The Future of Our Information Economy

To hear politicians talk youÕd think the key issue about the future of our communications system is who will win the horse race between cable operators and phone companies. That may be the way Washington sees it. It is not the way growing numbers of Americans see it. For us the key issue is whether Congress will develop rules that encourage a largely closed, corporate controlled communications system in which those who use it are largely passive consumers. Or will Congress encourage an open, decentralized system that inspires those who use it to become active producers. Two visions of our information future are at work here. One is the command and control Ò500 channelÓ vision. Cable t.v. is the model. Cable systems arenÕt designed to let you send data. TheyÕre designed for you to receive data. And the company that owns the distribution lines makes the rules. John C. MaloneÕs cable giant, TCI, for example, owns the distribution lines into about one third of all U.S. homes. Malone decides what shows to carry. Moreover, as PC World notes, Òit is difficult to get a new station carried on TCI without signing part of it over to MaloneÓ. In 1994 TCI owned ll percent of Black Entertainment Television, 15 percent of Family Channel, 50 percent of American Movie Classics and 71 percent of the Home Shopping Network. The Baby Bells are lobbying fiercely to be allowed to imitate cable operators and sell programming over their lines. Bell Atlantic, Nynex and Pacific Telesis are aligned with Creative Artists Agency. US West owns a piece of Time WarnerÕs entertainment division. Other Baby Bells have hooked up with Walt Disney. Both cable and phone companies view those who connect to their systems as customers of centrally disbursed products. As reported by the Washington Monthly Paul Shumate Jr. an executive at Bellcore, Baby BellÕs research consortium described the potential of online gambling and video games. ÒYou suck Ôem in cheap. Then, as they get to higher and higher levels, increase the rate per minute.Ó ÒItÕs a superhighway with 250 lanes in one direction and one lane in anotherÓ, says John Perry Barlow, co founder of the non profit Electronic Frontier Foundation(EFF). They are Ògoing to give you just enough back bandwidth to operate the button on your clickerÓ so that you can make purchases or play video games. Competing with the cable t.v. model is the decentralized, flat fee, communal Internet system, affectionately known as the Net. The 28 year old Internet began as a Department of Defense experiment in fault-tolerant communications. Today it links up 30 million members in more than 60 nations. The number of subscribers is doubling annually. The Net has no headquarters, no clearing house through which everything must pass. Any one site can contact any other site. Mitch Kapor, founder of Lotus and the EFF accurately describes the Internet as Òone of the worldÕs largest functioning anarchiesÓ. The Internet might be called the 1 billion channel, producer oriented communications model. Advocates of this model understand the unprecedented decentralization of productive capacity made possible by computers. Any product that can be converted into information could be sold directly to the final customer by the producer. A musician can Òcut a recordÓ using a few thousand dollars of computer software and hardware and sell it directly, via the Net. The customer could even sample a few tunes before buying. As the InternetÕs capacity expands, more and more sophisticated products will be added to the list of those sold in this fashion. First off the blocks was e-mail, then software. In the last year magazines and still photographs have begun to grace the Net. Soon, music and eventually, films will be sold in this manner. The 500 channel, passive consumer model so far has dominated the debate. It has the money, the visibility and the political clout. In 1994 spending on lobbying by the communications industry may have surpassed spending by the insurance industry on health care reform, despite the fact that the health insurance industry has 10 times the revenues. Communications companies gave $2 million to members of a single key congressional committee. And why not? Hundreds of billions of dollars in potential profits are at stake here. For the most part, the media hasnÕt been very helpful in this debate. After all, in this particular horse race the media itself own some of the horses. All of which means that those interested in a decentralized, democratic, open access communications system face an uphill fight. As Andrew Blau, chairman of the Benton Foundation says, ÒThe public interest vision -the potential of this network -- has been driven out as a subject for legitimate policy debate.Ó Will the future Òinformation highwayÓ truly be like a highway, with low cost, universal access where anyone can drive any vehicle and go to any destination? Or as PC World worries, will Congress participate in historyÕs greatest Òhighway robberyÓ? This may be one political battle in which the ends really are the means. Those who would nurture and expand the Internet model are using the Internet itself as their primary organizing vehicle. The network is networking to make networking the social and economic model for our information future. And if they win American politics may never be the same.

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