The news this week that Vietnam is thinking about regulating free chat services like Whatsapp and Line, and perhaps banning them, may seem like yet another Big Brother government oppressing its people — which is true. But these free chat services also pose a threat to purported democracies like the United Kingdom and United States, both of which have been caught broadly spying on their citizens and, in the United Kingdom, harrassing the family of a reportercovering the Edward Snowden leaks. They threaten the big telcos, as well, both the private enterprises in more economically liberal countries and the state properties in more controlled economies.
It's an odd situation: Companies banking on free services to attract millions of customers in hopes of making money on them through an as-yet-to-be-deternined method — the basic dot-com business model — are, in the process, threatening both governments and old-line telcos.
Governments are threatened because traffic taking place on nontraditional communications platforms can be harder to monitor; if it wants to spy on its citizens or block their speech, the government has to work harder to do so. Meanwhile, the telcos face an economic threat: If you're using WeChat, Whatsapp, Line, Viber, iMessage, or the like, you're not paying the carriers' obscene SMS charges, and that's real money. Carriers are very threatened, and a whole industry exists to advise them on getting that money back by blocking, taking over, or emulating the private chat providers (called OTT, or over-the-top, providers in telco parlance).
Ironically, in autocratic countries, the two threats come together, which is why Vietnam is nervous and why Saudi Arabia recently banned Viber: Their state-controlled telcos are losing money, and it's harder for them to monitor or block communication over the network.
The core notion of the consumerization phenomenon is self-empowerment. As technology gets democratized, the old-guard monopolies and oligarchies — like the traditional telcos and the Big Brother apparatus in goverments everywhere — are threatened. But they also adjust. We tend to forget that much of Silicon Valley's foundational innovation was funded directly or indirectly by the U.S. Defense Dept., and there's been a cozy relationship all along.
The Web companies may act as if they're surprised the NSA is accessing their servers, but such access has been routine forever. The telcos likewise are government proxies when asked. When you read their denials of providing backdoor access, they all say they cooperate with lawful requests — and as the people who make the requests set the laws, that means they provide what they are asked, even if the legislators don't know it and as the Snowden revelations show so clearly.
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