WIRED:THE INTERNET is without borders, they say. But if that's the case, why does LinkedIn, the popular social networking site, block anyone from using it in Sudan?, asks DANNY O'BRIEN

Why does Google, whose search engine is so popular and useful that the Iranian government dares not risk censoring it domestically, block its own open source development website, Google Code, from being accessed in that country?

And why does Veoh, a video-sharing site that rivals YouTube, block its service in Africa, Latin America and Eastern Europe?

The answers, in their own different ways, show the new costs of doing business internationally and online.

In Veoh’s case, that cost is tied up in the everyday profit and loss calculations of its website. Veoh has a huge potential audience for its videos in the developing world, but far fewer advertisers willing to pay for ads targeted at that audience. The result is that serving YouTube-style videos to those continents sucks up bandwidth, without giving any advertiser dollars to fund it. So Veoh effectively shut up shop in those continents.

For Google and LinkedIn, the costs are rather different. Bandwidth is hardly the issue for either site. LinkedIn is a mostly-text site, dealing in social networking, and the bandwidth of Google Code, Google’s software site, is tiny compared to its other brands, such as YouTube and its search engine.

Both companies instead appear to be concerned with the legal ramifications of serving users in these countries. Iran, like Syria, Cuba, Iran, North Korea, and Sudan, is on the United State’s list of prohibited countries when it comes to some forms of strong encryption software. Perhaps Google thinks that one of its Google Code contributors might upload one of these banned products.

However, it’s not clear (to me, at least), whether Google really needs to block an entire service out of concerns that one of its users might break this embargo. After all, if Google Code is a problem, then so is every other web-hosting company in the United States.

Amazon doesn’t block these countries from using its “S3” service, which can serve any form of content, from movies to binary executables. Google doesn’t block Blogger in these sites, and you could paste the code of any cryptographic program into a blog entry. The impossibility of enforcing the ban on cryptography is one of the reasons why the United States’ prohibition has been steadily diluted for years, to the point where it seems anomalous for Google to care.

LinkedIn’s embargo of Sudan is even stranger. LinkedIn is a simple social networking site for users. Trade with Sudan, like Cuba and Iran, is certainly under certain wide prohibitions in the United States, but the US Congress has made clear that those prohibitions don’t include the provision of information.

Unfortunately, it’s less costly for companies like LinkedIn to be conservative in their interpretation of law than it is for them to be generous. It might be worth losing a few users in a faraway country if it means a less-worried legal department. The US government’s war on international crypto may be long over, but ambiguous rules still left on the books make giants such as Google nervous.

For now, these blockades present potential opportunities for European countries. If the United States – both in its government and its companies – has decided to be parochial about where it finds its audience, that leaves that world open to businesses elsewhere. If Veoh wants to block eastern Europe from using its video site, perhaps those closer to that venue might look into advertising prospects there.

Cuba, Sudan and Iran all have large expat communities who would benefit from sites that don’t block their compatriots in their homelands.

But they also show how, even on a borderless internet, companies and countries still feel the need to divide up the world along state borders. And it’s not just the Americans that are feeling the temptation.

The US is working with Canada, Europe and Japan, among others, on a backroom treaty, named the Anti-Counterfeiting Trade Agreement. From what has leaked out of the deliberations, the agreement seeks to create a border authority which would be able to police not just the physical trade of intellectual property, such as fake Rolex watches, but also the international traffic of data across the net.

Such blockades might make sense in the physical world, but they simply do not make sense on the net. Banning users in Cuba from seeing the free world’s communications is obviously counter-productive. Filtering out entire continents of potential customers from your world because they’re too far away to fit your business model seems like clumsy corporate economics.

National borders are the wrong model to impose on the net – and politicians and the business community should stop leaning on them as quick solutions to more complex problems. They don’t work; and the quick savings they provide mask far greater costs in the long term.