This article is an elaboration of Dr. Turoffs remarks in accepting the Electronic Frontiers Foundation 1994 pioneer award for the early development of Computer Mediated Communications.

 

This article appear in Boardwatch Magazine, April, 1995.

 

Title:  The Marketplace Road to the Information Highway

 

Author:  Murray Turoff

 

Copyright 1994 Murray Turoff

Professor of Computer and Information Science

New Jersey Institute of Technology

Newark NJ, 07102.

 

Phone: 201 361 6680 (home) and 201 596 3399 (work)

Email:  murray@eies.njit.edu

 

"The ART OF PRINTING diffuses so general a light, augmenting with the growing day, and of so penetrating a nature, that all the window-shutters, which despotism and priest craft can oppose to keep it out, prove insufficient." -- Benjamin Franklin, October 2, 1783

 

While it might be argued that Ben Franklin was the originator of the window metaphor, it is far more important for our purpose that he represents a time in the history of this country where the functions of writer, printer, and publisher could be carried out by a single talented individual.  There is the opportunity today to recreate the information industry as the cottage industry it was at the time this nation was founded.

 

Sometimes the shortest distance in Hyperspace, and anywhere else, is not a straight line.  We have an unfortunate tendency, as a society, to look for straightforward simple solutions to problems that are not simple.  We also hope that the solutions that have worked in the past will work in the future.

 

Neither of these approaches will assure the information highway as a public, free for all, system.  What it might produce is an electronic version of the physical highway in the movie "Brazil" - continuous billboards on both sides of the highway hiding an unending expanse of lifeless polluted grounds, with mountains of junk obscured by an opaque haze of smoke and dust.

 

The road to freedom of the network and public access for all might be approached by reminding ourselves that we are not just a democracy, but a "free enterprise democracy."  We believe, or profess to believe, that no government or group of individuals has sufficient wisdom to design our social system.  Instead we have always said, as a country and as a society, that a free and open marketplace, with no hidden restraints of trade and monopolization, is the way to insure the rights of the individual to life, liberty, and the pursuit of happiness.

 

In all the years that I have spend in designing and trying to understand the nature of group communications in the network environment, the one definitive observation that can be made is that the design of such systems is the design of social systems.  Today INTERNET stands out as the group communication system whose scope is a social system on a nationwide, and even international, basis.  For this reason we need to approach questions about the future of INTERNET as questions about the future of this nation and its social relationships.

 

The fathers of this country realized they were designing a social system unlike those had gone before and they set down the long term objectives for a free enterprise democracy to guide the framing of the constitution.  They did not attempt to extrapolate a slightly modified version of a monarchy as a view of the future.  Similarly we should not extrapolate the future of INTERNET by assuming it will be an extrapolation of the current social system.  We need to take a normative view and ask, what is the future we want, and how do we work backward from that goal and get there from where we are now?

 

Those early networkers, the founders of our country, were right and that the objective we should be seeking is a free market and free enterprise democracy.  If that is accepted as the objective of the social system for the operation of INTERNET, then it is amazing how clear and deductive everything becomes.

 

For those who somehow think the current completely free utilization version of INTERNET is a viable social system, consider some of the long term wisdom of our culture: "There is no such thing as a free lunch!" and "You get what you paid for!"  These are surprisingly applicable if we realize that INTERNET and the technology it represents can revolutionize the economics of information distribution.  In fact, one can draw an analogy between the current information industry in this country and the British Monarchy during the American Revolution.  Todays writer is very similar to the American colonist without representation in the economic system.

 

  *      In digital networks the technological cost for the delivery of information is linearly dependent upon the amount of information; there is no "economy of scale."

 

On a network one does not save any money by delivering a whole book, newspaper, or magazine.  The rather important corollary is that it is perfectly economical to distribute a single poem, recipe, story or editorial.

 

  *      The value placed upon distribution will be significantly less than the value placed upon creation, because the cost of distribution is many magnitudes less in the electronic environment than in the physical environment.

 

Today authors may receive royalties of ten to twenty percent of the revenues from paper or broadcast products whose content they have created.  In electronic networks they should rightfully command eighty to ninety percent of the revenues.  A person writing a story that is sold for ten cents to a hundred thousand people electronically should be able to retain eight cents, and a twenty percent transaction fee (two cents)  is probably sufficient to pay for the true costs of the electronic distribution technology.  The creation of information also includes creating new forms of it in terms of summarization, filtering, organization, indexing, linking.  The role of talented gatekeepers, as individuals not organizations, will become more highly respected and subject to greater financial remuneration.

 

  *      New and changing information will have greater inherent value than fixed information.

 

Massive personal storage facilities for electronic information will make distribution largely one time occurrences.  Those who create information will be the true value creators.

 

This revolution in the distribution of information is likely to shake up and modify our current media and publications industry structure as much as the original revolutionary war modified the British Empire.  All this talk in the press about whether the phone companies, the cable companies, or the current media companies are going to win the right to sell to all us citizen consumers is as relevant as the British monarchy assuming it would continue to have the right to tax the colonies without representation.  By trying to fit this new technology in to the current perceptions of information distribution the real opportunities are being completely ignored.

 

The first key to understanding the future of INTERNET and of the concept of the "information highway" is to realize that it is the citizen who needs the right to be the information provider.  What needs to be assured by government is that artificial constraints of trade, such as discounts by volume, artificially high charges for plugging computers into the network, and any regulatory or pricing policy that says there is a difference between a consumer and a provider of information, will be prohibited.  Any such inequities would be an attempt to set up unequal class structures within the social system.

 

Information providers do not have to be limited to creators of original works.  They also include those individuals who can review what others have written, and who gain a reputation for being able to inform others as to what is worth reading.  There will always be a need for the reviewers, synthesizers, filterers, editors, and a new class of what might be called "information brokers."  However, the size of the staff to review and make available meaningful collections of material is likely to be much downsized from what we currently think of as a publications organization.

 

A true free market assumes that the consumer has adequate information to make an intelligent choice among alternative products.  That particular economic condition is sometimes very difficult to realize in the physical world of paper.  The costs of advertising represents a majority of the costs for many current information products.  In the network we can easily design capabilities to minimize this factor and to ensure a true free market:

 

  *      People who have purchased an item of information can vote on whether they think it was worth the money and the resulting vote distribution can be attached to the creator's advertisement in such a way that the creator cannot remove the feedback.  If the product has a limited size market, actual qualitative statements can be linked to the advertisement.

 

  *      Creators of the information can raise and lower the price at any time according to the degree of positive or negative consumer feedback, or this can even be done automatically by the computer.  Products will be able to find their own true economic value.

 

  *      With a database approach to advertisements and the ability of consumers to search for what they want, the need for "junk mail" is severely minimized.

 

In an electronic network information marketplace there do not have to be fixed prices.  In fact, the information marketplace view solves many problems far better than trying to use Band-Aids to adapt the current industry model to the network environment.  For example, people have proposed that ownership of a consumer's transactional data would eliminate junk mail.  The economic way to eliminate junk mail is to allow receivers of mail to place a cost to the sender on any mail sent to them, which would be a linear function of the size of the message.  Each individual must be allowed to adjust this cost factor to the value that he or she places on their time.  This would very quickly eliminate the junk mail problem.  It would also promote equality of communication among groups of people who want to communicate as a group (two or more).  Philosophically it does bring about equality between sender and receiver.

 

The essence of a person's value as a creator or reader of information is the time a person spends, and a marketplace should allow charges for the time of people in any valid role in the network.  Many communication structures on the network could also allow for other types of charges, such as a monthly charge for being a member of a conference, which would go to the person organizing and facilitating the conference.

 

Once we have a marketplace active, the operation of the basic network can easily be paid for by a fixed percentage cost of the transactions that are carried out by the buyers and the sellers.  In essence, a "stock market" for information transfer.  It now becomes clear that the public utility that provides the "carrier" services must be an integrated service of:

 

  *      Basic data communications

  *      Advertisement databases with abilities for accumulating feedback from purchasers.

  *      A credit/debit transaction accounting system to keep track of the buying and selling and to properly settle accounts.

 

Clearly, this type of carrier cuts across a number of separate industries that exist today under separate regulatory environments.  Clearly that current regulatory separation can be used to inhibit the evolution of a truly free marketplace.  We created marketplace software on the EIES system in the early eighties, but the university decided a state institution could not operate such an enterprise across state lines without perhaps violating a host of possible regulations.  We therefore were limited to treating it as a virtual money monopoly game for our users.

 

The current information industry attitude, that only big companies able to pay large significant entry charges are going to be information providers, can further delay the creation of true free and democratic marketplaces.  While the attempts of some online services to allow writers a royalty on the time charges of users should be applauded, this is a perpetuation of the old technology.  Unless writers can set their own selling price, there is no free marketplace.

 

The other critical aspect of a free and open marketplace is that it does not attempt to impose ethnic and cultural norms upon its participants.  INTERNET has grown up with a very real degree of open flow of information of all types.  This has taken on the atmosphere of being an ethic for the network as a whole.  This atmosphere has become almost a cause clbre as those that have partaken of it seem to have reached the conclusion that this is the ideal social system for the rest of our nation.  Somewhere along the way it has been forgotten that we are a multi-valued society and we do not believe in imposing uniform values on all segments of the society.  It is usually a point of pride that our sense of freedom allows a rich variety of ethnic, religious, and political groups that are as different as night and day.

 

If we are prepared to accept the rights of the Jewish Hassidim, the Amish, the Catholics, the Unitarians, the Democrats, the Republicans and the Nazi party to have their beliefs, to encourage their children to these beliefs, and to propagate their values in their community, how is it that many on INTERNET expect that they can change the multi valued fabric of our society and impose a universal ethic on those who have not yet seen the network light?  We have got to get away from treating this technology as a new religion and rather think of it as a vehicle for extending the multi valued character of our society.  The essence of networking as a social system facilitator is that it allows any group, no matter how small, to organize and exist as a functioning group at a much lower investment level than is possible by any other mechanism.

 

A free and true electronic marketplace will allow the evolution of INTERNET into a multi-valued society with many alternative group structures that allow groups to exercise the rights to discriminate on what information they want, who they want to communicate with, and what they want to see conveyed to their children.  It is the marketplace that can insure our democratic values far better than the current implementation of INTERNET.

 

The current public debate, both in the press and on the part of government officials, about the future of the information highway seems to ignore completely the key issue:  are we a society that truly believes in a democratic free enterprise system, or do we want perpetuate the current monopolistic practices over the creation and distribution of information?  It should be the inherent right of every individual to both create and market information.  This right should not be inhibited by artificial barriers of an economic, regulatory, or software type.

 

INTERNET is an experiment in creating a new social system.  It is a space where we can live and evaluate the possible futures open to us as a society.  As such, the logical next step is to create the software that will allow users to participate in a netwide free access marketplace.  If the government truly wants to put INTERNET on a pay as you go basis, this is the quickest and best way to obtain that financial independence.  It would also be an expression of what we state is the basic values our country is based upon.  It would counter the efforts of those organizations that hold the economic sway in the current distribution of information to maintain what will become a monarchy rather than a democracy. 

 

With respect to information and its role in our society we have a real opportunity that can ensure a true free enterprise democracy in this country.  Whether we can make that happen remains to be seen, if there is awareness of this issue in the various government bodies and even the press, it is well hidden.  The existence of INTERNET is an opportunity for government to express whether or not its expressed belief in the free enterprise system is real or virtual.

 

References:

 

Roxanne Hiltz and Murray Turoff, The Network Nation: Human Communication via Computer, MIT Press, 1993.

 

Murray Turoff, Information and Value: The Internal Information Marketplace, Journal of Technological Forecasting and Social Change, Volume 27, number 4, 357-373, 1985.

 

Biographical Information:

 

MURRAY TUROFF is Distinguished Professor of Computer Science and of Management at the New Jersey Institute of Technology.  For over two decades Dr. Turoff has been active in research and development associated with the utilization of the computer to aid and facilitate human communications.  Credited as "the father of computer conferencing," he designed the first computer conferencing system while working in the executive offices of the President of the United States in 1970.  Included in his three books and scores of journal papers is Learning Networks: A Field Guide (co-authored with Linda Harasim, Starr Roxanne Hiltz, and Lucio Teles), in press, MIT Press.

 

Turoff is most proud of the book he jointly authored with his wife (Roxanne Hiltz): The Network Nation: Human Communication via Computer, which won the 1978 award of the Association of American Publishers as the outstanding technical publication of the year (Addison Wesley, 1978; an expanded edition was published by MIT Press in 1993).  In March of 1994, they received the "Pioneer Award" from the Electronic Frontier Foundation for their "significant and influential contributions to computer-based communications and to the empowerment of individuals in using computers."

 

END