Internet DRAFT - draft-mcfadden-consolidation-taxonomy
draft-mcfadden-consolidation-taxonomy
Internet Engineering Task Force M. McFadden, Ed.
Internet-Draft internet policy advisors, ltd
Intended status: Informational 23 October 2023
Expires: 25 April 2024
A Taxonomy of Internet Consolidation
draft-mcfadden-consolidation-taxonomy-03
Abstract
This document contributes to the ongoing discussion surrounding
Internet consolidation. At recent IETF meetings discussions about
Internet consolidation revealed that different perspectives gave
completely different views of what consolidation means. While we use
the term consolidation to refer to the process of increasing control
over Internet infrastructure and services by a small set of
organizations, it is clear that that control is expressed through
economic, network traffic and protocol concerns. As a contribution
to the discussion surrounding consolidation, this document attempts
to provide a taxonomy of Internet consolidation with the goal of
adding clarity to a complex discussion.
Status of This Memo
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Table of Contents
1. Introduction - Why a Taxonomy? . . . . . . . . . . . . . . . 2
2. Toward a Definition of Consolidation . . . . . . . . . . . . 3
3. Background to Consolidation Issues . . . . . . . . . . . . . 4
4. Economic Consolidation . . . . . . . . . . . . . . . . . . . 5
4.1. 4.1. Economic Revenue Consolidation . . . . . . . . . . 5
4.2. 4.2. Economic Flow Consolidation . . . . . . . . . . . . 6
5. Traffic and Infrastructure Consolidation . . . . . . . . . . 7
6. Architectural Consolidation . . . . . . . . . . . . . . . . . 8
6.1. The Rise of Intermediaries . . . . . . . . . . . . . . . 8
6.2. Vertical Architectural Consolidation . . . . . . . . . . 8
6.3. Standards Development . . . . . . . . . . . . . . . . . . 9
7. Service and Application Consolidation . . . . . . . . . . . . 9
8. IANA Considerations . . . . . . . . . . . . . . . . . . . . . 10
9. Security Considerations . . . . . . . . . . . . . . . . . . . 10
10. Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . 10
11. References . . . . . . . . . . . . . . . . . . . . . . . . . 10
11.1. Informative References . . . . . . . . . . . . . . . . . 10
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . 12
Author's Address . . . . . . . . . . . . . . . . . . . . . . . . 12
1. Introduction - Why a Taxonomy?
Internet consolidation has been under discussion for the last several
years. The 2019 Internet Society's "Global Internet Report:
Consolidation and the Internet Economy" highlighted issues on this
topic and kicked started a series of discussions and publications
around consolidation. The DINRG Workshop on Centralization took
place in June of 2021 and was reported on at IETF 114[DINRG].
Furthermore, a draft for the Internet Architecture Board (IAB)
discussed issues of economic and technical consolidation[IABwrkshp].
Despite community interest, the draft expired without further work or
publication.
Several other contributions have focused on responses to
consolidation. However, the report from the DINRG Workshop makes
clear that there are different "categories of centralization." This
draft does not attempt to propose responses to centralization,
instead it attempts to build upon the Workshop's summary of
"categories of centralization" with a goal of supporting future work
and discussion.
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2. Toward a Definition of Consolidation
There's a reason that concerns have been expressed about the
"definition" of centralization. Centralization has seen many
attempts to define "centralization." In a now expired Internet-
Draft, one definition was "the process of increasing control over
internet infrastructure and services by a small set of
organizations." [Arrko1] A more recent Internet-Draft uses the
following definition: "centralization" is the state of affairs where
a single entity or a small group of them can observe, capture,
control, or extract rent from the operation or use of an Internet
function exclusively."[Nottingham]
This is not simply a recent trend. Dmytri Kleiner views the
situation as primarily economic and notes that the dot com boom "was
characterized by a rush to own infrastructure, to consolidate
independent internet service providers and take control of the
network." He describes the environment in the early 2000s as a sort
of economic land rush where investors tried to replace the smaller
service vendors with larger ones on every scale, from low level
telecommunications infrastructure to high level services such as news
aggregation, e-mail and video.[Kleiner]
Taking as a starting point the centralization of DNS services, there
have also been studies of what centralization means in the context of
key Internet services. For instance, one academic study found that
about 12,000 name servers used by websites in the Alexa top 1 million
used exactly the same third-party infrastructure.[DNSmeasure] This
finding led to the proposal of a metric for measuring the market
share of organizations that provide DNS resolvers.[Entropy] In this
case, the authors implicitly provide definitions of "centralization"
based on external metrics.
A completely different approach to the definition of consolidation
can be seen by looking at research that focuses on the consolidation
of data instead of economic measures.[DataConsolidation] In one study
the authors state, "as users get used to using their services, the
users' generated content and the data about their online behaviors
are concentrated in such companies. This phenomenon, called "data
consolidation", has become a serious problem, which makes the
Internet society seek to decentralize the current Internet. The
decentralized Internet aims to prevent the concentration of user data
in a few giant companies."[ISOCconsolidation] This approach to
centralization isn't an isolated research activity. Another study
surveys the ongoing research activities on "data centralization" from
the Internet Society, EU Horizon-2020, and Decentralized web.
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The key problem is that "centralization" means different things in
different contexts. Research takes on various topics including
economic, network and data centralization. As a result the guidance
from the DINRG workshop seems to have an important message for those
who would like to see a single definition of centralization: there
are "categories" of centralization, each with its own
definition.[DINRG]
3. Background to Consolidation Issues
Internet consolidation is defined in one setting as "the process of
increasing control over internet infrastructure and services by a
small set of organizations." [Nottingham] Economy of scale is the
driving force behind consolidation because markets naturally
consolidate when economies of scale come into play.
The DINRG Workshop Report notes that:
* the economy of scale enables one to generate the same service
outcome with far lower production costs, and consume fewer
resources for each instance of the service transaction.
* a large user pool produces big data which helps improve service
customization for each user, letting bigger companies gain an edge
over smaller competitors.
* centralized application developments reduce the number of
platforms, hence substantially reduce the cost in development and
maintenance, and circumvent interoperability issues. Consolidated
development and operational efforts also help mitigate technical
expertise shortages.
* most of all, monopoly players can dictate to the market the terms
of the service and the service price bought to the market, which
causes longer term stagnation of the market and increased
inefficiency within the market, which acts as a drag on further
innovation.
The current consolidation and centralization of control and operation
of Internet infrastructure and services was not an original design
goal. In fact, RFC1958 says:
* "This allows for uniform and relatively seamless operations in a
competitive, multi-vendor, multi-provider public network."
and later,
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* "Heterogeneity is inevitable and must be supported by
design."[RFC1958]
Much of the discussion surrounding consolidation focuses on Internet
services, applications and data. However, contributions to the
discussion of consolidation have also addressed economic, traffic and
architectural consolidation. In recognition of this, a taxonomy with
four main categories is proposed:
* Economic Consolidation
* Traffic and Infrastructure Consolidation
* Architectural Consolidation
* Service and Application Consolidation
4. Economic Consolidation
The Internet Society Report on Internet Consolidation suggests that
the Internet's economy is defined as the economic activities that
either support the Internet or are fundamentally dependent on the
Internet's existence.[ISOCconsolidation]
As a result, economic consolidation on the Internet refers to the
effects of market consolidation on competition and the economic power
of a small set of companies that dominate economic activity in the
Internet. There are two aspects to economic consolidation on the
Internet.
Economic consolidation means that a small number of companies
dominate the marketplace and hence, the revenues gathered from the
use of the Internet.
Economic consolidation also means that a small number of companies
control the flow of capital among enterprises that provide services
on the Internet.
4.1. 4.1. Economic Revenue Consolidation
One of the two aspects of economic consolidation is the generation of
revenue by a small number of enterprises. As an example, Amazon
accounts for more than 45% of all online retail spending in the
United States. Alibaba is estimated to have 60% or the electronic
commerce market in China. Meta - including Facebook, Messenger,
WhatsApp and Instagram - dominates social media and messaging holding
four of the world's top six social media platforms.
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In each of these cases, a very small number of companies operate
extremely popular services, concentrating revenue generation into
those companies. In fact, the popularity of these services is so
great that value is created by adding other, complementary services
onto the base they provide. The dominant services thus control the
foundation upon which other revenue streams are built.,xref
target="EmpiricalView"/>
The impact of revenue consolidation is enhanced by the presence of
network effects in digital media and services. A network effect is
market feature where the benefit to the user or consumer of a product
or service increases as the number of other users increases. First-
mover advantages play a role in defining the marketplace, but as a
product or service gains traction and sees its market grow, the user
base becomes the foundation for future growth.
An example of this would be the dominance of the portable document
format, originally introduced by Adobe. As the number of users grew,
it became the dominant format for the exchange of documents readable
on a variety of devices. While the network effect does not imply
immediate or inevitable market dominance, it does seem to be tightly
correlated with market leaders in digital, Internet-based services.
4.2. 4.2. Economic Flow Consolidation
In addition to revenue generation, the very large application layer
companies (Alphabet, Amazon, Tencent, Meta and Alibaba) control how
money and capital moves through enterprises providing services on the
Internet.
We have seen that embedded intermediaries that have substantial power
can implement platforms that provide services to downstream consumers
as well as upstream sources of content and applications. As the
controlling intermediary for those services and applications, these
large companies are also able to dictate how economic flows move
between consumers and providers of applications and services.
Regulators and policy makers often are concerned about the enormous
market power that these huge intermediaries have, but refrain from
imposing controls or sanctions on the grounds that consumers get
significant benefits when platform operators use upstream revenues to
subsidize downstream services.
That control is often influenced by the fact that an enormous amount
of the economic flow related to the Internet occurs largely out of
public sight. Advertising is a critical part of the economic flow of
the Internet. Advertisers want their message to reach the broadest
community of potential consumers possible. As a result, advertising
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platforms need to be built to provide services to the greatest number
of potential advertisers. The greater the reach of the advertising
platform, the greater the value to the advertiser. The result, on
the Internet, is a trend to collect the advertising tools in a
consolidated group of global, dominant enterprises.
The end user sees free tools, services and information. However, the
cost of those services is paid for, largely, by advertising revenue
that makes up a vast proportion of the economic flow of the Internet.
5. Traffic and Infrastructure Consolidation
A significant majority of the Internet's traffic is delivered from
very large content services including Google, Amazon and Facebook.
These companies naturally attempt to provide the best possible
service for their customers - including perceived speed of content
delivery - these content services seek to establish connections
directly with the companies providing access to the network. The
result is a "flattening" of the Internet's traditional topology.
In fact, a recent study shows that these large services can reach
more than 76% of the Internet without having to traverse traditional
Tier 1 and Tier 2 ISPs. Besides bringing benefits of low latency and
higher security to their users, these large-scale networks are also
able to implement improvements and innovations in protocol design by
having far greater control over the elements of the infrastructure
being used to deliver services.
An empirical view of this consolidation in February of 2022 shows
that the number of webpages that are hosted on these networks has
increased from 2015 to 2020 at a rate exceeding 80%. In looking at
data sources including TLD datasets and Alexa Top 1M datasets only a
small number of content delivery networks host the vast majority of
landing pages.
Centralization of this sort makes traffic filtering easier since
forcing a content network to block specific content (or worse,
blocking the content network entirely) would make a large amount of
the content unavailable. As these networks begin to migrate other
services to HTTP (for instance, DNS over HTTP), more than the web is
affected by the impacts of filtering by centralized content services.
In fact, blocking a content network entirely would block all the
content of the network, not just the content that was the target of
the filtering.
This happens at all layers. As an example at the application layer,
in 2021 Google and Apple were forced to remove applications created
by the Russian political opposition from their stores. The ability
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of a government to influence the content network means that
centralization can lead to a reduction in the diversity of
information or services on the Internet.
As the content networks grow in scale, the networks themselves grow
to support the required network capacity. This sets up a feedback
look that drives market concentration toward the infrastructure
provided by the content networks. As these networks grow larger, it
becomes difficult for smaller networks and infrastructure providers
to compete with the economies of scale from which the large networks
benefit.
6. Architectural Consolidation
A third category of consolidation is the evolution of the Internet's
architecture to meet contemporary use cases and requirements. Early
descriptions of the Internet's architecture described heterogeneous
endpoints connected by neutral transports. The end-to-end principle
suggested that the transport of data between endpoints was provided
without much intervention. [RFC1958]
Two developments have led to architectural consolidation: the
emergence of intermediary services and the movement of transport
related code to the application layer.
6.1. The Rise of Intermediaries
In the first case, technologies like CDNs are built into the network
for the efficient delivery of content and services. The consumer is
largely unaware that the service or application is being hosted by an
organization other than they one they think they contacted. Instead,
content delivery is pushed as close to the consumer as possible to
ensure that the end-user experience is as optimal as possible.
The result is a series of security, economic and policy concerns
associated with the small number of very large providers of these
intermediary services. However, in this section we only want to
consider the architectural issues specific to the use of
intermediaries.
6.2. Vertical Architectural Consolidation
The second case is vertical architectural consolidation. This is
where the companies that control the applications attempt to control
all aspects of the communication. For instance, the provider of the
browser may be the organization that the browser connects to. The
advantage of this kind of architectural consolidation is that it
allows the largest players to introduce technological innovation more
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quickly than if multiple layers of the stack required innovation in
parallel.
With tools like DNS over HTTPS, we see applications taking control of
the infrastructure of transport in addition to providing an
application or service. Applications essentially provide their own
ecosystem (from centralized control of DNS services all the way to
the end-user experience).
6.3. Standards Development
Others have rightly observed that, in the current environment,
development of protocols and standards for the Internet is largely
confined to a small number of participants from a small number of
organizations. One trend is that the giant enterprises on the
Internet also dominate the development of protocols.
Having a small number of organizations controlling the infrastructure
of the Internet also means that innovative technologies can be
implemented quickly and at large-scale. In 2022, a study in the ACM
Transactions on Internet Technology found that Google accounting for
60% of all TLS 1.3 secured resources. Some other, large CDNs use TLS
1.3 almost exclusively. QUIC is also an example of a new technology
that profits from consolidation. Large scale intermediaries can
facilitate the deployment and adoption of new standards because the
decision for the adoption is propagated across the infrastructure
instead of through user adoption or feature updates.
7. Service and Application Consolidation
Services and applications are those tools that users see when they
interact with the Internet. They take advantage of the
infrastructure (and, access) parts of the Internet's ecosystem.
According to the Internet Society's report on consolidation, "a small
number of companies operating some of the Internet's most popular
services dominate this market. Many of these companies act as multi-
sided markets or platforms, meaning they offer a base upon which
other applications, processes or technologies can be developed."
By itself, Google holds 90% of the global search market, the number
one mobile operating system (Android), the top-user-generated video
platform and has more than 1.5 billion active users of its Gmail
email service. Google also has a map service, a public DNS resolver
service, a cloud service and a document store.
While twenty years ago, an application would simply rely on the
underlying operating system to provide its communications and
transport services, now applications and services do this for
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themselves. This is a case of the intermediary or platform providing
the application integrating all the necessary components for
providing a service on the Internet.
8. IANA Considerations
This memo includes no request to IANA.
9. Security Considerations
While this document does not describe a specific protocol, it does
discuss the evolving architecture of the Internet. Changes to the
Internet's architecture have direct and indirect implications for the
Internet's threat model. Specifically, the changes to the end-to-end
model (see section 6 above) have inserted new interfaces which must
be reflected in security considerations for new protocols.
10. Conclusions
This document seeks to rekindle and restart the discussion on
consolidation. As argued above, Internet consolidation is happening
at different places and different layers of the Internet. Though
there has been interest in the Internet consolidation in the past,
now is the time to start the discussions again.
11. References
11.1. Informative References
[Arrko1] Arrko, J., "Considerations on Internet Consolidation and
the Internet Architecture", 2019,
<https://datatracker.ietf.org/doc/html/draft-arkko-arch-
infrastructure-centralisation-00>.
[DataConsolidation]
Kwon, T., Song, J., Jung, H., Chun, S., Lee, H., Kang, M.,
Park, M., and E. Cho, "How To Centralize the Internet: A
Focus on Data Consolidation and User Privacy", 2022.
[DINRG] Internet Engineering Research Group: DINRG, "Draft Report
of DINRG Workshop on Centralization in the Internet",
2021, <https://datatracker.ietf.org/meeting/114/materials/
slides-114-dinrg-draft-report-of-dinrg-workshop-on-
centralization-in-the-internet-01.pdf>.
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[DNSmeasure]
Zembruzki, L., Jacobs, A. S., Granville, G. S., and G,C,M.
Moura, "Measuring Centralization of the DNS Infrastructure
in the Wild", 2022.
[EmpiricalView]
Viet Doan, T., Rijswijk-Deij, R., Hohlfeld, O., and V.
Bajpai, "An Empirical View on Consolidation of the Web",
2022,
<https://vaibhavbajpai.com/documents/papers/proceedings/
web-consolidation-toit-2022.pdf>.
[Entropy] Bates, S., Bowers, J., Greenstein, S., Weinstock, J., Xu,
Y., and J. Zittrain, "Evidence of Decreeasing Internet
Entropy;: The Lack of Redundancy in DNS Resolution by
Major Websites", 2022.
[IABwrkshp]
Internet Architecture Board, "Design Expectations vs.
Deployment Reality in Protocol Development Workshop 2019",
2019, <https://www.iab.org/activities/workshops/dedr-
workshop/position-papers/>.
[ISOCconsolidation]
Internet Society, "Considerations on Internet
Consolidation and the Internet Architecture [draft-arkko-
iab-internet-consolidation-02] (Expired)", 2019,
<https://future.internetsociety.org/2019/consolidation-in-
the-internet-economy>.
[ISOCpaper]
The Internet Society, "Consolidation In the Internet
Economy", 2019, <https://future.internetsociety.org/2019/
consolidation-in-the-internet-economy>.
[JCP] Journal of Cyber Policy, "Consolidation of the Internet",
2020, <https://www.tandfonline.com/toc/rcyb20/5/1>.
[Kleiner] Kleiner, D., "The Telekommunist Manifesto", 2022.
[Nottingham]
Nottingham, M., "Internet Centralization: What Can
Standards Do?", 2023, <https://www.ietf.org/archive/id/
draft-nottingham-avoiding-internet-centralization-
14.html>.
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[RFC1958] Carpenter, B., "Architectural Principles of the Internet",
RFC 1958, DOI 10.17487/RFC1958, June 1996,
<https://www.rfc-editor.org/info/rfc1958>.
[RFC8890] Nottingham, M., "The Internet is for End Users", RFC 8990,
DOI 10.17487/RFC8990, August 2020,
<https://www.rfc-editor.org/info/rfc8890>.
Acknowledgements
Many thanks to all who discussed this with us in DINRG in 2021, 2022,
and 2023.
Author's Address
Mark McFadden (editor)
internet policy advisors, ltd
6 Bridge Street
Chepstow
NP16 5EY
United Kingdom
Phone: +1 608 504 7776
Email: mark@internetpolicyadvisors.com
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