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OCR for page 25
The Promise of the National
Infonnation Infrastructure
ROBERT W. STEARNS
There is a computer industry joke that is very relevant to a dis-
cussion of the National Information Infrastructure (NII). It explains
why God was able to create the universe in 6 days: He did not have
an installed base.
Creating the NII is certainly not as vast a task as creating the
universe, although the concept does seem to have boundless poten-
tial. The joke came to mind because realizing this potential will
require careful navigation through the baggage of old technologies
and partisan and entrenched points of view in industry, government,
and academia.
Underlying the sometimes overblown talk about the information
superhighway is a widespread recognition that information technol-
ogy has the potential to dramatically change many aspects of our
lives. We also are recognizing that information systems have the
potential to play a central role in reinvigorating many of the institu-
tions of our society.
Over the last decade, information technology has been an essen-
tial tool for corporations. It has enabled the cost cutting, reorganiza-
tion, and re-engineering that have helped re-establish the United
States' global competitiveness and rejuvenated many U.S. compa-
nies. We are now discovering that this technology could have a
similar effect on our noncorporate lives: It could change the ways we
25
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26
ROBERT W. STEARNS
educate our children and ourselves, interact with government, man-
age our health, and entertain and socialize. At Compaq, we believe
we play a central role in the development of the NII, particularly as
the computer evolves from a device used principally for computation
to one that is dominantly used for communication.
There are, of course, many different definitions of the NII, de-
pending on one's business and/or political perspective. NII has been
described variously as: a 500-channel interactive multimedia video/
cable network; numerous "edutainment" multimedia products and
services; the natural evolution of today's telephone system from one
that is voice-oriented to one that supports voice, data, image, and
video; an electronic marketplace for commercial and/or consumer
products and services; a commercial version of the Internet; a public
network for government information and services, medical informa-
tion, and education; not a single network at all but a loose aggregate
of many different networks and services with common or related
access; a public-policy debate about social rights and access to infor-
mation; a political battle in which the telecommunication and cable
industries may attempt to reassert their monopolies in the name of
universal service; and a government-funded initiative, created by the
Clinton administration and modeled after the National Highway
Project of the late l950s and 1960s, which could easily turn into a
new species of high-technology pork.
Whatever the technical description, five key issues dominate
policy discussions:
Universal service. All Americans should have easy access to
the NII, at least for some basic level of services yet to be defined.
Interoperability. Legacy and future platform devices such as
computers and phones, software applications, and databases should
be able to "talk" to each other easily via the highway.
Security, privacy, and protection of intellectual property. The
content and nature of communications on the NII should be carefully
protected from eavesdropping, misappropriation, or unauthorized use.
Private-sector versus public-sector model. Should the NII
evolve in a basically unregulated environment that responds to free-
market forces, or should the federal government fund and guide its
development?
NIl's link to the GII. Is the global information infrastructure
OCR for page 27
NATIONAL INFORMATION INFRASTRUCTURE
27
truly a worldwide, unified system or the aggregate of individual ser-
vice networks?
With these issues as context, I would like to review the recent
history of the information industry and attempt to characterize the
probable nature of the industry in the future. I will also explain why
the PC may well play a central role and give some examples of technol-
ogy use that exemplify the fundamental promise of the NII. Finally,
I will outline the key challenges to realizing the full potential of the NII
and identify some principles that should guide us as we move forward.
THE INFORMATION INDUSTRY
Underlying the information revolution has been the dramatic
pace of innovation in semiconductor technologies, fiber optics, voice
and data communications, and software. These innovations have
enabled a shift from incompatible analog technologies to inter-
operable digital technologies and have brought about the conver-
gence of computers, telecommunications, and media. The informa-
tion user has received an unprecedented improvement in features and
a sharp reduction in cost.
The industry structure that is emerging, although confusing, can
be divided into three basic categories: platform providers, conduit
providers, and content providers. Platform providers include vendors
of the hardware and software building blocks of personal and corpo-
rate computing. Conduit providers establish the electronic highways
through which the information flows. Content providers develop and
commercialize the software applications, information, and entertain-
ment that flow through the highways to and from the platforms.
These three categories of providers are inextricably linked. The
computer will increasingly be an access, processing, and storage point
on the network. The network will increasingly be designed and built
with a higher and higher percentage of the intelligence lying outside
the conduit in the devices connected to the network. The content
providers will increasingly develop their products in multiple ver-
sions to be compatible with the multiple technologies that will be
used to distribute these products.
It is no longer possible for any one provider, by itself, to move
the development of the information infrastructure. Innovations to the
platform, without a supporting network and content that people want,
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ROBERT W. STEARNS
will not succeed. Equally useless are network developments without
the corresponding platform and content innovations. In short,
progress in the information industry now requires close partnerships.
Companies in the computer industry have functioned in this type
of partnership model for the last decade. During this time, we have
made the transition from an industry that was dominated by vertically
integrated players offering solutions that were often proprietary to a
horizontally stratified one in which the players specialize in one or a
few aspects of the total solution. In today's computer industry, the
processor vendors, operating systems vendors, applications develop-
ers, and platform vendors all are highly interdependent. This model
is being extended rapidly outside the computer industry to include all
elements of the information industry. The real winners in this change
have been the customers. They now enjoy a multiplicity of services and
products, based on open standards, and offered at ever-lower prices.
STAGED TRANSITION
The popular vision of the 500-channel, high-bandwidth highway
into the home has received an inordinate amount of attention in the
press. I believe this vision is incorrect because it embraces a "couch-
potato model" of the consumer and therefore misses the fundamental
promise and essential appeal of what is possible.
Recent studies suggest that the cost of installing high-bandwidth
service are prohibitive as much as $2,000 per home. To date, ex-
perimental offerings of video-on-demand and home-shopping-type
applications show that consumers are unwilling to spend what is
needed to justify the investment. The most educated consumers, who
can afford to pay, are the least interested in a steady diet of passive
movie entertainment.
At the same time, 28% of American households have PCs, people
are subscribing to online services and using the Internet at an aston-
ishing pace, and sales of multimedia PCs have exploded. The num-
ber of new users of Internet is increasing at the rate of 10 percent per
month. Remarkable applications are being developed and utilized in
the areas of health care, education, government, and business, all
based on today's infrastructure. Customers are using the widely
available narrow-band technology and a PC with a modem and CD-
ROM drive for communication, information access and dissemina-
OCR for page 29
NATIONAL INFORMATION INFRASTRUCTURE
29
lion, transaction-oriented tasks, and various "edutainment" activities.
The compelling aspect of these applications is their interactivity.
This is the element that is grossly underestimated in the couch-potato
view, which promotes an array of one-way downloads of linear enter-
tainment and advertisements to a passive consumer whose options
are limited to ordering a pizza and a video.
Connectivity will allow users to participate actively in commu-
nities of interest. Online services and the Internet provide links for
chatting and information sharing that are easily accessed and can be
precisely focused to the user's particular interests. Children who
have been brought up with interactive games are especially drawn to
this type of application. They use the technology to connect to others
around the world. Parents report that children will spend hours chat-
ting online, playing interactive games, and accessing various network
resources. These same children are bored by passive television. A
recent study cited in the Wall Street Journal reported that the amount
of TV viewing declines in homes that subscribe to an online service
such as America Online, CompuServe, or Prodigy. These young
customers of tomorrow view the computer as a portal to a connected
life in which a computer-chat pal in Japan is as normal as a friend
across the street. It appears that many of the adults developing pas-
sive systems do not understand the key perceptual and behavioral
differences that are now shaping our children.
These factors suggest that the development of the information
infrastructure will proceed in measured stages. We will develop and
use information technology applications in layers, starting with basic
networked services. The evolution will be driven by applications that
provide new levels of interactivity and connectivity rather than appli-
cations that are simple extrapolations of the passive models of the
past. Instead of one or two individual "killer applications" attracting
users to the information highway, a large number of diverse applica-
tions that touch many different parts of our lives will drive the de-
mand for incrementally higher and higher levels of bandwidth and
service from the infrastructure.
THE PC WILL LEAD THE WAY
Many people believe that the TV will be the focus for all services
in the home. I doubt that will be the case. Today's TV is an old
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ROBERT W. STEARNS
analog design that receives broadcast signals and displays them using
interlace scan. This is hardly a device designed to accommodate the
digital world. I believe the PC will play the central role in the NII
because it is a multifunctional platform that is well-suited to the
mosaic of uses that people are demanding. A PC in the home can be
used as a node on the office network, an educational tool for children,
a tool for managing personal finances, the place to play entertaining
CD-ROMs, as well as a connection to the Internet. The platform is
open to all kinds of hardware and software additions and upgrades.
These factors make the PC, as it is currently configured, the platform
of choice for the near term. One might say the PC is the "ultimate
driving machine" on the information highway.
As the infrastructure develops, the PC will evolve with it. It will
take new forms that will be adapted for even broader uses. PCs will
be made to fit distinct lifestyle needs and to fit more gracefully into
specific environments. For example, one could envision PCs for the
living room with a large screen and a wood-grained enclosure or a
kitchen PC that has integrated telephony, a sophisticated messaging
system, a touch sensitive screen, and links for electronic commerce.
We might one day see PCs loaded with CD-ROM reference "juke-
boxes" and linked to office computers and databases used for home-
based study or a playroom PC with multimedia and "edutainment"
peripherals such as joy sticks and virtual reality helmets. Or imagine
a home mobile PC with embedded wireless communications and
voice recognition used in the yard for how-to applications such as
planting flowers or building a deck.
These various devices could be linked to each other via a home
local area network (LAN) that would allow individual devices to
share components such as software, hard drives, and modems. This
home LAN would provide access to the information infrastructure
with its array of services. Computers would be linked to other smart
products in the home such as security and energy-management sys-
tems. The sharing of components across all of these elements would
make the cost of the total system competitive with what people are
spending today on the various separate devices that provide these
functions. Increasingly, what we today call a TV and a PC will
merge into the same powerful programmable digital device, and at
that point, the TV-versus-PC argument will become moot.
OCR for page 31
NATIONAL INFORMATION INFRASTRUCTURE
APPLICATIONS OF NII TECHNOLOGIES
31
What are some of the near-term, practical applications of "high-
way" technology? Each of the following applications of information
and communications technologies could have impressive economic
and social benefits.
Health Care
We have had a long debate on health care in this country. One
point of agreement is the great potential for streamlining the adminis-
trative and service aspects of medical care. Information technology
holds great promise for this type of cost reduction and has the poten-
tial to improve fundamentally the patient-clinician relationship and
allow the patient to be a much more informed and active consumer of
health services. Systems are being designed that allow patients to
access their own medical records, including information on treatment
options. Some health care providers are offering online question-
response services and publishing online journals that summarize the
latest medical research to make it useful for the average patient.
These systems supplement and expand patients' knowledge, allow-
ing them to participate more directly in their care.
Telemedicine is another exciting application. This technology is
giving rural communities access to specialists in leading medical
centers. Using videoconferencing systems with high-speed, high-
resolution imaging, the specialists consult with the doctor in remote
locations, review X-rays, interview the patient, and offer their expert
advice on treatment options. In places where these systems have
been tested, users find that the technology not only brings better
medicine to the remote areas, but it also enriches rural doctors' lives
by giving them access to the knowledge and counsel of world-class
specialists.
Business
The continuing importance of information technology to busi-
nesses cannot be overstated. The knowledge and expertise of a
company's workforce and the ability to access and mobilize this
information are two of the basic elements of competitive advantage
in today's marketplace and will probably be the most important de-
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ROBERT W. STEARNS
terminants of success in the future. Realizing the power of the tech-
nology lies in shifting our view of information from something that is
stored or resides in specific experts to something that has its greatest
value when it is fluid and shared for the purposes of problem solving.
Companies are learning how to get the right products to market
faster by using information technology. They are using communica-
tion technologies to shorten the distance between groups inside the
company and to bring the right teams of experts to bear on a given
project. Team members are linked for the duration of the project and
are easily redeployed upon completion of their work.
These technologies have revolutionary implications for the struc-
ture of organizations. They flatten hierarchies, eliminating levels of
middle managers whose role was to gather information and move it
up or down the organizational pyramid. The new organizational
structures use teams of implementers connected via information net-
works to those who set policy, thus reducing the need for internal
intermediaries. The need for external intermediaries is also reduced.
Customers and producers and producers and suppliers are linked more
directly, significantly reducing cost and greatly increasing the utility
and currency of the information passed back and forth.
Information technology also has the potential to allow a better
balance between our home and work lives. Telecommuting allows
employees to spend more time at home with their families, and it will
benefit the environment as auto exhaust emissions fall with reduc-
tions in commuting.
As the infrastructure develops, it will spawn a more efficient
operating environment that rewards innovation and high-quality, low-
cost products. It will also alter fundamentally many of the current
business models. For example, as home shopping on a PC super-
sedes shopping at the mall or through a catalog, this new channel will
earn "rent" for its virtual "shelf space." While it is not clear at this
point how the conduit and platform vendors will share this income,
we can be certain that providing access to the home shopper will earn
a return.
Government
We all believe that many aspects of government are unwieldy,
uncoordinated, and expensive. We try repeatedly to reorganize gov-
OCR for page 33
NATIONAL INFORMATION INFRASTRUCTURE
33
ernment but fail to get the results we want. Information technology,
if applied properly, could be an essential part of the solution. It may
even help us return to a more democratic society by bringing people
together electronically.
The most notable effort in this arena is the Reinventing Govern-
ment initiative, championed by Vice President Albert Gore. The initia-
tive, which uses information technology to reduce paperwork and
streamline administrative processes, already is starting to show results
in terms of greater government efficiency, faster processing, increased
accuracy, improved service levels, and reduced administration costs.
The new information technologies are also allowing the govern-
ment to provide new potentially valuable services. For example, the
Department of Commerce collects and makes available online reams
of market data that companies can use to operate in a more informed
manner. Also exciting is the potential for involving more people in
the political process. Information technology can closely link the
electorate and the elected at the local, state, and national levels.
Education
The decay of the American educational system is a great social
tragedy. It may be the single biggest threat to the future social and
economic health of the nation. While the information superhighway
will be only part of the solution to this problem, it has a major role to
play.
Information technology frees us from the traditional but tired
model of learning: an "expert" teacher in the front of a classroom
intent on dispensing knowledge to a captive group of students. Infor-
mation technology encourages other modes of classroom teaching-
teachers and students do not have to be in the same place at the same
time, and learning does not have to stop when the student joins the
workforce but can occur throughout one's life.
For example, the National Technological University (NTU), a
collaborative effort by a number of leading schools of engineering, is
using a satellite TV system to bring the best teachers into corpora-
tions around the country. This is extremely affordable for corpora-
tions, and it minimizes or eliminates travel time for professors.
Equally exciting benefits are becoming available to young learners.
In Tennessee, educators are using a network link that allows high
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ROBERT W. STEARNS
school science students to ask questions and get answers from 70
college science professors. This capability complements learning in
the classroom.
Teachers themselves are benefiting. Incorporating information
technology in the pursuit of learning frees teachers from having to
know it all. Instead, they can be facilitators, helping students in their
quest for learning. Taking this approach, many teachers find the
classroom a less intimidating place.
Technology is helping teachers in other ways as well. In Texas,
teachers in remote locations are linked via the Texas Educational
Network. They use the network to share lesson plans and ideas on
new ways to teach old subjects. In the process, they enrich both their
work experience and their students' learning. The same network
offers similar advantages in the administrative area.
With increasing cost pressures in academia and the demand for
ongoing education in an information-based society, information tech-
nology provides an innovative, less-costly way to meet the nation's
educational needs.
Entertainment
The implications of new information technologies for entertain-
ment can be profound, but the vision of what might be has been
clouded by a focus on a passive rather than interactive model. The
interactivity offered by new technologies will allow networked games,
full-motion feeds of customized videos, and virtual reality experi-
ences, all available in the home. Either these services will be avail-
able using narrow-band technology with processing and compression
to allow a near-wideband experience, or they will wait until the invest-
ment in higher bandwidth communication is economically justified.
In the near term, communities of interest will meet in cyberspace
to interact and enhance each other's knowledge. This new form of
entertainment and social activity is the likely forerunner of the enter-
tainment world to come. No couches here.
GUIDING PRINCIPLES FOR GOING FORWARD
Moving forward will require us to overcome various technical
challenges. However, the products and services that are on hand
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NATIONAL INFORMATION INFRASTRUCTURE
35
today, combined with the technical innovations that will be available
shortly, will provide most of the core technology needed to realize
the next stage. The more pressing challenges are to identify the
embodiments of technology that the consumer will find truly compel-
ling and to ensure the creation and protection of a commercial and
academic environment conducive to real innovation.
Meeting these challenges requires the development of respon-
sible public policy. As Vice President Gore stated in a September
1994 speech:
"Government has an indisputable and appropriate role in develop-
ing the GII. By reducing the regulatory barriers and promoting
private sector involvement, by identifying the public interests that
must be served, and by aggressively using the GII to provide edu-
cation, health care and other public services, governments can play
a key role in developing the GII in cooperation with industry and
others in the private sector."
His emphasis on reducing regulatory barriers and on the strong
role of the private sector is correct. Untangling the regulatory legacy
of the telecommunications and cable industries is critical. These
efforts should be directed at opening up access to the networks and to
the devices that interface to the networks. We cannot permit tele-
communication companies to reassert a de facto monopoly power
over access to the home or the equipment used in the home. Nor can
we allow the cable companies to act as rigid gatekeepers controlling
the content of services they provide. If the conduit providers are
allowed to assert monopoly control over access to the home, or if
they are directed to do so in the name of universal service, this will
seriously stifle progress in the development of the infrastructure.
The government will also need to work to assure interoperability.
Here we should encourage straightforward, open standards whose
effect is to encourage competition among compatible solutions. The
opportunity for missteps is significant. For example, the idea of
requiring interoperability not only with new technologies but also
with all antecedent systems is potentially paralyzing. There are al-
ready many industry, national, and international organizations that
have a long history of debating, creating, and promulgating standards
for information technology. We do not need to impose another or
higher-level standards-setting process. Finally, forcing standards that
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ROBERT W. STEARNS
are too rigid or pervasive risks locking in inferior, unworkable, and
uneconomical approaches.
We must also avoid pressures to turn this into a government
entitlement program. Because the Clinton administration has shown
such a strong interest in this issue, some parties are recommending
poorly conceived technical visions in hopes of winning government
funding for ill-considered research activities that tend to complicate
fairly simple facts and practices. They suggest problems that exist
only in the minds of over-reaching central planners and over-zealous
academics. Let's not overstudy this, particularly in an academic
vacuum.
Many individuals advocate universal service to ensure that we
do not stratify our society into "information haves and have note."
They promote special support for needy individuals to allow them
access to the information infrastructure. Careful thought should be
applied to the priority we place on information access relative to
other needs in our society. In our zeal to provide access to advanced
information services for individuals, we must be careful not to place
higher value on the highway than we place on food, shelter, and basic
medical care.
Adherents of universal access look to the health care, education,
and government sectors to support widespread involvement in the
information infrastructure. This is a worthy objective, but I recom-
mend we examine closely the rationale and methods for such fund-
ing. John Browning, in a superb article in the September 1994 Wired
magazine, writes:
"Universal service cross-subsidies are a tax—albeit a tax buried in
the price of services and beneath layers of obscure allocation and
pricing regulation. They are a particularly inefficient and wasteful
tax. And worst of all, they are a deceptive and distorting tax, a tax
that makes it hard to see the real costs of the building blocks of
tomorrow's networks and thus the real opportunities in building
the networks that will change the world."
Since health, education, and government represent a sizable pro-
portion of our economy, this tax would be substantial, could obscure
the true costs of providing a specific service, and as a result could
hinder and distort the development of this enterprise. In general, the
less subsidy, the better. We should subsidize the consumer, not the
provider.
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NATIONAL INFORMATION INFRASTRUCTURE
CONCLUSION
37
A free-market approach to the development of the infrastructure
is critical to the appropriate development of products and services.
This point of view was strongly supported in a 1994 report issued by
European Union Commissioner Martin Bangemann that led to the
Commission's recent "action plan." Allowing market forces to guide
the computer industry, and more recently the telephone industry, has
worked well for industry, government, and the consumer. The
Internet is an excellent demonstration of what can be achieved
through unconstrained, unregulated innovation. With a minimum of
government funding and a lot of collaboration between government
and academia and most of all by letting a balance develop between
what people want and what they are free to supply the Internet has
grown and will continue to develop at an astonishing pace. The
Internet points to a future in which the information infrastructure is
not a highway but a web of interrelated public and private networks,
platforms, and services. A market approach will allow the infrastruc-
ture to continue to grow while addressing real needs today, will cre-
ate an atmosphere that encourages experimentation and rapid learn-
ing, and will permit good ideas to flourish and bad ideas to die.
A word of caution: we must not underestimate the population of
future users. By this I mean we should not develop the NII and all the
related products with an inactive user in mind. What is exciting is not
the ability to deliver more passive entertainment products. Instead,
the focus should be on new forms of entertainment, new connections,
and new ways of learning.
The NII is based on technologies in which American industry
leads the world. If we creatively pursue this opportunity with the
right goals in mind, there will be significant benefits to both the
public and private sectors. Moreover, we will lead the world into a
new and truly exciting era.
OCR for page 38
Representative terms from entire chapter:
national information
