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On Fri, 14 Apr 1995, RASCHKE wrote:

> Let me offer a simple observation about what appear to be the historical 
> analogies, or what are the false analogies, in net communications.  I 
> would appreciate some feedback.
> 
> First, the analogies with broadcasting and cable are off the mark. 
> Traditional media was developed to offer proprietary control to certain
> providers through spectrum licensing, the laying of coaxial cable, etc.
> The economies associated with those forms of media are directly associated
> with the degree, and structure, of proprietorship.  The same would go for
> print publishing.  
So we should compare internet to Ham Radio, or CB Radio?  Without 
encryption, yes.  With encryption, compare it to cellular telephone with 
conference calling.

> Even though in theory market opportunities remain
> open-ended, the fact is that print publishing ends up "cartelized" in
> various ways because of the distibution systems which are dependent on
> contractual relationships between publishers and proprietors at points of
> sale.  The print publishing industry is also a creature of scale 
> economies, which is why it first blossomed in the nineteenth century with 
> its technologies of mass production and regimented industrial workers.
Actually, anyone with a Xerox machine can start a "printing press".  Even 
the print shop can make a small publication for you.  If the publication 
is handed out, along with a phone number to call to get more information 
and the sales-person who answers the phone can get those who call to 
place an order, the printing press can be quite profitable.

Remember when churches would mimeograph political agenda?  Remember when
schools would mimeograph notes to the parents?  The value of the 
publication lies not in the medium, but in the message.  The Kiplinger 
letter is a cheap (to produce) publication, but the information is 
incredibly valuable.  An S&P stock report is valuable whether it is 
on-line or printed, to a stock broker or an investor checking out a tip.

> Second, the internet is to the twenty-first century what railroads were 
> to the nineteenth and the interstate highway system was to the 
> twentieth.
I always prefer the analogy that Telephones/X.25 nets, SNA networks... 
are like railroads - you have to go to the right spot and be their at the 
right time. And that the internet is like the road system.  Not only are 
there interstates, but there are side streets that will come right up to 
your driveway.  The kind of car you drive, and which 
stores/restaurants/theaters... you drive it to, is your choice.

>  My friends, the internet is NOT a form of media, it is an 
> information transportation system.  The closest analogy, as some 
> economists ahve suggested, is the interstate highway system.  Both were 
> built in a sense for civilian defense purposes.
Don't forget the secondary state and county roads and postal routes.  
These were funded by the postal service.

>  That is why by and large 
> you don't pay tolls on the interstate system, and why people will not pay 
> tolls on the information superhighway.
You may not pay tolls, but you need to have a vehicle.  E-Mail and 
Slip/PPP links are like catching a bus (your fares support the road),
PPP, ISDN, and Frame-Relay/ATM links are like having your own car.  But
you have to pay sales tax, insurance, buy gas, have the care serviced, 
and go to restaurants, all of which pay "frontage taxes", and provide 
other taxes which support the infrastructure.  The problem with tolls is 
that you can bypass them.  New Jersey collects tolls from the people who 
want to get from Philadelphia to New York City in a hurry.  The local 
traffic can use Route 1.  During rush hour, route 1 is usually faster.

>  Following the analogy of the 
> interestate system, we can see it is a public multi-use system.  "Trucks" 
> carrying expensive consumer items run over it.  So do kids joyriding.  
> Everyone is harrumphing about the kids joyriding, but that is because the 
> older folks, particularly the media folks, don't realize what they are 
> confronting.
Can you imagine what the national highway and road system would be like 
if every kid who could reach the pedals were allowed to drive, and drink!

Never underestimate the collective intelligence of 1000 pre-teens.  The 
government doesn't.  They are too young to drive, aren't obsessed with 
girls yet, have plenty of idle time, and have an infrastructure for 
unrestricted communication (school).  That's why you have 12 year olds 
making A-Bombs in the basement, and hacking their way into adult BBSs.
I made guided missles myself:-).

> Third, charging for net access should be seen as a close analogy to toll 
> roads.  Toll roads are necessary in some places because there are 
> certain locations or "geographies" in which people will pay a premium for 
> propretiary access.  I usually avoid toll rolls, but if there is no other 
> way to get there, I will pay.  I live in North Dallas, where most of the 
> urban expansion is.  US 75, an old federal highway, for long was the only 
> multi-lane access to the center of the city, and it has always been 
> overloaded and impossible to navigate at rush hour.  Thus city built a 
> tollway to parallel it on the west side, and whenever I go into town 
> during the day, I pay, because there is no other way really.  

Again, the local traffic would use the "free" road.  The toll road is a 
machnism for distributing revenue across localities that would otherwise 
be bypassed by rush-hour traffic.  In most of the Southwest, Cities are 
so large that toll roads aren't needed.  In Denver, for example, you can 
drive for an hour and still be within the domain funded by the Denver 
Regional Council of Governments.  The same is true with buses, 50 cents 
used to get you from Lakewood to Aurora - over 20 miles.  In northern New 
Jersey you get charged for a new "zone" every mile or so.

> But forget the notion that a bunch of smart media conglomerates will
> figure out how to make the information highway a global tollroad. As our
> engineers keep reminding us on this discussion group, no one does, or will
> ever, be able to own the internet.
Much of the "connect to your neighbor" technologies have been superseded 
by the common carriers.  In Boulder Colorado, several businesses were 
started in "incubators" which shared PBX, Copier, and Internet 
connections.  Storage technologies, Exabyte, and Solborne each now employ 
more than IBM ever did.  Today, due to "hacker hysteria", the common 
carriers put FDDI rings in the World trade center and charge 
$1000/month/connection for "T1" internet access.  They do however, lock 
up the routers and turn up the filtering.

>The internet is the most insidious
> weapon of democracy against global oligarchies since the invention of the 
> repeating rifle.  I suspect the cold warrior who turned it over to the 
> "masses" were not ignorant of that fact.  If you can't own it, you can't 
> profit from the medium per se.

Actually, the man truly responsible is named Richard Stallman.  He is the 
man universally credited with creating the General Public License.  As a 
student he wrote an application called emacs, put it in public domain, 
and found that another company had ruined the possibility of him making a 
profit by making proprietary enhancements.  They didn't offer him a job, 
didn't pay him anything, and threatened to sue him if he reverse 
engineered their enhancements.

Stallman re-relased GNU emacs under the General Public License, and 
coordinated the efforts of 20 other volunteer developers who wanted to 
pay for their companies' use of emacs by adding enhancements.

The Source Code for the TCP/IP implementation, along with DNS, Remote 
Procedure Calls, Mosaic, and about 8000 other applications ranging from 2 
liner "shell scripts" to X11R6 (300 magabytes of source code) was added 
to the General Public License.  Companies like IBM and DEC pay 
substantial fees to sell binary-only copies and must return all bug fixes 
and most enhancements.

Stallman knew exactly what kind of impact this would have on IBM and DEC. 
For years, IBM, DEC, and Microsoft smeared GPL and Open Systems software
as "Unreliable", "Non-Standard", "Unsupported", and "Hacker Friendly". 
Stallman strived to create a full-featured package including unix-like 
operating system, applications, windows, and office automation packages 
that could compare with Unix and MS-Dos, based entirely on GPL.  With the 
help of Linus Torvaldis' (looks like young Bill Gates) contribution of the 
Linux Operating System Kernal, the Linux distribution was born.

Meanwhile, companies like SUN and SCO quietly added to the GPL baseline 
and forwarded contributions from their commercial customers who didn't 
want the liability of distributing software under their own names.  The 
names were removed to protect the innocent.  Annonymous contributors 
include AT&T, Bellcore, IBM, DEC, Hewlett Packard, Chase Manhatten Bank, 
Great West Life Insurance, British Telecom, Nasd member brokers, and
several accounting firms.  Nearly every Fortune 500 company has 
contributed and benefitted.  Most have migrated from proprietary systems 
to "Open Systems".  They support each-other over internet newsgroups
using "personal accounts" from ambiguous hosts such as "hpvax.net".
Many companies have full-time staff supporting the "Unsupported" software.

Not only has GPL not caused "anarchy", it has caused a tightly self 
regulated infrastructure that cannot be contolled or owned by a single 
vendor or cartel.  Over the last 25 years, many attempts at a "coup" by 
AT&T, SUN, IBM, DEC, and Microsoft have failed miserably.  In the face of 
massive marketing hype, sales incentives that are more like bribery, and 
lawsuits and mass media slurrs, the Open Systems market as defined by the 
software generated under the General Public License agreement has doubled 
every 6 months for 15 years.  Back in 1982, when it was only about 300 
hosts nationwide, no-one cared.  Today, Unix-focused vendors like HP and 
Sun have been reporting 100% earnings gains (doubled profit) every year.  
The margins get thinner, but the costs shrink too.

The incredibly low cost of this "bartered software" has also deflected 
attempts to substitute "proprietary Open Systems" replacements such as 
System V Unix, OSI protocols, VMS, OS/2, AS/400, and SNA/LU6.2.  The 
costs of developing substitutes was too great (a complete set of OSI 
manuals cost $50,000) and the prices were not competitive (SCO costs 
$1400 for a "full implementation", Linux costs $69).

The most important impact was the end of "perceived value pricing".  This 
was a strategy of determining how much you thought you could get a 
customer to pay and budgeting support and advertizing to that base-line.
The common practice was to practially give away the first few copies and 
then charge 400%-600% more once the user had documents stored in the 
proprietary file format.  Once a document was stored in Word format, you
could only get all of the content (layout...) with Word.

The upside of percieved value pricing was that they could spend 90% of 
their product revenue on advertizing.  Often, entire publications were 
funded entirely by a handful of vendors.  What little coverage there was 
of competing standards was usually derogatory in nature.  PC-Week ridiculed
the need for multitasking -- until OS/2 and Windows-NT came out.  At 
which point they praised Microsoft for inventing this new technology.
Of course, they were much more interested in promoting Lan Manager than 
in TCP/IP.  By the time the PC funded press woke up the internet, 10 
million people were using internet e-mail.  Within a few months, 2 million
had downloaded trumpet or softwindows (A TCP/IP Winsock/Slip/Terminal 
from SofTronics - the maker of the terminal package for OS/2).

The internet, relying on the "advertizing" provided by "responders" to 
internet newsgroups would quickly have to solve problems like bugs when 
they were pointed out on the net.  It was not unusual to receive a bug 
fix over the net within 72 hours, and not see it incorporated into the 
next release for over a year.  Often, the fix was submitted by another 
newsgroup reader.  Several times I would call a vendor to report a bug, 
see his request for assistance on the newsgroup, and see the fix returned 
by the newsgroup.  I would call him for confirmation of the fix and he 
would tell me I could get it in the next quartarly patch tape.

As a result, the GPL library grew even faster.  Sun and HP eventually 
released source code under GPL about 6-9 months after initial commercial 
release.  They would focus on enhancements and new products and let the 
news groups (supported by paid Sun Staff) submit fixes.  Eventually they 
even opened up their own national archive.  In negotiations with 
Stallman, structures for commercial sale of GPL products was created and 
the advent of the CD-ROM made it possible to cheaply fulfill the "Source 
Code available" terms of the GPL.

> I hear a lot of gritching on groaning on this list, and now it is coming 
> in all the mainstream media, concerning (1) the poor quality of "content" 
> on the net (2) the fact that no one can make a buck.  What they mean by 
> (1) is that the self-designated cultural elites who have controlled the 
> media all this century are fuming at the notion that "anyone" can 
> publish, or air their views, on the net.

The challenge is not wether or not you write something, but whether you 
can write something worth reading.  The latter gets you a place in the 
history books (if you want it).  The internet also gives you anonymity.  
This is the first time in 15 years that I have been able to publish my 
first and last name (previously I used company accounts and we were only 
allowed to use our initials (reb@ccivax.com, reb@uccs.edu, reb@nyx.net, 
reb@softronics.com, reb@csn.net) or first initial last name 
(rballard@eng.dowjones.com).  If you had the archive for 15 years, there 
would be a story there.

>  The same continues to be said 
> about radio talk shows.  They are "bad" because the voice of democracy is 
> so rough and chaotic.  But, friends, the talk shows have listeners.

I've had 600 messages in the last 5 days.  That tells me we have over 
6000 "listeners" on this mailing list alone.  Alan Berg used to get 
better counts by saying something you had to react to.  He was a master 
at the art of talk radio.  I listened to him from 1976 to 1982 and used 
his tactics on the internet.  First you shock, then you inform.  It 
creates an audience.

>  What 
> they mean by (2) is that they are trying to make money in the old way in 
> the radically new environment, sort of like trying to profit from the 
> sale of crossbows in the century when the armies are buying muskets.  

Buggy whips for model-T drivers (they became popular as marital aids :-).

> Whoever makes money on the net will do it in an entirely different way 
> than in the past.

Anyone who has recently followed my posts to this group can see that 
there is method to the madness.  While my postings are purely personal (I 
don't work for Dow Jones anymore, I never worked for a Linux Distributor, 
and I am no longer associated with WAIS or First Virtual), but there has 
been the type of information that makes you want to "look and see".

Even though this isn't advertizing (my employer didn't even want me to 
post to this group), my sharing of information as a direct response to 
your questions has resulted in more traffic than I can handle.

> Right now the net, and the information that goes with 
> it, is free in the same way that water is "free", or at least it is a 
> public commodity.

Not all of it is free.  There are several thousand hosts on the internet 
which you can't even "See" because of firewalls, filters, and 
encryption.  Try to find "standardpoor.com" and ping it.  Several servers 
and news/information sources won't even respond to a ping.  It will only 
respond to an http request which includes valid authentication tags from 
an authorized host and 3rd party authentication using a password that 
changes every 30 seconds.

Some of them even require little "dongles", or can only be accessed by a 
Sun workstation (which has a serial number in ROM).

> When someone figures out how to bottle it for 
> specialized clientele, or to meter specialized information, they will 
> make money.

There are already many servers making great money.  You may have to 
download special software, use kerberos enabled clients, or send PGP 
encrypted requests, but there are many people making money over the 
internet.  Adult boards, Stockbrokers, Investors, news-wires, and 
downloadable software is routinely "mentioned" in appropriate newsgroups.

Browse the news groups to find the good web pages.

> But dinosaurs were never very good at competing in a 
> post-comet environment.   That took a few smart mammals who in the past 
> had been hiding out in holes.

The mammels also survived by eating the waste of dinosaurs (broken eggs, 
meat too close to the bone, excrement, plants trampled under foot.

GPL software was once the throw-aways and waste products of IBM (ethernet), 
DEC (tcp/ip), Hewlett Packard (X11) and AT&T(unix).  Even the PC was 
created from a "rejected" chip (Intel tried to sell it as a calculator chip).
and regected specs (The IBM PC design was originally a rejected 3270 
terminal)

Can I go through your trash bin? :-).

	Rex Ballard



From rballard@cnj.digex.net Mon Apr 24 21:29:39 1995
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