Critical Connections: Communication for the Future (Part 3 ...

Chapter 1

Summary

CONTENTSPage

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3CHANGING COMMUNICATION INFRASTRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3OPPORTUNITIES AND CONSTRAINTS PRESENTED BY NEW

COMMUNICATION TECHNOLOGIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Communication and Comparative Advantage in the Business Arena . . . . . . . . . . . . . . . . . . . . . 5Communication and the Democratic Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Communication and the Production of Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Communication and the Individual . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. .. .. .. .. ... . .. .......+ 8

POLICY ISSUES AND CONGRESSIONAL STRATEGIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Equitable Access to Communication Opportunities .. .. .. .. .. .. .+ . . . . . . . . . . . . . . . . . . . . . . . 10Security/Survivability of the Communication Infrastructure . . . . . .. ................+..,.. 12Interoperability of the Communication Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Modernization and Technological Development of the U.S. Communication

Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Jurisdiction in the Formulation and Implementation of National

Communication Policy .. . .. .+ .. ... . ..+. . . . . . . . ..............+.......+.. ● . . . . . . . . . . . 18THE NEED FOR A NATIONAL VISION OF THE ROLE OF COMMUNICATION . . . . . . . 18

Market Vision-Communication as a Market Commodity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Economic Vision-Communication as a Springboard for National Economic Growth

and Development . . .,...,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..,...*. .. . . . . . .22Social Vision-Communication as Social Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ..........................+.. . . . . . . . . . 23

FiguresFigure Pagel-1. Congressional Strategies and Options To Address Access to Communication

Opportunities..... ... ... .....+. .. .. .. .. .. .. .+. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13l-2. Congressional Strategies and adoptions To Address Security/Survivability of the

Communication Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . ● . . . . . . 15l-3. Congressional Strategies and Options To Address Interoperability/Coordination

of the Communication Infrastructure, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17l-4. Congressional Strategies and Options To Address Modernization of the

Communication Infrastructure . . . . . . . . . . . . . . . . . . . .. . . . .+ . . . . . . . . . . .+ .. . . ... ....+.... 19l-5. Congressional Strategies and Options To Address Jurisdictional Issues in

Communication Policymaking . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . ...+.,. 20

Chapter 1

Summary

INTRODUCTIONThe U.S. communication system is changing

dramatically. Recent advances in informationstorage, processing, and transmission technolo-gies, occurring in a newly deregulated andincreasingly competitive economic climate, arerapidly reconfiguring the Nation’s communica-tion infrastructure. New computer and commu-nication technologies have already transformedthe regulation and market structure of theindustry, altering the way information is cre-ated, processed, transmitted, and provided toindividuals and institutions.

Changes are also taking place at the interna-tional level. Because the new technologiesencourage the flow of, and the demand for,information products and services across na-tional borders, they are wearing away the linesthat historically have divided domestic andinternational communication systems and mar-kets. Communication is one of the fastestgrowing sectors in the international market-place, and international conglomerates are in-creasingly being formed to provide products andservices both at home and abroad.

New technologies hold promise for a greatlyenhanced system that can meet the changingneeds of an information-based society. At thesame time, however, these technologies willundoubtedly generate a number of significantsocial problems. How these technologiesevolve, as well as who will be affected posi-tively or negatively, will depend on decisionsnow being made in both the public and privatesectors. This study provides a context forevaluating these decisions.

CHANGING COMMUNICATIONINFRASTRUCTURE

The communication infrastructure is theunderlying structure of technical facilities andinstitutional arrangements that supports com-

munication via telecommunication, broadcast-ing, film, audio and video recording, cable,print, and mail. Although the “public works”connotation of infrastructure may lead some tothink of the term as public facilities, most of theU.S. communication infrastructure is held byprivate individuals and firms.

With digitalization all of the mediabecome translatable into each other—computer bits migrate merrily—andthey escape from their traditional meansof transmission . . . If that’s not revolu-tion enough, with digitalization the con-tent becomes totally plastic—any mes-sage, sound, or image may be editedfrom anything into anything else.

Stuart BrandThe Media Lab:

Inventing the Future at MIT, 1988.

The communication infrastructure helpsshape communication through the nature of itstechnical facilities and the ways in which thosefacilities are organized and made available tousers. Communication, in turn, is central to thebusiness, political, and cultural life of a society,and to the individuals that comprise it.

The societal effects of the Nation’s communi-cation infrastructure are determined by its over-all technical capabilities, their availability, andtheir patterns of use. Three aspects of theinfrastructure are relevant:

1.

2.

3.

the technical characteristics of the com-munication facilities themselves;

the economic interdependencies amongproducers, distributors, and users o fcommunication facilities; and

the policy goals and rules that define andconstrain these relationships.

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4 ● Critical Connections: Communication for the Future

The following advances in communicationtechnologies are generating changes in all threeaspects:

improved technical performance intransmission, encoding, decoding, storageand retrieval, and content production, atdecreasing costs;convergence of communication functions,as well as communication products andservices;decentralization of intelligence and controlthroughout communication systems withthe development of software-driven andsoftware-defined communication facili-ties;the availability of some discrete communi-cation services that were previously pro-vided only as part of a package (unbun-dling);increased portability of products and serv-ices;improved ease of use through better soft-ware design;increased networking capability; andincreased capability to target messages tospecific individuals or groups.

These technological trends and theirsocioeconomic impacts are unraveling the exist-ing U.S. communication system, creating newopportunities, players, and problems. In thewake of these changes, fundamental questionsare being raised about how to organize commu-nication systems to promote innovation, maxi-mize the benefits of competition, and captureeconomies of scale and scope, Moreover, thefact that the various media are converging as aresult of digitization raises basic questions aboutthe rules that govern access to communicationtechnologies. Above all, questions are beingraised about the goals of the communicationsystem, as well as how, and by whom, futurecommunication policy decisions should bemade.

If Congress is to affect the future of the U.S.communication infrastructure, it will need to

address these questions, perhaps by revisitingand reevaluating the Nation’s basic goals forcommunication. To successfully renovate theNation’s communication policy, Congress willneed to gain the support of, and coordinate itsefforts with, an ever-increasing number ofplayers in a variety of decisionmaking arenas.The task is a critical one, notwithstanding thedifficulties involved in such an undertaking. IfCongress fails to act decisively and generatebroad support, the opportunity to makedeliberate choices about new communicationtechnologies—and about the nature of Amer-ican society itself—will be overtaken by rapidtechnological advances, the hardening ofstakeholder positions and alliances, and theforce of international developments andevents.

OPPORTUNITIES ANDCONSTRAINTS PRESENTED BY

NEW COMMUNICATIONTECHNOLOGIES

To determine the role that government mightplay in the realm of communication, Congresswill need to consider the opportunities that newcommunication technologies offer society, aswell as the obstacles that prevent those opportu-nities from being realized. The stakes arehigh—for businesses, the democratic process,culture, and individuals—because using com-munication effectively provides a strategic ad-vantage in achieving goals. Taking advantage ofnew communication technologies in one ofthese four realms may, however, conflict withtheir use in the other three. For example,providing communication systems that meet thesecurity standards of business and governmentmay limit the extent to which the same systemscan be used for research and collaborativeefforts. Also, the business use of communica-tion storage and processing technologies totarget customers may create problems of infor-mation overload and of securing privacy forindividuals.

Chapter l-Summary ● 5

Communication and Comparative Advantagein the Business Arena

Although the United States has fared reasona-bly well over the past few years, many observersare beginning to express serious reservationsabout the future of the U.S. economy and itsability to compete in an increasingly globalenvironment. They point out that recent eco-nomic growth in the United States has beenfueled by foreign capital, and that the growth ofmanufacturing exports has been slower thanimports. Experts note that the continued decline

of the U.S. economic position in world trade ishaving serious consequences for labor. Pointingto the recent success of the Japanese model ofbusiness organization, some have even sug-gested that, to be competitive, the United Statesmay also need to develop and adopt new waysof organizing for production.

Many of those who are concerned about theU.S. economy look to the communication andinformation sectors to provide the impetus forfuture growth. This focus on “telematics” is notsurprising, given the trend toward a greater role

Photo credit: Bell Atlantic

Mobile telephones allow personnel to communicate with their offices and clients while on the road. New cordless phones that canbe carried on a belt are also being introduced to facilitate communication for those who work outside or away from their desks.


for information in advanced industrial societies,and the fact that the United States has tradition-ally had a comparative advantage in this area.Communication is regarded not only as a sourceof economic growth, but also as a means ofreconfiguring work relationships to make themmore effective.

Given the increased dependence of Americanbusinesses on information and its exchange, thecompetitive status among businesses and in theglobal economy will increasingly depend on thetechnical capabilities, quality, and cost of thecommunication facilities on which they canrely. The emergence of new technologiesprovides a unique opportunity for businessesand nations to create comparative advan-tages in a changing world economy. Failureto exploit these opportunities is almost cer-tain to leave many businesses and nationsbehind.

How well American businesses are able totake advantage of these opportunities will de-pend on:

the compatibility and interconnectivity ofcommunication and information systems,the laws concerning the use of information,economic and technical resources,corporate culture and organizational struc-ture,developments in international trade andinternational telecommunication regula-tion,domestic regulatory policies, andthe availability of a skilled work force.

It is clear that if government wants topromote the effective use of new communica-tion technologies to improve the economy, itmust find ways to deal with issues such asstandards and the standards-setting process,education and training, corporate organiza-tion and labor relations, and internationaltrade.

The widespread deployment of new commu-nication technologies for economic advantagemay also raise equity issues. To use telecommu-

nication competitively, many businesses arefinding it necessary to create their own privatecommunication networks. But the costs of suchsystems are high, in terms of both organizationaland financial resources. Thus, many smallcompanies cannot afford to take advantage ofthe new technologies. To the extent that thegovernment looks to new communicationtechnologies to foster U.S. economic growthand development—and wishes its small andmedium-sized companies to participate inthis—it may need to take special steps tofacilitate those companies’ use of these tech-nologies.

Communication and the Democratic Process

Since communication is central to all politicalactivities, the way in which the U.S. communi-cation infrastructure evolves is likely to affectthe future of the American political system. Newtechnologies can create new communicationpathways, allowing new gatekeepers to mediatepolitical dialog. For this reason, political “out-siders” have historically viewed communicationtechnologies as an effective means for becomingpolitical “insiders.” Those already in positionsof authority have sometimes sought to structurelaws and behavior in order to limit access to newcommunication technologies.

A new form of “politics” is emerging,and in ways we haven’t yet noticed. Theliving room has become a voting booth.Participation via television in FreedomMarches, in war, revolution, pollution,and other events is changing everything.

Marshall McLuhan,Quentin Fiore, Jerome Agel

The Medium is the Massage, 1967.

Today, many people regard the technologicaladvances in communication as a means forenhancing both citizen participation and govern-ment performance. The interactive, online capa-bilities of new technologies, it is claimed, couldallow citizens to directly voice their opinions on

Chapter I-Summary ● 7

Photo credit: C-SPAN

C-SPAN provides regular coverage of congressional floor debates and committee hearings via its cable network.Citizens can interact directly with program participants in Washington by telephone.

public issues, as well as conduct an ongoingdialog with other citizens, elected representa-tives, and government bureaucrats. Moreover,the targeting capabilities of the technologycould improve the ability of citizens to identifylike-minded people, create new interest groups,raise financial and political support, and trackthe activities of—as well as lobby—governmentofficials.

Government agencies can improve their effi-ciency by using technologies that facilitate bothnetworking and data storage and reprocessing.For example, the ability to identify specificgroups can be used to improve law enforcement,immigration control, and the detection of fraud,waste, and abuse in welfare systems. Real-timecommunication among government agencies,through the use of online systems, could alsomake government operations more efficient andeffective.

Other people are more skeptical of the effectof new technologies on government and politics.They view them as a means by which those

already in positions of power or authority canfurther solidify their influence. For instance,they claim that online, interactive politicaldialogs will generate information about indi-viduals that could be used by government tomonitor the activities of groups or individuals.Moreover, they are concerned lest the targetingof specialized groups lead to greater fragmenta-tion of the body politic. Some also fear that newcommunication capabilities will not be used toimprove the substance of political debate, butrather to promote personality instead of policy.

In government and politics, as in the past, theimpact of new communication technologies willbe determined to a large extent by the rules,norms, and skills that govern access to them.The emergence of new political gatekeepers,and who they are, will be of critical importance.As information is treated more and more as acommodity to be bought and sold in themarketplace, the traditional political gatekeep-ers—including political parties, the traditionalpress, and government agencies—are being


replaced by new kinds of political gatekeepers,such as political consultants, media consultants,private sector vendors, and international news-casters. Whereas the traditional gatekeepers aregoverned by political rules and norms, the newgatekeepers are guided to a greater extent bymarket criteria. Where markets dominate theallocation of communication resources--such as information, a speaking platform, oraccess to an audience-political access maybecome increasingly dependent on the abilityto pay. Thus, the economic divisions amongindividuals and groups may be superimposedon the political arena.

On another level, new international players,such as multinational news agencies, are replac-ing government officials as gatekeepers in areassuch as international diplomacy. Depending onthe extent of this development, the ability of theNation to exercise its sovereignty throughtraditional diplomatic channels may be compro-mised.

Communication and theProduction of Culture

Communication is the process by whichculture is developed and maintained. Informa-tion, the content of communication, is the basicsource of all human intercourse. Throughouthistory, information has been embodied andcommunicated in an ever-expanding variety ofmedia, including spoken words, graphics, arti-facts, music, dance, written text, film, record-ings, and computer hardware and software.Together, these media and their distributionchannels constitute the web of society thatguides the direction and pace of social develop-ment. From this perspective, the communicationof information permeates the cultural environ-ment and is essential to all aspects of social life.

The new information and communicationtechnologies provide many opportunities toenhance our culture by expanding the infrastruc-ture for information-sharing and exchange.Communication can be used to generate greateramounts of information and new cultural forms,to make this knowledge more accessible, and to

provide it in more convenient and suitable ways.Because these technologies are decentralizedand widely available, they can provide theopportunity for more people to become activelyinvolved in creative activities.

However, it is likely that many of thecultural opportunities afforded by new com-munication technologies will not be realizedwithout further government involvement orstructural changes in the communicationindustry. Recent communication history illus-trates, for example, that technological develop-ments leading to a greater number of trans-mission channels do not necessarily lead to

A panoply of electronic devices puts ateveryone’s hand capacities far beyondanything that the printing press couldoffer. Machines that think, that bringgreat libraries into anybody’s study,that allow discourse among persons ahalf-world apart, are expanders ofhuman culture.

Ithiel de Sola PoolTechnologies of Freedom, 1986.

increases in the diversity or quality of informa-tion content and programming. Equally impor-tant in determining the kind of content producedare the economic relationships among the keyplayers in the communication arena. If, in thefuture, government wishes to encourage morepeople to become active in creating their owncultural environment, economic incentives mayneed to be considered. Moreover, efforts willneed to be made not only to assure that peoplecan access a broad variety of information andcultural content, but also that they have the skillsand resources necessary to create, package, anddistribute information.

Communication and the Individual

Emerging technologies promise to provideindividuals with opportunities to increase theirpersonal autonomy, enhance their sense ofconnection to others, and, in general, enable

Chapter 1--Summary ● 9

greater accomplishments and self-fulfillment.These same technologies, however, could pro-duce the opposite outcomes, contributing topersonal isolation, increased dependency, andthe loss of privacy. How new technologies willaffect individuals will depend in part on the rulesthat Congress adopts to govern access to infor-mation and the new communication technolo-gies. For example, government decisions aboutaccess to the data that are collected in the courseof economic transactions will affect individualprivacy rights. Also, decisions about what kindsof information services telephone companiescan provide will affect the speed at which, andthe extent to which, fiber technologies and theinformation services they make available can bedeployed to the home.

The medium, or process, of our time--electric technology—is reshaping andrestructuring patterns of social interde-pendence and every aspect of our per-sonal life.

Marshal McLuhan,Quentin Fiore, and Jerome Agel

The Medium is the Massage, 1967.

The Nation’s communication infrastructure isbecoming increasingly complex. Individuals orfirms are becoming more responsible for design-ing the various communication resources theyrequire. In order to take the greatest advantageof new technologies, people will need to bemore technically skilled and have access tobetter “navigational tools” (means to help peo-ple access the systems, analogous to today’s TVguides or telephone books). Navigational toolswill be crucial in making individuals aware ofcommunication opportunities, and in providingguidance in the use of these systems. Thecommunication capabilities of individuals—their "1iteracy" in the languages, commands,and structures of future systems—willlargely determine the benefits they receive.

The extent to which access depends on theability to pay will also determine the impact of

Photo credit: Bell Atlantic

New caller identification terminals use a small electronicscreen to display the telephone number from which an

incoming call was placed.

new communication technologies on individu-als. In telephony, for example, there is generalagreement that services should be provideduniversally and it has been clear what thoseservices should be. Until recently, achievingconsensus was relatively simple because therange of telephone services that could be offeredwas narrow. The needs of all users could thus beequated and the cost of service could be shared;therefore, the price that individuals werecharged for service could be set relatively low.With shared usage it was possible to allow someusers to subsidize others.

Today, the concept of providing universalservice on a common, shared network, as wellas the system of subsidies that supported it, isbreaking down. Major questions are beingraised about the kinds of communicationservices that are needed, and the degree towhich all users have equivalent needs that


can be served in the same fashion. Thus, thequestion of what should constitute universalservice in an information age needs to bereaddressed. Depending on how this question isanswered, the United States could be faced witha two-tiered communication system, whichwould give rise to issues of equitable access. Forexample, if businesses view their needs asunique and decide to develop their own privatenetworks, as some are doing now, there may beinsufficient revenues available to support anadvanced public network to serve all individu-als. Under such circumstances, the costs andprices of services would be higher, to the extentthat there are diminished economies of scale andscope.

New technologies will not only affect howpeople access information, but also how infor-mation impinges on people’s lives. The pace oftechnological change has created confusionabout the appropriate standards for informationuse. For instance, what privacy protectionsshould individuals expect? While eager to takeadvantage of new electronic shopping opportu-nities, many people are unaware that transactiondata generated in the process can be collected,processed, and used in the future as tools formarketing or even surveillance. While embrac-ing new ways to access information for theirown use, many individuals may find it difficultto cope with the fact that others, in turn, nowhave much greater access to them.

POLICY ISSUES ANDCONGRESSIONAL STRATEGIESAlthough new communication technologies

afford a myriad of socioeconomic opportunities,many of these opportunities may go unrealized.Some may fail to materialize for lack offoresight, public demand, or political will.Others may founder because of poor circum-stances and timing. Some opportunities can onlybe fulfilled at the expense of others.

The need to make trade-offs among oppor-tunities is particularly great in commu-nication because communication lies at the

heart of social activity. For example, thegrowing use of private branch exchanges(PBXs) and high-speed data transmission linesto create private business telephone networksmay, if carried too far, drain the pool of financialand human resources available to the publicswitched telephone network. This could limitthe extent to which the communicationinfrastructure can serve other economic, politi-cal, and social goals. Making such trade-offs islikely to be more contentious in the futurebecause the strategic value of information isincreasing in business, politics, culture, andindividual development and personalgrowth.

Analyzing the potential for conflict amongnew communication opportunities, OTA identi-fied five major areas in which public policyissues are likely to arise:

1.

2.

3.

4.

5.

equitable access to communication oppor-tunities,security and survivability of the communi-cation infrastructure,interoperability of the communicationinfrastructure,modernization and technological develop-ment of the communication infrastructure,andjurisdiction in formulating and imple-menting national communication policy.

These are characterized below, along withcongressional strategies and options for ad-dressing them.

Equitable Access to CommunicationOpportunities

The opportunities for people to participate ineconomic, political, and cultural life depend ontheir ability to access and use communicationand information services. Individuals need skillsand tools to locate the communication path-ways, information, and audiences in a timelyfashion and in an appropriate form. Unequalaccess to communication resources leads tounequal advantages, and ultimately to inequali-ties in social and economic opportunities.

Chapter 1--Summary 11

OTA found that changes in the U.S.communication infrastructure are likely tobroaden the gap between those who canaccess communication services and use infor-mation strategically and those who cannot.Moreover, the people most likely to be ad-versely affected are those whom the newcommunication technologies could help themost—the poor, the educationally disadvan-taged, the geographically and technologicallyisolated, and the struggling small and medium-sized business.

OTA identified a number of factors that arelikely to contribute to access problems. Forexample, technological advances, deregulation,and increased competition have led to thereduction of a number of communication subsi-dies, and to changes in the way in which manycommunication services are operated and fi-nanced. For some, these developments areincreasing the cost of purchasing communica-tion services. The overall costs of identifying,locating, and applying relevant information in atimely fashion are on the rise. Costs are increas-ing because there is a larger volume of informa-tion for individuals and businesses to cope with,and because the tools and systems needed to dealwith the larger volume are becoming morecomplex. Access to communication services isalso likely to be more limited in the future iftrends toward increased mergers and verticalintegration of communication-related industries

Ownership in every major medium nowincludes investors from other media—owners of newspapers, magazines,broadcasting, cable systems, books andmovies mixed together. In the past, eachmedium used to act like a watchdog overthe behavior of its competing media. . . But now the watchdogs have been

cross-bred into an amiable hybrid, withseldom an embarrassing bark.

Ben H. Bagdikian,The Media Monopoly, 1987.

continue at their present pace, and if mediagatekeepers, in selecting content, are increas-ingly guided by market criteria. It is moredifficult to establish appropriate rules for accessin this rapidly changing environment. Newtechnologies are challenging traditional reg-ulatory criteria, magnifying the confusionand inconsistencies that surround firstamendment rights, and dismantling the tra-ditional definition of universal service.

In addressing these problems, Congress mayhave to move in some new, and untried,directions. Past policies to promote access toboth communication and information focusedon assuring access to transmission media. Barri-ers to access were reduced by structuring therights of those who owned the transmissionsystems (for example, by limiting the number ofbroadcast stations that an individual can own),or by structuring the prices that users paid fortransmission service (as in the case of telephoneand postal rates). Using transmission media asthe leverage for access was the chosen regula-tory approach, given first amendment proscrip-tions limiting government’s role in regulatingcontent. It was, moreover, a relatively effectiveapproach because transmission media repre-sented the major bottleneck to communicationaccess.

Today, this is no longer the case. Althoughtransmission bottlenecks still exist (as, forexample, in the local telephone exchange), newkinds of bottlenecks are also appearing. Some ofthese have more to do with the identification,production, and application of information con-tent than with its transmission. These bottle-necks occur because people lack, for example,the necessary technical skills, navigationaltools, and access to production facilities. Toeffectively promote communication access inthe future, government policies will need tofocus more on these newly emerging barriers toaccess.

Congress could pursue six different strategiesto improve access to communication services:


1.

2.

3.

4.

5.

6.

influence the means by which communi-cation services are funded and financed,structure the prices at which communica-tion services are offered,provide direct government support forusers to access information and communi-cation paths,regulate and/or redefine the rights ofmedia owners,influence the level and availability of thetools and resources required to accesscommunication and information services,andassume a more proactive role to assurerobust debate onissues of public impor-tance.

These strategies, and the options that each mightentail, are summarized in figure 1-1. An analysisof the benefits and disadvantages of adoptingany of these options is provided in chapter 9.

Security/Survivability of theCommunication Infrastructure

Adequate security and survivability are es-sential characteristics of an acceptable commu-nication infrastructure. However, establishing asecure and survivable infrastructure requirestrade-offs against access, cost, and ease of use.Although most people probably support thegeneral goal of security and survivability, thereis disagreement with respect to the level ofsecurity and survivability needed, and the extentto which other communication goals should besacrificed to achieve these goals.

OTA identified a number of factors anddevelopments that can affect the security andsurvivability of the communication infrastruc-ture. The increased reliance of business andgovernment on communication and informationsystems makes them more vulnerable to systemfailures. The number and variety of problemsthat may threaten the security or reliability ofcommunication systems are greater than in thepast. Communication systems are more com-plex, decentralized, and interdependent. Thus, itis more difficult to achieve security and surviva-bility goals.

In the past, issues surrounding the securityand survivability of the communication infra-structure were not important to most Americans.Such problems were generally addressed behindthe scenes in private businesses and govern-ment. These issues are becoming less containa-ble. OTA found that security and survivabilitygoals are becoming more important andmore visible; but it is also becoming moredifficult to make the trade-offs in communi-cation policy required to achieve these goals.Stakeholders’ views differ about how thesetrade-offs should be made and what policiesshould be pursued. In addition, governmentagencies are not adequately organized to resolvesecurity and survivability issues and achievesecurity goals.

Congress may need to play a more activerole in resolving competing security goalsand in promoting the security of both privateand public communication systems. The Fed-eral Government’s role in this area was tradi-tionally limited to assuring that the Nation’scommunication infrastructure was secure andreliable enough to meet the needs for defenseand emergency preparedness. Today, however,the public’s stake in the security and survivabil-ity of communication systems goes well beyonddefense and disasters. Given the dependence ofmany corporations on communication and infor-mation systems, there are now larger social costsfrom major failures in private systems. Forexample, in November 1985, a computer prob-lem in the Bank of New York’s offices pre-vented the company from completing an ex-change of government securities. This fault inthe system not only cost the bank $1.5 to $2million after taxes; it also forced the bank toborrow $24 billion from the Federal ReserveSystem. In this sense, communication securityproblems occurring in the private sector aremuch more difficult to contain. As the role andvalue of communication increase, the likelihoodthat security problems will spill over into thepublic sector also increases.


Figure 1-1--Congressional Strategies and Options To Address Access to Communication Opportunities

I Option A 1 I Option C I

Option CProvide common-carrler status forcrltlcal navigatlonaltools, recognizingtheir essential-facility nature

Option ARe-examine and re-evaluate thetraditional regula-tory categories ofcommon carrier, printand broadcasting inthe light of techno-logical change andmarket developmentsto determine whetherthey continue to bethe most suitable ,forfostering communicationaccess

1

1Option B

Increase support foradvertiser-subsidizedmedia that providethe publlc withnoncommercialInformation at pricesalready heavilysubsidized

Option CProvide publicInstitutions withcommunicationequipment, orIncrease currentfunding or subsidiesfor its purchase

Option AProvide monetarysubsidies toindividuals andspecial groups usingInformation andcommunication paths

I

DOption BProwde equipment,(or subsldles for Itspurchase) to Indlwdualusers

EEI

Strategy 4

I Regulate and/orredefine the rights

‘ -El --4,, ,1

of media-owners,Option D Option B

Strengthen requlre- Rescind the cable/ments to provide telephone companypublic access to crossownership rulesproduction facilities to Increase the com-

petition faced bythe cable Industry Strategy 5

Influence the leveland availability of thetools and resourcesrequired to access

information services.4

Option C Option ARequire media providers Codify the Fairnessto uphold more stringent Doctrine for broad-publlc-interest standards casters and/or extend

it to other media Strategy 6Assume a more

,I

+ proactiverole to assure

1 ’ I robust debate onissues of public

Option D Option B importance.

Adopt campaign-reform Mandate time and spaceIegislatlon on communicatlon path-

ways for discussionof public policy issues

1r Option BProvide Federalsupport fortechnological Iiteracy

LOption D

Provide funding forcreation ofbibliographlcal devicesfor publicly fundedprograms andInformation

SOURCE: Office of Technology Assessment, 1990,


Congress could pursue six different strategiesto address the security and survivability of thecommunication infrastructure:

1.

2.

3.

4.

5.

6.

undertake further study and analysis ofchanging security and survivability needsof the communication infrastructure;facilitate the transfer of information aboutsecurity and survivability, garnered in thepublic agencies, to the private sector;establish security and survivability re-quirements for key industrial sectors;provide special emergency facilities forprivate sector use;improve coordination of survivabilityplanning; andincrease activity geared to preventingsecurity breaches.

These strategies, and the options that each mightentail, are summarized in figure 1-2 and ana-lyzed in chapter 10.

Interoperability of theCommunication Infrastructure

Communication systems are, by definition,designed to interconnect. Thus interconnection,or interoperability, is critical to the communica-tion infrastructure. The more interoperable acommunication system is, the more connectionsit can provide and the more accessible it will beto everyone on an equal basis. Interoperabilityprovides for redundancy, thus improving systemsurvivability. Interoperability is important notonly in a technical sense, but in an administra-tive sense as well. To be most useful, theinfrastructure needs to be transparent to users interms of the services offered.

Interoperability also has a downside. It canmake a communication system more vulnerableto breaches in security by broadening access. Tothe extent that interoperability requires stan-dardization, it can retard technological innova-tion and slow development of the system.

In the past, there were few problems inachieving adequate interoperability within thecommunication infrastructure. In the area oftelephony, AT&T provided end-to-end serviceand system interconnection. The governmentplayed an important role in mass media andinformation processing, assuring, when neces-sary, that there was adequate standardization.

Interoperability is likely to become more ofa technical and administrative problem in thefuture. Not only will the need for interopera-bility be greater, but achieving it is also likelyto be more difficult. Five developments havecontributed to the difficulties of ensuring inter-operability. First, the growing importance ofinformation and communication as a strategicresource attaches greater importance to theinteroperability of any communication infra-structure. Second, many of the traditional waysthat interoperability has been achieved havebeen eliminated. Third, the globalization of theeconomy has led to a greater need for interna-tional standards and the extension of standards-setting efforts to the international arena. Fourth,the number and variety of players in thestandards-setting process have increased, ashave the costs and stakes of adopting standards.Fifth, the standards that need to be set are morecomplex (e.g., anticipatory, process standardssuch as open systems interconnection [OSI]l

and integrated services digital networks[ISDN]). 2

Although the overall circumstances in whichparticular government strategies are likely to bethe most appropriate can be generalized, thesewill have to be tailored to each case. Congresscould pursue five different strategies to addressthe interoperability of the communication infra-structure:

1. support research to provide better data anda more analytic rationale for standards-setting decisions;

031 is an Mchitecture for computer networks and a family of standards that permits data communication and processing among diver= technologies.

21SDN is ~ network that provides in[egated stitch and facility dl~ta] connections ~tw~n user-network interfaces to provide or SUppOfl i3 rNl&of different communication services.


Figure l-2--Congressional Strategies and Options To Address Security/Survivabilityof the Communication Infrastructure

Option CSupport thedevelopment ofcurricula to be usedin schools, Iibraries,museums, and otherpublic facilities tofoster a more positivecomputer ethic

I

Option AProvide governmentincentives to bothvendors and users forImproving computersecurity

I

uRefine computercrime laws and theremedies andpenalties for crlmlnalabuse

Option AContinue funding andsupport for the NRCto evaluate the stateof reliability of theU S communicationinfrastructure for

Option CUse governmentprocurement policiesto create incentivesfor vendors to buildbetter security intotheir computer-based

1 4

I

support for studies ofthe security ofcommunicationsystems

SOURCE: OffIoe of Technology Assessment, 1990.


2.

3.

4.

5.

allow for the emergence of market solu-tions, either in the form of gatewaytechnologies or through the setting of defacto standards;indirectly influence the standards-settingprocess by providing assistance and guid-ance to foster the setting of standards;influence the setting of particular stan-dards by providing incentives or imposingsanctions; andmandate industrywide standards.


OTA identified three specific cases whereinteroperability--or the lack of it—will havemajor implications for U.S. communicationpolicy. These are related to the establishment ofISDN, the evolution of OSI, and the creation ofan open network architecture (ONA).3 In con-sidering whether Congress should take addi-tional steps to encourage the standards-settingprocess in these three cases, certain factors needto be kept in mind. These are outlined, togetherwith corresponding policy responses, in chapter11 (tables 11-1, 11-2, and 11-3).

Modernization and TechnologicalDevelopment of the U.S.

Communication Infrastructure

As the role of information increases in allaspects of life, additional demands will be madeon the communication infrastructure. Some ofthese demands may increasingly be in conflict.The communication infrastructure will have tobe more competitive in providing communica-tion at the international level. To adequatelymeet and balance all of these communicationneeds, the U.S. communication infrastructuremust make maximum use of advances in com-munication and information technologies. It willneed to do so in the most efficient and cost-effective manner. The most critical policies arethose related to research and development,

capital investment, and human resourcedevelopment.

Historically, the United States has set theinternational pace for technological develop-ment in communication and information tech-nologies. However, in the late 1970s, technolog-ical advances began to outstrip the pace ofchange within the public shared telecommunica-tion network, finally leading to the divestiture ofAT&T and the emergence of a number ofcompeting communication networks and serv-ice vendors. Although competition has clearlycontributed to growth and economic activity inthe communication sector, OTA identified anumber of factors that suggest that in a compet-itive, global environment, the United States mayfind it increasingly difficult to retain its worldtechnological leadership.

The first factor is the development of interna-tional competition resulting in an increase in thepace of technological advancement in commu-nication infrastructure. The second is the highcapital costs of modernizing the communicationinfrastructure and uncertainties as to how it willbe financed. The potential inefficiencies thatcould result from lack of national coordinationand planning for communication represent thethird factor. The fourth is the proactive roleplayed by foreign governments in modernizingtheir communication systems. The fifth factor isthe fractionated U.S. decisionmaking process.The sixth is the limits of human resources forcommunication.

Congress could pursue three strategies toaddress the modernization of the communica-tion infrastructure:

1.

2.

involve the government directly in thedevelopment, planning, financing, and co-ordination of the communication infra-structure;

provide indirect incentives for moderniz-ing and developing the communicationinfrastructure; and

3ONA is tie over~l design of a c~er’s basic network facilities and services to permit all users of the basic network to interconnect to SpWifiC buicnetwork functions and interfaces on an unbundled and equal access basis.


I

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1!

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3. create a regulatory environment that ismore conducive to the modernization ofthe communication infrastructure.


Jurisdiction in the Formulation andImplementation of National

Communication Policy

Rapid technological advances in communi-cation, coupled with the unraveling of atraditional regulatory framework in theUnited States, have given rise to a highlyuncertain communication policy environ=

ment. Occurring at a time when the role ofinformation is particularly important, thesedevelopments will affect everyone. Each indi-vidual has a high stake in the outcome of currentcommunication policy debates. An exception-ally equitable, efficient, and effective poli-cymaking process will be required to findappropriate solutions to the complex and thornypolicy dilemmas that society faces, and toreconcile the conflicts that will inevitably ariseamong competing—even if meritorious—interests. At the very least, the allocation ofauthority and the rules of the game will need tobe clear and perceived by the public to belegitimate.

As the United States participates in theincreasingly global information economy, thelack of a coherent and coordinated nationalcommunication policymaking process is likelyto severely hinder the development and execu-tion of a strategy for dealing with the myriad ofcommunication issues that will emerge. TheAmerican policy process has always been some-what disorderly because of the important role offederalism and the separation of powers in theU.S. political system. However, its untidinesshas been particularly noticeable in communica-tion policy—a fact that has already promptedtwo Presidential policy boards (in 1951 and1968) to recommend the creation of a central

agency to formulate overall communicationpolicy.

OTA findings suggest that a number offactors are likely to make these problems worsein the future. These include the shift of commu-nication decisionmaking from political institu-tions to the marketplace, the expanding linksbetween communication policies and other so-cioeconomic policies, the increased interde-pendence of national and international commu-nication policies, and the emergence of largeusers-often multinational corporations-askey players in communication decisions.

Congress could pursue four basic strategies toaddress jurisdictional issues in communicationpolicymaking:

1.

2.

3.

4.

take the lead in establishing communica-tion policy priorities and in allocatingorganizational responsibilities accord-ingly;establish an ongoing organizational mech-anism, outside of Congress, to resolvepolicy inconsistencies and jurisdictionaldisputes;provide an interagency and/or interjuris-dictional mechanism for coordinatingcommunication policy and resolving juris-dictional issues; andestablish an institutional basis for facilitat-ing coordination and cooperation amonggovernment agencies, industry providers,and communication users.

These strategies, and the options each mightentail, are summarized in figure 1-5 and ana-lyzed in chapter 13.

THE NEED FOR A NATIONALVISION OF THE ROLE OF

COMMUNICATIONThe choice of congressional policy strategies

and options will depend primarily on howCongress views the role of communication in21st-century America and what communicationgoals it will set for the Nation. This studyprovides Congress with a roadmap for matching


2

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Figure l-5-Congressional Strategies and Options To Address Jurisdictional Issues inCommunication Policymaking

I Option C I I Option A I IEstablish a newexecutive agency toaddresscommunicationissues.

Option DEstablish an agencywithin the ExecutiveOffice of the Presidentto develop acomprehensivecommunication policyand to coordinate theactivities of existingcommunicationagencies.

Option CEstablish agovernmentcorporation to performessentialcommunicationservices for thepublic.

I

%%$:;or *Designate the FCC asthe lead organization

communicat ion po l icy . I I ~fi.

Option BDesignate an existingexecutive branchagency, such as theNTIA, as the leadagency to coordinatecommunication policy

Option AEncourage or supportthe establishment ofadvisory bodies toprovide input toexecutive agenciesand the FCC onspecificcommunicationissues.

I

Option AReassess and Option Credefine national Establish a Jointcommunication policy Communicationgoals, revising the Committee withinCommunications Act Congress.of 1934 whereappropriate.

I II1

Option BEstablish a nationalcommission toevaluate the changedcommunicationenvironment andrecommend toCongress appropriatepolicy changes andsteps to implementthem.

Option AEstablish anInteragencycoordinating bodywith representativesfrom all the agenciesthat haveresponsibility forcommunication policy.

I—I

Option B

Establish an ongoingFederal/State agency,along the lines of theFederal/State Boards,to coordinate andresolve Federal/Stateinterjurisdictionalcommunication policyissues.

SOURCE: Office of Technology Assessment, 1990.


There is nothing more difficult to plan,more doubtful of success, nor moredangerous to manage than the creationof a new order of things.

Machiavelli, 1513.

U.S. communication policy with consistentstrategies and policy options, based on the fiveissues discussed above. Three possible visionsare presented here:

1.2.

3.

communication as a market commodity,communication as a springboard for eco-nomic growth and development, andcommunication as a basic societal infra-structure.

These visions are purposely sharply drawn toprovide clear alternatives.

Market Vision-Communication as aMarket Commodity

This vision reflects the view that communica-tion is an end in itself, and that communicationservices should be treated like any other com-modity that can be bought and sold. This viewis illustrated at the extreme by former FCCChairman Fowler’s statement equating televi-sion sets and toasters, which, he said, leads to theconclusion that the marketplace is the mostappropriate mechanism for determining theproduction, distribution, and use of televisionsets as well as other communication devices andservices.

Those with this perspective include manyantitrust economists and lawyers who place ahigh value on economic efficiency, viewing itsattainment as the measure of an optimal socialoutcome. They claim that through market com-petition the criterion of efficiency is most likelyto be met. Supporting this viewpoint are manynew participants in the communication system(for example, resellers of communication serv-ices, system integrators, and gateway and infor-mation vendors) who, eager to take advantage of

the new technologies to add value to existingproducts and services, want a chance to enter themarket and compete. Many business users whooperate their own private communication net-works also subscribe to this point of view. So,too, would consumer advocates who, viewingcommunication primarily as a commodity, areconcerned most about the cost of service toconsumers.

Viewing communication policy from thisperspective, the ideal role for the FederalGovernment would be to intervene to correctorameliorate situations where market failures canbe clearly identified. Members of this groupmight disagree, however, about the means ofgovernment intervention. While some favortrying new or experimental regulatory ap-proaches such as price-cap regulation for tele-phone companies, others insist that, where realcompetition is lacking, adequate protection forusers and potential competitors requires tradi-tional rate-of-return regulation. With these dif-ferences in mind, the following congressionalstrategies are consistent with the vision ofcommunication as a commodity, and the gov-ernment’s perceived role:

●

●

●

●

●

●

●

reexamining and readdressing regulatorycategories in terms of the market structureof various industries as it is affected bytechnological advances, and strengtheningregulatory procedures where required;refining computer crime laws and penal-ties;allowing for the emergence of marketsolutions to problems of incompatibility;influencing the standards-setting processindirectly by providing assistance andguidance to foster standards-setting;providing indirect incentives for moderniz-ing and developing the communicationinfrastructure;

providing for some technology researchand development; andphasing out some existing regulatory agen-cies and integrating others.


Economic Vision--Communication as aSpringboard for National Economic

Growth and Development

This vision reflects concerns about the stateof the U.S. economy and the decline of the U.S.competitive position in an increasingly globaleconomy, and calls for the promotion of com-munication technologies and the modernizationof the communication infrastructure. Propo-nents view communication not just as an end initself, but also--and more importantly-as themeans for bringing about renewed economicgrowth and development in the United States.Some are concerned lest other nations—viewingthe modernization of their communication infra-structures as part of their overall nationalindustrial policies--employ new communica-tion technologies to gain a competitive advan-tage over the United States.

Most who hold this view would agree that thecommunication infrastructure can serve a num-ber of social goals. However, because of thegrowing intensity of international economiccompetition, some would argue that, wheresocietal goals conflict, using communication tofoster national economic goals should takeprecedence. They would point out that, if theUnited States fails to achieve economic success,it will no longer have the wherewithal toaccomplish other goals.

Such arguments have been made by a numberof government officials who deal with trade andnational industrial policy issues. This viewpointis also reflected in some recent governmentreports calling for a revision of the ModifiedFinal Judgment? and alternatives to rate-of-return regulation. Most of the regional Belloperating companies that stand to benefit fromthese changes also use this argument whenpresenting their case to government. Some usersin small and medium-sized businesses who

cannot afford to develop their own communica-tion networks, but who view communication asa strategic resource, might also be inclined tofavor the view of communication as the “spring-board for economic growth.”

Proponents of this view call on the FederalGovernment to play a more active role inpromoting technological development and themodernization of the communication infrastruc-ture. While they might differ on how to promotecommunication technologies for economicends, the congressional strategies consistentwith this overall viewpoint include:

providing direct government support forusers to access information and communi-cation paths;

undertaking further study and analysis ofthe changing security and survivabilityneeds of the communication infrastructure;

providing special emergency facilities forprivate sector use;

improving coordination of survivabilityplanning;

increasing activities geared to prevent se-curity breaches;

supporting research to provide better dataand a greater analytic rationale for stan-dards decisions;

while allowing for market solutions tostandards problems, providing for a gov-ernment role when necessary to achieveoverall, national economic goals;

providing indirect incentives to encourageinvestment in modernization;

removing regulatory barriers that discour-age modernization; and

taking the lead in establishing communica-tion policy priorities, and in allocatingorganizational responsibilities accord-ingly.

Wle Modified Final Judgment was the 1982 consent agreement entered into by AT&T and the Department of Justice, and Subsequently aPProv~by the U.S. District Court for the District of Columbia. AT&T retained most long-dlstancc operations and terminal equipment. The Bell operatingcompanies were spun off and reorganized into seven regional holding companies. They were permitted to offer local monopoly services, as well as tollservices within their restricted operating territories. They could provide new terminal equipment, but could not engage in manufacturing.

Chapter I-Summary ● 2 3

Social Vision-Communication asSocial Infrastructure

This view emphasizes the linkages betweencommunication, human activity, and socialstructures. It focuses on the relationship be-tween access to communication and services,and access to power, wealth, and position insociety. Hence, in weighing communicationpolicy choices, it places great weight on equity.Because proponents of this vision hold thatcommunication can serve as a means as well asan end, they often propose communication-related solutions to many of society’s problems.

This viewpoint is currently not well repre-sented in the communication policy community.There are, however, many in the academiccommunity-specially in departments of com-munication and social science—who stronglyadvocate this point of view. There are also manyeducators, health providers, government offi-cials, and citizen activists who see in communi-cation a potential for assisting them in solvingtheir problems. Communication providers whocould benefit from significant economies ofscale and scope by expanding and integratingtheir services would also support this view.

Those who view communication as a meansto accomplish societal ends historically havetended to grow in number (or at least to becomemore vocal) as technological advances in com-munication give rise to new aspirations. Thiswas so for the penny press, telegraph, telephone,radio, and television; and it is likely to be so asthe Nation moves forward in an age of informa-tion and advanced communication.

For those who view communication as socialinfrastructure, the role for government is toensure not only that needed technologies andcommunication services exist, but also that theyare available to everyone and will serve allsocial purposes on an equitable basis. Thus, theystrongly advocate—in addition to many of thestrategies identified for the Economic Visionabove-congressional strategies that are moredirectly designed to improve access. Thesewould include, for example:

●

●

●

●

●

influencing the means by which communi-cation services are funded and financed;structuring the prices at which communica-tion and information services are offered;regulating and redefining the rights ofmedia-owners;influencing the level and availability of thetools and resources required to accesscommunication and information services;andassuming a more proactive role to assurerobust debate on issues of public impor-tance.

Whereas those who adhere to the EconomicVision might want to limit government’s role ifit appeared to create additional burdens forbusiness and industry, those who view theinfrastructure more generically might not be soinclined. Considering all social goals to be moreor less equivalent, adherents of this SocialVision might also favor the following strategies:

●

●

●

establishing security and survivabilitystandards for communication systems inkey industrial sectors;influencing the setting of particular stan-dards by providing direct incentives or byimposing sanctions where necessary toachieve social ends; andmandating industrywide standards wherenecessary to achieve social ends.

CONCLUSIONBefore selecting communication policy strat-

egies for the future, Congress will first need toconsider how it views the role of communicationin society. This report provides a context forthese considerations by analyzing and reviewingthe changes taking place in the communicationinfrastructure. It identifies the range of societalopportunities that new communication technol-ogies afford, and the problems and issues towhich these new technologies give rise. IfCongress can agree on a consistent vision ofcommunication goals, many policy choices willnaturally follow. What is first required is avision, and a commitment to pursue it.

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