Page Impressions Ltd Blogcetera: 2012

Thursday, December 13, 2012

Will the 4G Auction exceed £3.5bn? You bet!

Although Chancellor George Osborne is unlikely to raise anywhere near to Gordon Brown’s £21bn for 3G licences, I believe he may do rather better than is being reported.  Recent auctions in Europe have raised £3bn which suggests that the UK 4G licences will achieve £3.5bn.  However, it is suggested that Private equity firms, retail groups and banks as well as international telecom players have entered the fray alongside the UK’s Big Four mobile operators, EE, Vodafone, O2 and Three to win a slice of these 4G licences.

Ed Richards, chief executive of Ofcom, the telecoms watchdog, said that it had “fired the starting gun” on an auction process that would “release crucial capacity to support future growth, helping to boost UK productivity”.  Even in these recessionary times, the total U.K. Internet traffic is currently projected to increase by an average of 37 per cent each year until 2015. Although the majority of traffic remains on fixed networks, traffic on mobile networks is growing at a faster rate of 84% year-over-year and is expected to account for 11% of total traffic by 2015. 

Mobile access to the Internet accounts for even more time spent browsing, communicating, and transacting than this traffic data suggests, with fixed lines being used to consume bandwidth-intensive services such as video and mobile used more for social media. Indeed, the Internet is increasingly being accessed on mobile devices, whether through mobile connections or Wi-Fi networks, and the next generation of mobile communications of 4G will continue to shift this dynamic and economists have suggested could add as much as 0.5% to GDP in infrastructure investment alone not to mention the enhanced capability of the mobile web usage.

The superior quality of coverage and speed of performance offered by 4G’s 800MHz network offers significant improvement over the current 3G licences.  This superior system will add significantly to the opportunity for both network providers and service providers to make significant revenue.  The UK is one the largest mobile internet markets and consequently the opportunity  to own a slice of this market will in my opinion drive the value of these licences far beyond the projected £3.5bn and along with the additional impact 4G will have on the UK economy, the auction could bring a welcome additional windfall for Mr Osborne.

Tuesday, December 04, 2012

Guess who will ultimately pay Amazon’s UK Taxes?

The recent moral crusade waged by the Press to get the major American Corporations such as Starbucks, Amazon and Google to pay more tax may seem at first sight entirely laudable.  Previous campaigns by Occupy Wall Street to embarrass the likes of Vodafone and Top Shop to pay more tax have had little effect.  Certainly the press didn’t seem that interested in pursuing Sir Philip Green as much as they seem to wish to pillory Google.  Maybe we are only affronted by foreign companies that appear to be ripping off the state and are quite happy for home grown companies such as Arcadia and Vodafone to avoid their share of the tax burden.

In truth, none of the companies are to blame.  Rather the issue lies not with the smart accountants exercising their abilities to save businesses millions of pounds in tax, but rather in the labyrinthine tax system Government have evolved not only domestically, but internationally.  Government not only use the tax system to generate income to spend on the defence of the Realm and the NHS but they also use it to achieve certain strategic and tactical objectives such as encouraging investment by foreign nationals to create jobs.  Equally foreign powers user their tax systems to attract companies to their jurisdictions.

So just how much is George Osborne missing out on.  So let us examine the case of Google.  Last year Google paid £6m on revenue of £395m. However, the UK is the largest online ad market in Europe and Google is the largest player in that market and given that Google’s EMEA (Europe, Middle East and Africa)  operations generated €12.5bn (£10.1bn), the Google’s UK turnover was in the region of $4bn (£2.5bn) and paid just £6m in corporation tax.  Google has located its European headquarters in Dublin where Google Dublin employs 2,500 employees to take advantage of Ireland’s favourable capital arrangements and consolidates its ad revenue through this subsidiary. Google Ireland had pre-tax profit of just €24.3m last year on turnover of €12.5bn.  Google’s consolidated accounts suggest a different picture of earnings generated by their operations of $11.7bn on just under $38bn turnover.  This suggests the true profit contribution from Europe should be in the region of $3.85bn.  By the same logic, the earnings contribution for the UK market would have been $1.2bn or approximately £800m profit or equivalent to £208m in Corporation Tax.  So there we have it, the UK Treasury is missing out on just over £200m in corporation tax.  Given that Google employ just 1,500 people in the UK there can hardly be said to be a jobs bonus whereby we are getting significant PAYE revenues instead.

Amazon is a somewhat different case.  Amazon is the largest on-line retailer in the world and has come to dominate the market.  However, in the UK, Amazon generated sales of £3.35bn, 25% of Amazon's sales outside of the US and paid just £1.8m in Corporation Tax to the UK Treasury.  However, in fairness to Amazon they have created 15,000 jobs in the UK, which is ten times that created by Google, and make a far smaller margin on sales of the many products they ship from Books to Microwaves.  Equally those 15,000 employees are significant payroll taxes and Amazon continues to invest heavily in the UK infrastructure.  Yes Amazon the Luxembourg holding company rouse, but I believe their contribution to the country is far greater than Google’s.

Harmonisation of the European Union’s Tax laws as regards companies and individuals would eliminate many of these distortions and clamping down on the BVI (British Virgin Island) corporations would also eliminate many of the tax loop holes that multi-national companies take advantage of.  However, these are probably a step too far for most UK based politicians and unlikely to occur.  
The HMRC could go toe-to-toe with these multinationals and try and get more out of them.  However, the most likely outcome is the cost of all these activities will eventually be borne by the consuming public through increased prices.  Years ago we used to consider that the same cost of a good in the US compared to the UK was on the basis what cost $100 in New York cost £100 in London.  Much of this Atlantic Margin has been eroded by the Internet and in no small part in the role taken by both Amazon and Google.  So I would not necessarily jump to the conclusion that we would be better off if the HMRC managed to get more out of the likes of Amazon and Google. 

Tuesday, November 27, 2012

Does Searle’s Chinese Room argument establish that the mind is not a computer program?

I recently looked at the case for artificial intelligence and I revisited the arguments laid out by John R Searle in his argument that so called strong artificial intelligence cannot evolve from a computer program.  Using the Chinese Room (CR) argument advanced by John R Searle, I examine whether his contention that the mind is not a computer program is true in the context of what constitutes artificial intelligence (AI) and thus the computational theory of the mind is false.  In order to do this I will establish the agreed basis of artificial intelligence, outline the Turing Test for evaluating machine intelligence, describe the CR thought experiment and then evaluate the Seale’s principle claim that the CR experiment is merely a syntactic process requiring no semantic understanding and demonstrating strong AI to be false.

In order to evaluate Searle’s CR argument we first need to have a clear understanding of artificial intelligence and in particular the form of AI, so-called ‘Strong AI’, at which Searle is directing his thought experiment.  Strong AI is the philosophical thesis that appropriately programmed computers have minds in exactly the same sense that we do.

During the 1950s, Alan Turing proposed a simple test to evaluate whether a machine is making an adequate simulation of the human mind.  The ‘Turing Test’ states that ‘if a computer can pass for a human in online chat, we should grant that it is intelligent’. 
This leads us to divide AI into four specific categories:-

                AI1         Computers are capable of thought;

                AI2         Only computers are capable of thought;

                AI3         A machine can think simply as a result of instantiating a computer program;

                AI4         Computer models are useful in the study of the mind.

Clearly AI4 is the weakest form of AI and is not considered to be particularly controversial. However, the AI argument builds from AI3 through to AI1 as the claims become stronger. Indeed if AI2 is true then we are all computers!  The combination of AI1 and AI3 suggest that a thinking machine is possible and all we need to do is write the appropriate program and run it to demonstrate a thinking machine (Wilkinson, 2005, pg 100). Strong AI of this form suggests that a suitably programmed computer can understand natural language and actually have other mental attributes similar to humans whose abilities they mimic. For this reason if the AI3 form of AI can be undermined the entire strong AI argument is invalid.  Consequently AI3 is the form of AI that Searle considers ‘strong AI’ and which his CR argument is intended to show to be false and hence the mind is not a computer.

Searle’s CR experiment is a thought experiment which imagines an English speaker who knows no Chinese, locked in a room full of boxes of Chinese symbols (the database) together with a book of instructions for manipulating the symbols (the program).  Imagine the people outside the room send in other Chinese symbols (data input) which, unknown to the person in the room are questions in Chinese.  By following the instruction book, the man is able to pass out Chinese symbols and answer the questions correctly (the output).  Searle contends that the man in the CR has actually passed the Turing Test for understanding Chinese without having to understand a word of Chinese.  Put simply the Searle argument may be sum up as follows:-

Premise 1.           If ‘strong AI’ is true, there exists a program for Chinese such that if any computing system runs that program, that system may be considered to understand Chinese;

Premise 2.           The program may be operated by anyone, without understanding Chinese;

Conclusion.         Therefore, ‘Strong AI’ is false (from premise 2).

Premise 2 conforms to the CR and as such the inevitable conclusion is that running a program does not constitute understanding.  Searle’s central claim is that the CR experiment shows that it is not possible for syntax to result in semantics.  Syntax in this context refers to the way in which the Chinese symbols are manipulated as opposed to semantics which relates to the meaning of the symbols.  Essentially the program is purely a syntactical symbol system which merely manipulates the symbols and entirely lacks semantic properties without any understanding of their meaning (Wilkinson, 2005, pg 105).

Before I consider the case against Searle’s CR experiment, it would be useful to describe the programming process.  For a process to be programmable, the process must be able to be constructed as an algorithm.  For a process to be algorithmic the following must apply:-

1.                   Every step is specifiable entirely without ambiguity;

2.                   At every step, there is no ambiguity about what the next step must be: no insight, inspiration or creativity is needed;

3.                   Provided each step is correctly executed, the procedure will produce the desired result in a finite number of steps.

All computers, whether based on traditional step-by-step von Neumann architecture or parallel processing, are programmed in an algorithmic manner (Wilkinson, 2005, pgs 100 - 101).  The key issue is the ability to ‘frame’ the question in an algorithmic format to enable the computer to work.  Searle considers the computer program based on the algorithmic formulation to be purely syntactic, therefore, unable to be semantic and hence computer programs cannot produce minds.  Searle’s contention may be shown as follows:-

Premise 1.           Programs are purely formal algorithmic processes (syntactic);

Premise 2.           Human minds have mental contents (semantics);

Premise 3.           Syntax by itself is neither constitutive of, nor sufficient for, semantic content;

Conclusion.         Therefore, programs by themselves are not constitutive or sufficient for minds.

Premise 3 supports the CR thought experiment.

Now there are a number of criticisms to Searle’s CR argument against Strong AI, however, they are essentially variants on the so-called ‘System Reply’.  Essentially the counter argument is that no single element should be considered as the ‘mind’ of the CR, and certainly the man at the centre running the process does not understand the Chinese language, but rather it is the whole system operating together that develops an understanding of Chinese and hence a semantic grasp of the Chinese symbols.  Searle replies that if the man in the room were to memorise the instruction book and the database of Chinese characters and become the entire system, he still would not be able to attach any meaning to the formal symbols even though he is now the entire system.

Others criticise the fact that the man in the room is deprived of any sensorimotor connection to the world and that these are vital missing factors.  Searle counters that the Chinese characters could be the outputs of a television camera and the outgoing symbols be the commands to a robotic arm. He now has a connection, but still no understanding.

Others suggest that the CR does not model the way the brain works as complex neural network.  Searle counters by applying Ned Block’s Chinese Gym thought experiment, whereby millions of people in a huge gym are connected to one another by walkie-talkie radios passing instructions to one another acting as individual neurons participating in a neural network.  On the other hand, the same issue regarding semantics applies in this case as well.  The Chinese Gym does not understand Chinese any more than the CR.
Daniel Dennett’s challenge to the CR is based on the issue of complexity.  He contends that Searle’s experiment is far too simple and that this is the reason for no apparent understanding being present within the system.  Dennett argues that with increasing complexity you will get unexpected results resulting in radical changes in behaviour known as emergent properties which only occur when a system is sufficiently complex.  Such radical changes in behaviour or properties of complex systems are common in the natural (Wilkinson, 2007, pg 113-114).  Consequently, Dennett argues that any system capable of conversing in Chinese would most likely be far more complex than the CR experiment and it would be difficult to say confidently that the computer system did not understand Chinese.  Searle contends that running increasing complex programs are no more than more complex algorithms and are just as syntactic as previously described and not capable of semantics however complex.  Whilst I agree that a complex computer program is just an assembly of multiple simple routines, increasing complexity often leads to increased computing capability and can result in unexpected capabilities and even outcomes.

In the same vein, the challenge posed by Patricia and Paul Churchland suggests that the issue is one of interpretation and speed, in that the CR experiment is operating at a very much slower speed than the brain operates and as such ‘understanding’ cannot be detected.  They use the analogy based on Maxwell’s theory of light being made up of electro-magnetic waves.  In their thought experiment, a man stands in a darkened room and waves a magnet up and down.  Although light is indeed made up of electro-magnetic waves, no light would be detected.  The man waving the magnet does not disprove Maxwell’s theory that light consists of electromagnetic waves.  The missing component is speed.  The Churchlands’ thought experiment slows down the waves to a range to which we humans no longer see them as light.  By trusting to our intuitions in the thought experiment, we falsely conclude that rapid waves cannot be light either.  Similarly, the Churchlands’ claim that Searle has slowed down the mental process to a range we humans no longer think of it as ‘understanding’.  Thus the Churchlands contend that the same applies to Seale’s experiment and that if we were to meet the man from the CR who seemed to converse intelligently in Chinese, but was really deploying millions of memorised rules in a fraction of a second, it is not so clear that we would deny he understood Chinese (Pinker, 1997, pgs 94-95).

In conclusion, in consideration of the narrow interpretation of Searle’s claim that the mind is not a computer program I would accept his argument to be valid and that the computer program itself does not ‘understand’ as we interpret that word.  I found Seale’s dismissal of the counter arguments to be reasonable, with exception of Dennett’s and Churchlands’ arguments. The Churchlands’ thought experiment it is based on a very simple premise and easy to understand and Dennett’s emergent properties argument compelling.  Speed and complexity could be key factors in strong AI.  What is undoubtedly true is that the ‘Turing Test’ is no longer a sufficiently subtle evaluation of artificial intelligence.  Progresses in computing have advanced to a stage whereby it is entirely possible to converse with a computer and believe you are conversing with a human being.  The key issue in achieving a true computer ‘mind’ comes back to the framing issue.  This relates to the ability to program algorithmically beyond the essentially mathematical and logical tasks to consider such areas as intuition, belief or even love.  These functions of the mind are frequently considered irrational and illogical, but they are what make us human. The ability or functionality to program ‘illogically’ is probably beyond algorithmic programming of digital computers as we know them today.  Equally Searle’s argument hinges on our understanding of the semantics of language.  What do we mean by ‘understanding’ or ‘meaning’?  Or finally, is it the limitation of English as a language which is unable to provide an adequate explanation of differences and similarities between the mind and artificial intelligence?  Regardless, Searle’s valid dismissal of strong AI will not slow the pace of computing development and the likely move from the physical limitations of silicon-based computer architectures to bio-computers which utilise biologically derived molecules to perform computational processes.  The future of ‘strong AI’ probably lies in the rapid development, dare I say growth, of such bio-computers!

Wilkinson, RJ (2007) ‘Chapter 3 Monism (Conclusion) and Artificial Intelligence (Beginning), Robert Wilkinson Minds and Bodies, 2007, Open University Press.
Pinker, S (1997), Chapter 2, ‘Thinking Machines’, Steven Pinker, How the Mind Works, W.W.Norton & Company Ltd., 10 Coptic Street, London. WC1A 1PU

Copyright© John Tomany 2012

Can you Google the Economy?

With over a billion searches a day, Google is arguably one the wonders of the modern world.  Search for almost anything and you will be returned tens of thousands, if not millions of results in a fraction of a second.  Recent studies are now suggesting that search patterns can tells us more than just the cheapest source of the must have gadget or who was the lead character in ‘Bonanza’.
Internet advertisers have long understood the power of search to establish trends in usage and demand for products and services to produce instantaneous views of economic activity known as ‘nowcasting’, but recent research is considering whether these trends in web activity can actually provide an accurate forecast of what is happening in the economy.
If you think that your random search for a suitable Christmas gift for your partner is of little interest to anyone other than yourself, think again!  Last year no lesser august body than the Bank of England reviewed all the recent studies on Google search activity to understand whether there was any validity in the proposition that economic forecasts could be based on our search behaviour.
In particular, the Bank homed in on two particular areas of interest in order to consider search as a suitable allegory for an accurate economic forecast.  They focused on unemployment and the housing market, both areas which are frequently quoted a real world factors related to economic activity.  They found that Internet search data have a number of appealing properties as economic indicators. They are extremely timely and cover a potentially vast sample of respondents (approximately 50% of the adult population in the United Kingdom now use the internet every day). In contrast to most traditional survey methods, they are collected as a by-product of normal activity, rather than requiring individuals or firms to respond to survey questions after the event. This can avoid problems associated with non-response or inaccurate responses. And it also means that information is continually collected on a wider range of issues, rather than just on a few pre-determined questions. As a result, search data can help analyse issues that arise unexpectedly.
Although it remains early days, this analysis suggests that internet search data contain valuable information for analysis of unemployment and house prices. These applications treated the search data in a similar manner to existing surveys in conducting standard regression analysis. However, internet search data also has the potential to answer different sorts of questions to existing indicators. Such data has the particular advantage that it can help analyse issues that arise unexpectedly at short notice. Whereas survey data must be consciously collected based on pre-determined questions whereas internet data is collected based on behaviour at the a particular time and trend data going back into the recent past helps to flesh out our understanding.  Such data is generally generated without engendering any form of bias that studies and surveys often find it difficult to avoid.  Equally the idle musings of millions of internet users may well provide a great deal of ‘noise’ which obscures the key trends.
However, without doubt the internet and associated social media reflect the pulse of today’s society and as such reflect our collective social mood. People learn what others are thinking and express what they themselves are thinking by posting and promoting their thoughts and opinions on websites like Twitter, Facebook, and on blogs. People reveal what is on their minds by querying topics on search engines and together create a learning process and a continuous feedback loop, whereby people form, express, and reveal expectations in real-time.
If the revealed expectations derived from Google Trends suggest genuine predictive power for future outcomes, then the symbiotic nature of social media and internet search behaviour suggests that these channels may facilitate self-fulfilling prophecies and if the predicted outcomes relate to economic events, then analysis of Google’s search trends can become important tool for the Bank of England to gauge and manage inflation expectations.

Is the Pop-up a Pep-up for the High Street?

What started as a fad in US shopping malls is increasingly evolving into a permanent feature of the UK High Street.  Pop-up shops are temporary retail outlets that take over an empty shop and are open for just a few days or weeks or sometimes hours to offer fashion goods or some surplus or other at significantly discounted basis.  Local authorities and landlords are renting out empty shops for very short-term lets in order to cash in on the demand for short term retail space.  These initiatives have a tendency to pop up unannounced, quickly draw in the crowds, and then disappear or morph into something else.  The run up to Christmas has become well established as a period when all types of retail opportunities are set-up to cater for every conceivable taste and interest.
During 2012, big brands including JJB Sports, Clinton Cards, Blacks Leisure, Game and Peacocks have either disappeared or scaled back their presence in town centres after going into administration and most recently with the collapse of Comet, the demise of the High Street is in full swing.  Caught between recession, unrealistic commercial rents and the internet resulting in upwards of one in ten retail shop-fronts lying empty, can the pop-shop provide a realistic answer.  The pop-up shop is often set-up as an extension of internet campaign are taking over some of these retail units for just days at a time often as extensions of some market-stall activity or sale of bankrupt stock creating a flash crowd of interest.  However, they are frequently used by major brands seeking to create some short-term buzz or more often to promote some wider event or PR launch.
Whilst this may work effectively in our major cities and shopping malls, with High Street stores increasingly seen as show room extensions of internet web sites this trend is likely to grow and go mainstream with major retail brands and reach the smaller towns and villages being whose High Streets are frequently becoming ghost towns as the money goes to the out of town shopping supermarkets.
Undoubtedly, the pop-up shop has become an additional solution for marketers and major brands to promote their goods and services, but we need to see local authorities and landlords beyond the major cities embracing this trend and encouraging more small businesses to try out this approach in the hope of revitalising the traditional High Street.   More over the greater encouragement to connect the online world with bricks and mortar reality is something that needs encouragement.  The more opportunities to demonstrate and support such initiatives the greater the opportunity that some business may developed into longer term tenants beyond the seasonal rush.

Thursday, November 22, 2012

UK ISP, Cable, Dongle and 3G and 4G User numbers November 2012

Here is an update of the UK ISP market covering DSL and Cable Access market as well as the Mobile Dongle market in the UK.  I have also added in the published figures for 3G and 4G mobile access devices. I have used ITU published data for Broadband usage numbers and Neilson Ratings and ISP published figures to get an accurate picture as well all the reports and disclosures for each of the companies shown below. I believe these figures represent a reasonably accurate representation of the genuine adoption of broadband either via DSL, Cable or mobile dongle. Broadband connections included in this data cover download speeds equal to or faster than 256kbit/s.

    Table 1. Broadband ISPs (Source: ITU, Neilsen, OFCOM & ISP Published Figures)

    No. ISP/Provider User Numbers % of UK Market
    BT Retail
    Virgin Media
    Sky Broadband
    TalkTalk Group
    Kingston Comms
    Zen Internet
    Thus Group

    The major change over the past year has been been the continued growth of Sky Broadband which has seen it rise above TalkTalk.  Undoubtedly the combination of the Sky bundled offerings with its satellite TV content has driven this growth.  Recent launch of Talk Talk's TV set-top box plus the major BT play into football are both aiming at trying to redress this strategy.  Clearly Orange and O2 are seeking to enhance their position in the UK market through growth in the connected Tablet market which is experiencing phenomenal growth as eluded to below. 
    The total UK Internet connectivity market is not only made up of Broadband ISPs, but connection is now frequently through 3G and most recently 4G mobile network connections.  The Broadband ISP market size is estimated to be just over 21 million broadband connections. The figures for mobile connectivity is much harder to obtain, however, given that there are now many millions of Internet enable phones in use today. However, OFCOM indicate in their latest facts on the market that there are 5.1 million mobile broadband users in addition the 21 million fixed line users.

Are the rise of networks and ICTs transforming the international system?

The rise of networks and ICTs has had a transformational impact on the development of international commerce and in particular the interconnected world of global finance.   However, to what extent have the development of networks, in the form of the Global Civil Society, helped political activists to expand their activities by increasing their capacity to mobilise dissent against particular states and international groups.  Equally have governments become increasingly astute in their ability to manage the information revolution to increase political control and suppress opposition.  Consequently is the Internet in both the expansion and suppression of dissent may be considered a network enabler in transforming the international system.
So what constitutes the international order of states and how might networks and ICTs impact on this order?  The transformation of the international order rests with the ability to manage, control or influence power within sovereign states and across the international system.  The Westphalian treaty of 1648 established the territorial state as the basis of the modern state system with its focus on establishing the international boundaries as legal boundaries between one country and another and defining their sovereignty (Teschke,2009, pg 51-56).  The modern state has evolved a hierarchical structure with clear borders and directed with downward authority.   Within the state system, power is considered to be a zero-sum commodity.  The more power that one actor acquires, the less relative power there is for others.  From a realist perspective, the changing power of the modern state resulting from Westphalia operates within an international system of anarchical relations in which states jockey for power and leadership against a background of the changing balance of power resulting from economic, military and cultural developments.  With this in mind, in a refinement of realism, the ‘English School’ suggests that a 'society of states' operates at the international level, despite the condition of anarchy, being able to co-ordinate some of their interactions to mutual advantage.  This approach may be seen to a large extent in the formation of the United Nations (UN), the WTO, the Bretton Woods Institutions (BWI) and NATO as a response to a purely realist perspective   Within these international organisations, the major powers control and manage relations through the ‘green door’ process in which key decisions are taken behind closed doors and they are unwilling to open up that process to a more democratic process as it will dilute their influence.
Let us now look at the theoretical basis of international transformation of realism and liberalism and then consider if networks empowered by ICT are indeed bringing about change.
The fundamental dominant process of realism is the balance of power between states.  If the state system remains in the Westphalian model and there is a plurality of powers and states continue to pursue their national interest, then there is no change of system.  However, this approach may in fact miss the subtlety of change that is resulting in the re-alignment of states and powers.  Liberal theory of international relations provides a more nuanced explanation of inter-state relations shaped by economic and societal interests as well as the political. The liberal model of international order is a bottom-up model built on three elements.  Firstly, political activity is made up of individuals and interest groups influencing the formation of state policy; secondly, state policy, both domestically and internationally, is based on the interests of a subset of society and group interests and, finally, the international outlook reflects the policy prerogatives of the most powerful states.  The bottom-up basis of the liberal model is almost tailor-made for the involvement and influence of networks.  The dominant process of international interaction of liberal theory contends that the positive-sum interdependence among individuals and private groups may be so extensive and powerful as to effectively transform the self-help nature of anarchy and the compulsions of the balance of power (Bromley & Smith, 2009, pgs 528-529). Equally, it may be for this reason that in those cases that networks empower non-state actors, they are most likely to influence government in societies that embrace and value liberal norms of the liberal model.
It is against this background of the structure of the international system that we need to consider how networks and ICTs have impacted.  Networks have always been a feature of political campaigns waged by different sections of civil society.  The campaign to end slavery in the eighteenth and nineteenth century networked across like-minded members of civil society in Britain, the United States and Europe.  Equally the campaign for women’s suffrage straddled civil society on both sides of the Atlantic (Brown et al, 2009, Audio 7).  Networks in the context of modern networks of dissent are defined as a set of interconnected nodes that have no centre and are based on the binary logic of inclusion/exclusion (Castells, 2009, pgs 19-20).  Unlike states, networks are not governed by such purposive authority, but are organised around concepts of trust, shared values and interests or loyalties.  Global Civil Society (GCS) is organised like a network, “characterized by voluntary, reciprocal, and horizontal patterns of communications and exchange” (Keck & Sikkink, 1999, pg 9).  The major difference between campaigning networks of the past and those of today has been the impact of technology to speed up the effects.  For example, the campaign to abolish slavery in the West took over fifty years whereas the campaign to ‘Make Poverty History’ took just four years.  Indeed, according to Manuel Castells, a major driver of the growth of networks in contemporary society is the development of information and communications technology (ICT).  He views the advent of new technologies as resulting in an historical change in the international order as the contemporary era passes from the industrial age into the information age (Bullion, 2009, pg 95). In order to provide some insight into the international system, Table 1 outlines an analysis of the international system by comparison of the sovereign state and global civil society as an example of a network enabled by ICT against the four basic elements(Bromley & Smith, 2009,pg 524):-

  1. The basic units that comprise the international level;
  2. The structure of relations among those units;
  3. The technological and organisational interaction capacity within the system;
  4. The processes of interaction that take place in the system.
The key distinction between the state and the network characterised by the Global Civil Society is how power passes through and around the system.  The state and intergovernmental and transnational organisations invariably operate a Weberian hierarchy with states as actors who use power as an instrument of coercion, and even in organisations separate from the discreet structures in which those actors operate. However, networks such as GCS work on a more Foucauldian model whereby power is everywhere, diffused and embodied in discourse, knowledge and regimes of truth (Foucault, 1978, pg 93). The idea that ‘Power is everywhere’ and ‘comes from everywhere’ is neither an agency nor a structure, but is diffused into the network.  Interestingly Foucault also equated power with knowledge and, given that the ‘information revolution’ is a key aspect of the Internet, there is a clear parallel with how the network empowered by ICTs utilises information as knowledge and hence power.
Table 1. Analysing International Systems: Realist & Liberal States versus Global Civil Society

Sectors of the international system
Elements of the international system
Political Sector of authoritative rule - Realism
Political Sector of authoritative rule - Liberalism
Global civil society
Principal units in the international system.
Sovereign states system operating individually and as networks configured to build/defend particular aims and objectives.
Individuals and private groups that use state system to conduct political exchange and advance their collective interests.
Networks organised around concepts of trust, shared values and interests or loyalties.
Structure of relations among units.
Hierarchical structures co-ordinating network based on realist determination of need.  Inter-governmental and transnational organisation.
Interdependence, which may be positive-, zero or negative-sum.
Horizontal voluntary networks based on a liberalist/cosmopolitan view of transformation and analogous to the non-hierarchical mesh structure of the Internet.
Interaction Capacity
Defined by flows of information and communication made possible by ICTs – Internet etc.
Defined by flows of information and communication made possible by ICTs – Internet etc.
Defined by flows of information and communication made possible by ICTs – Internet etc.
Dominant process of interaction.
Networking that serves to include some and exclude others (green room process – alignment around shared needs or objectives), balance of power.
Varies from harmony through bargaining to conflict, depending on the configuration of interdependent preferences.
Networking that serves to include some and exclude others; the network rather than individuals is the key mover.
The network characteristics of the GCS are directly comparable to the network structure of the Internet.  Consequently, as the Internet has become increasingly available, the networking power of GCS has been enhanced.   This network aspect is important as it enables the sharing of information and allows the co-ordination of collective action.  John Fisher stated that the Internet is particularly empowering as it enables individuals with few resources to have equal opportunities for political debate and involvement (Yanacopulos & Mohan, 2009, pg 422). Non-government organisations (NGOs) which lie at the core of GCS have traditionally lacked significant amounts of hard power resources that governments control.  The Internet and the associated information revolution have enabled NGOs to make more effective use of their political tools.  This has resulted in a realignment of power to make change happen (Drezner, 2010, pg 38).   There are examples of campaigns which have ‘gone viral’ and spread around the world, such as the breakdown in the negotiations of the Multilateral Agreement on Investment (MAI) in 1998, the campaign against Nike’s use of child labour in 2001, and the ‘Make Poverty History’ campaign (MPH) in 2005.  MPH made significant claims around the mobilisation of civil society through the internet and mass media to pressurise the G8 at the Gleneagles Conference in 2005 to agree debt cancellation programmes and increase aid budgets.  One group that is particularly interesting is the web-based group called Avaaz.  It is a global civic organization launched in 2007 to promote activism on issues such as climate change, human rights, corruption, poverty, and conflict.  Its stated mission is to "close the gap between the world we have and the world most people everywhere want" (, 2012).  It has 13 million members and many more ‘friends’ in the social networking parlance. 
Not all activists utilising the power of the Internet are quite so legitimate in their approach. The idea of Global networked civil society suggests an image of civic-minded activists committed to Western liberal norms of democracy and freedom.  However, the reality is sometimes quite different. Groups such as Anonymous, an amorphous worldwide network of computer hackers, use more direct tactics such as denial-of-service attacks and other types of network disruption to call attention to a series of political causes.  Anonymous closed down the websites of the US Department of Justice, the FBI and the UK Home Office demonstrating a very different aspect of civil society in action (The Daily Telegraph, 2012).  Other extreme nationalist groups have harnessed the web to spread their own brand of racial hate. Conspiracy theorists push their own fictional interpretation of global events.  The list of users of the darker side of the web is just as extensive as legitimate pressure groups.  The web is democratic in one sense in that anyone regardless of political stance can share the same platform and often one that would not be normally acceptable in liberal society.
The extent of Internet access and associated ICT tools such as mobile phones clearly has a bearing on whether there is a truly ‘global’ civil society emerging empowered by such networking tools.  Limited access would suggest not so much a global network society, but the emergence of a form of civil society envisaged by Antonio Gramsci in which a global networked elite achieves dominance by manipulating the global society so that its worldview is imposed as the societal norm and is accepted by every social class as a universally valid ideology that justifies the social, political, and economic status quo  as natural, inevitable, and beneficial for everyone, rather than as artificial social constructs that benefit only the ruling global networked elite (Yanacopulos & Moran, 2009, pg 424).
So if access to the Internet is a key measure of the capability of the network society to exercise power, how widespread is access to the Web?  Today, the world’s population is now over 7 billion and there are 2.3 billion internet users, which accounts for 32.7% average penetration. With near universal access in Western nations there is clearly sufficient access to support the claim of a network society.  However, outside the OECD countries, access is far more patchy in some the most populous areas such as Africa and Asia (Internet World Statistics, 2011).  The increase from the 6.7% as a percentage of Internet users of the global population in 2000 (Thompson, 2009, pg 370) to 32.7% in 2012 is significant and some of fastest growth has been in areas such as China and India, penetration rates are still far below those of the OECD nations (Internet Usage Statistics, 2012).  The evidence suggests that a global networked society is really only emerging in the West and many of the concerns and issues promoted are by those who are ‘left leaning and interested in technology’ as suggested by Peretti in the Nike case (Yanacopulos & Mohan, 2009, pg 419).  However, if access to a computer and the internet are economic barriers to joining the GCS, then recent developments, such as web enabled mobile phones, are challenging the Internet’s picture of inequality of access.  Recent surveys indicate there are 5.9 billion mobile subscribers, which is equivalent to 87% of the world population and more importantly growth is led by China and India, which now account for over 30% of users (Global mobile statistics, 2012).  So with camera phones able to upload images straight to the web and messages sent to anywhere in the world via text or networks such as Twitter, there is clearly an argument to suggest that we are nearing equality of access to the web and therefore enabling the opportunity to participate in the GCS.
Whilst the MPH and MAI campaigns are good examples of civil society having influenced decision making of liberal sovereign states, they are not good examples of networks and technology coming together to create genuine change in the international order. 
However, one of the most interesting transformational moments of recent times has been the ‘Arab Spring’. There have been extensive claims that technology was central in creating revolutionary fervour amongst suppressed civil society across the Arab world and mobilised the wider global civil society to bring pressure to bear on their own, invariably Western, governments to bring pressure to bear on the repressive Arab regimes. 
The Arab Spring began in Tunisia, where the underlying source of the uprising lay in government corruption, inequality, censorship and joblessness. Much of the organisation of the opposition took place on the Internet.  Pictures of the demonstrations recorded on mobile phones fuelled the revolt and provided a window on events for the Western media.  Similar anti-government demonstrations spread quickly across the region.  Protests spread to Egypt within days of the successful overthrow of Tunisia’s President Ben Ali.  Egyptian opposition leaders declared a “Day of Rage” on which protesters would take to the street against President Mubarak’s 30-year rule.  These protests lasted 18 days and once again protesters used the web to disseminate videos, photographs and called on Egyptians to protest.  Protesters provided minute-by-minute ‘Tweets’ concerning where to assemble in an effort to outwit police.  More than 90,000 people signed up on a Facebook page for the first protest, positioned by the organizers as a stand against torture, poverty, corruption and unemployment.  Despite the Egyptian Government’s attempts to block the Internet and mobile phone networks, the damage was done and Mubarak also fell from power.  Similar protests spread across the middle-east with protests occurring in 20 Arab countries; initial analysis suggested the empowerment of civil society networks by ICTs was a key factor.
However, whilst undoubtedly the Internet played an important role in empowering the protestors, Internet access in many of these Arab states is far lower than the average world-wide penetration of 32.7% and so any network effect clearly depended on other factors such as word of mouth at Friday prayers.  Equally the states involved used all their repressive paraphernalia to block access and even identify key ring-leaders (The Guardian, 2011).  One of the most interesting factors of the Arab Spring, identified by Keck and Sikkink in Activist Beyond Borders, was the ‘boomerang effect’ in which activists who are unable to change the conditions in their own countries leveraged power by networking with those transnational activists outside their country, who in turn publicised abuses by the reactionary governments to the outside world and also lobbied their own governments.  During the Arab Spring, pressure by transnational activists through the international media and direct lobbying in the USA and the European Union resulted in pressure, particularly by President Obama, to get Mubarak to stand down.   This perhaps identifies the key point.  The real change came about in Egypt and more particularly in Libya when the international community of states decided enough was enough.  In Egypt diplomatic pressure and threats of sanctions were enough to convince the Egyptian Army to take action to remove Mubarak.  In the case of Libya it took the direct involvement of the UN and the military action of NATO to collaborate to provide the necessary airpower to enable regime change.  Where international consensus is reached among the leading/dominant sovereign states then change happens.  Arguably Syria is the case that proves the point.  Despite widespread condemnation and citizen journalism blogging the tyranny of the Assad regime, there is no consensus among the international community of sovereign states to intervene directly.
Indeed whilst technology in the form of Twitter and Facebook clearly played a role across the Arab world and continues to do so in Syria in getting the videos out to the Western media and mobilising support and generating this ‘boomerang’ effect, Malcolm Gladwell points out, successful social movements long pre-dated social media (Gladwell, The New Yorker, 2010).  Gladwell disputes the importance of social media in the Arab uprisings and asserts that protesters could have organized in other ways, noting that East Germany overturned a government when only 13% of the population had landline phones.  Becoming a ‘friend’ or ‘liking’ an entry on Facebook is easy, as it does not constitute a decision to join the barricades!  Activism that challenges the status quo is not for the faint hearted.  It depends on a network of strong personal contacts to amplify the cause and the individual’s personal connection to the cause.  You are only going to take the risk of protesting if you know you are not alone and are connected to the cause.
However, the power of the Internet is not only at the disposal of global civil society to spread their message of dissent or support for particular campaigns.  States have also proved adept at the use of the web and applying it to their particular needs:  In the traditional cockpit of international politics, states have used the Internet in a number of novel ways: cyber-attacks allegedly by Russia on Estonia in 2007 disabling much of their state and banking infrastructure or Stuxnet, a malicious computer programme, downloaded into the Iranian Nuclear development agency’s centrifuges to delay their alleged weapons programme.   Whilst these examples of cyber-warfare are of interest, the ability of the state to adopt and apply the building blocks of the information revolution have proved as effective as any GCS campaign at controlling and regulating their own populations.
States have successfully utilised the Internet and associated technologies to exert greater control and tyranny to impose a digital version of Bentham’s concept of the panopticon and Foucault’s popularisation of the approach to enable the state to track all its citizens via the internet and encourage self-censorship by the networked society (Farinosi, 2011, pg 63).  The usual non-technological measures of the repressive state have been used to interfere with the use of the Internet, including the imprisonment of relevant individuals, active policing, high taxation of Internet access and pressure on ISPs.  Cuba outlawed the sale of personal computers to individuals and Myanmar outlawed personal ownership of modems until 2002. However, states have also used technological measures to control and regulate the Internet through the creation of firewalls, proxy servers and software filters to block access to content and applications that they consider undesirable.  Saudi Arabia routes all web access through government controlled proxy servers.   China controls access to the Internet on the grounds of national security and requires all ISPs to self-censor, removing content that is considered illegal from search results.  Such measures have been utilised by repressive states to control the use of the Internet by activists within their borders whilst allowing the economic benefits of the technology to be used unencumbered. Remarkably Google, Microsoft and Yahoo! have accepted such controls in order to pursue commercial interests even allegedly co-operating with the Chinese government by providing email details of known dissidents (Drezner, 2010, pg 35-37)!
There is a cost for both the state and activists.  Economically the Internet has proved to be one of the most powerful business enablers of our time. States that block Internet access pay a heavy cost, preventing them from enjoying the many commercial benefits of e-commerce.  On the other hand, individual citizens who break these rules pay a far greater cost if they are caught breaking the repressive state’s rules.  However, cost-benefit analysis by states clearly suggests that repression works.  The rise of the internet has not only dramatically cut costs for businesses and social networks, but it has also cut the costs for governments to monitor their populations.  Even where governments choose not to censor online political activity, the Internet enables a step change in the ability to monitor, anticipate and manage civil protest (Drezner, 2010, pg 35-37).
Repressive states are not alone in seeking to coerce the web to their will.  Even in liberal democracies such as the United Kingdom, the Government is seeking to introduce legislation to allow the monitoring of all the calls, emails, texts and website visits of everyone in the UK (The Daily Telegraph, 2012).  Internet Service Providers (ISPs) will be required to give the intelligence agency GCHQ access to communications on demand, in real time.   The UK is not alone, similar laws are planned in the US and across many of the OECD states.
In conclusion, networks have always existed since the earliest times.  In particular networks of dissent have often formed around issues and campaigns for change such as the abolition of slavery and women’s suffrage.  However, I cannot agree with the statement that networks and ICTs are transforming the international system as yet.  I believe that the impact of a networked Global Civil Society enabled by the Internet is rather more a normative idea than an empirical one.  Genuine power to cause transformation of the international order continues to rest with sovereign states that come together to operate in a co-ordinated fashion as was seen in the G8 response to the MPH movement.  The liberal norms of the Western Democracies that make up the G8 enabled the networking effects to be effective.  However, nothing would have happened had the states, such as the Western democracies making up the G8, felt that debt-relief for sub-Saharan Africa was not in their global economic interests and that pressure could be applied to the World Bank and the IMF to co-operate.  The MPH global network was effectively pushing on an open door whose time had come.  On the other hand, within states, and particularly those with a liberal democratic tradition, the additional tools of hard power offered by the various communication capabilities of the Internet have given the NGO sector an additional channel to publicise their case.
In many ways the increasing use of the Internet and growing penetration is adding support to pre-existing dynamics between sovereign states and civil society whether domestic or global.  In liberal democracies, the growth of the Internet, social media, citizen journalism etc. clearly empower civil society to influence government policy.  In this respect, liberalism may be viewed as a critical theory of transformation in which GCS and the Internet are key actors.  However, it would be a mistake to overstate any transformation impact of Internet empowered network campaigns that did not already have some form of political momentum behind it.  Outside the West the power of the Internet has been frequently used as a means of oppression as often as liberation.  In those states where liberal norms do not pervade, governments have successively adapted the Internet for their own purposes to continue to repress their citizens and to operate in a realist manner pursuing their own national interest.
However, it would be a mistake to ignore the potential that an Internet enabled GCS has in bringing about transformation of the international order.  The role of civil society and ICTs in the Arab Spring were not necessarily pivotal, but they were undoubtedly important in maintaining momentum and helping to generate widespread international support. Networks empowered by the Internet continue to grow in influence and are gaining main stream support as Avaaz has demonstrated.  Today’s political networks have not replaced the state in international relations, but they are becoming increasingly important and cannot be ignored.
Real power for change is still in the hands of the key hierarchies of sovereign states and the many inter-governmental and trans-governmental organisations.  The case of Syria is an object lesson in how extending consensus beyond the liberal West to involve both Russia and China is needed if the international system of states is to act.  Change will only occur when the circumstances are seen as beneficial to all interested parties in the state system and not because of the wishes of the Internet enabled global civil society.
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