Through both years the Internet economy has sputtered and faltered. The collapse of stock prices in the spring was followed by a contradictory impulse to prevent the delivery of broadband applications necessary for growth in the summer. In the second year the real economy collapsed with the Towers, the promised "solution" of Windows XP got off to a shaky start , and while e-commerce survivors flourished along with security companies , none of it made any difference on Wall Street. As usual investors were ahead of the curve, looking to the post-war world where new chips, a new generation of bandwidth and technologies such as 802.11 might get the old boom started again.

It was not the best of times but, unless you lived in New York, Israel, or some other true war zone it wasn't the worst of times, either. I saw the second plane hit the Towers on CNBC as I was walking off to cover a trade show. The fact that the event I was traveling to (NetWorld in Atlanta) turned into a wake was a positive, proof my TV hadn't stumbled into a bad Jerry Bruckheimer movie or Harry Turtledove book , that all this was real life and real life would go on. 

The war we were promised would be nasty, brutal, casualty-filled and long. The war we got was a Gulf War re-run, with a few months of bombing followed by a quick ground victory. Slowly all the old Internet issues returned, but this time the side demanding security was winning all the battles. Anonymous sites like Safeweb disappeared, the government quickly won the right to tap Internet logs and transmissions, and protests were greeted by Attorney General Ashcroft's memorable line, "To those...who scare peace-loving people with phantoms of lost liberty, my message is this: Your tactics only aid terrorists."  

The vast majority of Americans agreed with Ashcroft. There was no objection to his Internet wiretaps, and overwhelming support for his creation of special squads in all FBI field offices, and task forces around the country, even though they would not just be involved in fighting cyberterrorism but "cybercrime generally." We discovered just what Ashcroft meant this month with a sudden international raid on Warez sites . 

The question awaiting the capture or death of Osama Bin Laden was what new world would we find in the next new year, 2002. There are two worlds out there waiting to be born.

One world is a second boom, with great new technologies such as 802.11 linking everyone everywhere to broadband services, with GHz-speed chips in hand-held devices linked to peer-to-peer and distributed computing networks that bring the power of the world to bear on real and flippant problems alike.

The other world is that of a Cold War, with real casualties whose cause is ours but who must nonetheless suffer because our leaders refuse to distinguish among difference, dissension and treason. (In this war, however, the Russians and Chinese are on our side.) 

The Administration will try to deliver both. After all, the McCarthy era in which today's leaders grew up represented the start of America's great post-war boom time. My guess is that effort will fail, and we will end next year far more divided, perhaps even at war with one another, when we should only be debating questions of tactics. The distance between McCarthy and Vietnam in the 20th century was measured in decades. In Internet Time it may be measured only in months.

Happy New Year. 

It's here! Yes, the PDF version of "Living on the Internet" is finally available for purchase at eBooks.Com , hyperlinks and all. More outlets are being sought, and the November update is on its way to those who've requested it. You can get your own request in by dropping me a note, asking to be part of that list .

You can join the A-Clue.Com discussion at I-Strategy , our shared e-mail digest produced with Adventive.Com. You can also read me at ClickZ , BtoB, and Boardwatch. I'm also on the mast-head at Bottom Line Personal , a great print newsletter. Remember that it's journalism that keeps the Clues coming...

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Takes on the News

We Don't Need No Regulation

David Coursey's call to "regulate the Internet" over the fall of Excite-no-longer-at-home is simply wrong.

It's too bad the company closed , and it's sad that many were stranded, at least for a while. . The way in which big businesses played around with customers' daily lives was shameful.

But broadband is not yet like water, or even banking. It's not yet something so common as to require "too big to fail" regulation. The danger in the broadband market is the monopolies of the telephone and cable operators, who are using subsidized voice and TV-delivery networks to claim a stranglehold on how and when and for what price you get better Internet service.

Competition is the answer. Beyond guaranteeing competition, and allowing all players and technologies to contend in this market, there's little the government should be doing. People may lose their service for a while, but they can go to other providers. New technologies, like wireless, are coming. If we "regulate" outfits like AT&T or Comcast, essentially guaranteeing their survival, we become complicit in their efforts to stop technology's advance. That's probably what they want, and what they must not have.

Make 'Em Pay

Under cover of fighting terrorism, the Copyright Wars have re-ignited, and copyright holders have brought out the big guns.

First, the industry actually delivered a product. MusicNet and PressPlay, which are actually being brought to market by third parties are both really, horribly, terribly bad. They're like the first offer made in a labor negotiation. They don't let you copy the songs you download, and you lose access to all songs when you drop your subscription. Want to pay for an incompatible format that steals what you bought when you stop paying a monthly bill? ( ) It is absurd.

Still, in seeking to prevent competition for this garbage the industry has the law on its side and it's pressing that advantage in court. Despite the fact that Kazaa can't identify its users (it makes software sold and used by others) the industry has been beating it in court, demanding to know who those users are . Never mind that what the RIAA wants can't be delivered. That's not the point. "Do you expect me to talk?" "No, Mr. Bond, I expect you to die."

The industry also has troops, guns and prisons, to bring to bear. The FBI attack on Warez sites , while ostensibly designed to protect software , could be more than a dry run of protecting the recording industry.

There's no longer anything to stop the government from making a case on MP3s after raids aimed at stolen copies of Windows. Attorney General Ashcroft has said this loudly, saying he would 'arrest a mobster for spitting on the sidewalk if it would help in the fight.'" While Ashcroft was claiming to model his policy on that of Robert F. Kennedy, critics argue his model is actually Kennedy's arch-enemy, FBI director J. Edgar Hoover . Hoover's enemy wasn't the Mafia, it was Dr. Martin Luther King.

Why Red Herring Dropped its Newsletters

A lot of people were confused when Red Herring decided to drop its e-mail newsletters last month .

Since I personally produce such a newsletter, called ISP Executive, let me explain the math. You take the newsletter's monthly editorial budget and you balance it against the revenue earned from advertising in the letter. If the number is negative (more costs than advertising) the letter is a loser. So if your whole business is threatened with extinction you kill the newsletter. It's called limiting your losses.

Yes this is short-sighted, but newsletters are as easy to start as they are to end, especially if you have viable products in other media to publicize them. The closure is merely more evidence that "Red Herring"  is totally in survival mode, and while it may well lose the battle, the battle has to be fought.

Clued-in, Clueless

Clued-in is the New York trial court that gave online journalists the same protection as other journalists . A bank now owned by Citicorp had tried to intimidate Narconews (http://www.narconews.com), which investigates drug cases, into halting an investigation of its Mexican unit's president and his link to drug trafficking.

Clueless is David Fertell of Pearl Software , who claimed online Christmas shopping would cost U.S. businesses $500 million. He got the figure by multiplying the number of people who work with Web access (42 million) by the mean hourly wage ($12.64), and assuming they each spend an hour shopping online from their desks. Pearl Software makes products that let bosses monitor their workers' use of computers and (supposedly) scare or fire those who do anything they don't like. But if you can help workers meet their family obligations you're improving productivity, not reducing it. This is not a zero-sum game.

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