The recent decision by the Mubarak regime in Egypt to cut off all Internet access for its citizens is a textbook example of using a silver bullet to shoot oneself in the foot.

The whys and wherefores of how they’ve gone about doing so provide a useful opportunity to understand the paradox of control over the Internet and the costs involved when governments and other actors indulge their desire to dam the torrent of information that flows across their networks.

In order to do that, we need to dispel a rather pesky myth.

Perhaps the most dangerous misconception of the Internet is its survivability. It’s true that, as one information activist put it, the Internet treats censorship as damage and routes around it. But that statement is predicated on the actual presence of an Internet in the first place.

That may sound like a silly statement, but the Internet might not be as enduring as many assume it to be.

While many of the software and communications protocols that define the Internet are, by design, remarkably resistant to outside control, the physical networks through which our data passes are not nearly so robust.

James Cowie, a network analyst from Renesys Corporation, has written excellent analyses of state intervention in national communications both during the post-election strife in Iran and more recently in Egypt. Using forensic evidence gathered in real time, he constructs a vivid scenario: In contrast to Iranian authorities, who elected to use physical choke-points in the communications infrastructure to reduce the flow of information to a trickle, Egyptian authorities appear to have instructed all national Internet Service Providers simply to cut all communications with the outside world.

Starting at midnight (Egyptian time) on the 27th of January 2011, Egypt’s largest ISPs began disappearing from the Internet. Within a period of about 13 minutes, they simply stopped delivering data to and from their customers.

Cowie writes:

“[T]his sequencing looks like people getting phone calls, one at a time, telling them to take themselves off the air. Not an automated system that takes all providers down at once; instead, the incumbent leads and other providers follow meekly one by one until Egypt is silenced.”

How did this happen? Every large ISP participates in a cooperative system called the Border Gateway Protocol, or BGP. BGP allows them to discover how traffic destined to a remote network should be directed. Simply put, each ISP announces which address blocks it supports. These blocks can represent tens or even hundreds of thousands of individual machine addresses.

Designed for simpler times, BGP is a trust-based protocol. It relies implicitly of the good faith of all participants to continue working. This makes it remarkably vulnerable to the machinations of states or organisations whose interests don’t align with others’. Back in 2008, Pakistan Telecom caused a furore when, for a little over 2 hours, their bungled attempt to use BGP to block YouTube domestically resulted in the site disappearing from much of the Internet.

Just last year, a change to BGP traffic announcements resulted in about 15% of all Internet traffic being routed through networks in China for a brief period. This resulted in breathless speculation that the disruption was not accidental. Some claimed that it amounted to a reconnaissance in force, as it were, a probing of the global Internet to determine its resilience in the face of attack.

Intentional or not, these disruptions to the BGP apparatus make it abundantly clear that choke points exist on the Internet and that they are remarkably easy to subvert.

Debate continues to rage in technical circles about what can be done to mitigate BGP’s innate deficiencies. Changes will doubtless be necessary. But the liability wouldn’t be so grave if our physical communications networks weren’t so hopelessly centralised.

Egypt offers us a particularly vivid example of this. A country of over 80 million people, it has only a half a dozen or so large Internet providers. Only one of them, the Noor Group, initially resisted the demand to drop services. Some have speculated that its continued online presence was due to its extensive list of blue chip clients, including many banks and the Egyptian Stock Exchange.

Ultimately, though, it was a limited victory. Noor advertised only 83 of the roughly 3500 data routes in and out of Egypt. They were eventually forced off the air a week after their IT confrères.

In Iran, population 72 million, there are only 5 significant international links, all of which flow through a single Government-run office. Such centralisation makes it easy for the state to exert its influence.

(One European-owned company, Vodaphone, washed its hands of the decision to cut service to its Egyptian customers, claiming that the Mubarak regime had the legal right to issue the order. This rhetorical line apes the rationale provided by Nokia-Siemens when it was discovered that their equipment enabled Iranian authorities to block most traffic and eavesdrop on the rest.)

The Internet as a principle –that is, the idea of an open network allowing free communication regardless of source or sender– is not as popular as some might believe. It made its way into the commercial world more by stealth than by deliberation. Telcos didn’t really understand the Internet as a service; they just knew they had to offer it in order to compete.

One thing was clear to them: The sum of all services across a global network was clearly more valuable than those offered by a single provider. Equally attractive was the perception that these services came more or less for free with the connection.

But the seductive power of the Net hasn’t changed attitudes entirely.

Telecommunications companies, with a long legacy of market-controlling behaviour, still build and deploy their infrastructure using centralised models. Recently, some of them have begun lobbying for the right to exert control over the data that passes over their networks, potentially penalising services that compete with their own. Comcast, one of the largest ISPs in the US, recently got approval to acquire NBC Universal and its content-creation ecosystem, giving rise to fears that they might leverage their control over the information pipeline to dictate what passes through it.

Put simply, carriers would love nothing better than to go back to the telephone service model, where fees are based on where you are and who you talk to, with no conversation possible unless you’ve paid your toll.

The principle of an end-to-end network –that is, one that allows direct, unmediated connections between two parties– militates strongly in the opposite direction. Its appeal is remarkably seductive, leading most Internet users to view with displeasure the telcos’ (or governments’) desire to mediate communications.

Renesys quite rightly remarks that if cuts to Egypt’s Internet had lasted much longer, the reduction in commercial activity could have been catastrophic for the nation.

Furthermore, Cowie remarks, it wasn’t only Egypt’s pipelines that were at risk:

“[T]he majority of Internet connectivity between Europe and Asia actually passes through Egypt. The Gulf States, in particular, depend critically on the Egyptian fiber-optic corridor for their connectivity to world markets.

“Are the folks at Davos thinking about this? They should be.”

In a perfect world, consumer choice and basic business commonsense would always win. But the problem is that centralised networks not only cost a lot of money (placing their design and construction into the hands of the most powerful), they make a lot of money, too.

In monetary and political terms, the wealth of the network itself tends to pool rather than to flow.

A fundamental change has already overtaken the public’s perception about the value and nature of digital communications. Passive consumption of news through the television is considered passé, or at least diminished in relation to the sharing of photos, videos and words across the Internet.

As individual control over the flow of information rises, central control wanes. And this, obviously, is the crux of the dilemma facing businesses and governments across North Africa and throughout the world. They are belatedly coming to realise that they are fighting a many-headed hydra. As they cut off one avenue of communication, another rears its head.

But that hydra has a body, and the body is the network itself.

As this column goes to press, it appears that Egypt’s decision to cut off the Internet failed in every important regard. One protester is reported to have said, “F*** the internet! I have not seen it since Thursday and I am not missing it.… Go tell Mubarak that the people’s revolution does not need his damn internet!”

I would be amazed, however, if this fact led other governments to act differently, should they find themselves in a similar situation. Indeed, the US Congress is currently considering legislation that would provide the President with an ‘Internet Kill Switch’ for use in case of emergency.

Likewise, I see no evidence that the ultimate futility of attempting to control the flow of information will change attitudes in the board rooms and offices where our increasingly centralised networks are planned. For telcos, the challenge is merely technical.

For the Internet –as it was originally intended– to become fully realised and fully resistant to coercion, the devices and infrastructure through which our data travels will need to reflect the same principle of decentralisation as the software and protocols we use today. That implies the construction of communications devices that are very different from the locked-in, network-centric phones, tablets and computers we’re familiar with. I can think of no short-term scenario in which the development of such products will take place in any significant way.

For some time to come, we will continue to live in a world in which the powerful continue to load silver bullets and take aim squarely at their own feet.

I confess feeling a bit of smug satisfaction when I say I Told You So. Microsoft’s drive to secure the co-called China market at any cost demonstrates perfectly the complete imbalance in power that most businesses face when attempting to gain a foothold in China.

Back in 2007, when reviewing the purported victory, I wrote:

With trademark deftness, China has largely de-fanged one of the most effective and brutal corporate negotiating teams in the world. This is the corporation that managed to buy off the US government and avoid any real punishment following its conviction for abuse of monopoly powers. It’s the company that has consistently and rather successfully thumbed its nose at the European Union, the largest economic entity in the world today. It has controlled standards processes, locked in countless corporations and ruthlessly dominated the supply chain world-wide.

Yet Chinese negotiators got everything they asked for. Price reductions? They pay about 10% of what other governments do per seat. Control? They not only have access to the source code, they have to right to alter it to suit their purposes.

Think about what that means to the Chinese. In economic, political and strategic terms, they’ve negotiated unprecedented access to an invaluable resource, and they’ve done it in a way that costs them next to nothing. Truth be told, Microsoft got almost nothing out of this deal. China still uses Linux whenever and wherever it wants.

It still astounds me that anyone thinks that the so-called China Market is anything other than what the Chinese regime decides it is at any given moment.

Sure, there’s a lot to be said for the beneficial effects of market forces. I won’t dispute that. The one thing people tend to forget is that, if push comes to shove -and it has in the past- the Chinese are capable of enduring unimaginable suffering to achieve a strategic goal. (Well, capable of allowing their citizens to endure unimaginable suffering, at any rate.) That willingness gives them the capability to impose any number of arbitrary conditions onto the economic environment.

Western governments don’t think of themselves as the owners of their respective economies. The Chinese do.

So when the likes of Cisco, Yahoo! and Microsoft betray every iota of principle (and expose a callously cavalier attitude toward strategic security issues) in pursuit of economic gain in China, I can only caution them that things only look manageable now because they’re not happening to you.

Yet.

On the 12th of January, David Drummond, Google’s Chief Legal Officer, made a startling announcement: Google – and dozens of other companies operating in China – had been the target of concerted online attacks originating from China. Google also claimed that the attackers, targeting human rights activists inside China and around the world, used the activists’ own PCs to take over numerous GMail accounts.

These attacks used ‘0-day’ exploits, hitherto-unknown vulnerabilities in common software applications. In a Wired Magazine interview, security analyst Ryan Olson stated that the code itself was unremarkable, but that ‘the sophistication here is all about the fact they were able to target the right people using a previously unknown vulnerability.’

Businesses and governments face online acts of vandalism and attempts at corporate espionage all the time. Even this attack, which exploited flaws in Microsoft’s Internet Explorer and Adobe’s Acrobat reader software, was ‘not ground-breaking’, according to security expert Mikko Hypponen.

‘We see this fairly regularly,’ he told the BBC, but ‘most companies just never go public.’

Running against tide of companies flooding into China, Google has retaliated against these intrusions by stating that they will no longer censor google.cn, their Chinese search site. If that can’t be done within Chinese law, wrote Drummond, it ‘may well mean having to shut down google.cn, and potentially our offices in China.’

With annual revenues of around US$150 million (some estimates range far higher), China is a small but significant part of Google’s global operation. Pulling out, however, is commonly seen as passing up on the largest single consumer market in the world. Virtually all large online search providers have quietly acquiesced to China’s diktat regarding search results.

Some, indeed, have gone above and beyond the call. Reporters Without Borders accused Yahoo of becoming a ‘police informant’ following the 2004 arrest and imprisonment of Shi Tao, a Chinese journalist. Yahoo had apparently exceeded the strict requirements of the law in granting Chinese authorities access to Shi’s offshore email accounts.

Microsoft, renowned for their winner-take-all approach to business, finds itself in a similarly subservient position. With trademark deftness, China largely de-fanged one of the most effective and brutal corporate negotiating teams in the world. Negotiators got virtually everything they wanted. China pays about 10% per license of what other governments do. They not only negotiated access to the Windows source code, they have to right to alter it to suit their purposes.

Just this week, both Microsoft CEO Steve Ballmer and founder Bill Gates made public pronouncements simultaneously espousing the principle of Internet freedom and respect for Chinese law. They did not elaborate on how they intend to square this circle. Gates characterised Chinese censorship as ‘very limited’ in a recent interview on US network television.

For its part, China angrily denounced Google’s assertions, calling them inaccurate and suggesting they were motivated by outdated, imperialistic notions. They refused to draw any link between their censorship activities and the attacks on Google and others, stating unequivocally that such attacks are just as illegal in China as other countries. IT security experts remain convinced nonetheless that China sponsors such activities.

Despite strong pronouncements from US Secretary of State Hillary Clinton, most US businesses are holding their fire, according to the Wall Street Journal. Nobody wants to miss out on China’s rapidly growing consumer market.

The principle of Internet freedom is increasingly under attack in other countries as well. When questioned about their complicity in the suppression of Iranian online dissent, Nokia-Siemens’ phlegmatic reply was that they hadn’t done anything unusual. Most European and North American carriers are required to make wholesale surveillance and censorship possible, too.

Australian Minister Stephen Conroy has been steadily advancing an agenda that includes censorship of online material ‘refused classification’ by an Australian ratings body.

Businesses and governments both have reason to feel uncomfortable about the Wild West atmosphere that pervades the Internet. Its organised anarchy and ability to reformulate itself from one day to the next makes it a threat to many traditional business practices as well as to governments leery of dissent.

Increasingly, network carriers and content providers are cooperating to introduce measures to make the Internet a ‘walled garden’ rather than an open range. This implies a top-to-bottom approach encompassing centralised networks and wholesale filtering, copy-protection technologies and the criminalisation of file-sharing as well as computing devices on which only pre-approved software can run.

Yet again, people are seeking technological solutions to problems that are social in nature.
So far, Internet activist Perry Barlow’s affirmation that ‘the Internet treats censorship as damage and routes around it’ remains true. But with the increasingly evident willingness of corporate and government agents to create and use what MIT researcher Benjamin Hill terms ‘anti-features’, we may soon find that there’s nowhere else to route to.

Copy protection mechanisms included on CDs, DVDs and other media only serve to inconvenience legitimate users. People intent on copying quickly rip new versions and shared them widely. Likewise, content filters on individual networks are easily avoided through the use of relatively anonymous Internet cafés and proxy servers, allowing people to access contentious content even over rigidly controlled networks. Locked-down phones and computing devices are quickly ‘jail-broken’.

But with the imposition of control over the actual cables and connections through which Internet traffic passes, proponents of Internet freedom lose their ability to manoeuvre. Their data can no longer route around censorship. For them, the damage is complete. The Internet has effectively ceased to exist.

Anti-features such as copy protections, filters and firewalls add to the cost of accessing information. They make things harder, not better. It would be far cheaper to rely on people to establish ethical and moral norms than to impose technical solutions which do little to deter the determined and much to inconvenience everyone else.

Often enough, their closed nature makes anti-features more susceptible to 0-day exploits, exactly the kind of attack that left Google and dozens of other companies so exposed.

Such measures have only one significant virtue: Technological solutions don’t require the consent of the people.

I came across the following exchange (translated from the original Chinese language) on a technical news site today. This series of comments come from Xiaonei, a Chinese blog site, following a post about the recent global economic meltdown. (The writers’ names have been obscured for reasons that will become obvious):

AAA: Well written!! But why can’t I share it [i.e. link it to social media sites like Facebook or LiveJournal]?

BBB: Yeah, I can’t share it either. Must be because it’s today!

000[the author]: Well, I can post it, you guys should be able to share it….

CCC: [a few comments about the actual content of the article]

DDD: I guess Xiaonei is having problems recently. Anything with numbers seems to run into problems.

AAA: Anything with certain numbers runs into problems around this time of year….

EEE: I’m sure this maintenance is perfectly normal, as it is for all other Chinese websites right now. [sarcasm]

BBB: There is no spoon~~! [this in English]

FFF: Wow, nice word choice guys.

Mystified? You wouldn’t be if you had to deal with state censorship on a day to day basis. Today – the day the comments were being posted – marked the beginning of a worldwide observance of the 20th anniversary of the disruption by the Chinese People’s Liberation Army of the pro-Democracy demonstrations in Beijing’s Tiananmen Square.

Hundreds, possibly thousands, of students, citizens and onlookers died when soldiers, backed by tanks and other armoured vehicles, advanced on the square, shooting as they went.

While protests had erupted in larger population centres throughout the country and continued for some days after Tiananmen Square was re-taken, the focus of the 1989 protest was in Beijing. Despite the involvement of nearly 1 million people at the height of the protest, most Chinese have little or no access to factual accounts of the events.

Those who remember the events, or who wish to speak about them, are left with few options save the kind of oblique references seen in the comments above.

(The phrase ‘there is no spoon!’ is a reference to the 1999 movie The Matrix, in which a young computer hacker discovers that he is being kept captive in an oppressive computer-generated virtual reality. In this context, the comment appears to be an angry refusal to accept the reality being foisted upon the writer.)

Following a crackdown on so-called Web 2.0 sites like Facebook, MySpace and their Chinese-language counterparts that encourage sharing of comments, photos and links to information of interest between friends and peers, many sites took a novel course. As this column goes to press, over 500 websites are reported to have been brought down for ‘non-technical maintenance’.

One of them, thequietsnow.com, offers the following message on its main page (again, rendered here in English – spelling and grammar per the original translation):

Due to a reason we all know this site is presently under maintenannce.

The site will be under non-technical maintenance from 3. Juin to 6. Juin

[...]

For a harmonious environment, to make an appeal to create a harmonious sociaty, I advice all webmasters and internet users to do the following during maintenance period;

1. Go out for a walk, get some fresh air, due to the hot weather, please wear a white t-shirt

2. Since the current internet is extremely unharmonious, in order to create a healty and harmonious internet environment, please put all your websites into “maintenance state”, in oder to provide a better net environment

3. If you don’t want to put your site into “maintenance state”, please change your site into black and white colors, in oder to provide a better net environment

4. Please put your site onto the maintenance spreedsheat.

The ‘spreadsheat’ in question is a file hosted at Google Documents, listing over 500 social websites and their related ‘maintenance’ messages. Most of them make the same kind of oblique references, implying that they would rather shut themselves down voluntarily than be shut down by the State.

Perhaps the most fascinating element of this protest is its inherent cynicism. Most of the commenters limit themselves to wry observations, similar to the way we might comment that ‘It’s getting a little windy’ as a hurricane approaches. Even the angriest among them resorts to an arcane popular culture reference.

The person who translated the comments above writes of the commenters:

[T]hey’re masters at not using any words censors would find suspicious. But they’re all at least aware of it, even if its a minor annoyance.

“And it will probably remain just that: A minor annoyance for most, perhaps making them remember, but they don’t care that much. The ones that really want to protest will just use text messages or IM anyway, and even the hardcore democracy types know where the line is drawn. For the most part, it seems really unnecessary. If they really wanted to organize protests, they’d have been organized long before the 3 days before the anniversary, and then use texting or cells or IM to expand. I doubt there will be any protests to speak of anyway- the Chinese sort of have a silent agreement here, they know where to draw the line.”

They don’t care that much. They know where to draw the line.

An entire society has adapted itself to living in an environment wherein they can go about their daily lives normally, as long as they do not make themselves or their opinions known to the authorities.

One is inclined to wonder whether Fijians will become similarly inured to the censorship regime imposed by Commodore Frank Bainimarama. Recent reports indicate that the state of emergency will be extended until August at least.

Perhaps the greatest danger of State censorship is its ability to integrate itself into daily life. Provided that its exercise doesn’t affect too many of the people too much of the time, it quickly becomes an environmental factor like mosquitoes, bad weather or the common cold. Just something to be taken in stride.

Because it’s today, because elsewhere in the world people are trained from birth to avoid dissent of any kind, we would be well served to imagine how we would feel, were we in the same boat.

My greatest fear is that most of us would get used to it.

Because it’s today.

“Living next to you is in some ways like sleeping with an elephant. No matter how friendly and even-tempered is the beast, if I can call it that, one is affected by every twitch and grunt.”

Canadian Prime Minister Pierre Trudeau offered this wry description of relations between Canada and the US at the Washington Press Club back in 1969. Had he been a ni-Vanuatu politician addressing the press in Canberra, he might have used an aquatic simile, but the message would have been the same.

In recent years, Vanuatu has been learning to manoeuvre in this demanding and rather tricky role. To further complicate things, there is more than one elephant in this particular bed. Between the EU, the WTO, China and our other regional neighbours, trade and aid negotiators in Vanuatu have had their hands full.

Happily, 3000 years of practice in patient negotiation and peace-making have so far paid off. To mix metaphors, Vanuatu has of late consistently punched well above its weight when it comes to negotiating this sometimes parlous state of affairs.

But our work isn’t finished yet, and if anything, the stakes are higher now than they’ve been in years. Time is not on our side and the elephants are encroaching once again.

Much has been made recently of Vanuatu’s renewed negotiations toward accession to the World Trade Organisation, or WTO. It reached the brink of an agreement in 2001, but wisely backed away when it became clear that trade conditions would be imposed on it that were far worse than those of major developed nations.

Some developed nations saw the action as a sign of outright temerity and presumption, but Vanuatu stuck to its guns, and this latest round of negotiations could see Vanuatu losing very little ground as the price of accession. ‘Could’, of course, is a pretty big word in this context.

The Pacific Institute of Public Policy (PiPP) this week released a briefing paper on trade negotiations throughout the Pacific region. It notes that, “The WTO General Council has since agreed to provide more flexibility on the accession of [Least Developed Countries, of which Vanuatu is one]. It remains to be seen if Samoa and Vanuatu (set to re-start accession discussions in 2008) will benefit from this special treatment.”

The report goes on to describe Tonga’s experience. In spite of its LDC status, it was required to drop many subsidies and to keep tariff rates to an average 20%, very low by Pacific standards.

Tariffs are one of the main sources of revenue for the Government of Vanuatu. Negotiating them away, no matter what the potential benefits, is not a step to be taken lightly.

Worse, we don’t have a lot of time to deliberate. Vanuatu looks set to graduate from its LDC status by 2013. If and when that happens, we’ll lose a lot of moral traction.

The EU recently flexed its muscle in the region, requiring Fiji and PNG to sign up to its rather punitive Economic Partnership Agreements in order to maintain access to European markets for their tuna and sugar exporters. Vanuatu and other countries didn’t have as much to lose from this threat, because they export very little to European countries. As a result, they were able to slip aside before the elephant rolled over on them.

Life with our pachyderm bed-mates may require a little nimbleness and tact, but a trade agreement is like getting married to one. When it comes time to consummate the affair, you really, really want to make sure that the mouse is the groom, not the bride.

The prospects for future happiness may not seem terribly rosy, but there’s a limit to what Vanuatu can achieve. Whether we like it or not, the status quo is simply not an option. We can play off one elephant against another, we can play for time, we can even use a little guile and diplomacy, but in the end, we’ve got to move.

We also have trade negotiations in the offing with Australia and New Zealand, who want free trade conditions throughout the region. The upcoming PACER+ negotiations are arguably our most pressing challenge, and according to PiPP, the most controversial. The potential exists for free trade conditions to be imposed throughout the region, with the result that government revenues for some Pacific Island nations could decrease by as much as 30%. Such a drop in revenues would be one step shy of disastrous for Vanuatu.

The most likely outcome from such a scenario would be increased dependence on foreign aid. And given the circumstances, it’s one wonders how Vanuatu would feel about approaching either of its nearest donor neighbours hat in hand. That would leave the EU, hardly more attractive, or China, whose history of hands-off, no-questions-asked support might lead to backsliding in transparency and consultation in development processes.

Vanuatu and its Pacific Island neighbours are huddled together on a rather small bed with some very large would-be paramours. The years ahead will require every ounce of tact and nimbleness we can muster.

But what kind of a victory are we talking about here? Well, they gave away access to their crown jewels, the source code:

“In 2003, Microsoft began a program that allowed select partners to view the source code of Windows, and even make some modifications. China was one of 60 countries invited to join the program.”

They cut prices drastically:

“Microsoft got serious about competing on price by offering the Chinese government its Windows and Office software for an estimated $7-$10 per seat (in comparison to $100-$200 per seat in the U.S., Europe, and other countries).”

And they caved completely on piracy and so-called Intellectual Property enforcement:

“Microsoft’s initial strategy was to work to get intellectual property laws enforced in China, but that was an unmitigated disaster. Microsoft realized that it was powerless to stop widespread piracy in China, so it simply threw up the white flag.”

So what exactly did Microsoft win, again? This article is rife with untested assumptions. Let’s establish a bit of context here before going too far.

Microsoft beat Linux? That most certainly is how Microsoft sees the situation. But their entire ethos is of conquest, control and coercion. None of these apply to Linux. While it’s true that some have used Linux as a tool to gain leverage with Microsoft, Linux as an operating system has no goal, except to be good at what it does. Unlike Microsoft, Linux is not controlled by any single actor, or even by a like-minded group of actors.

Linux doesn’t fight Microsoft (though MS does fight Linux and FOSS in general). It just keeps improving for its own sake and for the sake of its users. If that has detrimental effects on Microsoft’s control of the operating systems market – and it does – well, that is nothing more than a collateral benefit.

So, from Microsoft’s perspective, maybe they did ‘beat’ Linux, but even that defeat isn’t complete or permanent. When China donates PCs to its development partners, what OS does it ship? Linux. Is Red Flag dead and buried? No. Is China dependant on Microsoft for its IT infrastructure? Hardly.

What price victory? A more honest evaluation of the circumstances of China’s decision to accept Microsoft at all shows that Microsoft’s ‘victory’ may be more pyrrhic than anything. With trademark deftness, China has largely de-fanged one of the most effective and brutal corporate negotiating teams in the world. This is the corporation that managed to buy off the US government and avoid any real punishment following its conviction for abuse of monopoly powers. It’s the company that has consistently and rather successfully thumbed its nose at the European Union, the largest economic entity in the world today. It has controlled standards processes, locked in countless corporations and ruthlessly dominated the supply chain world-wide.

Yet Chinese negotiators got everything they asked for. Price reductions? They pay about 10% of what other governments do per seat. Control? They not only have access to the source code, they have to right to alter it to suit their purposes.

Think about what that means to the Chinese. In economic, political and strategic terms, they’ve negotiated unprecedented access to an invaluable resource, and they’ve done it in a way that costs them next to nothing. Truth be told, Microsoft got almost nothing out of this deal. China still uses Linux whenever and wherever it wants.

A deal that would make Stallman laugh. If we think about the Four Freedoms that underlie the GPL, the same four freedoms for which Richard Stallman and the FSF have fought so desperately to support and preserve, the same freedoms that are so perfectly antithetical to everything that Microsoft stands for… these are exactly the freedoms that China has preserved in its deal with Microsoft.

Let’s be honest here: Microsoft may have won the battle, but only by utterly compromising itself and its future in China. They have placed themselves in a virtually abject position vis à vis China. Happily, the Chinese know enough about loss of face to ensure that they never rub this in Gates’.

Bottom line: This is not a Linux/Microsoft story. Linux is a bit player in this story, a Rosencrantz to Microsoft’s Hamlet. The real story is how China managed to pull a classic con on one of the toughest negotiating teams in the corporate world, and how they did it so well that Microsoft keeps coming back for more.