SIDN Annual Report 2013

2013: a turning point?

The most significant internet news story of 2013 began in a hotel room in Hong Kong. From that room, ex-NSA officer Edward Snowden leaked tens of thousands of documents about the USA's surveillance and intelligence activities. For weeks on end, NSA programmes such as PRISM and Bullrun were front-page news. Snowden was nominated for the Nobel Peace Prize, named 'Guardian Person of the Year' and awarded the International Whistleblower Prize. His flight from the US authorities dominated the headlines and ended in Moscow.
Edward Snowden's disclosures had far-reaching consequences. US companies lost out on billions in earnings, as offended countries withdrew from major deals and confidence in (US) cloud services collapsed. Diplomats worked round the clock to limit the damage to America's image and citizens' rights activists began legal proceedings against the NSA. Various countries also increased investment in cyber defence, reducing the online freedom of their own people.

One undeniably positive outcome of Snowden's disclosures was the increased interest in internet privacy. Anonymous alternatives to Google, such as DuckDuckGo, gained ground. Internet giants Yahoo, Google and Facebook all announced new encryption techniques. The new European Data Protection Regulation prohibited the collection of metadata. And the Internet Engineering Task Force started upgrading its encryption standards.

Percentage of the population
using the internet

Turning point in internet governance

As well as making the world stop and think about internet privacy, Edward Snowden's disclosures may have triggered a change in the governance and structure of the internet. In a vociferous response to unfolding events, Brazilian president Dilma Rousseff called for better protection for internet users in a speech at the United Nations General Assembly. Rousseff also argued that it was time to replace the existing internet governance model, in which the US is ICANN's sole overseer, with a multilateral model under the UN umbrella. Brazil even threatened to partially break away from the world wide web and to develop its own encrypted e-mail system. The existing multistakeholder governance model had been under fire for some time, and the revelations about the NSA increased the pressure for change, while weakening the position of the US (the main champion of the status quo).

Consequently, the concept of an open internet with little government interference and no central control – the concept that has underpinned the success of the internet – came under threat. Indeed, the very future of the internet was put in doubt. The Montevideo Statement on the Future of Internet Cooperation issued by the 'I-star organisations' (ICANN, ISOC, IETF, IAB, the RIRs and W3C) accordingly called for evolution of the existing multistakeholder internet governance model. Once emotions had cooled a little, Brazil announced plans for a Global Multistakeholder Meeting on the Future of Internet Governance in April 2014, with the aim of facilitating the evolutionary process. It is quite possible that the developments will ultimately lead to a new – and hopefully even better – global internet governance model.

Turning point in cyber security

The NSA affair overshadowed the consternation caused by a series of major hacks. The US Federal Reserve, Facebook, Apple and Twitter were just a few of the large companies to be affected. In December, the details of 70 million Target customers were stolen. Meanwhile, DDoS attacks increased in both frequency and impact, as they became a vehicle for criminal activity, often involving the use of botnets. In the Netherlands, the targets included the customs service, the tax authorities, the national rail operator and various banks. The attack on Spamhaus, involving a bandwidth of at least 300 Gb/s, was the biggest ever recorded and even slowed down large parts of the internet for a short time.

Partly in response to such incidents, there were numerous initiatives in 2013 to make the internet safer. The Radboud University introduced a study programme devoted to cyber security and Europe developed a new cyber security strategy. SIDN became the first registry in the world to introduce a local anycast service, helping to make .nl more secure against DDoS attacks. In collaboration with our partners in the Abuse Information Exchange, we also set up the AbuseHUB: a system that enables information about botnet infections to be shared quickly.

Turning point for the DNS

Almost unnoticed, a change described by ICANN as possibly the biggest in the history of the internet began in 2013. In November, ICANN added four new generic top-level domains (gTLDs) to the internet root, finally starting the long-expected rollout of hundreds of new extensions. The first four new gTLDs were all in non-Latin characters (Arabic, Cyrillic and Chinese). In the final month of the year, several dozen more new TLDs were added. In the next few years, they are likely to be followed by a further 1,300 or so additional gTLDs.

Turning point for video streaming and social media

The year was also a turning point for video streaming. Netflix made a global breakthrough, achieving a flying start in the Netherlands. House of Cards, a drama series created especially for Netflix, was the first web-only series to win an Emmy award.
Another significant event in 2013 was the disappearance of Hyves, finally succumbing to competitors such as Facebook. At the same time, numerous new social media emerged, including Vine – a platform that enables users to share video clips of up to six seconds. The new Snapchat service, on which posts are only temporarily visible, enjoyed a surge of popularity, as did the dating app Tinder. Instagram and LinkedIn introduced fresh advertising options. And 'selfie' became the Dutch Word of the Year.

Turning point for the economy

It appeared that 2013 would be the last year of one of the deepest economic crises the Netherlands has endured. Despite the difficult climate, internet companies generally continued to thrive, with more than ever being floated on the stock market. The most notable floatation was Twitter, whose initial public offering yielded 1.6 billion euros. E-commerce began to increase again – in Western Europe alone, 174 billion euros of business was done on line. The pattern of commerce was changing too, as more and more people made online purchases using a mobile device. However, as mobile internet use soared, PC sales fell more sharply than in any previous year. The world may have witnessed a monetary breakthrough as well, when the US senate declared the online currency Bitcoin a legal means of payment, pushing its price up to 900 dollar.

Turning point for the internet of things

Long predicted by futurologists and trend-watchers, the internet of things finally began to materialise in 2013. Google Glass was tested in the health care sector. Samsung brought out a 'smart watch', which can be used to make voice calls and browse the internet. And smart household appliances became commonplace. It is now nothing unusual to receive a message from your washing machine when its cycle is complete or to remotely control your vacuum cleaner from your mobile phone.
Meanwhile, the 3D printer made its breakthrough. Pop star Will.I.Am announced that he wanted to use 3D printers at his concerts. A US activist caused a commotion by creating a 'wiki weapon': a gun that anyone can print at home. And in Amsterdam plans were unveiled to print a complete house with the Netherlands' largest 3D printer.

Turning point 2013

In the history of the internet, certain years stand out. One was 1969, the year that ARPAnet, the internet's predecessor, came into being. Another was 1974, when the TCP/IP protocol entered use. And then there was 1990, the year of the world wide web's birth. Future generations may well look back on 2013 in a similar way. In the fields of privacy, internet governance, cyber security and new applications, the events of 2013 probably changed the internet for good. The first of a huge swathe of new gTLDs became active. The internet's transformation from a network of computers into a network of devices of every imaginable kind gained real momentum. And new online products and services appeared, which may change the world or may disappear without trace.

In the year ahead, SIDN will continue to monitor developments closely. We will also maintain our commitment to an internet that is open and accessible to all of the world's seven billion-plus people. An internet on which users are entitled to feel secure. While our role is not always very conspicuous, it is not infrequently central to developments. Whatever the future brings, we can say: we were there.

Roelof Meijer,
CEO

Introduction