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Measuring and Sustaining the New Economy: Report of a Workshop
measure well the value of adapting something to a unique situation. This could represent a bottleneck.
Legal and Regulatory Principles
Dr. Greenstein turned next to emerging challenges to basic legal and regulatory principles behind communications industries in the United States, beginning with three trends. First, a tradition inherited from common carrier regulation is that of a “ bright line” between content and distribution. One reason for this line is that it reduces the danger of bottlenecks in information delivery. The thinking is that competitive delivery information across multiple modes lessens worries about joint ownership issues like this. We worry about that because there are now bottlenecks in delivery as well as asymmetries in the cost of different modes of delivery.
Second, there is no agreement yet about how best to deliver and retrieve information to and from the household or business. Therefore, open-access rules are going to be reviewed continuously—the basic principles that affect the returns on investment in any kind of last-mile activity. Businesses are reluctant to invest in an environment without regulatory commitment.
Third, regulatory bodies at the national and state levels are accustomed to issues flowing to them at a certain rate. The present environment is bringing issues to them at a much faster rate and with greater frequency than they have ever seen, and they are not equipped to handle them. The amount of expertise necessary to make intelligent decisions is high, and this in turn, raises new questions about appropriate discretion in governance at the agency level. Many dimensions of the next generation of communications infrastructure will be influenced by local regulatory decisions in various states.
Will the Commercial Markets Serve Everyone?
Dr. Greenstein turned to another assumption that will be challenged: that the communications infrastructure will continue to be virtually ubiquitous. An established principle in this country is that governments first allow the commercial markets to function freely and then they promote services for those who are underserved. For the next five years, however, what will the commercial markets do with the Internet if they are left alone? Who will not be served? Dr. Greenstein said that he had examined these questions, and a lesson of the last five years is that commercial dial-up Internet access serves about 90 percent of the population without any help. This means that low-density areas can be targeted quite easily, with the help of some subsidies.
It is much harder to predict whether the digital divide will widen over the next five years. The quality of access varies among different groups and different geographic regions, and ease of access differs with training, education, and