The first phase of the Internet lasted until the early 1990s. During that time it was created and debugged, and grew globally. Its growth was not hampered by concerns about data security or privacy. Until the 1990s the race was for connectivity.

Connectivity meant that people could get online and use the Internet wherever they were. Because the “inter” in Internet implied interoperability the network was able to grow rapidly using a variety of technologies. Think dialup modems using ordinary phones lines, cable modems sending the Internet over coax originally designed for television, Ethernet, and, later, fibre optic connections and WiFi.

By the 1990s, the Internet was being used widely and for uses far beyond its academic origins. Early web pioneers, like Netscape, realized that the potential for e-commerce was gigantic but would be held back if people couldn’t have confidence in the security of online transactions.

Thus, with the introduction of SSL in 1994, the Internet moved to a second phase where security became paramount. Securing the web, and the Internet more generally, helped create the dotcom rush and the secure, online world we live in today. But this security was misunderstood by some as providing guarantees about privacy which it did not.

People feel safe going online to shop, read the news, look up ailments and search for a life partner because cryptography prevents an eavesdropper from seeing what they are doing, and provides a guarantee that a website is who it claims to be. But it does not provide any privacy guarantee. The website you are visiting knows, at the very least, the IP address of your Internet connection.

And even with encryption a well placed eavesdropper can learn at least the names of websites you are visiting because of that information leaks from protocols that weren’t designed to preserve privacy.

People who aim to remain anonymous on the Internet therefore turn to technologies like Tor or VPNs. But remaining anonymous from a website you shop from or an airline’s online booking site doesn’t make any sense. In those instances, the company you are dealing with will know who you are because you tell them your home address, name, passport number etc. You want them to know.

That makes privacy a nuanced thing: you want to remain anonymous to an eavesdropper but make sure a retailer knows where you live.

The connectivity phase of the Internet made it possible for you to connect to a computer anywhere in the world just as easily as one in your own city. The security phase of the Internet solved the problem of giving you confidence to hand over information to an airline or a retailer. Combining these two phases resulted in an Internet you can trust to transmit your data, but little control over where that data ultimately ended up.

### Phase 3

A French citizen could just as easily buy goods from a Spanish website as from a North American one. In both cases, the retailer would know the French name and address where the purchases were to be delivered. This creates a conundrum for a privacy-conscious citizen. The Internet created an amazing global platform for commerce, news and information (how easy it is for the French citizen to stay in contact with family in Cote d’Ivoire and even read the local news there from afar).

And while shopping an eavesdropper (such as an ISP, a coffee shop owner or an intelligence agency) could tell which website the French citizen was visiting.

And the Internet also meant that your and my information is dispersed across the world. And different countries have different rules about how that data is to be stored and shared. And countries and regions have data sharing agreements to allow cross-border transfer of private information about citizens.

Concerns about eavesdropping and where data ends up have created the world we are living in today where privacy concerns are coming to the forefront, especially in Europe but in many other countries as well.

In addition, the economics and flexibility of SaaS and cloud applications meant that it made sense to actually transfer data to a limited number of large data centers (which are sometimes confusingly called regions) where data from people all over the world can be processed. And, by and large, that was the world of the Internet, universal connectivity, widespread security, and data sharing through cross-border agreements.

This apparent utopia got snowed on by the leaking of secret documents describing the relationship between the US NSA (and its Five Eyes partners) and large Internet companies, and that intelligence agencies were scooping up data from choke points on the Internet. Those revelations brought to the public’s attention the fact that their data could, in some cases, be accessed by foreign intelligence agencies

Quite quickly those large data centers in far flung countries looked like a bad idea, and governments and citizens started to demand control of data. This is the third phase of the Internet. Privacy joins universal connectivity and security as core.

But what is control over data or privacy? Different governments have different ideas and different requirements, which can differ for different data sets. Some countries are convinced that the only way to control data is to keep it inside their countries, where they believe they can control who gets access to it. Other countries believe that they can address the risks by putting restrictions to prevent certain governments or companies from getting access to data. And the regulatory challenges are only getting more complicated.

This will be an enormous challenge for companies that have built a business on aggregating citizens’ information in order to target advertising, but it is also a challenge for anyone offering an Internet service. Just as companies have had to face the scourge of DDoS attacks and hacking, and have had to stay up to date with the latest in encryption technology, they will fundamentally have to store and process their customers’ data in different countries in different ways.

The European Union, in particular, has pushed a comprehensive approach to data privacy. Although the EU has had data protection principles in place since 1995, the implementation of the EU’s General Data Protection Regulation (GDPR) in 2018 has generated a new era of privacy online. GDPR imposes limitations on how the personal data of EU residents can be collected, stored, deleted, modified and otherwise processed.

Among the GDPR’s requirements are provisions on how EU personal data should be protected if that personal data leaves the EU. Although the US and the EU worked together to develop a set of voluntary commitments to make it easier for companies to transfer data between the two countries, that framework -- the Privacy Shield -- was invalidated this past summer. As a result, companies are grappling with how they can transfer data outside the EU, consistent with GDPR requirements. Recommendations recently issued by the European Data Protection Board (EDPB), which require data exporters to assess the law in third countries, determine whether that law adequately protects privacy, and if necessary, obtain guarantees of additional safeguards from data importers, have only added to companies’ concerns.

This anxiety over whether there are controls over data adequate to address the concerns of European regulators has prompted many of our customers to explore whether it is possible to prevent data subject to the GDPR from leaving the EU at all.

Gone are the days when all the world’s data could be processed in a massive data center regardless of its provenance.

One reaction to this change could be a retreat into every country building its own online email services, HR systems, e-commerce providers, and more. This would be a massive wasted effort. There are economies of scale if the same service can be used by Germans, Peruvians, Indonesians, Australians…

The answer to this privacy challenge is the same as the answer to the connectivity and security phases of the Internet: build it! We need to build a privacy-respecting Internet and give companies the tools to easily build privacy-respecting applications.

This week we’ll be talking about new tools from Cloudflare that make building privacy-respecting applications easy by allowing companies to situate their users’ data in the countries and regions of their choosing. And we’ll be talking about new protocols that build privacy into the very structure of the Internet. We’ll update on the latest quantum-resistant algorithms that help keep private data private today and into the far future.

We’ll show how it’s possible to run a massive DNS resolver service like 1.1.1.1 and preserve users’ privacy through a clever new protocol. We’ll look at how to make passwords that can’t be leaked. And we’ll give everyone the power to get web analytics without tracking people.

Welcome to Phase 3 of the Internet: always on, always secure, always private.

To learn more, please visit our Privacy and Compliance Week page.