Welcome to the Internet, the First Global Colony

        By STEVE LOHR

             In the beginning, there was Pangaea. It was the
             Earth's great land mass, the mother of all seven
        continents, which broke up 240 million years ago as
        Earth's tectonic plates moved apart. That was the last
        global continent, until now.

        The Internet is the new one, a cyber-Pangaea. But
        unlike the original, this global realm is not really
        stateless. In many respects, it is U.S. territory.

        The odd thing is that many of the pioneering
        breakthroughs of the Internet came from abroad,
        especially Europe. The World Wide Web, for example,
        was created by an Oxford-educated physicist, Tim
        Berners-Lee, while working in the shadow of the Swiss
        Alps at the CERN physics laboratory outside Geneva.

        But Berners-Lee, like so many emigrant technologists,
        soon departed for the more fertile soil of America,
        where the innovations of the Internet have flourished
        remarkably. The causes cited by way of explanation are
        all ingredients that contribute to the entrepreneurial
        climate in the United States -- venture capital financing,
        close ties between business and universities, flexible
        labor markets, a deregulated business environment, and
        a culture that celebrates risk-taking, ambition and
        getting very, very rich.

        The result is that the technology, economics and culture
        of the Internet feel awfully American. The companies
        that have cashed in on the Internet from newcomers like
        Amazon.com and Yahoo to the established technology
        suppliers like IBM, Sun Microsystems, Cisco and
        Microsoft are American. By one estimate, U.S.
        corporations collect 85 percent of the revenues from
        the Internet business and represent 95 percent of the
        stock market value of Internet companies.

        English is the dominant language of the Internet, found
        on most Web sites and used in most e-mail. Perhaps
        most important, the culture of the Net tends to be
        informal and individualistic, decentralized and hard to
        control. This makes it the preferred medium of
        dissident groups in countries around the world, and it
        also makes it feel just like home to American net
        surfers. "The Internet is profoundly disrespectful of
        tradition, established order and hierarchy, and that is
        very American," observed Fareed Zakaria, the
        managing editor of Foreign Affairs.

        Economically, the Internet is a transmitter of the kind of
        relentless, consumer by consumer competition that can
        be volatile and destabilizing. It has the astringent flavor
        of free-market economics embraced in America more
        than elsewhere.

        "If the United States government had tried to come up
        with a scheme to spread its brand of capitalism and its
        emphasis on political liberalism around the world, it
        couldn't have invented a better model than the Internet,"
        said Don Heath, president of the Internet Society, an
        international organization.

        Neither the values of the United States nor its faith in
        their universal applicability are universally welcome,
        however, and the same may be said of the Internet.
        France and Germany, among other nations, are
        concerned that the Internet economy may prove
        impossible for nations to regulate, and create such vast
        inequality and rootlessness among its citizens that they
        will lose their sense of social cohesion.

        "Reasonable people understand the Internet is a
        technology platform, not some form of American
        imperialism," noted Gerhard Schulmeyer, who heads
        the U.S. arm of the big German company Siemens.

        "But the Internet moves rapidly and is a disruptive
        technology that threatens institutions of all kinds,
        companies and trade unions, so it has added to the
        sense in Europe that people's backs are to the wall,"
        Schulmeyer added.

        Like much of America's influence on the world, the
        Internet lies in the arena of what Joseph Nye, dean of
        Harvard University's Kennedy School of Government
        terms "soft power." It's like rock 'n' roll or American
        movies, which earn lots of money, to be sure, but
        mainly influence other nations by offering an
        irresistible alternative culture.

        Still, despite America's early Internet lead, the Web is
        a vast expanse, accommodating significant national and
        linguistic differences. "There is a lot more diversity on
        the Internet than just looking at the English-language
        Web pages might suggest, and it's getting more diverse
        all the time," said Esther Dyson, editor of Release 1.0,
        a newsletter that focuses on the Internet.

        There is diversity, too, in how people believe the
        Internet should be allowed to function. Europe, in
        particular, has offered plenty of resistance to the U.S.
        self-regulatory approach for handling personal data on
        the Internet. The Europeans believe that Internet
        commerce poses a potentially alarming threat to
        privacy, and after two years of negotiation, the two
        sides have been unable to reach agreement on common
        principles.

        Robert Litan, director of economic studies at the
        Brookings Institution, calls the Internet privacy talks
        represent a "new-era trade dispute."

        Today, nearly half of the global online population
        resides in the United States. Forty four percent of
        Americans have Internet access at home or at work,
        more than double the percentages in Germany and
        Britain, according to Jupiter Communications. Only a
        few Scandinavian countries, notably Sweden, approach
        the American level of Internet access, the research firm
        reports.

        This edge in Internet use is expected to decline steadily
        as other countries, especially Europe and Japan, close
        the gap. And some industry executives believe Europe
        could quickly catch, perhaps even surpass America, in
        Internet technology as the world moves beyond the
        personal computer as the primary device for cruising
        the Net. In the coming "post-PC era," they say, people
        will increasingly use wireless devices like "smart" cell
        phones for e-mail, shopping and information services
        over the Internet. European companies like Nokia hold
        the global lead in the cell phone market largely because
        they rallied around a unified European technology
        standard, known as GSM (Global System for Mobile
        Communications), while U.S. companies competed
        with a handful of incompatible standards.

        But it is culture -- not raw technology alone -- that will
        determine whether the United States retains its status as
        the pre-eminent Internet nation. David Braunschvig, a
        managing director of Lazard Freres & Co., is optimistic
        about Europe and he insists "there is no logical reason
        why the U.S. should have this de facto monopoly on
        Internet innovation."

        Braunschvig, whose doctorate in computer science is
        from the University of Paris, says he tells his friends at
        dinner parties in France that all Europe with its 350
        million people really needs to produce is 30 or 40
        entrepreneurs like Marc Andreessen, who left college
        to co-found Netscape, the Internet browser pioneer.
        "My European friends say, Of course, we've produced
        such people, but they have moved to America," said
        Braunschvig, who lives in New York.