Андрей Солдатов: The Red Web: The Struggle Between Russia's Digital Dictators and the New Online Revolutionaries

Bulgak, a member of Yeltsin’s group, certainly played the game the old way. He used his position, his connections, and his power to support his leader. But Bardin, Soldatov, and Antonov were too far from the Kremlin to believe they were part of any power game. They acted because the free flow of information—their core conviction—was threatened. They also knew that they had the support of thousands of subscribers making the network stronger.

From the first day of the coup Bardin worried about the KGB. He was certain they had put the Demos building under surveillance days before the coup attempt began. He even saw a lone man standing out in front of the mansion. But the KGB never bothered once to interfere with Russia’s first connection to the Internet, neither at Demos nor at the Computation Center of the Kurchatov Institute. But at that moment and in years to come the KGB never went away. They were always keeping an eye on this strange and powerful new method for spreading information—but had great difficulty understanding it.

The collapse of the August putsch freed Soviet citizens from Communist Party control. By December the Soviet Union dissolved. In the suddenness of the moment the old Soviet rules had become obsolete and new democratic rules were not yet established. At one point the KGB organized guided tours through its headquarters for foreign tourists, as if showing off a relic from another era. Foreigners flooded into Moscow and other big cities, private businesses emerged everywhere, and for a while new “joint ventures” were being established at every turn with foreign investors.

Yet it was also evident in these turbulent times that freedom brought something to Russia not very familiar to its citizens from all the years of Soviet paternalism: the freedom to make choices. Few were prepared, including those engaged in the most Westernized area of business, the rapidly evolving technology of computers, networks, and communications.

The Russian minister of communications, Vladimir Bulgak, who had brought the radio transmitter to the courtyard of the White House during the coup, confronted a monumental set of problems. He had taken over the Soviet ministry of communications, moving in to the same headquarters office used by Kudryavtsev at the Central Telegraph building. Bulgak soon faced the same cursed legacy of international communications that had vexed Kudryavtsev for so many years. [1] Vladimir Bulgak, interview with authors, September 2014. New Russian business enterprises were desperate for more communications lines and connectivity, and their demands far outstripped the existing analog infrastructure. The Soviet Union earlier and, now, Russia, simply did not have enough lines to the outside world. In 1991 Russia had only two thousand international lines for the whole country, and all of these lines were analog, copper cables.

Bulgak’s first big headache was to acquire long-distance fiber-optic cable. Bulgak realized that his only option was to build fiber-optic lines with foreign money and foreign partners. He moved quickly and secured from President Yeltsin the right to sign off on government guarantees for foreign credits. Almost immediately Bulgak got Japan and Denmark involved. The partners built a fiber-optic cable from St. Petersburg to Vladivostok and from Moscow to Dzhubga near the Black Sea, and then the cables were laid to connection points of international telecommunications traffic: from St. Petersburg to Copenhagen, from Dzhubga under the Black Sea to Istanbul, and then to Palermo, Italy, and from Vladivostok through Nakhodka to Tokyo and Seoul. The whole project took three years and cost $520 million. Of the total, $500 million came from Japan and the rest from Denmark.

“The demand was huge. We thought these lines will be loaded in fifteen years, and that happened in five years,” Bulgak recalled. [2] Bulgak, interview with authors, September 2014. Sometime later, when Bulgak met Nikolai Ryzhkov, who had served as prime minister under Gorbachev, Bulgak underscored how he had done what the Soviet Union had not. “Look, you know, what did it cost me? $520 million. That’s for everything. And you were the prime minister of the entire Soviet Union, and what was $520 million to you? It was nothing! Why could you not do it?” Ryzhkov did not have an answer. [3] When Bulgak presented the same question to his predecessor, Kudryavtsev, he got a truthful response. Technically it could have been done, Kudryavtsev told Bulgak. The real obstacle was not money or technology but rather pressure from the KGB.

In three years, during a period of intense upheaval, Bulgak managed to increase the number of international lines in the country to sixty-six thousand, all of them digital.

An even more trying problem was to install modern telephone exchanges all over the country. “Our industry then lagged behind the West by twenty to twenty-five years in producing the local phone exchanges, both international and intercity,” said Bulgak. “We came to think that our industry would never catch up, and that meant we had to go and buy.” In three or four years over 70 percent of all Russian intercity phone exchanges were replaced by modern digital ones, made in the West.

By 1995 Russia had established modern, national communications.

Meanwhile, at the Kurchatov Institute, scientists faced their own obstacles. The phone bills for the open line to Finland were costing around 20,000 rubles a month—an ordinary Soviet-made car could be bought then for 45,000 rubles. Where could engineers and physicists go to find money to keep the connection open? These scientists were products of the Soviet Union, shaped by it, even though they recognized its failures and shortcomings. Private entrepreneurship had been outlawed in Soviet times, and the scientists had no concept of how to run a business. The two teams, one at Kurchatov Institute and the other at Demos, clashed constantly over the way to make the network profitable. Vadim and Polina Antonov, who were among the early participants at the Demos building, soon decided to move to Berkeley, California, leaving in December 1991, the month the Soviet flag came down over the Kremlin. [4] Larry Press, interview with authors, November 2014.

Finally the two teams divorced. The group on the embankment, which had started the cooperative Demos, transformed it into an Internet service provider (ISP) of the same name. Demos had a special department in charge of selling personal computers, a very profitable business in the early 1990s, and the profits were used to fund the ISP.

The other team, headed by Alexey Soldatov at the institute, registered Relcom as a joint stock company—a company owned by its shareholders—in July 1992. The Kurchatov Institute was listed among the founders, and Velikhov was made chairman of the board. Soldatov, who kept his position as chief of the Institute’s Computation Center, was elected president, and Valery Bardin became his deputy and a development director. The idea was to launch the company to provide access to the Internet as a nationwide service.

But in 1992 no one knew much about launching a private enterprise.

There was one person, however, who seemed to know. Anatoly Levenchuk, a flamboyant engineer from Rostov, was a libertarian, obsessed with the idea of a free market. Levenchuk was a sparkplug of a man—short, energetic, driven by ideas. He favored extravagant outfits and spoke in a high-pitched, rapid-fire voice.

Levenchuk was the most agile and informed expert in the nascent Russian stock market. He got connected to the Internet early, in the winter of 1990–1991. Because of his indomitable energy, many enthusiasts went to him with business ideas, often involving establishing computer networks. To all of them Levenchuk put two questions. First, could he subscribe immediately? Second, did the network have access to the IBM network VNET? (At the time the Internet was still a collection of smaller networks, and VNET, which was based on IBM technology, was one of them.) [5] Anatoly Levenchuk, interviews and communications with authors, August and September 2014. Usually the response was that the network was to be started in a few months, access to VNET was impossible, and then the enthusiasts disappeared. Finally someone referred Levenchuk to a contact who could say “yes” to both questions and gave him the home phone number of Valery Bardin of Relcom—Levenchuk called that evening. Bardin said Relcom had access to VNET, but he didn’t know how to sell to Levenchuk access to the network. It was a very basic business transaction, but the physicists simply did not have the know-how. Levenchuk subsequently helped write the contracts for Relcom to sell Internet access, and in the winter of 1991 he got an e-mail address provided by Relcom, one of the first 150 e-mail accounts in the country.