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The private sector, not the government, should set standards; de jure standards, whether set by government or the private sector, are not preferable to de facto standards; and

Unless security and privacy are protected, the NII will not reach its full potential as a platform for electronic commerce.

These assertions may be controversial; many run counter to conventional wisdom, particularly that of the Washington, D.C., community. However, all are market-oriented. And they are fundamental to U.S. economic goals.

The NII: Not Synonymous with the Internet

Entertainment is the engine that has already pulled broadband networks into over 60 percent of American homes. Entertainment will drive the investment necessary to upgrade those networks as well. This is not a fact easily accepted by some Internet aficionados and some in the computer industry. Many in those groups join millions of other Americans who have a low opinion of much of current television programming. Many view the Internet as a liberator from TV's vast wasteland. But there are also other reasons why the role of entertainment is not more widely acknowledged by the computer world 7.

Computer businessmen are aware that today's dominant entertainment terminal, the television set, is an extremely cost-sensitive (and low-cost), relatively simple piece of electronics, geared to nonbusiness consumers, with a life of over 10 years. This is a long way from their preferred business model. The consumer electronics industry is dominated by foreign-owned companies; the computer industry is U.S. based. The television industry has relied on interlace scanning and sees it as important to keeping down the cost of its investment 8; the computer industry wants progressive scanning formats.

Likewise, those in the computer business look at other players and find them to be quite different from themselves. The cable television industry has only recently emerged from its "pioneer" phase and still revels in its "cowboy" image 9. Cable operators have an obsession with cost control, based on experience with mass consumer marketing. Where the computer industry has traditionally sold into the business community, cable operators have focused on residential customers. Regional Bell operating companies (RBOCs), in contrast to both, have previously been large, sleepy, and cumbersome bureaucracies, typical of utilities, and the antithesis of the computer industry 10.

The computer and Internet communities are not alone in their suspicion of the alien cultures that have suddenly entered their world. About 15 months ago, a high-level business manager 11 for a leading supplier to the cable television industry told his staff, "Somebody is going to have to explain this Internet to me!" He was reflecting not only his lack of knowledge of the phenomenon but also his exasperation at the whole range of new factors he had to consider as he developed his current core businesses.

So it is not surprising that computer business managers tend to gravitate toward an Internet model of the future NII. They will naturally have less enthusiasm for the role of entertainment than those who have worked in that field 12. But to recognize entertainment as the primary engine of the deployment of advanced broadband networks does not denigrate the role or the importance of the Internet. The NII is and should be about a lot more than just selling pay-per-view movies or making it possible for people to watch reruns of Roseanne or Baywatch. The advanced broadband networks that will share the task of serving as the backbone of the NII are about making video an integral part of all communications. The addition of video capability has major, positive implications for education, health, and business efficiency.

What entertainment can do is bring this broadband capability to every home and business. It can and will carry the major load of the investment needed to do that. When cable television operators begin to deploy digital decompression terminals, they will be putting into each user's home a level of computing power that is the equivalent of yesterday's mainframes. Far from detracting from or conflicting with the Internet, the broadband pipes of these networks will make Internet access via high-speed connections available to an increasingly wider range of Americans 13.



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