Idées Fortes
Competition's Competitor
The Telecommunications Reform Act legislated a "pro-competitive, deregulatory national policy framework" for the information age. A year later, the centerpiece of that reform effort - two-way broadband networks to the home - has vanished.
Even with all the nifty new wireless devices that deliver voice, data, and video, the tough nut of building networks using fiber or fiber-coax hasn't cracked. And, because the Supreme Court let stand a lower court's stay of new FCC rules, competition won't roll out before judicial reviews are completed, months or years hence.
But the reason the promised infrastructure won't appear any time soon is not the law's delay: it's because local broadband networks aren't economically feasible to build on a competitive basis. Any one network, created at great cost, can usually be expanded more cheaply than a second network can be created. So it makes no sense for incumbent cable and telephone providers to bet their companies against each other by investing massively in new technologies: broadband infrastructure seems to be a "natural monopoly" - the rare situation where competition can't work, according to mainstream economics, because the market is too "thin."
Yet the ideology of competition (so productive where it applies and when it does work) has a life of its own. Some who boomed the information superhighway a few years ago now question whether broadband networks are needed - if only because competitive networks don't seem feasible. And Washington is smitten with selling off the airwaves. Intentionally or not, spectrum auctions siphon off demand and funding that could be aggregated to pay for broadband infrastructure. Deregulatory romance is hampering practical solutions to how to pay for such networks, how to build them with deliberate speed, and how to assure that they provide "universal" service.
Rather, the key to building broadband infrastructure will be to cooperate, not compete - with local power companies taking the lead to build common infrastructure. Why electric companies? Because utilities need universal, instantaneous data flows to optimize marketing, efficiency, control, and environmental accountability. "Just-in-time" energy could be an enormously advantageous application of computing. Utilities have financially significant reasons for bringing the infrastructure into being, together with assets such as poles, wires, billing systems, customer goodwill, and service crews.
These resources would be convenient instruments for cooperation, with the utility ceding retail service options to its telecommunications and information provider partners. The utility's rewards would come from building and running the platform over which rival providers reach ultimate customers.
An apt analogy would be a shopping mall - a developer (the utility) builds a shared space and leases to anchor tenants (telephone and cable companies) and others, who compete with each other to serve customers - a stimulant, not a threat, to competition.
Moreover, the mall model also offers a practical, entrepreneurial way to pay for such projects. Instead of looking to future monthly bills (which utility regulators traditionally scrutinize to protect customers), long-term leases with service providers become collateral for utilities to raise financing from Wall Street. This way, there will be abundant competition in services and plenty of reason to speed up delivering those services so that broadband networks can start creating new wealth.
Mass Transit!
Car and Driver considers it such big news that the magazine overrides the format readers have come to know through the years. The article starts in a blaze on the cover and continues from there, preempting even the table of contents.
"Mass Transit!" blares the headline. There's a psychedelic rendering of a bus ticket in front of a swirling route map. "Remember when competing models of cars came out every year and fought for your attention?" the article begins. "Well, forget all that. Cars are dead. And good riddance. Welcome to the new world of buses and trains."
Whoops, wrong industry!
What we have here is a tragic misalignment of corporate cultures. In the information industry, no one can figure out how to make real money off the most successful media innovation since television: the Web. The Web was a fait accompli before it made the cover of Wired. It happened so fast that millions of people were using it before anyone could design an advertisement for it. The damned thing was so successful that it raced ahead of both pundits and capitalists. The Web doesn't owe the industry any favors and seems to know it.
The industry, meanwhile, is racking its brains trying to figure out where the money is. And so, unlike the Web, "push" is being pushed on users, for the simple reason that it would reestablish the old basis for making money from media. Push is not a technology, but a away of using technologies to make new media emulate old media. Push indicts the business minds of new media for failure of imagination. Push ultimately will mean television all over again, since that's the only business model our moribund investment sector seems able to fathom.
Meanwhile, the transportation sector is having exactly the opposite problem. While we've successfully maintained the ready availability and low price of gasoline, it's obvious we can't keep doing it forever. For one thing, we hide the true price from ourselves. We have to send the army around the world to fight and die for a nonrenewable resource that we're squandering anyway. And the death toll from car accidents is worse than from wars. In fact, automobiles are staggeringly expensive. And yet the transportation industry can't imagine a business model that would attempt to wean people from their beloved cars.
Web browser, car - see the connection? The appeal is similar: I go where I want. I am in control. I express myself by what I do. I exist. The browser is the car of media, while television is the railroad, which attracted the masses but was owned by the baron.
For the sake of culture and the future of democracy, and for the sake of the earth and the well-being of our descendants, we need a mass exchange of pundits and investors. All the DeLoreans, Iacoccas, ad execs, sleazy salespeople, and slinky models who sell people freedom in the form of a product, please step over here to Hollywood. Next, all the Murdochs, Turners, chip/OS cartel bosses, ad execs, and demographic consultants who talk people into consuming as a mass mind, like herd animals at a trough, please settle down over there in Detroit.
We need you both, but you're in the wrong places. Switch!
Run for the Border
The United States government needs a search warrant to open a flat, letter-class envelope sent from London to Boston. But no warrant is needed if the envelope has a bulge - in fact, the US Customs Service has the power to conduct a warrantless search of any person or object entering the country.
And Customs is increasingly worried about contraband information - be it child porn or pirated software. I ordered a videotape from England in 1994; it arrived in an envelope resealed with green tape declaring "Opened by US Customs." The video had been fast forwarded halfway. The same video would have been ignored had it been sent over the Internet, says Customs import specialist David F. Jones. That's because federal law views information sent into this country by wire as a "nonentry, just like corpses and accompanying flowers."
Congress will want to rethink this distinction. Just as the vast majority of parcels and people entering the US do so through one of 301 authorized entrance ports, most digital data transiting international borders will do so on a high-speed leased line operated by one of the world's leading telecom providers. It would be a simple matter to subject this information flow to random or targeted searches.
Customs could tighten control by allowing international connectivity only via special proxy servers. Encrypted messages couldn't enter unless Customs was given a copy of the key. Small messages identified as correspondence, encrypted or not, might be allowed to pass through uninspected - especially if the service built systems to detect "smurfing" (cutting large files into tiny pieces to escape detection).
Nations have always struggled to preserve the integrity of their borders. It is unreasonable to think that this struggle will abate as we move from the physical world to the digital.
Reducing Hang Time
Given today's telemetric devices and the Web's ubiquity, Dr. Kevorkian should not have to bear the burden of assisting suicides alone. Consider two remote-assistance scenarios through an imagined suicide-assistance site: Wasteme.com.
Each day, a terminal don't-wannabe posts his or her story to the site, which is rigged to administer a minute dose of the selected poison. If the click-throughs mount up to some minimum threshold of fatality, the whole dose would be administered automatically. Or consider the firing-squad lottery option: All but one click would be innocuous and incur no delivery of poisons. The "winner," however, would administer the coup de grâce anonymously in delayed time. Leave the final act to the randomness of the Web, Jack.
Recalculating CPM
Across America, companies have responded with kneejerk proscription to the allegedly unproductive Web-viewing habits of employees: Microsoft denies temporary workers access to the Net; Compaq fires laborers who spend more time looking at silicone than silicon. But there's an untapped upside to unauthorized Web surfing. Indeed, the wanton white-collars at IBM, Apple, and AT&T who, according to a survey conducted by A. C. Nielsen, spend up to 13,000 hours per month ogling the Penthouse Web site are a tremendous corporate asset. Young, educated, affluent, looking to maximize their scant leisure hours with high-ticket consumer purchases: what advertiser would not pay dearly to reach them? Instead of making sites like Penthouseoff-limits, these companies should demand a cut of the advertising revenues.
Go with the flow
Will the bandwidth bonanza herald the death of the Web as a populist medium? An individual author might create 100 kilobytes of text and a few megabytes of rendered graphics in a day. Compare that with the amount pumped out by the armies of programmers and graphic artists at Microsoft or Time Warner. When the bandwidth logjam breaks, individually produced content will drown in the corporate flood. Turning up the bandwidth effectively turns down the volume on all the small sites that make the Internet what it is today.
