The Net was supposed to dissolve anachronistic national borders and cultural boundaries. It was expected to vitiate distance - both physical and mental. It was hailed as the invention that will unify Mankind and harmonize (though not homogenize) civilizations, east and west.

Yet, this was not to be. As dot.coms bombed, their more veteran and more experienced brick and mortar rivals took over the Net, transforming it in the process into a giant content delivery, marketing, supply chain management, and customer relationship management platform. This evolution all but demolished the non-local nature of the early Internet. It has also brought it into the remit of existing national laws. Moreover, governments throughout the world have become more assertive in exercising territorial jurisdiction over the hitherto ostensibly extraterritorial Net. A French court has prohibited Yahoo! from making certain content on its Web sites available to French citizens. An American court advised Yahoo! to ignore this decision. A Russian programmer was arrested by the FBI for offering a decryption software for sale in Russia (where it is perfectly legal). Governments from China to Saudi Arabia filter Web content regularly. Following the September 11 attacks, restrictive anti-terrorist legislation the world over targeted cyberspace.

But the real territorialization of the Internet - the redrawing of its internal contours and the withdrawal of its libertarian foundations - is more pernicious, all-pervasive, quotidian, and surreptitiously gradual. This is not the outcome of legal revolutions and court-driven evolution. It is piecemeal, quiet, unnoticed, often inadvertent and unintended. It is an "afterthought" rather than a premeditated "plot". It happens e-tailer by e-tailer, one Web site after the other, like the spread of a virus.

Consider these two - by no means exhaustive - examples. Amazon and Geocities (now, Yahoo!Geocities) are two Internet establishments, two gigantic communities of users that, between them, represent a sizable chunk of all the activity on the Internet.

It has long been impossible for a non-US publisher to sell its wares (books, for instance) through Amazon or to Amazon directly. Amazon works exclusively with US publishers and distributors. To collaborate with Amazon - one of the members of a duopoly as far as B2C e-commerce goes - a non-US publisher (no matter how substantial) has to work with a US distributor and thus forgo a large portion of its revenues (payable to the distributor as commissions). Moreover, said publisher cannot even open a ZShop (Amazon's version of mom and pop store). One has to be a US resident to do so. Amazon is closed to the outside world, despite its (false) global image. It sells all over the world - but it only buys American.

This discriminatory behaviour is partly profit-motivated. It is logistically easier and cheaper to deal only with US businesses. But Barnes and Noble works directly with foreign publishers and they preceded Amazon in the book business by decades.

Yahoo!Geocities has lately instituted a new policy. It limits the size of downloads from the free home pages of members of its community. If the downloaded content from a given home page exceeds 3 Gb (extrapolated based on hourly usage) - the "offending" member's page is shut down for an hour. The member is then prompted to pay a monthly subscription fee for a Premium Service in order avoid a recurrence of this unfortunate event. This "marketing drive" is intended to compensate Yahoo!Geocities for a precipitous drop in online advertising revenues.

The "Premium" package includes "Premium Mail". But only US citizens or residents can subscribe to it. And, you guessed it right, without the Premium Mail component, one cannot complete the subscription process. Though not stated explicitly anywhere, the Premium services are closed to the outside world and are the exclusive reserve of Americans. One can get around this virtual ethnic cleansing by providing false data while registering, but this is besides the point. The Internet is a reflection of the outside world. As economies contract, unemployment soars, personal safety vanishes, the social fabric disintegrates, and consumption slumps - countries tend to isolate themselves politically, react aggressively, and protect their national economies. Protectionism, unilateralism, and isolationism are scourges the Internet was supposed to be immune to. Little did we know.