… now we’re spending what kind of money trying to get universal broadband out there without pissing off the monopolistic beasts because we like to pretend that choice and utility can sit easily together. And because we’re afraid to regulate.

And here’s where we get to the meat of why Facebook being a utility matters. Utilities get regulated. Less in the United States than in any other part of the world. Here, we like to pretend that capitalism works with utilities. We like to “de-regulate” utilities to create “choice” while continuing to threaten regulation when the companies appear too monopolistic. It’s the American Nightmare. But generally speaking, it works, and we survive without our choices and without that much regulation. We can argue about whether or not regulation makes things cheaper or more expensive, but we can’t argue about whether or not regulators are involved with utilities: they are always watching them because they matter to the people.

Boyd, who now works at Microsoft, is ambivalent about regulation. Maybe because she remembers:

Microsoft was as arrogant as they come and they didn’t balk at the threat of regulation. As a result, the company spent years mired in regulatory hell. And being painted as evil. The company still lives with that weight and the guilt wrt they company’s historical hubris is palpable throughout the industry.

I’m not so ambivalent. Regulation sets the rules necessary for everyone to play a fair game. But so long as our government is owned by the moneyed corporate class, regulation can’t accomplish that. Our days of enlightened regulation have passed and I don’t expect they’ll be back again soon.

Boyd says, “This is going to come down to regulation, whether we like it or not.” I agree to the extent that Facebook will spend some time in a regulatory to and fro of little consequence. In the end, I think it more likely that, like AOL, Facebook’s time will pass.

What do you all think? Will Facebook end as AOL did? Or be regulated? Or rule the Internet for the foreseeable future? Your guess is as good as mine!

LATER RELATED: Ben Parr in defense of Facebook. I’m unpersuaded.

You can find me @jwindish, at my Public Notebook, or email me at joe-AT-joewindish-DOT-com.