No, the internet is not the surveillance state. Unlike the state it is based on voluntary arrangements. In particular this means that it is subject to competition, unlike government's monopoly on power. Neither Google, Apple or even ISPs (despite their collusion with municipal governments) can tax you or force you to use their product. You can even create your own network (physical or logical).

Because of competition, I am confident that a reasonable trade-off will emerge in terms of features and costs. Competitive pressure will lead to experimentation and improvement. There are privacy-sensitive options available already, and other ones will develop where there is demand.

That said, it is worrying how the actual state has been trying to turn this into its own surveillance tool. See latest 29C3 talks on government forcing telecoms to record traffic for the NSA and other agencies. But such use of power needs to be properly attributed, it is the fault of the state, not that of the internet. It is important to distinguish the cancer from the healthy organs.

From my understanding, this is often the case in antitrust cases.
Although antitrust is supposed to protect consumers, it is rarely because of user complaints that this power is wielded.

It should not be surprising, if such legal weapons are made available, the companies will seek to leverage them to club competitors. They just have to find a plausible rationale to give the case a veneer of civility.

High tech and software industries are some of the most competitive out there. Yet, I see many claims in the comments that the industry ignore its customers, that customers have much demand for such privacy features, etc. I would like to see such commenters at least trying to address this apparent discrepancy.

That said I agree with the editorial (DNT as implemented in browser does not offer functioning feature until providers support it). In my mind, the browsers jumped the gun and claimed victory where there was none. As implemented, the browser setting did not account for providers taking time to implement their part.

The DNT flag should not just be sent from the browser (and assume that the provider accepts it). The browser should assume that the provider has legacy behavior (ie still doing third party tracking) unless it receives some kind of acknowledgement back from the service.
The browser can display a warning to the user if not such DNT=ACK is returned by the site, so that the user is properly informed and not misled.

One more point regarding voting. Voting only changes who will be in charge of political power, but it does not change the nature of political power. Just as in the age of monarchy government is coercive. What has changed is just that we compete for that position of power.
I don't see how imposing a political and monopoly choice ("we will do X") is any different if it comes from a single king, a majority (mob), or a connected minority (lobbyists).
Assuming that the concept of natural monopoly was valid and that government is one, then there is no need to forcefully exclude competitors on a certain territory. The fact that government has to exclude competitors is proof that the monopoly is not natural.
For some history and analysis on the natural monopoly and anti-trust, see Tom DiLorenzo (book, paper, youtube). Here's a good overview: http://www.youtube.com/watch?v=gm8ZJx_t7Oo

Since I replied the same question just a minute ago, I'll copy & paste. I think it addresses your point:

That is a common response. Unfortunately, it doesn't pass the sniff test. By that standard, the mafia in your neighborhood is voluntary too, since you can move to a different neighborhood.

More fundamentally, what defines a voluntary association is not that you can leave, but that it is formed with consent. Even the Constitution (one of the most explicit attempts at a "social contract") received explicit consent from a minute part of the population at that time. For something so important, you would imagine that consent cannot just be implied.
Furthermore, no one would reasonably consent to joining an organization where the only form of appeal is that same organization. No one would reasonably join a club that has open-ended claims on one's life (no defined boundaries) and where the services that you get are not defined or committed. I can go on and point to Spooner's legal analysis of the "social contract" and the Constitution. And so on.

That is a common response. Unfortunately, it doesn't pass the sniff test. By that standard, the mafia in your neighborhood is voluntary too, since you can move to a different neighborhood.

More fundamentally, what defines a voluntary association is not that you can leave, but that it is formed with consent. Even the Constitution (one of the most explicit attempts at a "social contract") received explicit consent from a minute part of the population at that time. For something so important, you would imagine that consent cannot just be implied.
Furthermore, no one would reasonably consent to joining an organization where the only form of appeal is that same organization. No one would reasonably join a club that has open-ended claims on one's life (no defined boundaries) and where the services that you get are not defined or committed. I can go on and point to Spooner's legal analysis of the "social contract" and the Constitution. And so on.

No, what I was pointing out is that the details of decentralized production in the market are unpredictable (what kinds of shoes, how many, what materials, what price, what method of production, who does it), unlike centrally planned and coercive production.
They are unpredictable because they emerge from complex human structures, not from small committees, and because they evolve fluidly to adapt to changing and local circumstances.
Similarly, the organization, solutions, costs, features, amount, etc of security services are unknown once your remove them government monopoly. Will it be insurance-based, will it be bundled with other services? Will the solutions rely on prevention with bars on windows, or guards in banks, or reactive forces? What will be the resolution process between competing protection agencies? How much will those services cost? How will protection services be provided to the poor? What quality will be those various services (how fast will response time be when your alarm goes off)?
The two papers I pointed you to earlier offer speculative thinking about how such services could work. Read them. It clearly can work (again see historical solutions), but the nature of market-based solutions is that they are emergent, so it's not a blueprint.

All the rules I listed involve the individual joining the association voluntarily, so they are self-imposed. By coming into my house, you agree to abide by the house rules. If you don't know what voluntarily means, you are beyond helping.

Well done, sir. Your smarts overwhelm me.

As I replied above, libertarians are not against rules, as long as they are voluntary.
You correctly point out that agreement is core to having rules. There are plenty of such rules. For example, no smoking in my house, workplace rules, home owners association rules, club rules, rules of sports, ...
But government rules are different. They are not voluntary, but imposed by a group ranging from one to a minority or even a majority, on the rest.

Regarding your first question, how would property rights be protected, it depends if you ask a minarchist (small constitutional government restricted to police and arbitration services) or an anarchist (no government).
The answer is that nobody knows exactly, just like the soviets did not know how shoes would be produced in absence of government monopoly on shoe production. Another example, how will be pick cotton and make clothes if we repeal slavery (the answer is that people figure it out, invent machines, etc)?
If you are curious, look at "The not so wild Wild West" or "The machinery of freedom", for speculative answers. There are many historical examples of private solutions to security and arbitration services. Every service that government currently monopolizes has been successfully solved and provided privately in the past.

If you assume that both private rules and government regulations are voluntary, then I understand your confusion. The central concern of libertarians is to restrict civil society to voluntary behaviors based on property rights.
But government is not a voluntary association. Therefore government rules are illegitimate. They are based on coercion (of a king, or a majority, or an influential minority, all of which are bad).
Private organizations are voluntary and therefore their rules are legitimate. For example, no smoking in my house.
So libertarians have nothing against rules, only against non-voluntary rules (government regulations).

Now, clearly government is entangled in the internet. As you point out, ICANN is not a normal private organization. Should Ron Paul not use internet, or not use roads, and abide by the government regulations? This ethical issue has been addressed numerous times.
I can only speculate as to what the internet would look like absent government, or with a constitutional government. But there would certainly be mediation and conflict resolution procedures. Most likely these involve independent third-party arbitration. So the process would likely be similar to what ICANN currently uses, although I doubt the choice of arbitrators would be as today, and I doubt that the rulings would be the same either.
There is no problem with resorting to a higher power (again, I am the owner of my house). The question is who owns the internet, and whether ICANN has legitimacy. That is a worthwhile question, but it is distinct from the above criticism of an individual who does his best to abide by libertarian principles in a statist world.

I am a bit confused when a crowd that regularly complains about privacy issues also complains about privacy features (or lack thereof) being discussed openly with consumers.
Of course, as with all discussions, the quality of arguments (tone, innuendo, etc) may vary. But this specific ad is hardly smear and Google is not a weakling. Google can certainly reply back if Microsoft actually lied and it would backfire on Microsoft.

So bring it on!
May consumers choose what features they prefer, hopefully with some more information.

I'm curious what evidence you have in support of your statement. Quote? Reference?
I consider myself a libertarian (small 'l') and I think Ron Paul has many good things to say (does that make me a "Paullower" as you put it?), and I do not support taxes of any kind, including on drugs.

As a libertarian, one faces this type of dilemma frequently: I think drugs should be legal, but the only two options at this point are (1) the state prohibits them or (2) the state allows but taxes them. Both options are unlibertarian. But which option is worse? This is the type of false choice which libertarians want to avoid by separating the state out of those concerns and leaving decisions (use drugs or not, put social pressure on users or not, accept users in your home or not, ...) to the individuals and to voluntary organizations.

I agree with the benefits of competition (ie government not blocking competitors), but I question your broader understanding and appreciation of the free-market. In particular, when you say "it only works [...]", that is not the relevant question. The relevant question what works better.

Consider the alternative (presumably government control) against your four criteria: (a) you have a choice between two paternalistic and power-hungry parties which give out goodies and sell out principles for staying in power with very little differences in actual policies, (b) politicians routinely lie and voters have rational incentives to be ignorant (see Bryan Caplan's book on the myth of the rational voter), (c) critical decision allow time for deliberation (invading Iraq, bailing out banks) and government is any good even at decision when it has a long time ahead (think debt ceiling, bankruptcy of social programs), (d) individuals voters have infinitesimal ability to change which politicians win (consumers have relatively much more ability to change, even if there is lock-in, switching cost, contractual limitations, etc).

Side note regarding your signature. You may have taught both in unionized monopoly schools and non-unionized monopoly schools. But given your appreciation of competition, have you considered teaching in non-monopoly schools?

"Backed by funding from the French government"
Oh, so it's not free. This well-meaning organization just managed to get itself some of that money. Lucky taxpayers.

Great point. I would add that confidence in models comes from a track record of verified predictions.

Bitcoin is obviously threatening to central banks, as it questions their government-granted monopoly on their respective territories.
Funny thing, people tend to have a blind eye towards that monopoly, whereas they realize that monopolies are bad for consumers in other domains (lower quality, higher price, worse overall value). Bitcoin helps people reconsider the notion of alternative currencies.

Personally, I am attracted to bitcoin's feature of having a constrained supply by design. There is no problem with prices falling over time because of increased productivity relative to the money supply. Gold and silver are that way to. Other people may disagree and they are free to choose another currency to use. Just like Android fans can't force Apple or Microsoft users to switch.

May currencies compete for market share and popularity. That is good for the vast majority of people as it leads to innovation towards better service. The only exceptions are the banking cartel and their buddies in finance and politics, which currently benefit from the monopoly. If bitcoin or other currencies show signs of becoming popular, let me assure you they will fight it tooth and nails.