John Perry Barlow suggests that cyberspace secede and become a state of its own. Most people don't find this plausible. But think about it for a moment. Just about every conflict in cyberspace can be traced to a single phenomenon - the absence of locality. The Net's envelope is the whole planet. Some governments and their regulators talk about curtaining their nations from the Net, monitoring bitstreams, and banning offensive Web sites - all essentially impossible tasks.

Legal control is always local, and this is increasingly so. A country like Switzerland, itself very small, gives its 20 cantons (states) and six half-cantons enormous power. The federal government keeps a low profile, so much so that I defy you to name Switzerland's head of state.

In many ways, the United States is similar to Switzerland. Visitors marvel at our liquor laws whereby, state by state and city by city, regulations change. While you may not be able to buy liquor in one town, you may in the next. Decency laws are similar in the range of views they reflect. An important part of the current political debate concerns increasing the control at local levels because, we are told, people are more civic-minded when they believe they will be held accountable and when control lies close to their doorstep.

Everyone's your neighbor
When US Congress passed the Telecommunications Act of 1996, it included an absurd Communications Decency Act that has since been struck down by a three-judge panel in Philadelphia and is awaiting consideration by the Supreme Court. This legislation makes transmitting digital material on abortion illegal and overlaps regulations already in existence. It is interesting to note that even in the world of atoms, the practice has been not to enforce these regulations.

My point does not concern a violation of the First Amendment or the impossibility of enforcing such a law, although I believe the act suggests both. It is that legislators made, in essence, a categorical mistake. Cyberspace is not geopolitical. Cyberspace is a topology, not a topography. There are no physical constructs like "beside," "above," "to the north of."

This is obvious. But it is not so obvious to the digitally homeless who govern most countries. The tragedy of the CDA is that countries less democratic than ours have already pointed to it and said, "You see, even the Americans think the Net is smut," failing to recognize that the CDA was instantly enjoined. Sovereignty is an odd and maybe useless concept within the digital world. But the real test of sovereignty is not decency. It is money.

Digital cash
Excuse my apparent digression to a treatment of money as yet another issue of bits and atoms. What follows is an incident that caused me to think about digital money in a new way. Two years ago, I was skiing in Klosters, Switzerland. On this occasion, the first ski day of the season, I found that the paper lift ticket had been changed to a smartcard, which, snugly nestled in your pocket, is read as you approach a turnstile - certainly convenient for the mittened skier.

Since these smartcards contained electronics, the ski-lift company wanted them back and required a SwF10 deposit (approximately US$8) which can be redeemed at any lift or railroad station. I ended my first day near neither.

Instead, I drove to the neighboring town to visit my father in the hospital. On the way, I stopped to buy some chocolates and, while paying for them, reached into my pocket and pulled out a handful of coins, including the smartcard. Without my reading glasses, I squinted at the coins and must have looked like a struggling tourist. The cashier reached over the counter to take the exact change. First she took the smartcard, saying that it was worth 10 francs, followed by the few additional coins she needed.

I was stunned. Then I noticed a pile of smartcards on the cash register behind her. "What do you do with these?" I asked. "We pay the baker," she answered. This was too much. I visited the baker, and he had far more of these ski-lift cards, which he said he used to pay for milk, flour, and delivery. Obviously, the lift company must be running out of cards. What does it do? It does what our government does. It prints more. I sure hope the cards cost less than 10 francs!

Is this significant? Yes, because nobody cares; that's what is interesting. Nobody cares that these lift cards have become local currency because they are just that - local. This currency moves slowly and is restricted to a small section of a remote valley in eastern Switzerland.

Now, turn those atoms into bits. Suddenly locale has no meaning. I have a global currency as long as it's attached to a trusted entity - akin to the lift company - and that entity need not be a country. Most of us would trust GM, IBM, or AT&T currency more readily than that of many developing nations because the "currency" represented by those companies is more likely to remain convertible. After all, a guarantee is only as good as the guarantor.

The ski-lift currency moved by virtue of being in my pocket at the right time. As soon as currency becomes bits (dutifully encrypted), its reach is unlimited. In fact, while organizations like the EU struggle to achieve a single currency, cyberspace may develop its own much faster.

A new localism
Neighborhoods, as we have known them, are places. In the digital world, neighborhoods cease to be places and become groups that evolve from shared interests like those found on mailing lists, in newsgroups, or in aliases organized by like-minded people. A family stretched far and wide can become a virtual neighborhood. Each of us will have many kinds of "being local."

You can almost hum it. Being local will be determined by: what we think and say, when we work and play, where we earn and pay.

Next Issue: Laptop Envy

[Copyright 1996, WIRED Ventures Ltd. All Rights Reserved. Issue 4.11 November 1996.]