Interesting People mailing list archives
Universal Service and the Information Impoverished [baseball bats to the right .. djf]
From: David Farber <farber () central cis upenn edu>
Date: Sat, 16 Apr 1994 15:21:01 -0400
Date: Fri, 15 Apr 94 11:54:28 -0400 From: shap () viper cis upenn edu (Jonathan Shapiro) To: farber () central cis upenn edu, mnemonic () eff org Cc: interesting-people () eff org, dancer () aurora cis upenn edu [Mike: If you have any interest in publishing this in Effector, feel free - Jonathan Shapiro] There's been a lot of "hoopla" recently over the information poor. One side says the information poor need to be subsidized. The other side looks at welfare, food stamps, equal opportunity housing, illiteracy rates, and their tax returns and thinks this is crazy. If I disagree with the tone on both sides, I have sympathize with the anti-subsidy view. When I add it all up, my tax rate last year was over 47%. I'm inclined to think that most of the subsidies would end up in the pockets of the advocates, and I don't especially like that. Poverty is not curable, even in principle. It is an inescapable consequence of competition, which is an essential characteristic of humanity. But as a past CEO of the Xanadu Operating Company, whose original vision has influenced almost every part of the NII community either directly or indirectly, I'ld like to offer a business perspective on supporting the information poor. The term "National Information Infrastructure" is misleading. What we are building might more accurately be named a National (and hopefully international) Information *Marketplace*. You and I do not produce much in the way of tangible goods, but we can readily get in contact (e.g. by phone) with those who do. Without that ability, we would simply be adrift in a fantasy world that had no bearing on reality. The so-called "information poor" are the glue that binds the information world to reality. Without them the information marketplace lacks relevance, and loses its economic value. Universal Service makes sense to the National Information Infrastructure providers for the same reasons it made sense to the Bell System: o The capital investment would place the providers in a monopoly niche. The established utility, transportation, and energy companies of the day were all built on regional monopolies. o The per-capita deployment costs of technology are small, even for the poor. o Demographics: poverty migrates from one place to another over time. Wires do not. In the long term, wiring up the urban poor and the remote was a good investment. o Advantages of scale: Even if the poor could not afford to use the NII, their more fortunate friends and family *can*. The provider makes money regardless of who dials, but only if it controls substantially all of the NII "telephones" in a region. Today, even the appalachian poor have access to telephones. Unfortunately, there are some major differences between the NII deployment and the deployment of the telephone: o The National Information Marketplace is being constructed by the government (which is, in my opinion, unfortunate). o The notion of a monopoly is, in our day, distasteful. There is no single player involved in the NII effort who can lead the way, nor would we permit them to do so if they could. o The access technology being deployed to the end users is not supported by even a short-term monopoly, which prevents amortizing the costs over time. (This dramatically alters the picture as seen by an investor. If you can amortize the NII "telephone" it becomes part of your capitalization instead of a cost.) Under these conditions, it is simply not possible for any one player to economically motivate Universal Service. Having started the game in this fashion, it is too late to switch to the other model; there are already to many players for any one to achieve the necessary scale to amortize the costs of the poor, and the cost of entry into the business is too low to act as a barrier. Nonetheless, from a *collective* business perspective, we need the information poor connected. The question is not *whether* to pay for them, but *how* to do so while maintaining a level playing field for the competitors. Jonathan S. Shapiro Synergistic Computing Associates
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- Universal Service and the Information Impoverished [baseball bats to the right .. djf] David Farber (Apr 16)