ICTs AND THE INTERNET: THEIR IMPACT ON GLOBAL COMMERCE

3.1 Evolution of the Internet

The Internet is the result of research and development collaboration between the military, defence contractors and the academic community involved in defence research for the US military in 1969 under the aegis of the Advanced Research Project Agency (ARPA).175 _{It was developed as a basic network to connect the} tripartite groups engaged in military research activities. The goal was to create a network of computers for which there would be no central operating computer, in order to reduce the risk of vital information and communication being lost if a computer on the network was damaged or compromised. This was of course the ―cold war‖ era and the fear of the Soviet communists was the catalyst for technological innovation.

The term ‗internet‘ is used to identify any collection of networks forming either a larger Local Area Network (LAN) or Wide Area Network (WAN) commonly called ―intranets‖. The ―Internet‖176_{, however, refers to the interconnected network of} networks spanning the globe. Millions of individual computers are connected one to another, but each one is independently controlled by its owner who has agreed to use a common communication standard known as TCP/IP.177 _{This standard, or protocol} as it is called in the industry, makes it possible for different computers running on different operating systems to communicate with one another and share data, even though they may be hundreds of miles apart and have no direct connection to another. This standard communication protocol was deployed between 1973 and

175

In 1957, the then USSR launched Sputnik, the first artificial earth satellite. In response, the US in the following year set up the Advanced Research Projects Agency (ARPA). ARPA was set up in the Department of Defense (DoD) with the aim to establish US supremacy in the use of science and technology by the military. See Encyclopaedia Britannica ―Defense Advanced Research Projects Agency (DARPA)‖ (2010). See also Leiner, Cerf, Clark Brief History of the Internet [online] for a definitive perspective on the history of the Internet by some of the key players in the development of the Internet, published by the Internet Society.

176

The term ―Internet‖ was first used in a research paper written by Vinton Cerf and Robert Kahn in 1974. It described a ―network of networks‖ that would link together computers across the country, and eventually the world. See Samuelson and Varian The "New Economy" [online].

177

Leiner, Cerf, Clark et alBrief History of the Internet [online]. In 1974 Vint Cerf and Bob Kahn published

"A Protocol for Packet Network Interconnection" which specified in detail the design of a Transmission Control Program (TCP) and in 1978 the TCP protocol was split into TCP and Internet Protocol (IP).

55 1974.178

It is the TCP/IP standards that make the Internet possible. The most important feature of the protocol is that it defines a ―packet switching‖ network; a method by which data can be broken up into standardised packets which are then routed to their destination through an indeterminate number of intermediaries.179 _{This means that} two different computers do not need to be in direct contact with one another in order to communicate. After the networking protocols were put in place, the Internet began to grow and expand as the necessary software and services that make up the Internet began to appear.180

Throughout this period, the original network, ARPANET, acted as the ‗backbone‘ of the global Internet network. The fundamental objective for both ARPANET and the Internet was to create an enabling environment for resource sharing. This object continues to motivate the Internet today, although it is becoming increasingly commercialised. Since the 1980s, the Internet has been developing beyond its primary research roots to include both a broad user community and increased commercial activity. In 1991, the American National Science Foundation (NSF), which was then the Internet backbone administrator for the universities and research institutions, lifted restrictions on the commercial use of the Internet.181 _The Internet has been used for commercial purposes since then and the commercial sector is now by far the most rapidly growing sector of the Internet.182

178 _Ibid.

179 _{See n 177 at 6-8. See also Basu Global Perspectives on E-Commerce Taxation Law 7-9.}

180 _{Ibid. Some of the more well-known services on the Internet are:}

 Gopher is a network protocol tool designed for search, retrieval and sharing of documents over the Internet, much like the World Wide Web.

 FTP is a File Transfer Protocol that allows users to copy files between their local system and any system they are connected to on the network.

 USENET is a worldwide network of public discussion forums accessed over the Internet. Millions of people scattered all over the world, make up the different discussion groups dealing with diverse issues. It is also a rich source of news and stories of interest to the members.

 World Wide Web ("WWW") is a service that operates over the Internet, by which people can read and write via computers connected to the Internet.

181 _{See Abbate Inventing the Internet 182.See also Catlett ―Internet Evolution and Future Directions‖.}

56 The invention of the World Wide Web in 1989 by Tim Berners-Lee and its deployment on the Internet greatly expanded the scope of the Internet, by adding to it on a continuous basis new communities of networks.183 _{The Web, as it is commonly} called in the IT industry, is a hypertext-based information service providing access to multimedia documents and databases. It is accessed through a browser such as Microsoft‘s Internet Explorer, Netscape‘s Navigator or Mozilla Firefox. It is one of the most effective methods of providing information to the widest audience possible. It has also levelled the playing field to some extent for small and big businesses that can project themselves to a global market place by publishing information about their goods and services on a web site.

3.2 Impact on global commerce

The Internet has opened up new opportunities for businesses to trade, advertise and operate across frontiers, and over borders. For businesses, large and small alike, the Internet and its varied technologies has become a window of opportunity to access a global marketplace.184 _{What started out as a research and development endeavour} has now become the backbone of a new way of doing business, namely electronic commerce. The potential of this is limitless.

The phenomenal rate of technological advances has resulted in the lowering of prices and an increase in the quality of goods and services. Consumers worldwide have come to identify successful enterprises as those who can deliver on lower prices and higher quality goods and services. These demands, combined with a globally competitive marketplace, have placed great pressures on the producers of goods and services to effectively use cutting edge technology to ensure they remain in business.185

183 _{See n 172. According to Zakon, the World-Wide Web (WWW) was released by CERN in 1991. The first} Web server, nxoc01.cern.ch, was launched in Nov 1990 but later renamed info.cern.ch.

184 _{The logic of not re-inventing the wheel makes the Internet a good platform for businesses and researchers} to share ideas and move forward. See Greenstein ―Commercialization of the Internet‖ 151 [online]. 185 _{Id at 154. According to Greenstein, the commercialisation of the Internet by the NSF at the same time as}

the introduction of the World Wide Web gave industry access to a new technological opportunity that thrived under a market- oriented and decentralised decision-making environment.

57 By means of the Internet, businesses are able to find suppliers and buyers, conduct valuable market research and publish information about themselves, their goods and services. The Internet helps businesses and all other interested users by providing free expert advice and presents opportunities for recruitment of new employees and access to information.186 _{Accessing information on the Internet is faster than using} conventional methods such as bulky business directories, thanks to ever improving search engines. The Internet also has unsurpassed capacity for the wide-scale dissemination of information; it allows for rapid communication by means of electronic mail and for cost-effective document transfer without the risk of damage or loss. It also enables peer communication between researchers and businesses. One significant consequence of the impact of the Internet and its enabling technologies on global commerce is that it has opened new opportunities for developing countries to participate in global commerce. This in turn has led to increased trans-border data flows between countries and drawn attention to the issue of data protection. The following paragraphs and chapters will explore the opportunities and challenges that the Internet and its enabling technologies present to a developing country like Nigeria, to connect to the global network economy and how it should respond to the said opportunities and challenges.

3.3 The Internet and developing economies

The Internet offers entrepreneurs new business opportunities at low entry cost. This is particularly beneficial to businesses in developing countries that can take advantage of the opportunities offered by the Internet. For a modest investment, entrepreneurs can put themselves in a marketplace of millions of potential buyers.187 For less developed countries like Nigeria, the Internet provides unique opportunities to greatly expand their markets both externally and internally. Externally, the

186 _Ibid.

187 _{According to a UNESCO Report, data exchange on the Internet is distributed as follows: 60 per cent for} trade, 27 per cent for research, 9 per cent for administration and less than 5 per cent for education. The corporate sector is making increasing use of the Internet to penetrate markets around the world and for interchange with customers. The Report estimated that trade activities could generate revenue of between $7 billion and $40 billion in the year 2000. See UNESCO World Communication Report: The Media and

58 Internet and other technologies may allow for low cost international trade by creating a level playing field for small, local businesses who want to engage in international trade alongside the big players; something which otherwise may not have been possible.188 _{Internally, it can provide these same small-scale businesses, as} well as the large ones, opportunities to expand their market exposure and give them access to a near limitless pool of resources in terms of information, communication and advertisement.

The Internet provides potentially the biggest marketplace in the history of commerce.189 _{Furthermore, the World Wide Web, the most significant component of} the Internet, has radically changed the dynamics and indeed the economics of information publication by allowing everyone to be a publisher with worldwide reach. The seemingly inexhaustible variety of documents, opinions, articles and works of all sorts on the Web demonstrate that millions of people worldwide are making use of its capability to disseminate information. But, as Cate notes, the Internet is only one tangible example of the explosion of digital information that includes other national and global networks, corporate computer and telecommunication systems, bulletin boards, nationwide paging services and countless other technologies.190

188

UNCTAD The E-Commerce and Development Report xvii, shows there is growing agreement about the positive contribution of ICT to productivity growth. Through the application of ICT, firms will become more competitive, new markets will be accessed and new employment opportunities created. All of these will result in the generation of wealth and sustainable economic growth.

189 _{Id at xviii. According to the report, the global number of Internet users continues to grow; the estimated} number of users reached 591 million people in 2002. In a report published in October 2010, the International Telecommunications Union (ITU) estimated that by the end of 2010, the number of Internet users worldwide will surpass the two billion mark of which 1.2 billion will be in developing countries. See ITU The World in 2010: ICT Facts and Figures 4.

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4. THE GLOBAL TRADE IN INFORMATION AND INFORMATION