 Well, good morning, ladies and gentlemen. Welcome to the first issue briefing of Saturday, day four of a World Economic Forum annual meeting. We're going to take a trip back in history almost with this when we're looking at the internet. Twenty years ago, at this very meeting, a document, the Declaration of Internet Independence, was released by a gentleman called John Perry Barlow. It set the stage for the development of what turned out to be a crucial and blessed global commons, an engine of growth and job creation the world over. Is that engine under threat today? We do release an internet fragmentation report this very morning here which actually sets to build a landscape for the threats that are posed to this global commons and tries to, I hope, map out some of the pathways forward. Here to talk about it, I have a very, very esteemed panel indeed. We're going to introduce them and then I'm going to hand over to them to make some remarks and then we'll have, in accordance to our usual format here, plenty of time for questions. To my immediate left, I have Dr William Drake from the University of Zurich and one of the lead authors of this report. Very honoured to be joined by President Thomas Hendrick Ilves of Estonia and next to the President, Jonathan Zitrain, a long-term friend and partner of the Working Forum and a member of our partner, forgive me, of our global challenge and future of the internet. Mr President, I'd love you to start, if I may, to give us an overview of your perspective on the state and health of the internet today, and whether it's in good shape and good health or how it can be best returned to full potential as an engine for optimising growth and jobs. I'll start off by not being an author of this. I'm probably not the right person to turn to, but since you served with John Perry Barlow, the second lyricist after Robert Hunter of the Grateful Dead, which probably means nothing to this audience any more. But in any case, I found that in his Declaration of Independence there was one word that was not mentioned. I mean this kind of anarchic vision of what the internet meant and the word privacy doesn't exist there. I mean I just find that unnotable, which shows not so much that he was doing anything wrong, but how that did not foresee all of the issues and today perhaps even an overblown form. Privacy is what concerns the citizen more than anything else. Now fragmentation of the internet can take so many forms and I actually would hope that the esteemed author, Dr Drake would talk about that rather than me, but our own connection to the issue of fragmentation aside from the 2007 cyber attack on us, which was I guess the first politically motivated cyber attack, which did lead to fragmentation in the simple sense that we were denied access. I mean access to fundamental services, public and private, and basically what did we have to do in order to solve that? One of the things we did to this massive DDoS attack on us was to cut ourselves off temporarily from the web. So the web worked internally in the country but we couldn't because these massive DDoS attacks on various institutions. We did not have that time, the resilience or the preparedness or the readiness to deal with it. So we in fact fragmented voluntarily. We cut ourselves off. Now what has been the primary focus of my country in policy terms where we have been extremely active is in the issue of internet freedom. We were one of the founders of the Freedom Online Coalition. Freedom House rated us as number one in internet freedom for years and then the Icelandics had developed even better or more liberal legal frameworks. So now we're pushed back to number two. I should point out the United States is number three on this or maybe four. In any case what we see in terms of fragmentation are illiberal regimes pushing for an international intergovernmental as opposed to multi-stakeholder model in order to they call security but it's actually informational security. By offering security or wanting to have security which we understand as keeping your emails from being hacked to Scottish systems being hacked and so forth that's our idea but there are those mainly illiberal or authoritarian countries with authoritarian regimes that want to actually fragment the internet in terms of content. Be it bloggers who are then arrested for what they say to keeping out or filtering information from outside the country that might be deleterious or detrimental to the regime in the eyes of the regime. Block things, block access to sites and as I said ending up in the most extreme case of repression of people who actually express opinions within country and online. That has been a fundamental concern of ours for the last three or four years especially when we saw that in the ITU there was a strong push to take internet governance over from the multi-stakeholder ICANN model in the name of security but that would have left out the civil society, the third sector, fourth sector, second sector. It just kept internet governance in the hands of governments under the ages of the UN which we thought was a very bad idea. William, you're an author of this report so is Vint Cerf famously coined the phrase the internet has escaped the lab. So where is it running? Is it running amok and how do we reign it in? Tell us a bit more about the landscape. Okay, thank you very much. I don't think that the internet is running amok. The internet is becoming the essential fabric of modern societies. It is interwoven into our politics, our economics, our culture. It has become essential to everything and indeed the theme of this meeting at Davos is the fourth industrial revolution. The internet is a driving force in catalyzing any shift towards a fourth industrial revolution where you have all these different realms of technological development in materials and energy and other fields all coming together with the internet at its core. So the internet is central and it's not about the collapse. It's not in danger of falling apart. We're not predicting any cataclysm. However, there are problems and you pointed out to me earlier I hadn't realized that it was here in this room that 20 years ago John Perry Barlow, the grateful dead lyricist, made his declaration of cyberspace in which he said you know cyberspace would be this free, open, innovative thing that would not be subject to the heavy hand of the state and people would be able to draw on the internet and do all kinds of creative things with it etc. And the problem that we're having now is that while that is still true to a very significant extent, we're also seeing troubling signs emerging. We're seeing chipping away at the global public internet as an open space that allows people to have that kind of creativity, that kind of freedom because of fragmentation. And fragmentation takes many different forms and many thought leaders in the global community have been raising alarm bells lately about fragmentation. And so the purpose of this project was to try to get us on the same page and say well what are we talking about because it becomes very clear once you start to talk to people that they have very different ideas about what fragmentation might mean. Technical people think of the fragmentation in terms of the basic functioning of the infrastructure and whether you get the same results every time you put in a certain kind of input and so on, whether the net performs in the same way every time reliably. But beyond that there's the level of content and transactions, cyberspaces where people live, where people create content and use the internet to do economic activities, engage in transactions or form social networks with other people who like cute cats. And there they are experiencing fragmentation too. All kinds of new blockages, all kinds of new policies or mechanisms are being put in place that are limiting people's ability to use the internet in a very free and open way. So what we try and do in this report is take a holistic view and say there's technical fragmentation but there's also fragmentation that comes from government action and there's also fragmentation that can come from quite frankly private sector action. And we try to map the landscape of different forms of fragmentation going through the process. We came up with 28, it was not a preordained number, it just happened to be what we came to. And then from those 28 examples of fragmentation that are listed under each of these three categories, technical, governmental and commercial, we come at the end to a top 10 list of the ones that we think are especially worth paying attention to, which I could go into more detail about later. But cases where we see real problems emerging with ensuring an open free integrated end to end internet available to all to use. And then after that we try to make some suggestions for the web about areas they might want to consider further. But that's it. It's a landscape exercise. It's a foundation setting so that future work that might go on in the web or in the larger global community has a common baseline in thinking about fragmentation and not one that's very narrowly exclusive to the technical dimension. So that's the purpose of the report. It's quite long, it's quite meaty, but the executive summary and the conclusion I think make the management of the key points quite tractable. Jonathan, we've been hearing about the chipping way of public spaces and the president here talks about real first hand experiences of fragmentation. It's a new normal. We possibly abused that term here at the forum, but it seems to be a new normal situation. How is internet adapting to this? Well, thank you Oliver for including me today and when you bring up normal, the normal then of the book end of 20 years ago in Barlow's declaration where he said, Governments of the industrialized world, you weary giants of flesh and steel, I come from cyberspace, the new home of mind. On behalf of the future, I ask you of the past to leave us alone. As you say, somewhat anarchic. You've remembered this for the 20 years. Congratulations to you. I can tell the guy is an lyricist, but there's been so much that has changed between then and now and at the time Barlow was writing and leading up to it, not many people and certainly not many institutions had a strong sense of just how crucial and central and ubiquitous the internet would be. And as a result, it could develop in a corner without anticipating all of the problems, including privacy for which if you wanted to try to plan around them ab initio, it would be really difficult. It's one of the reasons I think that the internet did succeed. But now 20 years later, we really do have issues that have to be dealt with. And this report, which I think Bill may be underselling a little bit. This is a really powerful report. It talks about primarily at a technical level, but it matters so much for the political for the social layers about one of Barlow's core ideas, which is a user centricity or a human centric view of technology. That's really emphasizing the ability of a person using this network to exchange bits freely with any other point on the network, permissionless innovation, location independent. These are the sorts of things that so many would agree are important to preserve even as we know, we can't just wish it to be the case. And that's why so many things in this report are agreeable, but not continually ordained. And that's why, while Bill is right, this report is not prescriptive, it is in its way a call to action to defend some of the basics of an open and unowned internet, an institution that may have founders and creators, but no CEO, no one entity controlling it. And that's why I think it's such an important report. I also look, there's just a brief mention in the report about interoperability for the internet of things. Interoperability is a huge theme. I mean, it's a foundation stone of the internet. I put it next to user centricity. But for the internet of things which has not truly fully happened yet, I think it sets a marker to show how for these devices that we are welcoming into our bedrooms, our kitchens, we're locking them around our wrists. I mean, we're very intimate with these things. To have a vision that by acquiring one, you need not be establishing a long-term relationship with a single vendor that now the rest of your devices had better have to be from that vendor. These are the sorts of things the report is pointing us towards and why I think it's such an important roadmap and why I'm so pleased the Berkman Center, which I'm a part of at Harvard University, and my colleague Professor Urs Gasser, it really contributed to the report and I'm just so pleased to see how it turned out. Mr President. I just want to point out how real the implications are. One at the economic level, the upcoming big battle in the European Union is going to be on having a digital single market, which we do not have today because virtually all electronic services are geolocated. I cannot buy an iTunes record for someone who lives five kilometers away from me if it's across the border. Creating a digital single market is probably one of the biggest hindrances to European competition with the United States and with China and India because we have 28 different markets digitally. When it comes to physical goods, it's easier to buy or ship a bottle of wine from the Algarve in southern Portugal and sell it in Lapland than it is to buy an iTunes record for someone across the border. It has even gotten worse, in a sense, through a court case, which in throwing out the Safe Harbor Agreement, we're back to where we were before the Safe Harbor Agreement, which means that all data transfers across borders within Europe are the responsibility of the National Data Protection Agencies, which we have had no bad cases yet. We are back to before the Safe Harbor Agreement, which means nations within Europe, which is already a political entity, are responsible for what goes across borders. This has implications for all kinds of things which I want to get into. Fragmenting, we are fragmenting in ways that we don't even realize. You do realize you've ever tried to buy an iTunes record for someone in another country. So this kind of fragmentation is one problem. There's another one which I just mentioned. I have not done the empirical experiment, but it has been claimed to me that there is something called, I would call algorithmic or search engine algorithmic fragmentation. If your search history is one of environmental activism and you put in fracking, you will get a lot of anti-fracking articles. If your search history is one kind of industrial energy-based, sort of not anti or not environmentalist, you will get a different set of articles on fracking. I am told I have not tried this, but nonetheless if you have an algorithm that basically chooses things based on your previous history. So it means that you end up creating or decreasing sort of discussion and the world that you're in, as in with say Facebook, you only are talking to your friends. They all share the same ideas and I'm worried, okay that's fine if you're just talking to people who also support candidate A or candidate B. But if I want to get information on something, I want to be intellectually independent. It makes interpersonal cognitive fragmentation happen. There's no interoperability between the people. Starting the virtual world and moving to the real world. Let's just dwell on that though, because I can't help thinking some of these fragmentary pressures also create business opportunities. Therefore, for example, better search, more targeted search. People may want that. Is that not against the spirit of the internet to curb business enterprise opportunity? For my part, I think surely competition is good and the idea of competition even for different models. Some people want to give their music away, others absolutely want to sell it. The fact of the interoperable single internet, the way it developed, allowed for that mosaic to come about. Perhaps the kind of fragmentation that isn't as healthy is when you're locked into one system or another and as soon as you go down that path, it may mean that you're having to pick a single winner or loser. When the internet is, quote, a winner beating out other networks as it did, the fact that it's not extracting itself a tax for every bit that moves. There's no one CEO who gets to move it. It makes it a public good. So if you have a ubiquitous public good that's shareable, then you can have the diversity that is so healthy that you talk about. That's something to anchor and I think again the report points to that. Let's just develop some thinking on the other areas of the report. You had 28 frameatary risks. We had no time to go into all of them. Give me your highlights. First of all, I'd like to highlight that we do in fact address the question of algorithms, but we did not go deep into that because it's a point on which many people are disagreeing. So we simply put it on the table as being one. But there is this whole question of filter bubbling and how people only expose themselves to certain amounts of information and algorithms feed into that. But more generally, we were just talking, John was just talking about the freedom of the customer in using these different technologies to be able to access everything. One of the types of fragmentation that we do talk about in the report as a commercial sort of fragmentation is the creation of so-called walled gardens, platforms where you buy into something and essentially become locked in via an app to an entire ecosystem where it is then difficult to take your information portably and move to another environment and where you can't necessarily access the whole internet, etc. This is growing very rapidly as a business strategy and just perfectly logical and defensible reasons for companies to want to do that. But at the same time, from the standpoint of competitors and some customers, there is a debate as to whether this is not fragmentary. There are other kinds of things one could look at. Geoblocking of content based on being told in your location, this information is not available to you. This is something that governments sometimes require, but it's something that companies often require because of their own commercial relationships. And again, you can make the argument, there's perfectly defensible reasons for companies to do this. They have licensing arrangements with local content distributors and so on, but for the customer there are issues. And indeed the European Commission is looking into this question now because they think some forms of geoblocking may be anti competitive. But there's other forms. Those are both examples of commercial. If you look at some of the governmental forms of fragmentation we talk about, for example the establishment of strategies based on this notion of cyber sovereignty or having a national internet segment that is somehow sealed off from or separate from the larger global transnational fabric of the internet, subject to strong territorial control from the top down by the state. This is a somewhat problematic strategy arguably and it can lead to fragmentation. We talk about prohibitions on the transborder movement of certain types of information that may be of great importance to global companies, but also to SMEs, the small, medium sized enterprises who lose out and don't have the ability to defend themselves effectively when such barriers are put in place. We talk about requirements for local data processing, local processing and local retention which many countries now are exploring to try to keep local data within their territorial jurisdiction. The growth of digital protectionism efforts to try to bolster the development of local digital industries through establishing protectionist barriers to foreign entry to markets. Filtering and blocking based on content. Many governments have concerns about the substantive content of certain forms of information. Don't want their citizens to have access to it and establish blockages. Blocking of GTLDs, the generic top level domains. We adopted in ICANN, the body that manages global names and numbers. Dot triple X top level domain like dot com dot org et cetera. There's now a dot triple X and many governments simply said we're blocking this. Now you can understand they may have arguments but ICANN has now adopted a new GTLD program that's rolling out hundreds of potentially thousands of new top level domains. And if governments begin to block entire domain names based on their particular preferences, this could introduce a level of fragmentation into the internet and there's reasons to be concerned. There's been long running debates about the possibility of establishing entirely separate internet systems, new root servers that would run an entirely distinct set of connections from the global public internet. There have been discussions about what to do with the transition from the current kinds of IP numbers we use now. The numbers that are built into all the objects you have in your laps, IPv4 numbers, which are now running out effectively to IPv6, which offers trillions of numbers. But the problem is the transition going from one to the other is different and they don't inter work. So we can end up with two different internets, technically, that don't inter work effectively. So these are just examples of some of the many types of forms of fragmentation that are looked at at the port and where we say governments, civil society, technical community, business. We all have to look at these things together. We all have to be vigilant of these problems and we all have to try to work together where we can to develop more effective solutions. I'd add one more to a risk simply because I've seen it, which is that there's an inequality that comes out of commercial applications in that one concrete example. iTunes, in which I keep bringing up, and iTunes was available to Western Europe about seven years before it was available to Eastern Europe. In some cases simply because they didn't quite trust Eastern Europe for reasons beyond me. But also because, oh, you're so small, why would we bother spending all this time and effort on an intellectual property contract for iTunes in your country? Because, you know, I mean, you know, here's Germany. I mean, Germany's big, but you guys, you're not going to buy anything because it's not worth the effort. So that in fact, I mean, I think we're going to have to deal to fight or to avoid fragmentation. We're going to actually have to deal with other issues that are not even technical but have to do with intellectual property agreements, VAT agreements across borders that in fact currently are sort of pressures to for greater fragmentation when in fact, and it has nothing to do with the internet. It has to do with intellectual property law and it has to do with VAT agreements. And this is a complex thing because if you take the European Union again, there are 28 countries. The number of VAT agreements is 28 factorial that you have to decide. That's a lot of property agreements. If you know what 28 factorial is, it's a lot. We're running too fast running out of time, but I do want to see if there are any questions from the floor in which case we'll go to one of mine. Now, we're here at this meeting looking at the fourth industrial revolution. Bill, your report is very much a landscape here and now. Are there any fast-moving, fast-approaching, long-range threats which could complicate further this landscape you're putting before us that we need to be thinking of? How is the fourth industrial revolution going to contribute to the progress of mapping fragmentation of the internet? Well, I mean, again, we are mapping the current state of play and we do note that some of the trends we're talking about are just that, the trends. There are emergent possibilities that many people are worried about and it depends on the choices that actors make. So, for example, going back to Jonathan had mentioned the Internet of Things and standardization. We do talk about this and we say there's an emerging concern that as more companies get in there and try to follow different standards processes based on different organizations, they may adopt their own technology as the way to tie together Internet of Things applications and so on. And then others will have other ones and you could have limited interoperability across these. This would be reducing the potentiality of the Internet of Things and its contribution to the fourth industrial revolution. If you read the book that Professor Schwab has where he talks about the development of these kind of like digitally enhanced value chains and global corporate operations that are reliant on these kinds of technologies. He talks about this with standards blocks where you have lack of interoperability across because particular companies and forums have decided to lock in on their technology. That would be a real problem and that would be a problem that we would be stumbling over quite soon, I think, in terms of our transition. It would be a track versus beta max writ large. I think it may be a generational problem. So, again, the point is to raise the concern and say we should have a global multi-stakeholder dialogue around these things. We should not allow these pressures towards fragmentation to just kind of accumulate in a distributed way in different parts of the Internet ecosystem with nobody really kind of paying attention to it and raising the alarm and saying, hey, are we going in the right direction here? We need to have at least, as the first cut, a joint awareness of what is happening so that we can then identify problems and see do we want to try to figure out some solution to these? I think data transfer regulation on part of sovereign nations will collide with IoT because we have a wide array of national legislation on transferring data across borders. On the other hand, IoT becomes interesting if and only if the data can move between borders. I mean, again, metaphorically, the pictures of a Mercedes auto, I mean sort of a self-driving or autonomous car that gets to the French-German border from which everybody comes, and it stops because it depends on receiving input over the Internet. You know, through Wi-Fi, but that data may not be transferred, and then it just stops. But I mean, that's a metaphor, but nonetheless that is a potential picture of where we will be unless we figure out cross-border data transfer. And just to say, the metaphor you're using of moving between borders is in itself a problem, right? Because the Internet ignores borders. The Internet is transnational. It's viewing it as one integrated logical space, and once you start to impose that territorial separation into it through some mechanism, then you are really changing the way routing and everything else is working and taking away from the vitality of the net. No, no, not at all. When you look at the original design and ongoing design of the Internet, it's interesting not just to see what was put in, but what was quite by design left out. So identity and reputation down to a person was quite self-consciously left out of participation in the Internet. As far as the Internet is concerned, as Bill mentioned, there's the Internet protocol address, and that's it. It doesn't map to a person all the time. It goes to different people. And as time has gone on, you can see all sorts of reasons why people would want to be able to preserve identity, convey it across borders, have a reputation developed so they can be trusted and can trust others. And thinking about, is it better having that be somewhat distributed if not outright fragmented so that there are lots of different stores of reputation and perhaps you're not well regarded at Uber, but you have a really good view elsewhere on the Internet. It makes a nice diverse portfolio for someone or should it be something in which, no actually, how well behaved I am as far as a company like Uber or Airbnb is concerned might then be helpful to me in acquiring a loan when I haven't otherwise established a financial reputation the way that a normal bank would presume. So these are the kinds of questions I think looking forward that really are grounded in some of the technical questions of the report that are not probably solely in the province of the engineers to try to solve. That's a group decision really to make. I'm very worried about time because we're going over, but before we do finish there's been a fascinating discussion. I'd like each of you to give me one key single intervention that you would like to see happen that could have the greatest impact in addressing Internet fragmentation. I have a very parochial view when it comes to the European Union. I want to eliminate borders and also avoid protectionism between the EU and other countries. I see that as an increasing risk and could ultimately lead to the European Union falling way behind the rest of the world because protectionism always is a bad idea but when the change is non-linear that is exponential then falling behind a little bit for a short time can have a very long lasting effect in the face of Moore's law. Jonathan. I would say that the many freedoms and opportunities we enjoy thanks to this network are grounded ultimately in a certain freedom to possess a device that can run any code the user wants to see it run. To have that be the presumption. That's something that over time for many reasons including simple consumer choice and development of the market has eroded that when you make a choice of device you are picking your team and as you accumulate your apps and the data within those apps you get into these concentric walled gardens that Bill was talking about and to be able to pick your code provides such an important safety valve against capture by any one party and ultimately would be one of the important atoms the building blocks to avoid the sorts of situations that President Ilvis was talking about of the car that stops at the border as we go. I would just say finally though it is complicated now in a way that it wasn't before to ask that somebody can run any code that he or she wants on a vehicle versus just a device that moves bits around. Those have physical kinetic consequences and I just want to recognize this is much more complicated than it was when it was quote only bits. Bill. When John Perry Barlow made his statement 20 years ago there was a notion that the internet was maintaining its freedom because the governments had not been centrally involved and that that should continue but it was inevitable that governments were going to get involved. It was inevitable that governments were going to want to see the internet being embedded within frameworks of public authority so that in cases where they have responsibilities to protect their citizens to promote certain values and so on that they were not just standing on the side doing nothing and the citizens would say what are you doing to protect us right. So of course they're going to come in but the question is come in on what terms and via and use what tools and the risk that I'm seeing now is that many governments are perhaps overextending the types of interventions they're making seeking to impose more territorial control in a vertical way onto a transnational space than is really necessary to achieve the objectives that they have in mind. And so that the conversation we need to have is what kinds of measures can governments take that to preserve the values and objectives that they legitimately want to pursue but which intervene in and shape and disrupt and block the freedom of citizens and businesses least. How can we have an optimization a proper calibration of what that intervention should look like. That conversation is a difficult one but I think it's one that we need to have more and more because we're seeing more and more reactions to the internet that are going too far in one direction and so having a multi stakeholder global inclusive dialogue on issues like that I think would be very helpful. RF is based on being shipped away with a new normal fragmentary pressure so I think we need to be dealt with politically motivated sometimes commercially motivated. There is an increasing risk and one that hopefully multi stakeholder collaboration can help address. Hopefully the landscaping document you've got here is a good starting point. Thank you very much gentlemen much appreciated. Thank you for joining us in the room this session is now over.