Electronic Fascism

by William F. Jasper

Electronic Fascism

by William F. Jasper

The White House folks who want to bring you socialized medicine under the rubric of "managed competition in health care" are pushing hard to socialize cyberspace under the guise of "managing the transition" to the new "information age." In his campaign manifesto, Putting People First, Bill Clinton called for: "A national information network to link every home, business, lab, classroom and library by the year 2015. To expand access to information, we will put public records, databases, libraries and educational materials on line for public use."

Vice President Al Gore has been given the role of pitch man for this effort and has taken to it with the same gusto that Hillary has shown for promoting her brand of fascist medicine. Assisting Gore in this undertaking is Commerce Secretary Ron Brown, chairman of the Information Infrastructure Task Force, and Laura D'Andrea Tyson, chairman of Mr. Clinton's Council of Economic Advisers. That is certainly a trio to inspire confidence in a national effort to harness and promote dynamic new technologies: a vice president who authored one of the most embarrassing, technophobic, Luddite diatribes ever written (Earth in the Balance); a Commerce Secretary who has hopped from one corruption scandal to another involving charges of influence peddling and bribery; and a socialist economist from the People's Republic of Berkeley.

HYPEMEISTER IN ACTION

Al Gore was the logical choice to lead the fedgov charge into the electronic frontier. While still a senator, he authored the High Performance Computing and Communications Act, a five-year, $3 billion boondoggle signed into law in 1991, ostensibly for the purpose of advancing our nation's high-tech research and development. He has been nearly as passionate about the need for federal intervention into, and management of, the exploding technological revolution as he has been for UN regulation of the global environment.

In a speech at the National Press Club in Washington, DC on December 22, 1993, Gore stated: "Today more than ever, businesses run on information. A fast, flexible information network is as essential to manufacturing as steel and plastic. If we do not move decisively to ensure that America has the information infrastructure we need, every business and consumer in America will suffer."

"To understand what new systems we must create though, we must first understand how the information marketplace of the future will operate." And the "marketplace," you can be sure, always takes on interesting new meaning when discussed by anyone from Clinton, Gore & Co. The Vice President continued: "Some highways will be made of fiber optics, others of coaxial cable, others will be wireless. But this is the key point: They must and will be two-way highways so that each person will be able to send information in video form as well as just words, as well as receiving information."

No, here is the key point: For all it's disingenuous bows to the "market" and "private sector initiative," the Clinton Administration is determined to dictate the development of the exciting new frontier of interactive, multimedia communications. It doesn't trust consumers and producers (and state and local governments) to work out solutions to the challenges presented by the new technologies. It cannot countenance the idea of this huge and lucrative new arena of human activity being outside of its control. Why must the new highway be two-way, i.e. interactive? Is there any proof that consumers even want such services? If so, at what cost? Private companies are already racing feverishly and spending billions of dollars to develop a host of new technologies that promise to deliver a vast assortment of services -- including interactive capabilities -- to individuals, businesses, schools, hospitals, and other institutions.

But Mr. Gore is undaunted by reality in this crusade. "This Administration intends to create an environment that stimulates a private system of free-flowing information conduits," he says. "It will involve a variety of affordable and innovative appliances and products, giving individuals and public institutions the best possible opportunity to be both information customers and providers."

"But how do we get from there to here?" asks Mr. Technoveep. "That is the key question facing government." Indeed it is. "It is during the transition period that the most complexity exists and that government involvement is most important," says Gore. And then he gives the Administration's bottom line: "We want to manage the transition." Of course. The Clintonistas are big on "managing" and on government- business "partnerships." They realize full well that in most such "partnerships" there is a built-in tendency for the "transition" to become permanent and for government control to increase rather than decrease. National industrial planning is another name for it. Corporate- state fascism (government control without outright government ownership) is another.

There are plenty of statists in Congress who support this Clinton-Gore "vision." According to Senator John D. Rockefeller IV (D-WV), government has "a unique, essential role in making sure that the private sector is involved in developing new technologies, turning them into commercial products, exporting and selling those products, and putting people to work in jobs that pay good wages." He made that statement earlier this year in announcing his support for the Clinton-favored National Competitiveness Act. "This legislation will help our future Thomas Edisons," he asserted. Rather, it will help our technological dinosaurs who can't convince private investors of the worth of their products and services, but who have sufficient political clout to force taxpayers to fund their projects.

FREE MARKET BATTLE

Government is ill-equipped to make any worthwhile market decisions, let alone those affecting cutting-edge technologies with potential global markets. Titans of the computer industry such as IBM and Apple have faced several years of tough times with staggering financial losses and loss of market share to more aggressive, nimble, and market-savvy upstarts. Armies of electronic engineers, computer wizards, and financial geniuses are pulling out their hair over decisions on which technologies to invest in. Some of their decisions will be wrong and many entrants into the "information superhighway" race will be weeded out by consumers who will reject their products and services for one reason or another. That is the way of the marketplace.

The Clinton-Gore-Rockefeller way, by contrast, would have government bureaucrats, not consumers, pick the winners and losers. This is a sure prescription for havoc, bureaucratic inertia, and total frustration of the potential benefits offered by new technologies. An excellent example of this is the federal government's subsidies to manufacturers of flat- panel display screens for computers, one of the critical areas now dominated by the Japanese. The federal government continues to pour hundreds of millions of dollars into producers of flat-panels using the nearly 30-year-old liquid crystal display, or LCD, technology, when there are other American companies that have developed entirely new technologies far superior to -- and less costly than -- the Japanese flat-panel screens.

But besides intervening to make sure that industry provides consumers with the products they want and need, says Mr. Gore, it is fedgov's responsibility to guarantee that all people have equal access. The sacred cow of equality goes under the title of "universal service" in telecommunications jargon. In building the "national information infrastructure," Gore explains, we want to avoid creating "a society of information haves and have-nots." And he correctly notes that "the most important step we can take to ensure universal service is to adopt policies that result in lower prices for everyone." "But," he goes on to say, "we will still need a regulatory safety net to make sure that virtually everyone will be able to benefit." Which is a little like saying that unless the federal government controls and manages food production and distribution we will end up as a society of food "haves" dining on caviar and "have-nots" surviving on dog food.

Dr. George A. Keyworth II of the Hudson Institute tells those fretting about the information "have-nots" to just "look at the PC [personal computer] revolution." "The PC revolution happened at an absolutely explosive rate," he reminds us, "taking place in approximately six years. It went from around ten percent market penetration to perhaps 50 percent practically overnight, and it penetrated down deeply into American society." And it continues to penetrate deeper, as technological advances and market forces drive down prices of computers, software, and on-line services.

The same can be said for cellular phone technology. When AT&T launched its venture into the infant cellular phone universe it hired a consulting firm, McKinsey & Co., to research the potential cellular market. The consultants predicted that by the year 2000 there would be 900,000 cellular phone users. Another research firm, Herschel Shosteck Associates, predicted 1.5 million by the end of the century. They slightly misjudged the market; by the end of 1993 there were already 13 million cellular customers, and predictions now are that by the year 2000 there will be 60 million mobile telephone users, not 900,000.

Technology and market forces are throwing just as many uncertainties into the interactive, multi-media arena. Fiber optics are giving us virtually unlimited communications capabilities for voice, data, and video transmissions. The drawback with fiber is cost; laying fiber-optic cable to every community is labor- and capital-intensive. Which is one big reason wireless technologies are so hot. Another reason is portability. Huge advances in microchips and software have freed phones, faxes, and computers from wires, allowing telecommunications technology to move from conventional analog transmissions to digital, which converts speech and data to a stream of ones and zeros understood by computers. Digital transmissions are less susceptible than sound waves to static interference and can be compressed or transmitted in bursts to make greater use of the broadcast spectrum. New computer software programs have made new transmission technologies such as cellular digital packet data (CDPD) feasible. Existing cellular systems work at only 60 percent efficiency, say CDPD developers, leaving a large amount of unused "dead" time. CDPD breaks voice and data transmissions into bits that can be squeezed into the "dead" spaces between sentences, words, or even syllables in the electronic stream -- and then reassembles the transmission at its designated destination.

New cellular telephone technology is also freeing up the previously jammed frequency spectrum. The U.S. is now covered with thousands of cells, many of them miles in diameter, using the same spectrum frequencies. By making the cells smaller -- say, thousands or even hundreds of feet across -- and covering the country with hundreds of thousands of these cells, it is possible to dramatically increase transmission capacity through the re-use of currently crowded frequencies and the use of very high frequencies that presently have few users. In fact, with emerging technologies making frequency spectrum a much less precious and crowded commodity, and making signals much less vulnerable to interference, the federal regulation of spectrum is becoming harder and harder to justify.

BUREAUCRATIC OBSTACLES

Unfortunately, the regulators and the politicians are unwilling to yield any of their power. Instead, they are throwing road blocks onto the information highway. Industry giants and new entrepreneurs alike are being stymied in their efforts to bring consumers the technologies the Clinton Administration says it is all for. In February, a $26 billion buyout of cable television giant Tele-Communications Inc. (TCI) by Bell Atlantic Corp. fizzled largely because of the Federal Communications Commission's (FCC) 17 percent rate roll-back of cable television rates, which caused TCI's stock to fall. In April, Southwestern Bell Corp. and Cox Enterprises called off a proposed $4.6 billion partnership, citing the FCC's new cable television rate cutbacks as the culprit responsible for souring the deal. At the same time, AT&T's planned $12.6 billion purchase of McCaw Cellular Communications was nixed by Federal Judge Harold Greene, who presided over the breakup of AT&T in 1982 and still holds tight control over nearly every move AT&T and the "Baby Bells" make toward interactive communications.

The Wall Street Journal reported on April 8th that the FCC's bureaucratic morass has created a "logjam." "The agency has approved just five trials for interactive video services. Another 17 requests are pending, and some of them have languished at the agency for more than a year," said the Journal. According to Journal reporters John J. Keller and Leslie Cauley, "the FCC uses an approval process that dates back to the early 20th century and originally applied to railroad requests to extend their tracks. Today it is a fractious affair. One Bell Atlantic filing alone has had more than 50 pleadings, as consumer advocates, potential competitors, incumbent cable operators, and municipal officials weigh in with their conflicting views." So much for Mr. Gore's cutting-edge government.

Even when the FCC tries to be helpful to industry, it gets it wrong. Earlier this spring, the agency sent cable television operators computer disks with the new mandated rate reductions. "But the agency used the Excel spreadsheet program instead of Lotus, which is used by almost every accounting department in the industry," the Journal reported. "The FCC is now working on a Lotus version." Nice, but a little late to do much good.

GET OUT OF THE WAY!

The best thing for the federal government to do is simply to get out of the way and let the consumers, inventors, innovators, and producers -- rather than bureaucrats and politicians -- build the information autobahn. There is no shortage of interested private parties willing to undertake the task. Long-distance phone giant MCI has unveiled plans to invest $2 billion to build "the nation's first transcontinental information superhighway." In Orlando, Florida Time Warner says it will have its Full Service Network (FSN) up and running to 4,000 homes by year's end. Customers will be able to call up movies on demand, carry out electronic banking and shopping, and have access to government agencies. In Omaha, U.S. West is test- marketing a similar service. Cable operators are seeking permission to compete with local phone companies in offering access to computer data bases and services. Hundreds of companies are forming alliances and consortiums to pool resources for the effort.

END OF ARTICLE

THE NEW AMERICAN -- July 25, 1994
Copyright 1994 -- American Opinion Publishing, Incorporated.
P.O. Box 8040, Appleton, WI 54913