nettime: What does Capital want? 2/2 - McKenzie Wark

[Pit Schultz <pit@contrib.de>]

The 1980s saw a series of new regulations that 'deregulated' 
aspects of the long distance phone call market, and a series of 
court battles that saw the regional subsidiaries hived off from 
AT&T, forming the seven 'baby Bells' -- including Southwestern 
and Bell Atlantic. The complexity of these legal and regulatory 
processes gives the lie to any flat-earth economist's notion of a 
'free' market or an 'unregulated' one. Through trial and error, 
a pragmatic politics evolved of regulating to create competition 
and skewing price structures to create competition. 

It also created a quite surreal notion of where and what exactly 
a market is. The United States was divided up into 161 Local 
Access and Transport Areas (LATAs). The local independent 
phone companies and the new-born baby Bells are only 
allowed to carry traffic within a LATA, even if there are several 
in the area where they are a franchised monopoly service. The 
traffic between LATAs is carried by long distance carriers, such 
as AT&T, MCI or Sprint. These are names familiar to any 
American TV viewer, as their 'competition' for the long 
distance traffic seems to revolve less around the complex ever 
changing confetti of price plans as around elaborate and 
stylish TV ads. These, ironically enough, are taken as evidence 
that a 'market' is in operation, when of course they mean the 
opposite. As Fred Block (1990, p60) points out, advertising is 
premised on an imperfection in the market. Lacking the 
information to make a rational comparison between phone 
companies, one is left with little choice but to go with the one 
that put that cute little child actor from The Piano in an ad just 
after she won her academy award.


MARKET INTELLECTUALS

An interesting dimension to the deregulatory mood of the 1980s 
was the way in which the social science academies and think 
tanks became a key theatre of operation, and one in which 
notions of economic rationality achieved via the market 
overtook models of technological rationality through 
engineering cybernetic information systems. Its no accident 
that the Bell labs contributed to information theory. Its where 
Claude Shannon worked out an index of the ratio of noise to 
signal for a given bandwidth. Between them the centralised, 
bureaucratised theatres of operation that are a private 
monopoly or a military apparatus were amenable to the 
ideologies of operations analysis, systems analysis, cybernetics 
and information science spawned by the unprecedented 
logistics problems of world war two and developed in novel 
intellectual theatres of operation like the Macey Foundation's 
Cybernetics Group (Heims, 1991) or the RAND corporation 
sponsored by the air force (Kaplan, 1983). As in the first war, 
the second war was a foretaste and a catalyst for the logistical 
operations of the giant bureaucracies of the corporations, 
which uses logistical techniques combined with communications 
and computing technologies to take many aspects of the 
production cycle out of the market. 

The eclipse of technical by market rationality is most likely best 
seen in a Gramscian light. (Gramsci, 1971, pp55-90) Its not that 
the free marketeers were 'right', its that they narrated a future 
field of action for a rising coincidence of social forces. To some 
corporate strategists, the proliferation of alternate vectoral 
technologies and the rise of the intensive vector of computing 
promised to take the development of capital beyond its rigidly 
bureaucratic phase of Fordist mass production and 
consumption. (Aglietta, 1979) The desire to pursue distinctive 
communication and information strategies turned corporations 
against the AT&T monopoly, and the notion of a market rather 
than an administratively rational form of information covered 
this desire. 

The last area in which the relatively stable regime that runs 
from the consolidation of AT&T to the 1982 break-up came 
apart was in the challenge to the restrictions placed on AT&T in 
the area of electronic publishing. Ironically AT&T argued that 
its long distance monopoly had already been undermined by 
MCI and Sprint, and so the argument that it should be kept out 
of electronic services because of its monopoly position no 
longer held. The courts agreed. 

The regional baby Bell companies, like Bell Atlantic, presently 
expect the restrictions on electronic services will be lifted for 
them also. Deals like the Bell Atlantic/TCI merger only make 
sense if the combined matrix of vectors can also serve as the 
conduit for expanded services. Ray Smith's pronouncements on 
the future of Bell Atlantic were basically a bet that restrictions 
would be lifted before the massive infobahn investment is 
completed. This is where it gets interesting. 


THE OBSCURE OBJECT OF DESIRE

As an object of desire, the infobahn has to display two quite 
contradictory attributes. It has to have socially desirable 
qualities, and it has to have them as a matter of course, as a 
consequence of its basic contours, such that it will not require 
regulation, and indeed can appear to be at its most socially 
desirable when it is not regulated. On the other hand, it has to 
pay off. It has to shake its moneymaker for the stockholders 
and screen jockeys with their hands on the bonds that are 
going to fund the projects and who are trading the stocks of the 
companies that talk up this new object of both public and 
privatised desire. (Wark, 1994d)

Two clouds appear on this sky blue horizon. The first is that 
other sectors of capital may not see the quasi-monopoly 
behaviour of unregulated media companies, who are both 
service providers and common carriers for the services 
marketed by others, as in their interests. An Electronic Times 
editorial cautions: 
"the danger facing the electronics industry is that the immense 
potential of the information superhighway will be highjacked 
by the US telecom companies fighting old battles. The local 
companies want unrestricted access to the long distance market, 
without reciprocation, and the long distance operators want 
access to the local market, again without equal access." (Anon, 
1994a)
Only by calling the phone market something else -- an 
information superhighway, and arguing that it has benefits for 
employment, growth, productivity, as well as social and 
cultural benefits, they are evading a history of US experience 
with monopoly service providers which indicates otherwise. 
Newspaper journalists might pick up the infobahn as an object 
of desire, but the specialised press, with a firmer grasp of the 
interests of its readers, was and is more sanguine.

Then of course, there's the public interest. That tireless 
debunker of corporate visions, Herbert Schiller describes the 
infobahn as
"... a blueprint for corporate domination with the public 
interest given short shrift....Stunning corporate mergers and 
acquisitions among telephone, computer, cable and 
entertainment companies, each of them already dominant in 
their field, are preparing the way for what could be -- failing 
growing public protest -- an unprecedented corporate 
enclosure of national social and cultural space.... Can public 
benefits be expected when the structure is erected on a 
privately built base? ..." (Schiller, 1993)

The infobahn boosters want to make sure that the firms 
monopolising the present vectors also monopolise the next 
generation of vectors. But they will not be able to raise the 
money to develop really extensive new infrastructure unless 
they can be sure of capturing a significant flow of income from 
any new services the new vector matrix generates. They cannot 
do that with one hand tied behind their back in the form of the 
separation of the vector field into distinctly regulated fields by 
the Communications Act, the FCC and anti-trust law. If the 
infobahn is going to be the future vector matrix of big business, 
like the telegraph, telephone and television before it, then the 
monopoly firms needs a wider field of action, preferably a 
maintenance of their legislated monopolies as sources of stable 
revenue for the development of vast new infrastructure. And so 
they would like us to believe that enhanced economic 
competitiveness, community spirit, public debate and 
educational opportunity will somehow flow naturally from the 
technology itself. Hence the vision of the 'information 
superhighway' and all the fantasies of freedom of movement 
that the metaphor suggests -- for anyone who has a car at 
least, meaning anyone with a modicum of personal and 
political power who's views might matter in constructing a 
hegemonic bloc of interest around the thing. 


THE VISION THING

The man who is generally credited with coming up with the 
rhetorical strategy for forming an image of just such a hybrid 
object of desire is former senator, now Vice President Al Gore. 

Here is Vice President Gore telling parables to the National 
Press Club:
"I'd like to start by talking about an incident from the past. 
There is a lot of romance surrounding the sinking of the Titanic 
91 years ago.  But when you strip the romance away, a tragic 
story emerges that tells us a lot about human beings -- and 
telecommunications. Why did the ship that couldn't be sunk 
steam full speed into an ice field?  For in the last few hours 
before the Titanic collided, other ships were sending messages 
like this one from the Mesaba: "Lat42N to 41.25 Long 49W to 
Long 50.30W. Saw much heavy pack ice and great number 
large icebergs also field ice." And why, when the Titanic 
operators sent distress signal after distress signal did so few 
ships respond? The answer is that -- as the investigations 
proved -- the wireless business then was just that,  a business.  
Operators had no obligation to remain on duty.  They were to 
do what was profitable. When the day's work was done -- often 
the lucrative transmissions from wealthy passengers -- 
operators shut off their sets and went to sleep. In fact, when the 
last ice warnings were sent, the Titanic operators were too 
involved sending those private messages from wealthy 
passengers to take them. And when they sent the distress signals 
operators on the other ships were in bed. Distress signals 
couldn't be heard, in other words, because the airwaves were 
chaos -- willy-nilly transmissions without regulation.  The 
Titanic wound up two miles under the surface of the North 
Atlantic in part because people hadn't realised that radio was 
not just a curiosity but a way to save lives. Ironically, that 
tragedy that resulted in the first efforts to regulate the airwaves. 
Why did government get involved?  Because there are certain 
public needs that outweigh private interests." (Gore, 1993)

As far as I'm aware, this is not a widely reported instance of 
Gorespeak, but it neatly encapsulates the problem of an 
infobahn run by quasi-monopolies in a deregulated 
environment. Gore's rhetoric here seems to me an instance of 
what I'd call 'Breen's Law'. (Breen, 1994) In my reading, Breen's 
Law states that the opportunity for policy increases in direct 
proportion to the perceived gap between the use value and the 
exchange value outcomes of a given communication regime. I 
say perceived, for it is not use value that is at stake here, but 
the sign of use value, as indeed it is not exchange value that is 
at stake, in the first instance, but the sign of exchange value. 
Policy is as much the management of the simulacra of divergent 
values as capital is the management of the indexes of futurity. 
(cf Baudrillard, 1988, pp124-125) The opportunity for policy 
presents itself when, and only when, there is a divergence 
between the signs. But while the opportunity for policy is here, 
putting together a hegemonic bloc incorporating enough 
interests to sustain it is another matter. One that requires a little 
more than a video presentation or a press release -- it calls for 
the staging of the spectacle of a public media event.


THE SPECTACLE OF THE SPECTACLE

At a meeting with 30 executives from interested companies for a 
'summit' sponsored by the the Academy of Television Arts and 
Sciences in January 1994, Al Gore offered a 'new deal'. Provided 
they pipe access to schools, libraries and hospitals, infobahn 
barons were offered the prospect of a lessening of the 
regulatory net. (May, 1994; McAvoy, 1994) He proposed a single 
new regulatory agency for all the players in the convergence, 
removing the rules that keep local telephone, long distance 
telephone and cable TV companies from competing with in 
each other's area of business. The Administration would 
authorise the FCC to reduce regulation and enable smaller 
players into the phone and cable markets, but big players are 
supposedly to be blocked from using their quasi-monopoly 
positions to gain more market leverage. In place of the separate 
regulatory regimes for cable and telephony, a new regulatory 
category will be created that offers communication companies 
exemption from local and state regulation in return for a 
commitment to universal service. Rate regulation will continue, 
however, until sufficient 'competition' is established to prevent 
monopoly pricing. 

That was in essence the fantasy Gore tabled for the 
communications future, and it mostly got good press. "The 
communications industry reacted warmly to White House plans 
for legislation intended to speed up the arrival of the 
information superhighway" -- that's what went over the 
Reuter's wire, accompanied by quotes from a selection of 
corporate stars. Jeffrey Katzenberg, chairman of Walt Disney 
Studios: "Its full of the promise and hope Hollywood needs in 
terms of a level playing field as this new universe evolves." 
Robert Kavner, CEO of AT&T's multimedia products and services 
group: "We support local telephone companies entering the 
long distance market, but we only support it after it is proven 
their are no bottlenecks." Scott Sassa, president of Turner 
entertainment group: "It is important in terms of competition 
inside the country and outside the country. Entertainment is the 
second largest surplus export in the country and I don't think 
defence is going to grow any more." (Miller, 1994) 

The Advertising Age likewise quoted well those with well 
quottng stocks: Alan Kay, a fellow of Apple Computer: "This is 
the biggest thing since the invention of the printing press." 
Richard Notebaert, Ameritech Corp, a regional Bell Co.: 
"Creating the superhighway is the easy part, but creating the 
kinds of services that consumers will use again and again, 
that's where mistakes will be made and where we will find 
some 'roadkill' along the way." (Deagon, 1994b) In sum, 
'universal service' becomes the much reduced public interest 
component of the fantasy, and 'free market' off sets the fears of 
those outside the claustrophobic world of the telephone 
monopolies and their ancient infighting. But will it fly? And if 
it does, who benefits? 


CYBERHYPE FOR ALL!

It seems like every week there's a new bit of jargon being 
hyped about communications. We've had cyberspace, virtual 
reality, multimedia, video-on-demand and now the infobahns. 
Typically, Gareth Powell wrote in May: "We are starting to ease 
away from information superhighway... Now all the talk is 
about the Internet network." (Powell, 1994b) It gets harder and 
harder to pick the trends from the hype, and indeed the 
clearest trend in communications is that the growth industry is 
none of the above, but is rather the expanded production of 
hype about all of the above. You can run a very lucrative 
consultancy or corporate conference about new media hype. 
Everyone knows there's a lucrative new market in here 
somewhere.

New categories of investment opportunity create new categories 
of consultants, pundits and experts, or old ones seeking to 
demonstrate an ability to intuit in a new theatre of operations. 
So they put together surveys and position papers and put out 
press releases to boost them and their creators into the media 
landscape. It must have been a good day for Metavision when 
The Financial Review quoted "local analyst Susan Pyke" with 
the stunning observation that "the crucial question of what 
services people will choose to pay for is as yet unanswered." 
(Meredith, 1994) 


INEFFABLE DESIRE

The crucial question for business is, as always, the desire of the 
other -- the customer. "What does the customer want?' might 
be the slogan of a Lacanian theory of the business of desire and 
the desire of business. (Zizek, 1989) And of course, where the 
other of the other is concerned, the gaping hole of the real that 
business fills with its fantasies, is: 'What does the market 
want?', for the market is also the catch-all phrase for the real 
as defined by the business of desire and the desire of business. It 
is the historical form of the unknowable, ineffable real that 
lurks beyond the imaginary and symbolic ways we know 
ourselves and imagine ourselves as others see us -- as buyers 
and sellers of our time and that of others. 

The real too has an historical form, woven out of the vectors of 
telegraph, telephone, television, into a vast and unknowable 
matrix that business plans, audience surveys and policy reviews 
cover over with a symbolic order upon which we can imagine 
ourselves and act. A symbolic order that drags both our 
fractured identities and even the real itself into its ceaselessly 
project of accumulation and supersession.  

And so the consultants weave a web of words over the void: The 
Advertising Age quotes Andersen Consulting "of New York" with 
a calculation that the amount of time consumers currently 
spend on activities that might migrate to the infobahn is only 
about 3.5 hours per day. Assuming that no more than 30 
million households have such services available to them by 
1998, that's a market of about $15m. "But an important part of 
the pilot tests will be the need to demonstrate what is the 
elasticity of that curve and what people are willing to spend 
per hour on new activities." (Mandese, 1994) Meaning that if it 
merely replaces existing consumption, there's no blue sky here. 
The infobahn needs to create new desires, not merely replace 
them, or it will not arouse the desires of investors in its 
projections. It will not persuade us on the big question: what 
does the market want? 

One of the elements most in need of fabrication for this fantasy 
to succeed is to produce some statistic or survey to paper over 
the "black hole" of the indifference of the 'audience'. 
(Baudrillard, 1993) There has to be a horde of 'early adopters' 
out there, who will stir up desire for the new information 
landscape offered by broadband services. The rub is that our 
Titanic information engines just don't seem to be 
communicating to the public what is looming up ahead. Or at 
least, that's what the surveys say...: An Advertising Age survey 
of 1000 people finds that only 19.1% are aware of the concept of 
interactive media. Young people and the affluent are the two 
demographic groups interested in the new media. (Fawcett, 
1994) Reuters reports that A survey of 800 respondents 
conducted by Peter D Hart Research Associates for MCI finds 
that the majority said that what appealed to them about 
interactive television was home access to library resources and 
education courses.(Miller, 1994) And that: A poll by Louis Harris 
and Associates found that 66% had not seen, heard or read 
anything about the information superhighway. (Anon, 1994b) 

The powers of the telegraph cannot inform those of us who 
experience everyday life within late capitalism what its would-
be leading forces of development wish to persuade us to want, 
and hence call into being by our desires. But it can pretty 
efficiently let business know, through the business 
communications vector, that the public information vector 
doesn't inform. The FIND/SVP consulting firm got its plug on 
the wire announcing that the information superhighway made 
its list of top 10 business concerns for the first quarter of '94, 
along with telecommuting, gourmet pizza, alternative medicine 
and Mexico. (Leedy, 1994) Cold comfort for anyone who wants 
to believe the present communications vectors can inform the 
public well enough for it to either (a) make a rational decision 
as a body of citizens about its information futures, or (b) be 
seized by the desire for the infobahn that can will it into being. 

No wonder the interested parties are spending their public 
relations money elsewhere. With two major telecommunications 
bills before congress, corporate lobbyists stepped up their 
campaign, spending $69m in the effort, according to PC World. 
The Markey-Fields bill would allow cable TV and phone 
companies to compete against each other, while the Brook-
Dingell bill would open long distance calls and electronic 
publishing to local phone companies. (Anon 1994c) No prizes 
for guessing what fantasies of desire are embedded in those 
bills. 


End notes available at 
http://www.mcs.mq.edu.au/~mwark
Its filed in the Warchive under Media Information Australia.




--
*  distributed via nettime-l : no commercial use without permission
*  <nettime> is a closed moderated mailinglist for net criticism,
*  collaborative text filtering and cultural politics of the nets
*  more info: majordomo@is.in-berlin.de and "info nettime" in the msg body
*  URL: http://www.desk.nl/~nettime/  contact: nettime-owner@is.in-berlin.de