Where's the internet headed?

Governments now have, or are developing, the capability of storing everyone’s every digital activity. Every communication, every search, conceivably every TV show we watch.

Are people going to allow that?
Can we have a free and open internet and some degree of privacy?
Who will have access to this information?
How can it be protected?
Are we putting all our eggs in one electronic basket? Or is that inevitable?

I have heard that there is a system poised to overtake the internet itself. Do you have a vision of that?