Hearing that poor Dealmaker’s site was blocked by the Great Firewall of China put me in mind of a recent dilemma. Of course, I can see why they blocked The Dealmaker. Like a true Maoist, he points out the weaknesses and contradictions of the capitalist system by using gross caricatures of the capitalists themselves, and of course the Chinese are quite keen to move on from that.
Thing is, I worry I have helped the Chinese to block him, or more precisely, block him better in the future. One of my top holdings is this little Canadian outfit called Sandvine, a fantastic stock. It’s made me 300% already, and there’s at least another 100% left in it if it all works out and the management doesn’t screw up. It’s in something called Deep Packet Inspection (henceforth DPI), and this does exactly what it says on the tin: peers into the little packets of data that make up traffic on the internet, checks they are kosher (viruses, evil spam bots and hopefully those horrible chain letters can all be discarded, but please can we keep the Nigerian scam emails?), and sends the morally upright ones on their merry way to their final destination. It’s a no-brainer: every Cable and DSL provider in the world is going to want this, it enables new levels of network visibility and control. It’s a proven business model (with initial hardware sale, high-margin software module upgrades later on) in an under-penetrated market growing at 100% a year. It is a stock that cries out “buy me, buy me!”; finding stuff like this is why I do what I do. Of course, I have to own it.
Trouble is, Sandvine’s customers may use it for nefarious ends; already Comcast is in trouble with some of its users who have seen their peer to peer file searches (operators hate peer to peer video) restricted to Comcast subscribers, and some no doubt hoggish users have been completely blocked. If the end of network neutrality — a very illiberal, unSpinozan outcome — ever comes to pass, it will be enabled by DPI. And then of course with this stuff China could really go to town in controlling what its users get to read. Of course, Sandvine only tells the operator what is going on, and what type of data is in the packet; it’s up to the user to determine what action to take.
OK, it’s not like I am buying arms makers, or ciggie companies. DPI will allow operators, if they want, and no doubt most will, to ensure the best internet experience for all its customers. But at its worst it enables snooping, and my provider knowing far more about what I am doing on the network than I may be comfortable with. What do you think, Bento? Would Spinoza have invested his nut and raisin trading profits in Sandvine? Am I making too much of this? Am I just too virtuous? I probably am.
Meantime, I noticed that every single URL I inputted into www.greatfirewallofchina.org, and not just blogspot.com URLs and other bloggy sites, was “blocked”. Including some Chinese sites I sometimes look at, including that of my favourite Chinese domestic car company (which one is yours?) www.bydauto.com.cn. As this is part-owned by a friend of Prime Minister Hu Jintao I find it unlikely that the Chinese are unable to view it. Are the Great Firewall guys a bit overzealous? Is it anti-Chinese agitprop? What’s going on there?