Article by Gunter Pauli
Author of The Blue Economy
Founder of the ZERI Network
When in late December 2020 the communication medium WhatsApp announced its new terms of service, imposing a novel policy about sharing private data with Fabebook, its controlling shareholder, tens of millions of users shifted in a matter of days to the alternative services of Telegram and Signal. The rush to the alternative messaging system spiked overnight since WhatsApp imposed a very tight deadline on accepting these new terms. While WhatsApp is not sharing content with anyone, which is claims is fully encrypted to the point that even the service provider cannot access the content, the app has announced that it will share all metadata: who sends a message to whom, when, and from where. WhatsApp openly says that its business model uses data related to its clients for profit. This is in contrast with the statement made in 2014 by Facebook when it took over WhatsApp: Facebook would not collect data from WhatsApp. However, as we now know, WhatsApp offers data to its mother company! There is always a fine line separating reality from intention and that is because “data is the new petroleum”.
Digital services, ranging from network infrastructure providers (like ISPs) to hosting services (like cloud storage providers), and online platforms (like social media and marketplaces) all consider that their future lays with data mining. Data mining is the business of getting privileged and even exclusive access to a rich and unlimited flow of revenue derived from exploiting data. The European Union with 450 million inhabitants has tried to impose strict rules on data collection and processing of personal information including profiling. Unfortunately, its good intentions have not resulted in a successful enforcement of its policies. The United States of America (330 million inhabitants) has been rather relaxed on the data mining and the privacy rules. The American Administration has tilted its policies towards a break-up of the technology empires that control this lucrative and powerful business. Whatever both regulators intend to undertake, only a small and very exclusive number of data miners today exploit the masses of information for commercial, political and strategic purposes. Also here we notice a grand difference between reality and intention … because data is the new petroleum.
The novel business of datamining is not much different from petroleum. Both data and crude oil require a central control to design, process and distribute products to clients. The petroleum industry – and the present format of datamining – is an antithesis of the natural model of information, communication and community service we have just described in the first part. However, the comparison between the two helps define clearly what is happening, what is needed and what has to be avoided. There are always different angles to study the same industry. For example: fossil fuels contribute largely to climate change, while a secure and abundant access to petroleum became the grease of the economy, without which everything would come to a grinding halt, or could never have taken off.
Petroleum, as a strategic commodity that powered growth enjoyed a century long expansion. Its influence goes beyond energy. Derivatives of crude oil include asphalt for roads, plastics and packaging, fertilizers and even microplastics for cosmetics. We could state that the petroleum industry could be considered as one of the most efficient users of raw materials: nearly nothing is lost. Data miners are looking for the same centralized approach to their business: all possible information is gathered, stored and processed ready to be sold.
Since the advent of the petroleum industry, it adopted a centralized command and control model. This is also true for datamining where a few powerful businesses dominate. This bias towards power in the hands of a few with disregard for for the local economy, citizen rights, especially privacy pushes policy makers to rewrite the rules of the game without much success. Worse, as each political authority creates its own set of rules they are easily manipulated by the powerful few that master the market dynamics. Numerous attacks on the centralization of power both the datamining and the petroleum powerhouses have been to no avail so both continue to thrive and expand their cloud.
Their business model emulates a simple logic: “more of the same” as prescribed by the economic model of globalization, standardization and economies of scale where the cutting of costs stands central. Shell demonstrated this with an amazing confidence by inaugurating in Pittsburgh, Pennsylvania (USA) the largest polymer factory in history crunching out one million tons of plastics a year. The pellets are distributed by more than 3,000 rail carriages to be turned into phone cases, auto parts and food packaging. Everyone knows that microplastics emanating from these plastic products will be lingering in the air, land and seas long after they have served their purpose. However, the projected growth in sales over the next few decades is so solid that it translates in more than a dozen additional facilities that will be built by Exxon Mobil, Dow and a handful players that dominate the market. What was and is true for petroleum seems even more true for data which is thriving on the massive expansion of communication networks and server parks. Will it still be true in the future? That is up to us to decide.
Consider a Better Roadmap
The purpose of this article is not to criticise petroleum or data mining companies, and certainly not to demonize sectors that have brought a lot of development to societies and quality of life to individuals. Rather than arguing in favor or against any business we suggest in the next pages how we can design a different business model for data that serves the citizens of the world. Policy makers must know that there are choices to be made, and that if they do not stand by their promises, a new generation could take initiatives that transform the reality the world. Instead of the present roadmap for data which has an ever greater concentration of power than we witnessed for petroleum, we must undertake concerted efforts to create opportunities that will change not just the datamining industry, but the livelihood of the people it affects.
We must make a reflection on the importance of the consumption model that has been adopted for both petroleum and data. The energy model was carefully designed so that everyone would need a generous supply of fossil fuel for the rest of one’s life. The analogy is amazing: no one can imagine that anything would work without data, without communication networks and server parks.
The Merger of Computer and Communications (C&C)
Data is created and collected at the nexus of computer data and communication technologies (C&C). The owners of the early technology companies realized that the real money is not earned by moving boxes containing phones and computers with ever changing technologies and ever increasing investment costs. Real money is earned by handling the data itself. Data mining businesses designed a legal framework that ensures that all data from the smallest source like a sensor or a mobile phone would be forcibly channeled to server parks which emerged like mushrooms around the globe mirroring many times over all data as it is accumulated and stored. While Governments would be asked to foot the bill for fiber optic networks and satellite communications, few realized that this investment was only to serve a few who knew that data mining would dominate a digital world.
Steve Jobs and Steve Wozniak both realized that a desktop computer in every home connected to a phone line would gather much more precise and detailed data than the supercomputers in the basement of headquarters of Wang or DEC, companies that do not exist anymore. Hence, the quest was on to identify the ways and means of creating and capturing data, securing exclusive access, building of data highways including fiber optic cables crossing oceans and continents. The pioneers designed a portfolio of devices equipped with software that permits the effortless capture and the exclusive control of all metadata transiting computers, portable devices and phones.
In the same year that Apple was created (1976) Dr. Koji Kobayashi, the CEO and later Chairman of NEC, the Japanese computer giant coined the term C&C (computers and communications). He recognized the tremendous value in the merger of computer technologies and knew all too well that this would lead to an explosive demand for hardware, integrating previously two separate pillars of industries into one powerful new business conglomerate. However, he and many others only saw the hardware and never grasped that long strategic vision that underpinned the strategy of both Apple and Microsoft. Once computers and communications were connected, and a wide range of data transmission through ethernet, ADSL, T-1 lines and dial-up systems were established moving data through information pipelines it was Steve Jobs who took the whole logic to a different level with the ingenious creation of the iPhone.
Services and Commissions through Miniaturization
The strategy that unfolded has the stroke of a genius and impacts our connected world for decades. It has transformed our lifestyle. Many tried to imitate the business model of the iPhone, and while a few like Samsung succeeded surpassing the number of phones sold, no one has succeeded in turning as profitable, valuable and powerful. The revolution of the iPhone was building on the creation of the highly intelligent and mobile services (HIMS), a term that was first coined in 1980 by Nomura Research Institute, the research arm of the largest investment broker of Japan. The success of the “mobile” was more than the capacity to transport phones and computers. It was miniaturization as a fundamental third technological breakthrough that made the HIMS evolve into a phone with a very powerful computing capacity. The amount of devices, technologies, software and services cramped into a phone could only evolve as fast as it did thanks to the ever diminishing size of cameras, lights, sensors, supported by ever more performing chips, and the standardization of the SIM-card.
The master stroke of Apple was not just the endless services included in the iPhone, the real breakthrough is that this phone emerged as a must-have item as much desired as the Louis Vuitton bag for ladies. This smart phone was built on the business model that successfully negotiated a commission (and loyalty) on data volume: the mobile operators agreed to pay Apple a percentage of their earnings generated thanks to the ever increasing volume of data transiting the iPhone. At first most mobile operators resisted this commission. The first mobile phone company that cracked was ATT. As a late-comer to mobile telephones ATT bet on the success of the iPhone and found the high commission estimated at more than ten percent a fair price to pay. It paid off for both ATT and Apple.
Expand the Portfolio of Services and the Integration of Devices
The drive towards miniaturization with ever smaller functional devices integrated into a hand held phone and a three way loyalty (Apple, network provider and user) was further reinforced through a novel strategy of Apple to invite creative developers to imagine all possible types of apps that would exclusively operate on the iPhone thanks to a dramatic increase of functionality. This was not just a service like forecasting the weather in each city, it was the integration of dozen of pieces of equipment that used to be stand-alone into an integrated platform that was now soon called a smartphone. From an alarm clock and a stop watch to a high performing camera, even an electrocardiogram and a program to predict the precise time of ovulation, to moon cycles with full vision of astronomy, astrology, a flash light and a GPS. All these individual devices were bundled into one and only iPhone. This meant that Apple locked in the users to use more datatime and ensured the transit of an ever increasing amount of details about the daily whereabouts, professional needs and personal interests beyond work. Thus emerged a whole new culture around Apple. This approach locked in the users to Apple, and locked in the mobile telephony companies who enjoyed rapid growth who witnessed an exponential growth in the volume of data transiting their networks. Even voice left the telephone waves and converted into digital soundbites with the arrival of Skype. As the customer base grew, and the data flows turned into tsunamis, fortunes were made overnight. It was no surprise that mobile telephony operators offered phones nearly for free, provided the client would commit to operate exclusively with one operator. This business model resulted in customers exploiting the low rates within the network to acquire several phones. Instead of one phone in the house, within a decade, each member would have from a very young age their smart phone connected to dozens of IoTs and take this device everywhere. Imagine how unknowingly we offered anyone who provided us the network, the hand-held device or the applications the opportunity to invade our privacy.
The solid and ever rising revenues linked to an ever growing suite of digital services ensured a continuous and ever more detailed flow of data: this is nothing less than a well planned bonanza and the materialization of a vision. The continuous improvement of iPhones with the integration of new connectivity technologies switching quickly from one to the other upgraded continuously the streaming of data soon including high resolution pictures and even videos. Then another master stroke was the invention of iMusic, followed by Apple TV and a myriad of online games now good for more than 30% of the business. We often forget the sheer numbers; when iPhone offered a phone version of the game Tetris, fans of the game downloaded over 100 million times in a matter of weeks. Before anyone realized, and complemented by the novel developments with Pixar, Apple would bypass Disney, Universal, Vivendi providing access to music, film and entertainment of all sorts backed-up by an estimated 2.2 million apps. Just think about the massive pool of data this represents for Apple and its privileged partners. The C&C of computers and communications evolved to the C&C (exclusive) content and (total) control.
Then competition geared up and everyone learned from Apple’s success. Google Play bypassed Apple with 2.8 million apps but has not succeeded in copying the revenue model. Google focused its search engine – its original grip on the market with tremendous data collection, and then providing Google maps, and Google translate. This was powerful, and soon the two giants lived next to each other. The role and grip on the market by Huawei and its smaller but design savvy Oppo from China carefully emulated these strategies, adapting to a Chinese context. Samsung outshone its local competitor LG and focussed first on unit volume and then started aiming for the upper market. The amount of detail of data that can be gathered through these companies operating globally represents trillions of data transmissions per day.
Since Apple iOS and Google’s Android put the smart phones at the center of IoT (the internet of things), and offer the Cloud to store data and subscription services where a few can freely mine everything, one can only imagine the unparalleled opportunities associated with mega data. If one adds the likes of Facebook, Amazon, Tencent and Alibaba then we have listed the magnificent ten. Datamining is not just the petroleum of the future, it is the guaranteed cash flow for these (and a few other) technology giants. Every time we click on the cookies button, we hand over everything about us without ever considering the implications of trading free emails, free GPS, free translations, free weather forecast and free social media with the total loss of privacy and the hand-over of a trillion dollar revenue model.
It is only a beginning
In order for this strategy to maintain its momentum, there is a need to continuously improve the connectivity of mobile devices and take over ever more storage at central points. The Cloud is composed of millions of servers that operate like grand data homes in heaven. At the same time that many talk about the marvel of having everyone’s information in the Cloud this set-up is emerging as the biggest energy guzzler in modern history and growing. It is against this background the Cloud on one hand, and the energyvore system that has been deployed that we have to understand this massive push to get 5G in place: it permits the datamining industry to fill their reserves in the Cloud at rapid and fully controlled growth rates. 5G is not only a next level of datamining, it is an improved version of communications that avoids interferences, thus easing the flow of data from the most intense data users ready to pay a premium price to very selective hosts.
While in the beginning of the mobile phone, dropped calls and seamless connectivity was an issue that caused a lot of customer ire, now it has radio wave interferences and the permanent risks of hacking. The new communication technology made a major effort to strengthen the unencumbered point to point connectivity. This is necessary when the number of radio-based connections to phones on one square kilometer soon reaches the milestone of one million. Even though this is only a minute fraction of the density of the fungal network we described, this airborne communication system enters its next technical and performance challenge. The more connections per square kilometer, the higher the risk of one connection disturbing the other. Worse, the more unprotected connections with a very weak security protocol, the more hacking will take place. In addition to the datamining by the top 10, there is data theft, extortion and even datakidnapping planned and executed by millions of small gangs (and sometimes even political pundits). The users often neglect that the wireless communications were selected for ease of use, not for their secure connectivity.
This increased level of complexity of mobile communications has many side-effects. First of all, instead of roaming around, the new 5G antennas can only perform when these are in the line of sight with the device that must be connected. This novel technical requirement reinforces the digital divide between the heavily populated megalopolis and the thinly inhabited rural zones. In addition, this ever increasing complexity of a high concentration of users with ever more data transmissions over not more than 1,000 different radio frequencies explains why the industry does not want to go too fast with their expansion nor with too fast data transmission.
This may sound as a contradictory statement knowing the expectations of the market to have seamless, faster and ever more accessible communications. However, there is a hard logic. If speed of data measured in bits per second (bps) were a real top priority then the industry would embrace better performing technologies like LiFi, the internet over millions of light frequencies. The deployment of a large number of 5G networks supported by millions of newly placed antennas can barely offer one Gigabit of data volume. This is a fraction of the Terabits LiFi can be operating at. Why are the giants of the digital world and datamining reluctant to shift to better performing data transmission systems that is free and abundant?
It is Control over Data – Stupid!
Technically speaking the amount of data throughput could increase hundred fold, even thousand fold shifting the transmission technology from the present radio waves based on Bluetooth, satellites, 4 and 5G, to data transmission and geolocalization over light. Why does the industry not embrace the grand advantage that the light infrastructure is the largest and the cheapest in the world. If data miners were to opt for this cheaper, faster and health conscious connectivity, then there would be no need to undertake billions in capital investment to install antennas which face an increasing resistance from citizens worried about the electromagnetic frequencies.
The single reason why the datamining industries decided to stick to radio waves is that these can be tightly controlled by the few who have carved out their market in datamining. While everyone recognizes that radio waves are not at all secure, and are easily hacked, the datamining industry concluded that their control of their sources of information is more important than to provide a secure high speed connectivity. The light based transmission at super speed is uncontrollable, worse for the big operators it invites too many small competitors to nibble market share away, even potentially undermine the hegemony of the data control!
The interest of the consumer (speed, volume, protection from hackers) or the democratization of the internet (making access available to everyone) is not the main preoccupation of the industry. While the industry and the political supporters claim that this is important, we have concluded that after greenwashing there is something new called “datawashing”! This is why this article suggests that there is an urgent need for academia, policy makers and citizen groups to urge a shift in the focus from a narrow debate on 5G, to a broad debate on datamining. Unless we offer a solid alternative to datamining and its C&C infrastructure (exclusive content and total control) we will continue to be locked in a system that serves few, and consider each one of us as a data object as the term “The Internet of Things” clearly suggests. Would it not be more appropriate to design the internet of and for people?
Why does the datamining industry refuse to embrace a better and faster technology? The risk to loose control is well founded. Why? Light has a billion frequencies, and radio waves only have a thousand. This implies that when the standard of data capture and transmission were to use in parallel a billion light frequencies, then there is no chance to keep datamining exclusive. A Government can sell a few licenses for available radio frequencies at a high price and to stem budget deficits, while offering an exclusive access that ensures control of datamining for a few companies. However, the unregulated and free light frequencies are accessible to everyone! There is no chance to ask anyone to pay for using it. Remember, light frequencies are unregulated, while radio waves are highly regulated. Now you realize why the drive to expand the 5G network is so forceful: it is a race to widen the exclusive area for exploiting the petroleum and the lubricants of the economy of today and tomorrow: your data. Any effort to put a dent into this unrelenting drive will be bulldozed over.
Now that this control issue is clarified, we should take for a moment the position of the data provider. There are few credible initiatives to date that aim to protect privacy, distribute power and share the benefits of datamining with a wider audience. One of these exceptions is Sir Tim Berners-Lee, who is credited with the invention of the WorldWideWeb. He announced in 2018 his commitment to build a fairer and more decentralized internet. Finally, he created a dataplatform called Solid. The goal is to give internet users more control over how all their personal data moves and gets used across the internet.
Another initiative is called Holochain, founded by Arthur Brock and Eric Harris-Braun. They have similar objectives as Sir Tim. Their Holo project was created to bring the benefits of distributed apps to anyone with a web browser, redistributing the wealth and health made possible by our mounting interconnectivity. Both initiatives act in favor of a new form of internet concluding that concerted and open source action in their new generation of cloud is more effective since individual users, watchdogs of national governments and even the European Union have ultimately very little power to change the total control by a few. There is a need for an entrepreneurial approach to datamining that complements the highly necessary regulatory initiatives.
Now, the Solid and Holochain platform is not only about privacy, it is about the capacity to decide whereto your information goes and what do you permit that is done with it. While this is a very valid contribution to opening up of the market of data collection, storage and mining, we must point to the fact that Solid and Holochain’s clients are large corporations and national services. While we welcome alternative options like these we realize that this only softens the hard edges of datamining. We need to have a more fundamental shift in the business model that is underpinning the present drive towards datamining. That is the purpose of the last part of this article.
Iscriviti alla nostra Newsletter!