National information infrastructure


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Kenneth L. Kraemer & John Leslie King


Information infrastructure is increasingly the focus of national policy aimed at carving out a niche for local industry in the global production system. Debate rages over government intervention versus private sector leadership, and over policies for production versus use, sometimes missing the fact that these dual aspects are interrelated and mutually reinforcing. This paper discusses the dilemma of policy design for information infrastructure in the context of the information superhighway initiative, or national information infrastructure (NII), in the United States. The dilemma is how to design an institutional framework to bring about NII visions when the technological possibilities are changing, the role of government in information policy is declining, and NII implementation depends mainly on private sector investment and action.

The paper notes that the early utopian vision of a single, unified, seamless U.S. information superhighway with high bandwidth and connecting every major societal institution (business, government, education, family) is not going to be a reality for a long time, if ever. It argues that the information superhighway already exists in the U.S.; that it is highly fragmented and disjointed; that it is comprised of a network of networks; that these networks variously link major business and governmental institutions as well as higher income households, but that they also bypass many others which lack technology, expertise or money.

It points out that the NII will be shaped less by government policy design than by the actions of very large private firms, especially given the new competitive environment being created by the recent telecommunications and media reregulation of the U.S. Congress. Moreover, it argues that developing a unified policy design is impossible in large pluralistic democracies, and that market institutions represent an appropriate way of achieving “order without design.” The devolution of decision making to market institutions by communications liberalization fits well with the current evolutionary development of technologies, applications, standards and user markets for the NII.

The paper notes that, thus far, private firms in communications, computers and content (movies, television, media) have shown more interest in competitive positioning than building any sort of unified system or creating new content that consumers might want. This competitive jockeying appears aimed at gaining strong positions in current markets through mergers, acquisitions and alliances which create powerful centers of production and distribution that can cannibalize the markets of other players, control the programming available to subscribers, and deliver new interactive, multimedia services as business and consumer demand develops. This development could suggest that rather than bringing about the utopian vision of a bounty of information and choice to every U.S. citizen along the lines of the Internet, the NII could bring a distopian reality of content packaged by media conglomerates following the model of interactive TV, but it is really too early to tell what models of service provision or what outcomes will accrue from private-sector-driven development of the NII.

These trends have implications for other countries with environmental contexts similar to the United States. Large private firms are moving ahead on NII and GII (Global Information Infrastructure) whether governments do so or not. The analysis suggests that if governments wish to avoid being left behind, they need to: (1) deregulate telecommunications so as to create vigorous competition among firms in order to stimulate variety and differentiation in content, (2) ensure domestic industry is part of mainstream developments whether led by multinational firms, domestic firms, or alliances between them, (3) stimulate individual and institutional learning in order to use the new technologies, and (4) focus on the development of applications which build upon existing domestic capabilities while using multinational firms, application trials and R&D to develop new domestic capabilities.
The United States operates under a system that is based on a deep skepticism of government intervention in economic affairs and that makes rational national planning of industrial development extremely difficult.”

Roger Noll, 1995


In 1993 the United States Information Infrastructure Task Force called for the establishment of "...a seamless web of communications networks, computers, databases, and consumer electronics that will put vast amounts of information at users' fingertips" (Information Infrastructure Task Force, 1993:3). This web was portrayed as an essential national asset for developing new and better ways of learning, working and interacting with others. That same year, the Presidents' Council on Competitiveness made the even bolder assertion that this new infrastructure would, "enable all Americans to access information and communicate with each other easily, reliably, securely and cost effectively in any medium—voice, data, video—anytime, anywhere" (Council on Competitiveness, 1993) This "National Information Infrastructure" (NII) would improve the productivity of work, lead to dramatic improvements in social services, education and entertainment, and generally revolutionize the US economy and society.

These enthusiastic visions for the NII require not only the successful development and deployment of the necessary technologies, but their widespread use within business, government, education, and households. There is little reason to deny the widespread political appeal of these visions: they are embraced by politicians at all points on the political compass, with minor disagreements about how best to unlock the power hidden beneath the wrapping of the NII. Nevertheless, it is imprudent to draw policy guidance from this kind of grandstanding, no matter how attractive or politically appealing it seems. The long-term implications of what we call the "NII movement" are surely great, but the details of how they will be manifested cannot be foreseen. Already, significant debates are underway in the technical and institutional communities that make up the NII movement regarding the long-term dominance of the Internet model, the Interactive TV model, and other models of technical deployment. Similarly, the widely agreed-on need for regulatory reform in key sectors such as telecommunications has devolved into a struggle among long-powerful forces such as the residual Bell Operating companies and media companies, and upstarts from the cable TV, information services and software industries. Every argument by every one of these powerful players contains reverential homage to the vision of the "seamless web," but in fact, the future of the NII movement is more difficult to predict now than it was in 1993.

This paper takes a critical look at the NII movement in the United States. Our intent is not to argue against the broad assertion that evolving information infrastructure is important: we feel it surely is. Rather, our objective is to question the rationales behind many of the widely-cited pronouncements regarding how the NII will and should evolve. As we shall show, the understandable enthusiasm for the potential of new information technologies masks three important facts about the NII: (1) that the NII is not new, and much is to be learned from the path that brought us to this point; (2) that the NII is now and increasingly will be driven by the private sector through the institution of the market, while the institution of government plays an important but diminishing role; and (3) that the crucial questions about the NII over the next decade will not concern "policy," but rather ways of coping with the turbulent clash of innovation and tradition in the market with policy evolving out of the clash as the need for government intervention becomes clear to deal with market failures, distortions or other imperfections. We shall suggest that both scholars and policy makers turn their attention away from the anticipatory and directive role of government policy, which has functioned reasonably well for the six decades, and toward the shaping of an effective ecology of institutional forces, including the institution of the market, that will yield the benefits of innovation without the dysfunctional extremes of free-market chaos or regulatory strangulation.

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