geert on Sat, 20 Apr 2002 17:05:22 +0200 (CEST)

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Re: <nettime> Re: The Economist: The Internet sells its soul

here some other horror story. it's becoming a genre...

IBM, Microsoft plot Net takeover,14179,2861123,00.html

April 11, 2002
By David Berlind, Enterprise

IBM and Microsoft have been quietly busy behind the scenes for the last two
years building a toll booth that could position the two companies to collect
royalties on most if not all Internet traffic.

While the technologies that form the foundation of that toll booth have yet
to be officially recognized as standards by an independent standards body,
the collective strength of IBM and Microsoft could be enough to render
Internet standards consortia powerless to stop them.

The potential for the two giants to erect a toll booth is tied to the
likelihood that Web services protocols such as SOAP, WSDL, and UDDI--and the
related ones to which the two companies hold patents or other intellectual
property rights--will one day be as important as the standard protocols
(such as TCP/IP and HTTP) on which the Internet is based today. Web services
and the protocols that make them possible are destined to play a major role
in most if not all electronic commerce as well as other Internet traffic.

If the protocols do become standards, either by virtue of an independent
standards organization's imprimatur or by attaining a de facto status, IBM
and Microsoft--or any other company that maintains the intellectual property
rights to them--could legally impose royalties on that traffic. In fact, any
protocols that become a part of the core Internet infrastructure without
having been made available on a royalty-free basis could guarantee the
owners of the intellectual property the right to place a tax on the Internet
traffic that depends on those protocols.

That tax could show up in both direct and indirect ways. Web sites that use
non-royalty-free protocols--to which IBM and Microsoft claim intellectual
property rights--could be subject to per-use or annual licensing fees.
Competitors to IBM and Microsoft could be forced to pay royalties before
they are allowed to sell tools and products for developing those sites.
These vendors, in turn, might decide to pass on their additional costs to
customers, or they might decide not to develop and sell their
products--thereby reducing the number of competing alternatives. In the
least likely scenario, users of Internet applications that depend on the
protocols could be asked to pay based on metered use of those protocols.
Currently, no plausible or globally scalable mechanism exists for doing so.

No standard policy

For the most part, standards-setting for the Internet and Web has taken
place within the working groups of two organizations: the Internet
Engineering Task Force (IETF) and the World Wide Web Consortium (W3C). Until
recently, neither organization had maintained a policy requiring vendors to
make the intellectual property (IP) they contribute to the standards setting
process available on a royalty-free basis. According to W3C Patent Policy
Working Group Chairman Danny Weitzner, "Despite the lack of a policy, there
has always been an understanding amongst the various contributors that the
Internet and the Web wouldn't be possible or scalable unless their
contributions were available to everyone on a royalty-free basis."

But that gentleman's agreement has been tested several times over the years
and it could end up being tested again by Microsoft and IBM. According to
documents on the W3C's Web site, IBM and Microsoft not only own intellectual
property within specific Web services protocols, but also have no intentions
of relinquishing their IP rights to those protocols should they become
standards. The documents indicate that the two companies are currently
maintaining their rights to pursue a reasonable and non-discriminatory
(RAND) licensing framework as opposed to a royalty-free- based framework.
The RAND framework is widely acknowledged as the one that keeps a vendor's
options open in terms of being able to charge content developers and
Internet users a royalty for usage of relevant intellectual property.

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