Paper 2: Architecture and Platforms in the Evolution of Infrastructure
Paper 3: Turf Wars and Power Struggles

Section II and III

Sections  2  and  3  of this course dealt with the  evolution  of
infrastructure  and architecture for communication  technologies.
The  class  looked  at the development of railroads,  telegraphs,
radio,  and  television  broadcasting  in  both  Technologies  of
Freedom,  and  The Gordian Knot.  We specifically looked  at  the
development   of   the  Internet  and  how  various   historical,
political,  and economic forces shaped it's development  and  how
these same forces will shape the development of the NII.

I   was   particularly  interested  in  class  room   discussions
concerning  the role of market demand in the structuring  of  the
NII.   The  most  recent  example, was a  brief  foray  into  the
artistic merits of Hollywood.  Some had expressed disdain for the
quality and nature of the movies produced by Hollywood.  This was
presented  as  an  example of a failure of the  medium,  in  part
because  of  tight  control by a media hegemony.  Though  I  feel
Hollywood often produces material that is inane and offensive,  I
would  hesitate to require that the government do anything  about
it  other  than  make  sure  there is  an  environment  in  which
competition  may occur and some form of choice and  participation
is  afforded to consumers/citizens.  However, most people  _want_
to  see  Arnold  Swarchzenegar, and it is a bit  presumptuous  to
assume  that  these  people really need to be watching  "quality"
programming of someone else's choosing.

I  have  encountered this viewpoint before, particularly  from  a
European  film professor, and in the debate in France  concerning
whether  they  should  be able to exclude  American  films.   The
reason  this argument is applicable and important to this  course
is  because  the demand help shall shape the NII, and those  that
can  manipulate  or interpret demand in their  favor  shall  have
immense  power.  A simple comparison of possible scenarios  is  a
country  only  wired for video on demand, versus a society  wired
for independent publication and communication.

In  a  previous discussion on this topic Mitch Kapor  had  argued
that  market  demand is not always an indicator  of  what  people
would  eventually  find to be valuable.  His  argument  was  that
though no large corporations perceived a demand for products like
Lotus,  spreadsheets have become a necessity of  the  modern  day
world.   Though  I  do  not disagree with this  argument,  it  is
interesting  to note that though the market may have  not  seized
upon the idea as quickly or eagerly as he would have liked, Lotus
eventually became immensely successful.  Yet, one can  find  many
examples  in  which a superior product is not chosen  by  a  free
market  system.   In  this paper I shall examine  this  phenemona
within  the  context of computer and communication  technologies.
First, I shall argue why a free market is sub-optimal, then why a
controlled economy is the same.  Finally, I shall recommend  what
I  think  is  a good balance between the two poles for technology
policy.

Why Market Demand May be Sub-Optimal to Social Welfare?

One  difficulty in the thesis that market demand shall drive  the
market  in  the most efficient manner is that even  if  consumers
express  preferences unambiguously, companies  may  not  perceive
those  preferences correctly.  For instance, the great amount  of
hype  concerning the NII leads some to feel that it shall meet  a
great  demand for sophisticated video services and nothing  else.
I would argue that this perception is false.

Even  if  someone could argue with my example above,  one  cannot
deny that companies expend a great amount of effort in attempting
to  measure  consumer demand.  This is where a second  fault  may
crop  in  to  my  thesis.  It is well known--and  was  very  much
discussed  at  the Internet Economics Workshop--that  surveys  of
people's  preferences are relatively useless if they are  not  in
the  context of the real world. (Comments from David Clark.)  For
instance, people may say they are willing to pay 1 cent more  per
minute  for a higher resolution video image, but until the person
is  presented with the new image, and with a monthly bill,  their
actions may not reflect their words.

The nature of technology policy further confuses the relationship
between demand and supply.  Neuman et al, described the evolution
of   our   communications  infrastructure  as  a  borrowing   and
modification  of previous transportation models.   For  instance,
the  network  of  rails used by trains led to a  similar  web  of
telegraph  poles.   Later, long distance  telephone  service  was
defined  in  terms  common  carriage,  a  concept  borrowed  from
railroad regulation.  In fact:

  ...the  wording  of the Communications Act was a  transposition
  of  the  1888 Interstate Commerce Act, with "railroad" replaced
  by "telegraph and telephone". (Neuman, et al, p. 37)
  
Pool agrees:
  
  ..the general impulse of American courts was to pretend that
  the phone was nothing new and to take precedents from
  telegraphy and common carreir law over into the telephone
  field... (Pool, p. 101)

Because  communication spectrum was considered to be limited  and
because the infrastructure required "right of way", communication
was  often regulated as a natural monopoly.  Rate of return (ROR)
regulation  overly monopolies totally skewed the  workings  of  a
competitive   market  to  the  point  where  the  difficulty   of
regulating AT&T led to its break up, and to the current proposals
for a competitive industry.

Continuing  with  the  discussion of monopolies  and  hegemonies,
currently there is some "danger" to our society and economy  from
the  immense  power of individuals such as Gates, Malone,  Smith,
and  Diller.  From the readings, I felt a bit frightened that the
future  of the NII--and consequently the nation--is dependent  on
actions that may be born of swaggering egos rather than reason.

There  is  another  difficulty in relying solely  upon  perceived
demand  as  a motivation for NII decision making.  Market  demand
and  shareholder's  desires are often based on  the  short  term.
This  short  sightedness is further exaggerated by  extranalities
like the "bandwagon effect" which results in an advantage to  the
first  mover.   If people release an inferior product  first,  or
promise  to  (vaporware), that product has an advantage  in  that
once  some  people by it, it become a standard with  which  other
people  will wish to interoperate with.  (Or the example  of  the
inefficient  and dangerous QWERTY keyboard shows how  inefficient
technologies and policies can persist.)

Why  Government Centralized Control May be Sub-Optimal to  Social
Welfare?

I  shall  deal  with  this question quickly in  hopes  that  most
readers would be sympathetic to my answer.  First, I would  argue
that controlled economies seemed to have faired worse than "free"
economies  throughout the world.  Second,  one  could  argue  the
government is nothing more than a business itself, albeit a large
one.   Governments have a natural tendency to want more  revenue,
and the decision making within a government will have many of the
problems  discussed  previously, if not more  and  to  a  greater
extent.

What  is  the  Role of Government and the Market  towards  Social
Welfare?

The function of the government is to do beneficial things that no
other  entity could.  No other entity could enforce uniform civil
rights  throughout  50 states, no other entity  could  provide  a
stable  currency and set of uniform regulations providing  for  a
competitive  market.  Of course, the government  may  also  screw
things up as no other entity could.

Hence,  where  the  market fails, the government  should  act  to
mitigate  the failure.  If most people pay millions to see  inane
movies,  it is not be government's place to prevent it.  Instead,
it should provide an environment in which, if people wanted, they
could  have  the  oppurtunity to see good  movies.   Or,  it  may
provide  a  helping hand through PBS to cable babies,  so  as  to
educate  and  enlighten.  PBS  provides  an  immense  amount   of
education  materials to schools.  Furthermore, if  it  were  cut,
affluent and large populations in areas like New England (Boston)
or  the  Mid Atlantic (Baltimore/DC) would continue to have  such
programs, but poorer regions would not.  It is providing benefits
that  far  exceeds the costs and in a unique manner that  private
industry could not.

Returning  to  technology, the development of  standards  in  the
digital community is an example of good government.  The IETF and
ISO  act  in their own ways to understand the present,  and  look
towards  the  future  so as to provide long  term  planning,  and
common  sense  in  the short term.  The Computer  Systems  Policy
Project  spoke  of interoperability, scalability,  extensibility,
accessibility,  etc. as goals for development.  This  is  not  an
attempt  to  satisfy immediate short term goals of the producer's
or  consumer's, but a process in which the social welfare of  all
will  hopefully be enlarged through long term goals, and  current
real  world  know  how.   It is important  to  realize  that  the
standards  process  is  not  immune from  many  of  the  problems
discussed  earlier.   It can provide to be a powerful  weapon  of
monopoly and abuse as seen in the histories of AT&T and  IBM.   A
goal  is  to keep the standards process as open and flexible  and
possible,  and the standards themselves should be non-proprietary
and  interoperable.  "Perspectives on  the  National  Information
Infrastructure: Ensuring Interoperability" provided  some  points
reflecting  my opinions on both standards and government  in  the
context   of  developing  architecture.   (Except  I  think   the
government  should play a stronger role in standards  development
in advanced research projects than they seem to advise.)
  
  o Open Interfaces are Essential
  o Industry-Led Standards are Crucial
  o Government Has a Role in Regulated Franchised Markets
  o Interoperability Fosters Competition
  o Minimize Government Intervention
  o Government Must Promote Competition

I  hope  I  have explained my views concerning the importance  of
market  demand in the digital realm, and how it could effect  the
architecture  and platform for our future.  Furthermore,  I  have
explained  my  view of the proper role of government.   Both  the
market (driven by demand, greed, egos, and extranalities) and the
government (driven by politics, greed, egos, and momentum) may be
able  to  complement  each other's strengths  and  mitigate  each
other's  weaknesses  so  as  to provide  for  the  best  solution
possible.


References:
Pool, Ithiel de Sola. 1993. Technologies of Freedom. Cambridge
  MA: Harvard University Press.
Neuman, W. Russell, Lee McKnight and Richard Jay Solomon. 1995.
  The Gordian Knot: Political Gridlock on the Information
  Highway.  Cambridge: MIT Press.
CSPP. 1994. "Perspectives on the National Information
  Infrastructure: Ensuring Interoperability." Computer Systems
  Policy Project. (February 1994).
"An Architectural Framework for the Information Infrastructure."
  Cross-Industry Working Team. (September 1994).
Kline, David. 1994. "Infobahn Warrior." Wired. (July 1994).
Kline, David. 1995. "Align And Conquer." Wired. (February 1995).
Schwartz, Evan. 1995. "Ray Smith: The I-Way, My Way." Wired.
  (February 1995).
Auletta, Ken. 1993. Barry Diller's Search for the Future. The New
  Yorker (February 22, 1993).