This article appeared in Reason Magazine (April 1995).
If the looming changes brought forth from a technological innovation four orders of magnitude more powerful than the printing press leave you a bit confused, don't worry. Al Gore has the answer: the National Information Infrastructure, or NII. The administration's "Agenda for Action" begins with the promise of "a device that combine[s] a telephone, a TV, a camcorder, and a personal computer" that would bring "the best schools...vast resources of art, literature and science...health care...fulfilling employment...the latest movies...government benefits" and more. In sum, "whatever you need."
By promising so much, Gore et al. create an expectation that quickly tilts toward entitlement. If, as they suggest, the government must guarantee universal access to essential services, then who but the government can determine what constitutes "access," and what is "essential"? National Public Radio head Dell Lewis was among those named to advise the administration on what type of chicken belongs in every pot.
A major justification for government "guidance" in this $400 billion investment is fairness. Who among us, indeed, would want a society of "information haves and have-nots?" But the call for universal service is a red herring. It masks a fundamental mistrust of a process that will deeply reshape society and yet is almost entirely beyond government control. A process that is chaotic and self-organizing, utterly without a central plan. In other words, a market.
That this should cause some cognitive dissonance among the social engineering crowd is no surprise. David S. Bennahum, author of a forthcoming book on cyberspace, notes in The New York Times that the Internet was created "mostly by accident" and worries about what kind of cyberspace we will get "if we surrender it to the vagaries of the market." The New Republic even goes so far as to castigate Wired, the magazine of the Information Age cognoscenti, for its "taint of contempt for the poor" and its "willful rootlessness and hyper-individualism" which "do little to minimize the class polarization and segregation that have always plagued the United States."
With the title "Anarchy, Chaos on the Internet Must End," an op-ed in the San Francisco Chronicle perhaps gets to the heart of the matter. Martha Siegel, author of How to Make a Fortune on the Information Superhighway, is appalled, rather than awed, by "an international computer web tying together about 30 million people [yet] governed by no one." She can scarcely imagine "the most powerful communication medium ever invented...left to the equivalent of mob rule." To her, the "need for firm direction is all too obvious." Firm direction, of course, means "the guiding hand" of the FCC.
That's not to say that there is not a very real danger of some being left behind. A 19th-century peasant, newly arrived in the big city, faced a skill and knowledge gap much narrower than will a 21st-century worker ignorant of the ways of the Infoweb. The very nature of the emerging information economy differs fundamentally from its industrial predecessor. While uncertainty comes hand in hand with rapid change, the ongoing universal-service debate misses four important truths.
First, Siegel is right. The Internet, the early progenitor of a 21st-century global Infoweb, is not governed by anyone. It is truly a self-organizing phenomenon, defined mainly by the simple rules, or protocols, which allow information to pass from one computer to another. Moreover, sometime soon if not already, nobody really knows for sure, the number of foreign Internet connections will outstrip those in the United States, making any attempts at national control futile.
Second, the "Information Superhighway" is anything but a highway. The paucity of our metaphor reflects the Machine Age mindset's inability to grasp an emerging, evolving, chaotic phenomenon. Unlike a planned, mapped, and relatively static highway, 1995 info-reality is a not-quite-seamless, organic web of Internet nodes, cellular modems, fax machines, CNN, GPU-equipped delivery trucks, and 1,001 other microprocessor-enabled innovations. Together, they make manipulating, moving, and storing information cheap, time and distance immaterial, and hierarchy the quick route to organizational failure.
Third, information is fundamentally different from matter. If I mail my dad a copy of this article, I don't have that copy anymore. But if I e-mail him--and everyone else I know--I retain my copy. And my friends could do the same. Leaving the issue of intellectual property aside, we must remember that information is not material and carefully question statements that imply that it is. Unlike money, for example, information I have is not necessarily information that you have not. Have versus have-not, or zero-sum thinking, belongs to the Machine Age, not the Information Age.
Fourth, the idea of "convergence"--televisions, computers, and phones all merging into one, or vice versa--both will and will not occur. While increasing bandwidth will allow once-separate technologies to overlap, there's no reason to expect one answer. Rather, we should anticipate many answers, as entrepreneurs create and fill niches based on consumer needs. Banks and bakeries do not have the same information infrastructure needs. Nor do all consumers. Bell Atlantic CEO Ray Smith identifies five different technologies that his company will (or might) use just to compete with cable companies for delivering video signals. In other words, there is no single twisted copper wire with matching black rotary phone that will be installed. Fortunately, as Peter Huber of the Manhattan Institute puts it, "the markets have already grasped this, even if the metaphor makers haven't." Nor have the policy makers, who rely on convergence to make their one-black-box-fits-all vision plausible.
That having been said, how do we get from the industrial here to the information there? Imagine that in 1895, some 13 years before the Model T, Al Gore's great-grandfather had correctly identified the potential importance of the new "horseless carriage" to future employment, and led the government push to ensure that we did not become a nation of "motorized transportation haves and have-nots." History provides an answer to this hypothetical question. Instead of the dizzying array of car classes that compose the U.S. automobile industry--essentially related, but separate, markets--we would be selecting among shades of black for our new Trabant.
By contrast, the process of technological innovation in a market environment is well documented. From jet engines to fiber optics, performance-conscious, price-insensitive consumers pay a premium for innovations, which drives unit production costs down the learning curve and brings the newer, better technology into ever lower price ranges. That's why anti-lock brakes are found in Chevys now, not just Cadillacs. That's why burgeoning cellular service, a luxury everywhere but L.A., enabled cellular service to arrive in certain rural homes not economically served by land lines, contributing to an increase in the percentage of homes with phones since the explicit cross-subsidies were phased out early this decade.
The danger lies in deciding ahead of time that we all need anti-lock brakes in our car, or a videophone, or a certain set-top box on our TV, or any other single answer, because some technologies don't make the grade. The recent Japanese debacle with HDTV shows how trying to guide, much less predict, technological innovation can leave consumers stuck with white elephant solutions.
When consumers are ready, new technology can, and does, spread with startling rapidity all by itself. Although the basic concept of facsimile machines had been around for decades, it took a microprocessor upgrade and consumer desire to bring "fax" into our vocabulary. From just 300,000 units in 1986, the installed facsimile base exploded to 10.7 million just six years later. Similar exponential growth patterns characterize the ongoing information revolution. According to Vinton Cerf, president of the Internet Society, if current growth rates continued, sometime early in the next century everyone in the world would have an Internet address.
Investors and early adopters pay for the innovations that fail, as well as the successful ones like fax. They should continue to do so, because progress comes from innovations unknowable in the time frame of Gore's vision: Apple Computer, Microsoft, and the PC itself have all existed for less than the estimated 20 years it would take to bring fiber-optic cable to every home in the United States. Undoubtedly, there is more than one goateed cyberpunk tinkering in his garage right now, looking for a better way. As long as there are geeks with a dollar to spend today on what will cost 50 cents tomorrow, just to be the first in their Usenet group to have it, new ideas will continue to germinate. Once government committees have the power to decide what society will need, the process of innovation will die.
To the level-playing-field crowd, letting some people have something all of us don't just isn't fair. As if free home access to Nexis and Dialog would miraculously provide jobs for the poor, these folks worry that "electronic redlining" will keep such high-priced services only in the offices of law firms, investment banks, and other rich users, totally ignoring the rapid erosion of information services prices. Nothing short of mandating fiber-optic lines to every home will do. Even if a planned solution were technologically feasible, would this zero-sum, slice-of-the-information-pie policy work?
Not a chance, says Jeff Eisenach, president of the Progress and Freedom Foundation, a Washington think tank. "The problem in America today is not information have-nots, it's information want-nots," he notes. "Before we start putting a computer in every home, we have to create a culture in which people want the information a computer would provide."
He may be right. A television, today's prime source of information and entertainment, can be found in upwards of 99 percent of American homes, higher even than the 93 percent of homes with a phone. Without a hint of government subsidy--let alone a domestic producer--TV reaches more homes than telephones, despite six decades of sweeping universal telephone service policy courtesy of the Communications Act of 1934. Today, as computer price-to-performance ratios plunge, a used computer and modem can be had for prices equal to or less than a TV, with basic access to today's online world about $9.00 per month. And, like virtually everything else in the high-tech arena, those prices are falling.
If "universal service" meant that buyers and sellers would be ensured access to each other (as with today's access to a variety of long-distance phone service providers) and that, perhaps, we would ask how best to get even one modem into every school (even without asking why they don't have them already), then Washington would have made the first small steps in the right direction.
It's a positive sign that Vice President Gore's rhetoric seems to have evolved in its own right, away from the class-conscious, entitlement-creating "haves and have-nots" of early 1994 to at least the potential for deep reform. In January, Gore suggested that what's needed is "the courage to throw out the regulated monopoly model that we've used for more than 60 years and instead create a truly competitive marketplace." But the rhetorical rubber has yet to meet the legislative road, and the potential for serious mischief, such as domestic-content requirements, remains.
More important, as long as the debate echoes with "on-ramps to the Information Superhighway" and other Machine Age images, Democrats and Republicans alike remain conceptually limited to policies that, at best, will produce a horseless carriage. Lacking an appropriate Information Age metaphor--economy as ecosystem--policy prescriptions inevitably ring with class consciousness and zero-sum thinking. Until the political mindset matches the organic reality of the Infoweb, the best we can hope for is a short waitlist for our e-Trabant.