I would add the following additional events as factors to consider:

The Melissa virus outbreak of March 1999:
The source being blamed as a usenet post, millions of computer users worldwide fell victim to a self spreading computer virus. This was the first well known outbreak since the Morris worm in the 80s. A New Jersy man was fingered as the author, he has been charged, but curiously all has since been quiet regarding this matter in the news. Who does he work for now we wonder? Whoever it is has clearly effected legal proceedings and media coverage on the outcome. Putting the legal aspect of this aside, we should also wonder about the speed in which the virus spread. The author was not responsible for actually releasing it, but only writing it. Who would have been able to release it in such a manner that it spread as rapidly as it did? Why? What was learned by doing this? A lot.

The Yahoo/Ebay/Etc Web Site Attacks of February 2000:
For brief periods of time over a series of two days, Yahoo and several other large popular website suffered attacks. These were simple flooding attacks which caused no harm, they simply tied up the target computers with bogus requests for a few minutes at a time. Since these websites use large numbers of redundant servers, it takes an awful lot of knowledge and resources to shut them down. In the end a young Canadian boy was blamed for an unrelated attack on CNN, however the mainstream news used this as a solution to the Yahoo and other websites also. This was a very powerful attack, no one knows who did it. The types of people with the knowledge to do things such as this don't do it for fun. Was this just a ploy for more laws? It seems all too simple to assume this event was staged to push for more laws. Was this event a test by some rogue group? Or was it a scare tactic by some rogue group? The one thing I can say, it wasn't planned and carried out by just one 14 or 15 year old. This was planned and executed by a group experienced people, for a purpose. What purpose is the question.

The ILoveYou virus outbreak of May 2000.
A little over a year after Melissa, we have the ILoveYou virus. This one spreads just as fast, is slightly more damaging. As with Melissa, an author is tracked down and charged. In the end charges are dropped. No one questions who launched the outbreak, only who authored it. It almost seems as if someone has studied email traffic and found a pipeline of users who are well enough connected to assure a very fast infection rate if you can get them to run the virus.

You talk a lot about factions fighting for control, no doubt they both would like control of the Internet for quite a few reasons. I wonder if the above events are signs of a struggle of some sort taking place.