Richard Kahn

ED 253A- Douglas Kellner

April 16, 2001

Notes on Ch. 11 & 12 of Bill Gates’ The Road Ahead

Chapter 11: The Internet Gold Rush

Review of the height of information mania in 1994 and 1995 (much of this remained true up to last year?)

• Companies racing to provide interactive broadband networks to deliver video entertainment to suburbs
• Heavy investment in stocks — NASDAQ and IPO craze.
• Unprecedented media coverage despite the fact that technology and demand for it were unproven
• "Intoxicating frenzy" led to business as well — with companies often trying to out-position each other, despite economics.

Review of the history of telecommunications industry

• Telephone and cable providers wiring neighborhoods for on-demand video, didn’t realize at first PC connection.
• Despite expensive field trials, Internet outmoded business expenditures on on-demand video…new Gold Rush is on.
• At first commerce on the net was delayed due to problems with "ease" or "security" of transaction — (opposite reading: pusher strategy)
• Four parallel paths (264): 1) go after each other’s business, 2) provide mid-band (DSL) connections, 3) conversion to digital tech. to provide more channels and hi-quality (greater resolution), and 4) some companies will conduct trials of broadband to tvs and pcs in residential neighborhoods.
• Until 1996 a broadband network was illegal in the US — then Telecommunications Reform Act deregulated and set market activity to work.
• By 1997, broadband to business and mid-band to homes.
• Telecommunications companies will be the primary suppliers to the world of network connections. (266)

Gold Rush — what it means for the economy

• Miner 49’ers had "optimistic can-do attitude that shaped the American psyche." (p.262)
• Gold Rush is a revolutionary economic moment. The Net rush is "a force for economic progress" despite the fact that "the total revenue from Internet activities has been small, and the profit has been a large negative number." (p.262)
• Implausible promises are made — Gates is surprised by how "uncritical" people can be with Net fever. "It pays to be wary of hype." (263)
• E-publishing may make some money, but the most promising returns on the Net are in advertising (278).
• There will be a breakdown between content-providers and content-producers. Is this good?
• Capital Darwinism (pg. 280): rapid innovation will lead to mostly unsuccessful ventures, but proven winners who make for rapid progress overall.

The global network

• "The infrastructure will develop at different paces in different communities and in different countries. Networks will tend to go into richer neighborhoods first b/c that’s where residents are likely to spend more. " (266)
• How far ahead is the US? US is in a favorable position…Gates concludes (p.283) that unless poor political decisions are made, he doubts that many of the developed countries will end up more than a year or two ahead of the others.
• Japan is 2^nd in infrastructure development. Canada, Great Britain, France, Germany, Nordic countries, Eastern Europe, Hong Kong, Australia and NZ also in the race.
• Singapore is an interesting example — "everyone is connected." Lee Kuan Yew tells Gates he understands that the Net will decentralize — but reality is Singapore is highly centralized…all connections are monitored by government and go through the central servers first — government mediation.

• Similar to China — national intranet: net isolationism.
• Even developing countries around the world will see improvements that reduce income and tech. gaps between societies.
• Satellite-based wireless technologies will foster the quick development of underdeveloped nations.
• Governments should stay out of the technology game if they want rapid progress.
• For companies to succeed they must look to the global marketplace for innovations and examples.,,"the marketplace is the greatest decision-maker, smarter than any business or political leader…" (283).

Chapter 12: Critical Issues

Technophilia

• Gates is (284) "an optimist about the impact of the new technology. It will enhance our leisure time…enrich our culture by expanding the distribution of information…help relieve pressures on urban areas by enabling people to work from home or remote-site offices…relieve pressures on natural resources because increasing numbers of products will take the form of bits rather than manufactured goods…give us more control over our lives, enabling us to tailor our experiences and the products we use to our interests…citizens will enjoy new opportunities for productivity, learning, and entertainment"…money will be made.
• Since the Enlightenment, every generation has improved work efficiency…the average person today enjoys a much better life than the nobility of centuries ago. Question: is this true relatively, though? Has the split between classes widened or decreased?
• Advancing productivity propels societies forward — it’s only a matter of time before the average "developed" citizen will be "richer" in many ways than anyone today.
• Against Malthus — "population growth slows as technology increases affluence and improves education." (291)
• "The worldwide movement towards capitalism and democracy is encouraging, if uneven." (291)
• Biotechnology, enabling medical advances, is a cause for celebration.
• The fully interactive network will be affordable by definition — it can’t be so expensive that it doesn’t make money. (292) For the Bourgeois.
• A lot of educative information will be free — poor schools and Beverly Hills will get the same information on-line.
• Gates technophila is not "wide open" — there should not be a "free cyberspace" that is "a self-governed world apart, in which copyright, libel, pornography, and confidentiality laws do not apply." "The web is mainstream now, and its days as a lawless backwater are over." (309)
• Gates is looking for a "balanced" progressivism — a free marketplace that meets governmental demands even as it extends the issues government must deal with.

Concerns — a broad debate must begin

• Societies will be asked to make "hard choices" about availability of technology, investment in education, regulation, and the balance between individual privacy and community security. National security will also be an issue.
• In some business sectors, "dislocations will create a need for worker retraining." (285)
• Free communications and computing will alter the relationships of nations and of socioeconomic groups within nations.
• "There will be equity issues" b/c "information society should serve all of its citizens, not just the technically sophisticated and the economically privileged. Not everyone has to have their own computer — less privileged can share at a library, school, post office, or public kiosk (291).
• Societies must put all the available resources into getting computers into schools and libraries…they did this with books. Question: what about libraries? Ted Roszack points out that 90% information is still hardbound, not digital — and librarians are experts who can help find specific, personalized info, as opposed to corporate search-engines.
• Technology will empower terrorism (290).
• Correct gender imbalance — more women must enter technical careers. (294)
• Local cultures lose out to global culture, or
• Potential for xenophobia — Net citizens gravitating to their own parochial interests. (299)
• Potential for the virtual to replace the actual. (300) — counter with virtual speed bumps.
• Global dependence upon the network — what if it fails?
• Information can be stolen and used against it. (p.301-303) Gates proposes a possible solution of the "documented life." (304) It might not be bad, unless you’ve something to hide…mass techno-surveillance. People will decide if privacy or protection is more important.
• Gatekeeper technology: telecommunications companies in charge of filtering the content they carry. (311) Gates sides with the creation of fluid "standards" instead.

Conservatism

• We should think about the future, but not make impulsive moves to act on it…as we can only ask general questions today, we shouldn’t make detailed recommendations about tomorrow’s specifics. There are a number of years to chart the course of revolution.

Answering Luddism

• People are worried that their jobs will become obsolete, that they won’t adapt to the workplace, that their industries will close on them, or that wholesale unemployment will occur (especially amongst older workers).
• "These are legitimate concerns" (286) and "entire professions and industries will fade." However, new professions will flourish and it’s "hard to find any large sector of the economy that has been negatively affected." "Outside the computer industry, it’s also hard to find a whole business sector hurt by the PC."
• This revolution is "remarkably benign."
• Each time a job is lost, it frees that worker to do something else…the net result is more gets done, raising the standard of living. Recessions will occur, but technology tends to create jobs overall.
• There will be a growth in Education, Social Services and leisure opportunities (287).
• The interactive virtual marketplace will displace "middlemen" — this is similar to the pressure put on communities by mass merchants such as Wal-mart, etc. "When Wal-Mart moves into a rural area, the merchants in the local towns feel the pinch. Some survive, some do not, but the net economic effect on the region is modest. We may regret the cultural ramifications, but warehouse stores and fast-food chains are thriving because consumers, who vote with their dollars, tend to support outlets that pass their productivity savings along in the form of lower prices." (287-288)
• "The broad benefits of advancing productivity are no solace for someone whose job is on the line." (288) Still, change is necessary.
• "More than ever, an education that emphasizes general problem-solving skills will be important. In a changing world, education is the best preparation for being able to adapt. As the economy shifts, people and societies who are appropriately educated will tend to do best. The premium that a society pays for skills is going to climb, so my advice is to get a good formal education and then keep on learning. Acquire new interests and skills throughout your life." (288)
• People will have to be open to reinventing themselves many times over the course of their life…individual’s are responsible for this: begin with computers and knowing how to use them as part of an evolving network.

Answering Cyberpunk Dystopia

• People fear that computers will "take over" and do away with human intelligence. Not anytime soon. AI makes big predictions, but is overly optimistic about what computers can do re: human intelligence. Computers can be made skillful, but not thoughtful. Question: isn’t Gates recommending that individuals educate themselves towards skills, not thoughts?
• Gates is troubled that in the distant future computers could achieve true intelligence. This is when Luddite fears become viable.
• Losing our work to computers will raise the questions, "Who is in control?" and "What is our purpose as a species?" (290)

Answering global issues

• Technology involves intellectual property costs and so does not fall within supply/demand economics…pharmaceutical example (295)
• One answer might be "progressive taxation" per income taxes.
• Eventually, network access may have a price set by politics as opposed to the marketplace. This will allow for the development of areas that companies choose not to enter for financial reasons. Should the Net be a "universal service" per phone, mail, and utilities? Should the government subsidize connections to unconnected areas, or should it regulate connected areas to connect to unconnected? (296)
• Gates thinks that being "remote" will become fashionable and that there will be incentives to run connections to outlying areas.
• Global barriers will break down and the net result will be a "wealthier world, which should be stabilizing." (297)
• "Developed nations and workers in those nations are likely to maintain a sizable economic lead, but the gap between the have and the have-not nations will diminish. "(297) English-speaking people will enjoy advantages until translation software becomes better. (298)
• The new access to info can unite peoples by increasing cultural understanding. However, some nations fear that this can create a "revolution of expectations" when affluent nations are portrayed to less affluent societies. Within societies, the "balance between traditional and modern experiences is bound to shift as people use the network to expose themselves to a greater range of possibilities." There will be a tension between the global and the local. (298)

Changing the interactions between people and government

• "Each media advance has had a substantial effect on how people and governments interact."
• Chance for political action on the Net.
• Direct democracy might be possible — but Net will probably make representative structures juster instead.
• The need for middle-positioned experts will remain due to the tremendous amount of information. Good news for higher-ed!