The Internet Is Broken. Can It Be Fixed?

A new Stanford GSB course probes the online world’s growing problems and potential remedies.

July 17, 2019

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It wasn’t that long ago that the idea of connecting computers across the world into one sprawling digital network still seemed like a miraculous breakthrough, one that would transform lives, giving all of us access to vast amounts of knowledge and forging connections with like-minded souls in distant places.

In this utopian world, we would be empowered, and everything, including not only prosperity but also democracy, would be much better.

Also, we’d get to watch videos of monkeys riding dogs.

But today, the internet seems like an increasingly troubled place, where fake news stories run rampant, users’ personal data is gathered surreptitiously, and economic power is increasingly centralized in the hands of a few giant companies that operate with scant government oversight. Each day brings another front-page story about the perils of the technology industry.

This spring, a new course at Stanford GSB offered students a chance to step back from the current breathless debates and understand how and why the internet evolved from glittering promise to dark malaise — and to explore potential solutions for those woes.



Left: Anat R. Admati; Right: Jonathan Dotan | Photos by Courtesy

Anat R. Admati, the George G.C. Parker Professor of Finance and Economics and faculty director of the Corporations and Society Initiative, teamed up with lecturer Jonathan Dotan, a fellow at Stanford’s Center for Blockchain Research and at the Stanford Compression Forum and a consulting producer on the HBO series Silicon Valley, to design an interdisciplinary curriculum that gives students new tools to address the most intractable issues facing tech policy and governance.

The course title asked a simple and provocative question: Is the Internet Broken?

About three-quarters of the students were from the MBA and MSx programs at Stanford GSB, and the rest came from other Stanford programs in engineering, international policy, and law.

A Path to Solutions

“The perception of the tech industry has changed dramatically in the past five years,” explains Dotan. “Back then, it could do no wrong. Now it can do no right. Those extremes point to a discussion that we need to have about the role that the internet plays in people’s lives.”

Whereas Dotan came to the subject with experience in technology and investments, Admati developed an interest in the internet’s problems as an outgrowth of her research into corporate governance. “I want to understand and help students think through the bigger context of how corporations fit into a system that includes investors, customers, government, news media, and citizens — the whole ecosystem,” she says.

Stanford’s Computer Science Department offers ethics courses on issues such as data privacy, but Admati and Dotan felt that business students also needed an opportunity to engage and lead a path for new solutions. It is important for future business leaders to understand governance issues that they are likely to encounter in their careers.

“We must all ponder, ‘What should be the rules of the game and who in the private or public sectors should set and enforce them?’ ” Admati says. “And, ‘Is there something wrong related to the power and practices of internet platforms?’ ”

“The role of governance is something that companies can no longer avoid,” Dotan says. “Mastering corporate governance goes beyond setting the conduct of the board of directors or establishing ethics policies. It’s about making corporate values and incentives account for the impact of companies on society as a whole.”

Admati sees governance parallels between the financial sector and the internet. But whereas the financial system intermediates money, “internet companies intermediate data. The issue here is really about the control of information.”

The Idealistic Early Days

Another key difference is that while the financial sector is heavily regulated, internet companies have been largely left to do whatever they choose. “With the internet, the government only recently has awakened to the huge impact of the technology,” Admati says. As a result, “in this country, where the internet was born, there are few rules, as compared with China, for example, that immediately imposed strict government oversight.”

Three decades into the revolution of the World Wide Web, mounting concerns with user privacy, content liability, and network neutrality are forcing companies and governments to discuss what new rules are required to address the unprecedented challenges facing a network with billions of users.

In the course, Admati and Dotan — with the help of an assortment of guest speakers that included longtime tech industry attorney Richard Whitt, venture capitalist Albert Wenger, Facebook early investor-turned-critic Roger McNamee, Federal Trade Commission member Rohit Chopra, encryption activist Riana Pfefferkorn, and Mitchell Baker, executive chairwoman of the Mozilla Foundation — reconstructed how the internet evolved from its origin in the 1960s to the present.


“Understanding the history and the context of the internet helps you to know how to think about it,” Admati says. “It makes for a more informed debate.”

This is especially crucial for millennial MBA students, who aren’t old enough to recall the very different culture of the internet’s early years, when it was all about “democratizing and giving power to the end user,” as Admati explains. “That was the idea powering these innovations. It became paradoxical. The original thinkers were idealists interested in communities of shared knowledge, yet somehow today we find ourselves in a world where power is very concentrated.”

The Growth of Surveillance Capitalism

One of the major influences on the internet’s development was Section 230 of the federal Communications Decency Act of 1996, Admati and Dotan say. That legislation gave internet platforms immunity from legal liability for third-party content in the hope that market forces would help create proper self-regulation of such content. The new laws classified the internet as an exceptional medium that is not subject to the regulations governing, for example, telephones and newspapers. This privileged treatment enabled the explosive and unregulated growth of companies such as Facebook and YouTube, which rely upon user-generated content and profit from collecting data on those users.


The original thinkers were idealists interested in communities of shared knowledge, yet somehow today we find ourselves in a world where power is very concentrated.
Anat R. Admati

Along the way, the free-thinking, decentralized spirit of the early internet gradually morphed into the sort of monolithic culture its pioneers had sought to rebel against. Dotan points out that today’s internet giants espoused the same ideas at the start, expressing them in the sort of language used by the pioneers — even as they rose by co-opting those principles to create an antithetical culture.

In the past, for example, few would have questioned Google’s noble mission statement “to organize the world’s information and make it universally accessible and useful.” Today, the idea of large platforms being able to track and collect so much personal information is key to what Shoshana Zuboff dubbed “surveillance capitalism.”

“That’s what makes it complicated,” Dotan says. “We want to trust them, and we did for years. But now that trust is broken.”

At the same time, powerfully transformative new ideas also developed. In the course’s second session, for example, venture capitalist Wenger described how the internet changed the very nature of business. “He basically argues that the constraint of capitalism now is attention,” Admati says. “The attention-merchant concept, the battle to get inside your head, as described in Tim Wu’s book on the subject — that’s where the action is. But the question is how all of this going to work out in terms of control issues and privacy issues.”

A Deeper Understanding

Another session explored the extent to which companies rely upon mysterious proprietary algorithms to recommend choices to users and influence their consumption of content. Social media posts that provoke anger and fear, for example, may be prioritized by such algorithms. “Such posts might get more user engagement that platforms can monetize,” Admati says. For example, why would 65% of the results from a search on YouTube for “Who is Michelle Obama?” recommend videos that claim the former first lady was born a man?

There also was discussion of another troubling characteristic of today’s internet: the widespread use of deceptive practices, woven into the complex and vague language of terms-of-service agreements and privacy settings, to manipulate users. “These are practices that people feel helpless with, because the fine print takes too long to read or understand, and users have no power to truly negotiate or alter the terms,” Admati explains.

Students had the opportunity to debate various potential solutions to some of the internet’s problems, such as using antitrust laws to break up big internet companies, putting expiration dates on stored personal data, and enacting privacy laws in the U.S. that emulate the European Union’s General Data Protection Regulation.

Those discussions helped students’ views to evolve.“We asked the same question at the beginning and end of the course: Is the internet broken?” explains course assistant Kate Wharton. “At the beginning, students typically responded that something was wrong, and they described the symptoms, but they weren’t sure exactly what had ‘broken’ or why. But by the end, there was a much deeper understanding of the underlying issues and debates, and how we might ‘fix’ the things that aren’t working for society.”

Wharton and the second course assistant, Scott Lowenstein, were also student leaders of the Corporations and Society Initiative, which seeks to promote similar in-depth understanding and discussions.

“As we look forward to a new era of the web, entrepreneurs need to go beyond the hype to create lasting solutions,” Dotan urges. “Otherwise, we may succeed in decentralizing the internet in its current state only to have it recentralized 10 years from now by a new set of powers.”

— Patrick J. Kiger

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