That the new policy is expected this week implies that President Obama may devote a few words to the subject in his State of the Union address on Tuesday night. Or he may not. But the fact of the matter is that the headlines have been rife of late with news of hacking attacks against American banks, media organizations and others that appear not be coming from pranksters in a basement, but from parties that appear to be operating barely at arm’s length from governments in countries like China and Iran.

One provision would order government agencies to share more information about the nature of computer threats with private companies and give relevant executives of those companies the option to get proper security clearances to get briefed on certain classified information about the nature of the threats, and perhaps lay the groundwork for improved responses.

Republicans and business groups have generally opposed this approach, arguing that voluntary government standards essentially amount to implied regulations that they have to follow whether they want to or not. Additionally they say — correctly — that any government-set standards would quickly be overtaken by the fluid nature of cyber security threats, which are changing daily.

Compare the approach, however, to the European Union, which has its own proposal for cyber security rules on the table, this one more onerous. It would require certain companies, including search engines, energy companies, banks, transit hubs, stock exchange and others to report disruptions to the operations of their computing systems and networks — including anything from human error to full-blown cyber attacks — to government authorities. The expectation is that the proposal will become law within the 27-nation EU within two years. Nothing voluntary about it.

Given the difference, here’s an interesting thought: So often the targets of attacks are entities so large as to have global operations and global networks. An attack on Google’s operations in Europe, for example, one that under the EU scheme would have to be reported to government authorities there, amounts to an attack on its operations in the States. The same is certainly true for many banks that operate on more than one continent.

Sharing of information about cyber security incidents has always been a tricky thing. Large companies don’t like to advertise that they’ve been attacked and their operations disrupted — and when they do disclose it publicly, they do so only sparingly — and the same is true for countries. One country doesn’t like sharing what it knows about a cyber attack because it doesn’t trust what its neighbor might do with the information.

But the difference in approaches makes me wonder why there isn’t more cooperation generally between countries, especially between the U.S. and Europe. National borders mean nothing in the digital realm, and attacks are very often launched from computers in one or more countries, operated remotely by people in one or more countries, against targets in one or more countries. Now everyone is a target and no one knows exactly who the attackers are.

This makes questions about cyber warfare and security infinitely more complex. Most attackers operate at a certain remove from any governments to which they may hold an allegiance, however strong or loose, allowing for what the diplomats like to call “plausible deniability.” Or they may be the equivalent of digital mercenaries fighting for whoever pays the most, or some combination of both. The multiple combinations of variables make the the old nation-to-nation, single attacker, single target paradigm seem outmoded.

That makes the sharing of information among authorities in the most target-rich nations — the U.S. and Europe generally — an important piece any response. If houses are being broken into by a burglar who happens to be good at prying open a certain kind of door or window that happens to be prevalent in your neighborhood, would you not want your neighbor to share that information with you so that you can prepare accordingly?

Perhaps the same kind of common sense approach should apply to the community of nations in the area of cyber security. Could it be done under the auspices of a multination treaty? Perhaps something similar to NATO, where an attack on interests in one country — whatever the entity doing the attacking, be it a nation-state, terrorists, or a gang of troublemakers — amounts to an attack on all? Just a thought.

Looking forward, if such a country has the largest population of Internet and mobile users in its region with one of the largest youth populations in the world; is a large consumer market in the early days of e-commerce; is a global tourist destination where roughly only five percent of all travel revenue is booked online — might this be an intriguing investment opportunity?

Am I describing Germany? China? Brazil?

Try Egypt.

Two years after the Arab uprisings and in the midst of wrestling significant economic and political change, the Internet is quietly and increasingly growing as a central platform of economic development around the country as it is around the globe. And according to a new Google-commissioned study by The Boston Consulting Group — Egypt at a Crossroads: How the Internet is Transforming Egypt’s Economy — policy makers, executives and investors alike are poised at a central moment of opportunity to embrace this platform for economic growth, job creation and returns.

David Dean, Senior Partner and Managing Director at the Boston Consulting Group — and one of the authors of the study — told me that this is the latest of fifteen country-wide studies his company has done, and he was impressed by what he found. “I think the biggest positive surprise was that there are many entrepreneurial companies using the Internet to grow their businesses.” The report highlights a handful of among hundreds of recent Egyptian startups as diverse as the content portal Masrawy, which now reaches over eight million unique users per month; e-commerce destination Nefsak, which offers over 25,000 products; and Alexandria’s Vimov, whose paid weather app WeatherHD was the fourth-best seller in Apple’s App store after its recent release. It notes that Vodafone, among other global investors, is making serious commitments both to the infrastructure and to funding startups in the region. “The report makes clear that there is much uptapped potential for Egypt’s nascent Internet ecosystem,” Samir El Bahaie, Google’s Head of Policy in the Middle East and North Africa, said — adding that “there is also a great opportunity for investment, economic growth and job creation waiting to be seized.”

The study underscores that the opportunity is now. Egypt’s population of 31 million Internet users is the largest in the Middle East, and while mobile penetration exceeds 100 percent in many parts of the country, the big news is that smartphones — with real computing capabilities — are expected by some to reach 50 percent penetration in the next three to five years. Unmeasured in penetration and GDP figures are what the report calls “ripple effects” on the Egyptian economy and society: The ability to reach new markets, to have better informed consumers, to have greater work efficiencies in the knowledge economy, to have simplified access to government and social services for people to take more control of their lives. Egypt, with its mobile penetration, is especially poised to capture opportunities in mobile banking (as significant success has been seen in Africa) and to fully embrace all the opportunities offered for tourism. Dean notes, in fact, that travel and tourism is “possibly the largest short-term lever that the Internet can have in the country.”

If the opportunity is now, however, so is the potential for missed opportunities. While access to the Internet is growing, there is still a lack of Internet skills in the workforce, even as compared to other emerging markets. While business adoption of the Internet as an economic platform in Egypt is competitive among larger enterprises, small- and medium-sized businesses still rank lowest among emerging growth markets. More fundamentally, there remains significant question of the most appropriate, entrepreneurship-driving policies — areas such as rule of law, copyright protection, lessening bureaucracy in starting businesses. “Of course, these are clearly not just questions for Egypt,” Dean explained to me. “What would really be encouraging would be a commitment by the Government to the Internet as an economic factor — which would mean simplifying the process for opening businesses, encouraging investment, demonstrating the benefits of the Internet in the way the government operates, and using the Internet to address some of Egypt’s most pressing problems, such as youth unemployment.”

Google hopes to play a continued role in working with governments like Egypt’s. Studies like these are extremely useful as they provide factual economic data points around the value of the Internet, El Bahaie noted. “We hope to work with the government of Egypt to leverage these data points to unlock the potential of eCommerce and mCommerce and well-informedly create a more enabling business environment for Egyptian small- and medium-sized business, and to help the country reach its full economic potential.”

Christopher M. Schroeder is a leading U.S. Internet entrepreneur and venture investor, a member of the advisory boards of the American University of Cairo School of Business, the regional entrepreneurship portal Wamda.com and incubator Oasis500. He is the author of “Startup Rising: The Entrepreneurial Revolution That’s Remaking the Middle East,” to be published September 2013 by Palgrave/MacMillan. He can be followed on Twitter @cmschroed.

“Eric Schmidt was like a rock star there,” Richardson told CNN. “Talking to people, to students, to scientists, to software engineers about the importance of the Internet.”

The pair traveled to North Korea earlier this month — over the protests of the U.S. State Department — to advocate a moratorium on missile launches, to call for greater Internet freedom for North Korean citizens and ostensibly to facilitate the release of American detainee Kenneth Bae. On the last matter, the “private humanitarian mission” seems to have been a failure. On the others, it remains to be seen, though I doubt we’ll see North Korea throw open the doors to the Internet anytime soon. But evidently Schmidt was awesome while he was there, and that’s something, right?

Said Richardson, “… Right now our relationship with North Korea is frozen and if some individuals, private citizens, especially someone like Eric Schmidt, who can bring a message of openness and hope and the Internet and cellphones and more communications, and be treated as someone they’re intensely interested in. Remember, we met with students, with average people — it wasn’t just the government.”

Image copyright koya979

Most of us don’t use rotary phones, beepers, dial-up Internet or fax machines anymore. Yet we still use magnetic stripe credit cards and outdated point-of-sale systems. Payments technologies continue to lag far behind the technological adoption curve, and adopting new technologies as they become available has been a slow process, with hurdles that include legacy infrastructure and costs.

That said, 2012 saw some major leaps forward for the payments industry. Between Squarebucks, PayPal, Google Wallet, Isis, LevelUp and MCX, the mobile payment wars have just started to get exciting.

But despite the progress, the prediction that 2012 would be the “Year of Mobile Payments” didn’t come true. Now some people are arguing that, “someday we may look back and say [2012] was ‘The Year Before the Year of Mobile Payments. ‘”

Maybe so. Maybe 2013 will be the year we finally stop using insecure payment technologies from the 1980s and 90s. The year where paying with your phone will finally become mainstream. Here’s how 2013 could change everything:

Merchants Will Decide Who Wins the Payment Wars
People often wonder what it takes to win the so-called payment wars. Getting the most users? Forming an alliance with a big brand or a major credit card? Deploying salespeople everywhere? The answer is: none of the above. Merchants, often the so-called “Main Street” businesses, will be the ones who decide which apps will emerge victorious from the mobile payments battles (and there won’t be just one victor).

Here’s why: The mobile payment revolution isn’t just about giving customers a trendy new way to pay. It’s more about finding solutions that will deliver new value for the consumer (discounts or rewards for loyalty, for instance). In turn, mobile payment apps can drive new and repeat business for the merchant.

When it comes to emerging victorious, other factors — especially security — are important. But benefits to the consumer and the merchant are the number one determining factor. When both parties get something great out of mobile payments that they never had before, then the revolution will prevail; it will be win-win for everyone.

The Hyperlocal Sales Model Will Fail
Is it easier to knock on five million doors, or to play nicely with payment systems that already exist?

Well, that’s kind of a loaded question, but it underscores the biggest problem that mobile payments have faced so far: Scaling. In 2013, two things could replace the inefficient hyperlocal sales model and encourage wide-scale adoption of mobile payments.

First, merchant payment processing systems need to adapt — and quickly — to accept a wide variety of payment options (preferably, all of them.) Additionally, the checkout process with mobile payment apps needs to move just as quickly as (or, better yet, faster than) a credit or cash transaction.

Second, payment apps need to play nicely with existing systems. Incentivizing merchants to try your new app is nice, but not an effective way to scale. Instead, the name of the game is cooperation.

Paradigm Shift: The Mobile Wallet Is Your Smartphone
It’s much easier — and better — to create a mobile payment app than a mobile wallet. Eventually, the phone will become the mobile wallet, and consumers will have a variety of payment and loyalty apps to choose from, depending on which places they visit most. No single system will rule them all.

Don’t believe me? Think about your own physical wallet right now. You might have a Macy’s card, a Capital One Visa, an American Express Gold, a loyalty card from your grocery store, and a dozen others. None of those could replace or encompass all the others. Your wallet does the encompassing. And, eventually, the phone will be no different — a storage space for all your payment and loyalty apps.

Security Is Important (Really Important) — So Expect to Hear More About It
Security is one of the biggest hurdles that will have to be surmounted to enable the widespread adoption of mobile payments. That’s because plenty of consumers are (rightly) concerned about the security of new payment options.

The good news is that mobile payments are actually significantly more secure than legacy payment options like mag stripe cards. The average mobile payment app has far more data points at its disposal than a magnetic card. It can verify your identity and intent much quicker and more accurately than this type of card. Plus, since we’re glued to our personal tech for much of the day, people will notice and report a stolen or lost phone much quicker than a credit card used just once or twice a day.

Another important security feature is tied to the power of over-the-air updates to apps. These can both refresh apps with the latest security features and turn the app off in seconds in the event of a breach.

Once merchants and app developers can convince consumers that mobile payments are secure, they will quickly become the dominant solution.

Mag Stripes Will Go the Way of the Dial-Up Modem (Adios!)
As I alluded to earlier, the technology in the magnetic stripe credit cards that most Americans use on a daily basis is more than 40 years old. It’s also highly vulnerable to fraud. And despite various protections against fraud, the U.S. loses about $8.6 billion dollars every year on credit card fraud, according to the Aite Group. Yikes.

EMV (short for Europay-Mastercard-Visa, its founders) is the way of the future. EMV uses a smart chip embedded in the card to store sensitive account data securely. In fact, it’s so much more secure than magnetic stripe credit cards that every major global region has already adopted the technology en masse … except the U.S.

Why is the most tech-savvy country on the planet lagging behind here? The reasons are complex, ranging from expense to legacy infrastructure to powerful lobbies. But while we’ve been able to procrastinate on upgrading our systems for decades, the economics of putting EMV into the field are now starting to make real sense.

The emphasis on EMV at a recent payments conference could be a bellwether, and the year 2013 should see some major strides in the EMV direction.

Mobile Will Level the Playing Field for Brick & Mortar in This E-commerce World
Brick and mortar businesses have some real competition in e-commerce, and (admit it) we’re all guilty of indulging in a little showrooming here and there.

Mobile has the power to level the playing field for brick and mortar again, and 2013 is the year we’ll start to see this happen for real. For example, advances in mobile payment technology will soon make it possible for people to find the exact product they’re looking for, when and where they need it.

Let’s say it’s February 12. You’ve procrastinated on buying a Valentine’s Day gift for your sweetie. You know what you want to buy, and you could order it online, but you’re worried it won’t show up on time (and don’t want to pay an extra $20 for overnight shipping.) With new mobile technologies, merchants can track inventory down to the individual product and connect shoppers directly with that data. This will give consumers a strong incentive to buy from a local merchant rather than take their chances with e-commerce. Plus, they’ll get the benefit of checking the item out with their own hands and eyes before they buy.

This, along with new customer loyalty and promotional opportunities, will make it possible for brick and mortar stores to get really competitive vis-a-vis e-commerce this year. Watch out, Amazon!

So, are you planning on making any big changes to the way you pay (or accept payment) in 2013?

Henry Helgeson is the CEO and co-founder of Merchant Warehouse, a recognized leader in payment and commerce technologies.

Background image copyright kentoh

For the uninitiated, the former president is referring to the fact that there are few to no American communities that are hubs of the kind of world-leading bandwidth sufficient to drive next-generation innovation in our economy. He’s referring to the fact that, though international studies differ, the United States does not enjoy bandwidth that is nearly as fast as our peer countries. He’s referring to the fact that, for the first time since American ingenuity birthed the commercial Internet, we do not have a single national wireline provider with plans to deploy a better, faster and bigger network. For most Americans, five years from now, the best network available to them will be the same network they have today. As a result, the best networks — along with the innovations and economic power they enable — will live in other countries as well.

But we should not give up on American ingenuity; as Tom Friedman detailed in a recent New York Times op-ed, upgrading the broadband network in Chattanooga, Tenn., to world-leading gigabit speeds has transformed the community from a “slowly declining and deflating urban balloon” to the fastest growing city in Tennessee, attracting “a beehive of tech startups that all thrive on big data and super-high-speed Internet.” That’s what Gangnam bandwidth can do in America.

That’s why a recent announcement about big bandwidth from Seattle is also big news. The city just announced a plan to bring gigabit service to a dozen of its neighborhoods. Over 100,000 Seattle residents, as well as health care and educational institutions, will have access to world-leading speeds. Not only is the scale of Seattle’s effort impressive, the path it took — smart policies involving rights of way management and dark fiber — can be replicated by other communities that wish to control their own bandwidth destiny.

As America’s National Broadband Plan concluded in 2010, our country needs a critical mass of communities with world-leading networks for us to continue to have the kind of environment that fosters the cutting edge innovations necessary to develop the next generation of world-leading broadband applications. Seattle is not alone in recognizing that bigger bandwidth is an economic development tool. Just as in decades past, when communities had to learn how to benefit from new modes of power or transportation — with electrical, train or air terminal facilities — so it is now with bandwidth. Officials in Kansas City, Kansas and Missouri worked with Google, offering streamlined processes and regulatory efficiencies. Mayor Emanuel in Chicago and Mayor Bloomberg in New York have both recently launched initiatives to enhance their cities’ digital future. Thanks to efforts by their local leadership and a commitment to next-generation networks, residents in Bristol, Virginia; Chattanooga, Tennessee; and Lafayette, Louisiana can already get gigabit speeds. And Gig.U, a consortium of universities and communities looking to accelerate next-generation connectivity in their regions, has, in addition to the Seattle project, helped catalyze ultra-high-speed broadband projects in the past few months: in Orono and Old Town, Maine; Cleveland, Ohio; Gainesville, Florida; East Lansing, Michigan and Champaign-Urbana, Illinois.

Not every community has Seattle’s assets, particularly the strong information, communications, apps development economy and committed local leaders like Mayor McGinn. But Seattle has created a model that every community can follow in improving the environment for the private investment necessary to create a new generation of American broadband leadership. Mr. Friedman proposed a $20 billion fund to bring gigabit connectivity to 200 American cities, arguing that these networks would lead to “a ‘melt-up’ in the United States economy.” While, unfortunately in our view, such a program may not be in the realm of the politically achievable, ironically, it might be the actions of individual cities to catalyze such networks that leads to the kind of growth, debt reduction and surplus that could enable the federal government to once again consider big programs to drive growth and American economic leadership. And this is the kind of policy innovation America deserves.

Blair Levin became Communications & Society Fellow with the Aspen Institute after serving as Executive Director of the National Broadband Planning effort. He is currently Executive Director of Gig.U, a project within the Institute that seeks to accelerate the deployment of next generation networks and services by using university communities as test-beds.

The University Community Next Generation Innovation Project, or Gig.U, is a broad-based group of over 30 leading research universities from across the United States. Drawing on America’s rich history of community-led innovation in research and entrepreneurship, Gig.U seeks to accelerate the deployment of gigabit-speed networks to leading U. S. universities and their surrounding communities. Improvements to these networks drive economic growth and stimulate a new generation of innovations addressing critical needs, such as health care and education. Visit Gig.U online at www.gig-u.org.

The American delegation tasked with defending the Internet’s flat, decentralized and globally unregulated structure was composed of a vast swath of government agencies ranging from the State and Defense departments to the FCC and White House National Economic Council. The delegation also encompassed a powerful tier of commercial representatives from preponderant technology companies like Google, Facebook, Microsoft and Cisco. In the months before the conference, the U.S. team was assiduously briefed on an array of hugely controversial proposals to regulate Internet content, impose tariffs on Internet traffic, and usurp management of the Internet’s technical protocols and address system. But no member of the delegation, not even the most seasoned veterans of such global negotiations, could confidently predict how the acutely contentious conference agenda would ultimately generate an acceptable international agreement.

“Consensus! Consensus! Consensus!” This was how an emphatic Hamadoun Toure, secretary-general of the International Telecommunications Union (ITU), promised to navigate world governments through the two weeks of talks, the first in history to debate the prospect of international Internet regulation. Delivering his opening remarks to more than 150 national delegations, Toure, an electrical engineer from Mali educated at the Moscow Technical University of Communications and Informatics in Russia, sought to assuage the palpable anxiety among many countries that the future control and governance of the Internet were at risk.

In the weeks before the conference, Toure had provided repeated assurances to the U.S. and other governments that the treaty under discussion in Dubai would hew carefully to established principles for the management of international telecommunications that have been in force for decades. The last time member states had debated the scope of the ITU charter was in the decidedly pre-Internet era of 1988. As the body convened 24 years later to modernize its rules and mission, the ITU’s culture of consensus, Toure seemed to be arguing, was the ultimate safeguard that a United Nations agency primarily dedicated to managing a largely anachronistic international telephony regime and radio spectrum would not aspire to exercise regulatory oversight of the Internet.

Toure’s promise of consensus came on the first day of the conference, during a plenary meeting held on Dec. 3, when all of the ITU member states patiently listened to a series of opening statements delivered to an attentive assembly convened in Dubai’s mammoth international trade center. It was a hopeful moment with thousands in attendance, many wearing the traditional national dress of the Arab world, Africa and South Asia. Within 10 days, however, the conference was on the brink of collapse.

The tipping point came after iterated sessions of grinding, tedious parliamentary skirmishing and maneuvering. With two days before a treaty was to be signed, and scant progress on the most consequential issues, the conference delegations were called into late-night negotiations. It was then, at about 1:10 am on Dec. 13, when Toure jolted a sleepy proceeding awake with a surprise intervention.

The hushed quiet of the plenary meeting that evening was the same it had been each day before. Hundreds of delegates sat at long rows of tables in a massive space the size of an airplane hangar. Strapped into headsets that transmitted the now deeply familiar voices of the U.N. translators interpreting Arabic, Chinese, French, Spanish, Japanese and English, the delegates listened in respectful silence, with the only noise emanating from the floor being the tap-tap-tap of countless laptop computers transmitting live color commentary and email exchanges about the historic debate. Walking through the cavernous meeting room for the plenary sessions, studiously quiet except for an occasional muffled cough, one would have assumed that a gigantic standardized test was being administered, a global LSAT or GRE exam.

Into this environment of perfunctory calm swooped Toure, prompting conference delegates to consider a resolution calling on the ITU and its member states to play an enlarged role in “international Internet governance and for ensuring the stability, security and continuity of the existing Internet and its future development and of the future Internet.” It was precisely the sort of provision, recycled from a prior U.N. conference, that Toure had promised would not divide his gathering, the World Conference on International Telecommunications (WCIT).

One of the senior American negotiators, Dick Baird, a career State Department official with an elegant mastery of the ITU’s arcane procedural and political machinations, jumped in swiftly. Always the diplomat, Baird cloaked his skepticism with courtesy. “We are concerned about this resolution because it begins to be — it is a resolution about the Internet.”

The conference chairman, Mohamed Nasser Al-Ghanim of the host United Arab Emirates, responded incredulously. “I’m so surprised to hear this, while yesterday I thought we have reached a consensus,” he said. This premise — that a secret deal had been brokered to expand the U.N.’s authority over the Internet — would engender continued bitterness and confusion long after the conference. The notion that the U.S. and its allies in the Americas, Europe and Asia had agreed to empower the ITU to have even a whisper of authority over Internet governance was baffling. Rejecting that effort was the most consistently articulated priority of the U.S. team and its top allies. Chairman Ghanim nonetheless sought to force the issue by preempting debate. “I think I’m going to stop this discussion at this point,” he casually pronounced, “because we are not moving forward.”

Yet the discussion continued. Toure took the microphone. “It’s not a crime to talk about the Internet inside the ITU,” he insisted. Toure launched a rambling defense of his resolution, his emotion rising and his argument splintering into incoherent fragments. “There is nothing wrong with this. Please, we are trying to build bridges so we work together so the consumers benefit better. Please, everybody, help us to continue to build that bridge.” Toure added: “The future is broadband, and the future is Internet, and the future is Internet, and the future is broadband Internet.” He was now pleading with the delegates for their support. “Trust me,” he implored.

In the next few minutes, the conference imploded. A series of countries endorsed Toure’s resolution, with South Africa, Cuba, Nigeria and Saudi Arabia taking the floor. The chairman called for a show of hands to measure support for the resolution. “I want the feel of the room,” he offered innocuously. According to the ITU’s procedures, the chairman had the prerogative to seek a simple show of hands — little placards, really — to assess the weight of opinion on a given issue or provision. And he also could interpret that expression opinion, known as the “temperature of the room,” according to his own discretion, which is precisely what Chairman Al-Ghanim did. “You can lower your plate now,” he stated coolly from the dais. “The majority is with having the resolution in.”

Mass confusion erupted from the plenary floor. The delegate from Spain spoke on behalf of the dozens of member states deeply confounded by the procedural sleight of hand that apparently had just legitimized a role for the U.N. in the governance of the Internet. “I would like you to clarify whether the temperature you were taking was simply a taking of the temperature,” he asked, borrowing from the arcane conference nomenclature.

“No it was not a vote, and I was clear about it,” Al-Ghanim replied. Although it was not voted on, the resolution was nonetheless adopted at the discretion of the chairman, its language to be incorporated into the final treaty text. “We have reached the end of the time,” said the chairman. “Thank you, and have a good night.” According to the official transcript of the proceeding the plenary session then concluded, at precisely 1:31 a.m.

The conference’s fate was now sealed. It would likely end in angry discord because the red line of Internet governance had been crossed. Before the formal debate was concluded other Internet provisions were crammed into the treaty, dangerous precedents recently enumerated in a news analysis for the Financial Times. At the insistence of Russia, China and several Arab states, the new treaty includes a provision mandating coordination on cybersecurity, defined euphemistically in the treaty as “network” security. The treaty calls on the U.N. International Telecommunications Union (ITU) and its member states to accede to vague commitments that experts fear may evolve into an effort by state governments to engage in the global surveillance of Internet traffic.

Encouraged by African states and supported by countries such as Iran and Saudi Arabia, the treaty creates a requirement that member states seek to defend against Internet spam, which is imprecisely defined as “unsolicited bulk electronic communications.” Critics of the provision noted that spam is easily managed by commercially prevalent software programs, and warned that the expansive definition it applied could be appropriated as a tool to censor content on the Internet ranging from political speech to Web advertising. Yet that vague definition was more than satisfactory for some of the member states. “Spam is spam!” the delegate from Iran complained. “I don’t need a definition!”

Finally, the scope of the treaty and the entities to which it could be applied was never clarified. Under the treaty’s fuzzy language, its jurisdiction could potentially be applied to Internet service providers, private networks, and even government networks.

When the full panoply of provisions relating to Internet governance was clearly defined, the U.S. signaled its refusal to sign the treaty. The U.K. and Canada quickly followed. Eventually, all of Europe refused to sign the treaty, along with Japan, Costa Rica, Australia, New Zealand, and Latvia. In total, 55 countries rejected the agreement.

Silicon Valley should take note of the international debate in Dubai. The collapse of the global dialogue about the future of the Internet foreshadows a conflict that will almost certainly accelerate in coming years. The Internet’s prevailing governance paradigm revolving around the private sector, technical cooperation, innovation and multi-stakeholder management will be increasingly challenged by world governments. Why? The Internet is simply too consequential a strategic and geopolitical resource for many global powers to not seek to control it. In that sense, Dubai was only the first battle in an emerging global contest to shape the future of the Internet.

The author is a managing director at Silver Lake, and served as a member of the American delegation to the World Conference on International Telecommunications in Dubai. He writes in his individual capacity, and the views expressed here are his own.

Image copyright Nataly Bannykh

But my experience — both on the way up and the way down — is a good window into one of the central questions facing President Obama as he prepares to take the oath of office for a second time on Jan. 21: What role, if any, should the government play in nurturing entrepreneurs and, by extension, jobs, in America? In our case, we really had no expectation that government would play any role whatsoever. Unfortunately, though, we were wrong. Dead wrong. It did play a role and, for the most part, it was not a good one. It doesn’t have to be that way; there are fixes that can be made.

The original idea was straightforward: Replace “error” pages, which are generated when you type a mistake in your web browser — “amazon,cm,” for instance — with search results that contained paid advertising. We figured, if there were enough such mistypes — indeed, it happens millions of times a day — the money could be substantial. The first challenge was to raise enough capital to turn our concept into reality. At the time, investors — still burned by the dot-com implosion of 2001 — were understandably wary of tech startups and a business based on errors sounded, well, decidedly unsexy.

Enter the government, specifically the state of Virginia, where we are based. At the time the state had just set up a $3 million “gap” fund, so named to fill the void, or gap in time, between the initial launch of a company and the time it’s ready to take on venture capital money. We applied and received $100,0000 — the first company to get such money — and the terms were good. That’s because the primary goal of such programs — which many states now run — is jobs and taxes, not just return on investment (although that’s nice, too). It was just what we needed to get going, and we did just that. We named the company Paxfire.

But what one arm of government giveth, another arm can quickly taketh away. We learned that government officials are often wary of, if not downright hostile to, the kind of disruption that is an all-but-inevitable consequence of innovation. We developed a unique approach for quickly capturing a boatload of errors, namely placing computer servers deep inside the heart of the Internet, specifically in front of domain name servers run by registries such as Verisign and Neustar.

It worked great, with one teeny tiny problem: A lot of techies — including the father of the Internet (and Google evangelist), Vint Cerf — didn’t like that we were mucking around with the guts of the Internet. More specifically, they thought what we were doing was a violation of “net neutrality,” an ever-evolving patchwork of rules that says that infrastructure providers shouldn’t mess around with traffic they handle, but, rather, simply pass it from Point A to Point B. By contrast, we argued the redirection of errors was specifically allowed by technical standards bodies like the IEEE under a provision known as “wildcarding.” Who was right? It’s a toss up. The mere debate, however, prompted tremulous bureaucrats at the U.S. Commerce Dept. — congenitally allergic to even the slightest whiff of controversy — to tell the registries (who are regulated by Commerce) to knock it off. We thought the complaints were nonsense. After all, how bad could it be to get rid of errors and replace them with relevant search results? But it didn’t matter. The government had, effectively, dealt us a death blow.

Then, largely out of necessity, we pivoted. Rather than play in an area of the Internet where Washington bureaucrats held sway, we moved the playing field to a different — and less regulated — part of the Internet. Here the players were Internet Services Providers, or ISPs, which, generally speaking, had fewer government masters to worry about. With thin margins and the promise of highly profitable revenue from errors (we didn’t charge anything for our technology, but, rather, took a revenue share) there was little resistance from the ISP community. The business took off: We quickly signed up nearly 50 ISPs, often splitting the revenue 50-50. We expanded internationally, to Europe, South America and Asia. The money started rolling in. Investment bankers, such as Allen & Co., came calling, offering to shop us to potential buyers.

We had struck gold, and wasted no time capitalizing on the opportunity. But if we were the proverbial hare, the government, specifically the U.S. Patent Office, was more like the tortoise in this Aesop fable. Early on, we had asked them to reward our innovation with a patent, effectively establishing a moat around our business that we hoped would deter competitors. It didn’t, in part because the patent office — blithely disconnected from the realities of a fast-moving marketplace — took nearly seven years to approve our application (a pending patent is about as useful as a car without wheels). Just to get a patent examiner to even look at our application took years (a problem that could easily be fixed by adding more examiners). In the meantime, at least four other companies jumped into the fray. In short order, the competition drove down our lucrative 50-50 deals to more like 80-20. Layoffs ensued. The competition was stomping all over our intellectual property with impunity and, with less money coming in the door, it was tougher to enforce our rights.

We knew we needed to come up with a second act, and fast. But, at this point, the consequences of government inaction came into sharp focus. Despite repeated efforts at reform, almost always stymied by political gridlock in Washington, federal rules make it a snap, and potentially quite lucrative, for people to file civil lawsuits, no matter how ludicrous. We became a target. Our legal bills began exceeding our R&D budget. One suit against us, a proposed class action, came from an elderly woman in New York City who claimed, in all seriousness, that we had wrongly taken away her errors. I kid you not. The unspoken message could have been plucked out of the HBO series “The Sopranos”: Pay up, or else. Almost overnight, a $10 million buyout offer, which we were prepared to accept, vanished, many of our customers bolted, though some have stayed. Though too late for us, the antidote to the problem of specious civil suits can be found in Britain (which has relatively few of them), namely, forcing the loser to pay all costs.

Nobody, least of all me, is suggesting that government should provide anything more than a level playing field in which anybody with a bright idea and a little pluck can succeed. The settlement between Google and the Federal Trade Commission on Jan. 3 was an attempt to do just that in search. Even with a level playing field, companies, ours included, succeed and fail for a variety of complex and unexpected reasons, but there are ways to shift the odds: More state and federal seed money would grease the skids, and clearing away structural impediments — like adding more patent examiners and following the British model to curb the number of specious civil suits — would probably help, too. A little luck never hurts but, ultimately, as any good entrepreneur should know, it’s up to the individual to succeed or fail on his own, regardless of the obstacles.

Mark Lewyn, a founder of Paxfire and several other technology companies, has written on media and technology topics for many years for a wide range of publications, including Businessweek, Newsweek, the Washington Post, The Wall Street Journal and USA Today. He can be reached at mark.lewyn@gmail.com.