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Donkey Carts: IPRED an Economic Catastrophe for Sweden

About the industry that could have taken us out of the financial crisis. By Jon Karlung.

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Bahnhof handles about 10% of Sweden's public Internet traffic. Up until 1 April our traffic peaks were at 25 Gbit/sec. Then in a single day - the day IPRED went into effect - this traffic dropped by nearly half. Today 3 April the peaks are at 15 Gbit/sec. This is a tremendous downturn, not only for us but for the entire Swedish part of the Internet - for all providers.

We're probably seeing only a temporary dip in the curves. That's the way it was in Finland. When their implementation of the EU's IPRED directive went into effect in 2006 their traffic went down by 30%. But in a few months it came back up again and went higher than ever before.

But Finland's law is kinder than Sweden's and here lobbyists have been getting ready for a long time. The current situation could be a permanent one if this turns into a bitter struggle between illegal file sharers and the lobbyists.

Sweden will in such case lose her position as a leader in the broadband industry. The more than SEK 100 billion that have been invested in one of the world's best broadband networks will have been in vain. Our Swedish information highways will be trafficked by donkey carts.

The tragedy isn't that musicians, directors, and authors suddenly get paid more. They won't. Those who'd earlier been file sharers are hardly going to buy more films and books. But that's another matter entirely.

The tragedy is that the legislators have forced a law on us that establishes an outdated business model. Instead of working with a business model where file sharing becomes a method of distribution for the media customers are forced back to the age of plastic and vinyl. And not just that - an entire sector jeopardised should our Internet traffic be permanently halved.

Some might be happy that file sharers can today be hunted down by private corporations and inconsolable troubadours. Maybe the CEOs of the record companies in the US will be content. Most assuredly the fat legal firms in Stockholm's inner city who specialise in maintaining and protecting outdated business models will be holding loud and noisy victory parties.

But it will be a terrible tragedy if Internet traffic in Sweden is halved. An entire business sector of the future is put in jeopardy. As a nation we stand to risk forfeiting the avant-garde status we've had.

It's creativity and the new generation's joy of discovery which have formed Sweden - not the copyright industry's lobbyists or the clerks in the government who haven't understood the broad commercial aspects of IPRED. The effects will be huge for a sector that's supposed to take over now that Volvo and SAAB are gone.

Bahnhof replied recently to a referral on government censorship of the Internet. It dealt with whether the government should block and censor foreign gambling sites. The great inspiration for the researchers in this context was Italy. They'd been on a visit and were lyrical about Italy's fantastic censorship law.

At the same time they noted that southern Europe has five times less use of broadband and development of broadband infrastructure than Sweden. In other words they're far behind us commercially in this context.

Donkey carts.

IPRED not only implies Italian broadband standards and their classic corporativistic view of commerce. It also opens a fast lane for powerful private interests that get free room to maneuver and their own channel to the legal system. In the worst nightmare scenario the door will open for outright extortion as a business model. I find this reminds me of entirely different organisations from - amongst other places - Sicily.

Perhaps there's a reason Spotify, MySQL, and Skype weren't developed in Italy?

Bahnhof are not only Sweden's first Internet provider - they were also from the outset a broadband provider, offering 10 Mbit lines already fifteen years ago. Their current CEO Jon Karlung is well acquainted with the unscrupulous methods of the antipiracy lobby. See the link below for further information.

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