Hold that metaphor. The phrase "information highway" is a great way to describe a great idea. But it is also a lie - or wishful thinking at best. It may be, in twenty years time, that information will be as free as a convertible full of sophomores on spring break, and it would be wonderful if it were so. But in the meantime the networks that America is actually building more closely resemble another form of transport: the railroad.
In America, "highway" is pronounced with the accent firmly on the first syllable. Before the lips pucker into wuh for -way, the dream takes hold. There's wind in the hair, sun on the cheek, rock 'n' roll on the radio and baby-smooth blacktop all the way from home to wherever. You may drive in the comfort of your own car, but the road is free because the government built it.
Railroads, on the other hand, are less inspiring. They conjure images of traveling to inconvenient parts of town only to sit in cold, dilapidated stations, surrounded by derelicts, drug addicts, and out-of-work Damon Runyon characters; images of waiting for a train that would be late even if it didn't break down. Worse, railroads have spent much of the past century or so oscillating between unacceptable profiteering and equally unacceptable bankruptcy.
So into which category do information networks fall? Like any new technology, they don't precisely match any of their predecessors. But the parallels between networks and railroads seem a lot stronger than those between networks and highways - and so do the potential costs and benefits of building them. The comparisons that matter most concern infrastructure - tracks, roads, and wires.
The federal government built the highways and made them freely accessible to all. But America's government is not going to build information networks. It can't afford huge networks, nor could it administer them even if it could. Like railways, information networks are being built by people who hope to profit from them.
Like railroads, new information networks are increasingly being built in large, monolithic chunks - starting from the long-distance links and working down to local ones. Just as it was possible to travel from the Atlantic to the Pacific on the railway, long before spur lines branched out to the cattle centers and mining towns of the frontier, long-distance information links are today far better developed than local ones. Telecoms companies, cable-television operators, and others have already installed several times more long-distance fiber-optic cable than they now need - though there are as yet few local networks to provide access.
By contrast, highways - and the Internet, the exception that may prove the rule about information networks - grew from the bottom up rather than the top down. By the time the National Highway Act of 1956 spurred the federal government's building of the interstates, motels and billboards already stretched from one end of America to the other. South Dakota's Wall Drug Store, patriarch of roadside attractions, was 25 years old. Unlike railway builders - or information-network builders for that matter - the creators of the interstates had a pretty good idea of where people wanted to drive and what they wanted to do when they got there.
But the biggest contrast between railways and highways is regulation. Regulation was the least of the worries of highway builders. Their problems lay largely in stimulating investment - how most efficiently to dispense taxpayers' money for construction. Railroads, by contrast, have been a regulatory nightmare for more than a century. On a variety of issues - including rates, access, and competition - regulators have found themselves caught between vehement, entrenched, and irreconcilable interests. Pleasing everyone is impossible; the best that railway regulators have been able to hope for is to annoy all equally.
Into just such a regulatory nightmare are about to stumble the builders of information networks. The proposed merger of Bell Atlantic and Tele-Communications Inc. (TCI) brings home some of the dilemmas. First, it highlights the fact that the problem of building information networks is not stimulating investment but deciding what, if any, regulations are needed for the flood of investment entering the field. Second, and more important, it highlights how little thinking politicians have done about such regulation.
Knee-jerk political reaction condemns the size and power of the firm the merger would create. But this misses the point. Big-ness is a necessary evil in the network business. Combinations of big firms are required to make the huge investments needed to create information networks, even though they also create a real risk - that instead of information highways, America will get information railroads run by information robber barons.
The thankless job of regulators is to broker compromises that combine most of the benefits of big firms with as few as possible of the costs - while simultaneously working themselves out of a job over the longer term by laying the foundations for truly competitive markets. But in order to be effective, regulators need goals. And America's politicians seem to have been so focused on the appealing problems of information highways - stimulating investment and reaping the gratitude of constituents impressed with their foresight - that they have not thought much about what to do if someone should actually decide to start building.
The National Telecommunications and Information Administration recently published a report entitled "The National Information Infrastructure: Agenda for Action." Seven of the nine items on that agenda for action were gifts that politicians could bestow. The other two are mostly talk. The agency wants to set up a panel to discuss what access Americans should have to networks and another panel to discuss the government's role in setting standards to promote connectivity.
They had better talk fast. The combination of telecommunications and entertainment firms now forming to build information networks poses all of the same regulatory dilemmas as railroads - plus a few new ones. The most familiar set of problems concerns access. Many, including Bell Atlantic and TCI, assume that there will eventually be only one information wire to each home and that through this wire will flow everything from grandma's phone call to the news. Unless they are wrong - for example if wireless communications can rival the wire - ensuring that all forms of information can get access to that wire will depend on a free flow of information.
On access, regulators have made a start. The Federal Communications Commission has long managed regulations aimed at preventing telecom companies with wires to offer regulated 'basic' services from taking advantage of their position to sell more 'enhanced' services. But the combination of entertainment and communications creates new opportunities for messing up competition.
Entertainment can subsidize communications instead of vice versa. Some of America's biggest networks are already run entirely on the profits of entertainment. Should the entertainers find that selling subsidized communications helps to lure people into the market for the entertainment, they could kill any competitor without access to endless supplies of I Love Lucy and The Wheel of Fortune. The ability to use control of popular entertainment to gain clout in distribution - which in turn can be used to sign up exclusive rights to more popular entertainers - has crushed competition from the soft-shoe and shuffle of vaudeville to movie studios and television networks.
All aboard! The information express is now leaving from channel 500.
