The Future of Our Information Economy

Date: 4 Jul 1995 | posted in: From the Desk of David Morris, The Public Good | 0 Facebooktwitterredditmail

The Future of Our Information Economy

by David Morris

July 4, 1995

To hear politicians talk you’d 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 “500 channel” vision. Cable t.v. is the model. Cable systems aren’t designed to let you send data. They’re designed for you to receive data. He who owns the distribution lines makes the rules. John C. Malone’s cable giant, TCI reaches about one third of all U.S. homes. As PC World says, “it is difficult to get a new station carried on TCI without signing part of it over to Malone”. In 1994 Malone owned ll percent of Black Entertainment Televison, 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 Warner’s entertainment divison. 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. Paul Shumate Jr. an executive at Bellcore, Baby Bell’s research consortium, described the potential of online gambling and video games to Macworld magazine. “You suck `em in cheap. Then, as they get to higher and higher levels, increase the rate per minute.”

“It’s a superhighway with 250 lanes in one direction and one lane in another”, says John Perry Barlow, co founder of the non profit Electronic Frontier Foundation(EFF). They are “going to give you just enough back bandwidth to operate the button on your clicker” 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 eveything must pass. Any one site can contact any other site. Mitch Kapor, founder of Lotus and the EFF accurately describes the Internet as “one of the world’s largest functioning anarchies”.

The Internet might be called the 1 billion channel, producer based communications model. Advocates of this type of system understand that computers make possible an unprecedented decentralization of productive capacity. Any product that can be converted into information could be sold directly to the final customer by the producer. A musician can “cut a record” and sell it directly to customers, even allowing the customer to sample a few songs before buying. As the Internet’s capacity expands, more and more products can be added to the list of those sold in this fashion. First off the blocks was e-mail, then software, now magazines and still photographs and soon, music and films.

The 500 channel, passive consumer model so far has controlled the debate. It has the money, the visibility and the political clout. In 1994 alone 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 of the communications industry. 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.

The feeding frenzy by members of Congress and the fact that in this particular horse race the media itself own some of the horses, 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, “The public interest vision–the potential of this network–has been driven out as a subject for legitimate policy debate.”

We hear the term information highway but will the system 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 history’s greatest “highway robbery”?

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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David Morris

David Morris is co-founder of the Institute for Local Self-Reliance and currently ILSR's distinguished fellow. His five non-fiction books range from an analysis of Chilean development to the future of electric power to the transformation of cities and neighborhoods.  For 14 years he was a regular columnist for the Saint Paul Pioneer Press. His essays on public policy have appeared in the New York TimesWall Street Journal, Washington PostSalonAlternetCommon Dreams, and the Huffington Post.