Pit Schultz on Wed, 1 Oct 1997 23:49:08 +0200 (MET DST)

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<nettime> Richard K. Moore: DEMOCRACY AND CYBERSPACE 2/2

 |   so companies, like Gannett, Cox Communications, Dow Jones, The 
 |   New York Times Co. and Newhouse's Advance Communications, with 
 |   annual sales ranging from $1 billion to $5 billion. 
 |       That the 1996 Telecommunications Act's most immediate effect 
 |   was to sanctify this concentrated corporate control is not 
 |   surprising; its true mission never had anything to do with 
 |   increasing competition or empowering consumers.  
 |       ...A few crumbs were tossed to "special interest" groups 
 |   like schools and hospitals, but only when they didn't interfere 
 |   with the pro-business thrust of the legislation. 
 |            - Robert W. McChesney, The Nation Digital Edition, 
 |              author of Corporate Media and the Threat to Democracy

Just as the media industry is already becoming increasingly 
vertically integrated (owning its own distribution infrastructure - 
satellites, cables, and the like), so the media industry will seek 
mergers and acquisitions in the telecom industry as the digital 
network gets closer to implementation.

The ultimate direction is for a single media-communications mega-
industry, dominated by a clique of vertically-integrated majors, 
following awesome merger wars among huge conglomerates.  Regulation 
will indeed govern cyberspace but - in accordance with the globalist 
paradigm - it will be regulation by and for the cartel of majors, as 
we see presaged by the following recent announcement:

 |       BRUSSELS (Reuter) -- The European Union's top  
 |   telecommunications official called Monday for an international  
 |   charter to regulate the Internet and other electronic networks.
 |       "Its role would not be to impose detailed rules, except in  
 |   particular circumstances (child pornography, terrorist  
 |   networks)," he said.
 |       The charter would recognize existing pacts negotiated within  
 |   the World Trade Organization and World Intellectual Property  
 |   Organization and draw on principles agreed by other bodies such  
 |   as the Group of Seven top industrial countries, he said.

>From an economic point of view, the whole point of monopolization is 
to create an all-the-traffic-will-bear marketplace - where products 
are priced on the basis of "How much will the mass consumer pay for 
this product?", without a need to consider under-pricing competing 
products.  This is the market paradigm that operates today, for 
example, in cinemas and in video rentals.  Films compete there on the 
basis of consumer interest, not on the basis of price.  Copyrights 
are the foundation of this regime, and WIPO is busily implementing an 
industrial-grade version of copyright for cyberspace.

Majors _will_ compete with one another, but their competition will be 
in the realm of content acquisition - seeking to have the most 
successful product offerings, and coverage - seeking to extend their 
market territories.  Consumers benefit - this competition brings them 
ever more titillating entertainments, but as citizens they are poorly 
served - the scope and "message" of their entertainments (and 
information) is limited and molded by corporate interests.

WIPO's strict copyright laws basically mean that each consumer must 
pay for delivery of each and every media product - it will be illegal 
to save a copy (on disk or tape) or to forward a copy to someone 
else, and there will be mechanisms (including technical provisions 
and surveillance of communications) to provide effective enforcement.

The regulations being laid down for libel, copyright, and pornography 
combine to make Internet culture ultimately untenable.  A bulletin 
board, for example, could not be run in open mode - there would need 
to be, in essence, a bonded professional staff to filter out 
submissions to avoid liability to prosecution.  List owners would be 
forced to become censors, and to verify contributor's statements as 
do newspaper editors.  The open non-economic universe of today's 
Internet seems destined to be marginalized just like America's CB-
radio or public-interest broadcasting, thus completing the commercial 
domination of cyberspace and the corporate domination of society.

The power of monopolized ownership, in a laissez-faire environment, 
translates into the power to define service categories, and to set 
prices, according to whatever goals - economic or political - the 
owners may have in mind.  

The ability to distribute media products at reasonable rates to large 
(but not quite mass) audiences translates into the ability to start 
up a competing media company - a new film label let's say - with only 
production costs standing as the major capitalization required.  This 
is exactly the kind of situation media cartels wish to avoid - 
discouraging distribution start-ups is what "control over 
distribution" is all about.  In the case of television, scarce 
bandwidth translated into expensive licenses and the cartel was easy 
to maintain.

In the case of cyberspace, the cartel can maintain its traditional 
distribution-control by defining services, and setting prices, in 
such a way that media-distribution is artificially expensive, and 
becomes only cost-effective on a massive scale - requiring massive 
distribution capitalization.

In the case of non-commercial group networking, we're talking about 
small distribution lists, say less than a thousand.  What do you 
think it will cost you to send a message to one person in commercial 
cyberspace?  My guess is that the "traffic will bear" about as much 
for a one-page message as for a first-class letter.  This may seem 
over-priced to you, but so what?  I consider my voice phone service 
(and CDs) to be over-priced - c'est la vie in the world of monopoly 
market forces.  And the advertising brochure will boast "Get your 
message instantly to anyone in the world - all for one flat rate less 
than a domestic postage stamp".

At 25 cents/recipient, say, you can see what happens to the Internet 
mailing-list phenomenon: a 500-person list carries a $125 posting fee 
direct from the poster to the telco.  You can play with the numbers, 
talk about receiver-pays, and point out that corporate users will 
insist on affordable networking, but it should be nonetheless clear 
that monopoly-controlled pricing has the power to totally wrench the 
foundations out from under Internet usage patterns.  We could soon be 
back in the days when groups and small publications struggled to 
scratch together postage for their monthly missives.

The media-com industry will make plenty of money out of 1-1 email 
messaging, and plenty of money out of their own commercial products.  
Whether or not they want to encourage widespread citizen networking 
is entirely up to them - according to their own sovereign 
cost/benefit analysis.  If they don't favor it, it won't happen - 
except in the same marginalized way that HAM radio operates (only for 
people with extra time and money on their hands - talking to each 
other mostly about HAM radio).

One can presume that there will be some kind of commercial chat-room/ 
discussion-group industry, and one can imagine it being monopolized 
by online versions of talk radio shows, presided over perhaps by an 
Oprah Winfrey, a Ted Koppel or a Larry King - with inset screens for 
"randomly selected" guests.  "Online discussion" can thus be turned 
into a new kind of media product, and its distribution economics can 
be structured to favor the cartel.

The prospects seem dim for both democracy and cyberspace, and 
cyberspace itself seems to be more a part of the problem than a part 
of the solution - as with many previous technologies.  I will 
endeavor to address the question of "What can we do about it?", but 
first let's consider a theme of the day: "electronic democracy".

Electronic Democracy: dream or nightmare?
"Electronic Democracy" has no generally agreed upon definition - the 
term is used to refer to everything from community networking, to 
online discussion of issues, to email lobbying of elected 
representatives.  What I'd like to discuss here is one of the more 
radical definitions of the term: the use of electronic networking to 
bring about a more direct form of democracy, to short-circuit the 
representative process and look more to net-supported plebiscites and 
"official" online debates in deciding issues of government policy.

There are well-meaning groups on the Internet actively articulating 
and promoting such radical schemes, and to many netizens this kind of 
"direct democracy" may seem very appealing.  It holds out the promise 
of cutting through the bureaucratic red tape, reducing the role of 
corrupt politicians and special interests, and allowing the will of 
the people to be expressed.  In short, it would appear to 
institutionalize the more promising aspects of Internet culture for 
the benefit of mankind and the furtherance of democratic ideals.

But into this pollyannic perspective I must cast a cynical dose of 
realism.  Just as it would be naive to assume idyllic visions of a 
global-village commons are likely to characterize commercialized 
cyberspace, so would it be equally naive to assume electronic direct 
democracy, if implemented, would turn out to be anything like the 
idealistic visions of its well-meaning proponents.

In examining the future prospects for cyberspace, what turned out to 
be determinative, at least by my analysis, were the interests of the 
major players who stand to be most affected by the economic and 
political opportunities presented by digital networking.  It may be 
the Internet community that is the most aware and articulate about 
cyberspace issues, but they are not the ones who own the 
infrastructure or make the policy decisions.

Similarly, when examining the prospects for electronic democracy, it 
is absolutely essential to consider the interests of those major 
players - including corporations, societal elites, and government 
itself - who would be directly affected by any changes made in 
governmental systems.

If official changes are made to our systems, it is governments who 
will make those changes - the same governments who are currently 
presiding over the dismantlement of their own infrastructures and 
systematically selling out national sovereignty to corporate 

The plain fact is that direct electronic democracy is very much a 
two-edged sword.  Depending on the implementation details - and the 
devil is indeed in the details - it could lead either to popular 
sovereignty or to populist manipulation.  It could give voice to the 
common man and woman, or it could be the vehicle for implementing 
policies so ill-advised that even existing corrupt governments shy 
away from them - and in such a way that no one is accountable for the 

Consider some of the issues involved:  Who decides which questions 
are raised for a vote?  Who decides what viewpoints are presented for 
consideration?  Who decides when sufficient discussion has taken 
place?  Who verifies that the announced tally is in fact accurate?  
Who checks for vote-adjusting viruses in the software, and who 
supplies that software?

I don't deny that a beneficent system could be designed, but I don't 
see how such could be reliably guaranteed as the outcome.  Even with 
our current Internet and its open culture, the above issues would not 
be easy to resolve in a satisfactory way.  In the context of a 
commercialized cyberspace, the prospects would be even less 

Let's look for a moment at a direct-democracy precedent.  In 
California there has long been an initiative and referendum process, 
and it is much used.  This particular system was set up in a fairly 
reasonable way, and in many cases decent results have been obtained.  
On the other hand there have been cases where corporate interests 
have used the initiative process (with the help of intensive 
advertising campaigns) to get measures approved which were blatantly 
unsound, and which the legislature had been sensible enough not to 

In today's political climate, with elite corporate interests firmly 
in control of most Western governments, the prospects for any radical 
changes being implemented in a way that actually serves popular 
interests are very slim indeed.  The simple truth is that those 
interests currently in the ascendency would be blind fools to allow a 
system changes that seriously threatened the control over the 
political process they now enjoy.

If "electronic democracy" were to be implemented in today's political 
environment, one can only shudder at how it would be set up, and to 
what ends it would be employed.  The rhetoric surrounding its 
implementation would of course be very attractive - direct expression 
of popular will, cutting out the corrupt politicos, etc.  But 
rhetoric is rhetoric, and the reality is something else again, as has 
become apparent with globalization itself, or with the U.S. Telecom 
Reform Bill.

The most likely scenario, in my view, would include a biased 
statement of the issues, a constrained set of articulated 
alternatives, and a selected panel of "experts" who pose no threat to 
established interests.  It would be a show more than a debate - 
reminiscent of what has happened to public-broadcasting panel shows 
in the U.S. today, where the majority of panel experts typically 
"happen" to come from right-wing think tanks.

Especially disturbing is the intrinsic unaccountability of this kind 
of direct-democracy process.  If an emotionally charged show/debate 
convinces people to vote for nuking Libya, or expelling immigrants, 
or sterilizing single mothers, for example, no one is afterwards 
accountable - it was "the people's will".  The political process is 
reduced to stimulus-response: a Madison-Avenue-engineered show 
provides the stimulus, and spur-of-the-moment emotion provides the 

The history of populism in the latter half of the twentieth century 
is not particularly promising.  Mussolini and Hitler both came to 
power partly through populist appeals to cut through bureaucracy and 
bring "decisiveness" to government.  I'd say extreme caution is 
indicated as regards electronic democracy or any other constitution-
level changes at this time of elite ascendency.

"Electronic democracy", like cyberspace itself, threatens under 
existing circumstances to only compound the problems faced by 
democracy.  In closing, allow me to offer my thoughts on how a 
democracy-favoring citizenry might best respond to the onslaught of 
corporate globalization generally, and how they might approach 
communications policy in particular.

Democracy & Cyberspace: strategic recommendations
Pursuant to the goal of improving the quality of our democracies, it 
seems to me, upon consideration, that the only effective strategy is 
an old-fashioned one: grass-roots political organizing, creation of 
broad coalition movements, formulation of common political agendas, 
and the energetic support of sound candidates - with the objective of 
re-balancing the elite-people see-saw.

In order to restore balance, national sovereignty must be re-instated 
over economic and social policies, returning to democracy its 
potency.  Coercively and deceptively imposed debut burdens must be 
forgiven, and corporations must be effectively encouraged by 
regulation to be good citizens just as people are so encouraged by 
laws.  Laissez-faire deregulation is just a another name for 
lawlessness - and gang rule is the inevitable structural outcome, as 
history - unreconstructed - conclusively demonstrates.

If popular ascendency can be achieved in this way, then there are all 
kinds of improvements that could _then_ be made to our electoral 
systems, and increased direct voting _might_ be one of them.  

Such a popular resurgence would of course be an incredibly formidable 
undertaking, but can we honestly expect significant societal 
improvement by any other means?  In the meantime, novel proposals for 
system-level changes, even the best-intentioned, will only be 
implemented after being re-formulated by the current establishment - 
to our peril.

Pursuant to the goal of preventing the kind of commercialized 
cyberspace that has been described above, my recommendation remains 
the same: broad-based popular political activism.  The only way 
favorable policies can be expected regarding communications, mass 
media, excessive corporate influence - or anything else for that 
matter - is for better candidates and parties to be put in power in 
the context of a sound progressive agenda.

Nonetheless, permit me to offer some specific strategic 
recommendations regarding media and telecommunications policy.  The 
worst aspects of commercialized cyberspace, according to my analysis, 
arise from monopoly concentration.  The indicated policy strategy 
would be to focus on preventing monopolization - both the horizontal 
and vertical variety.

To be sure there are the issues of copyright, censorship, and others, 
but I believe those are, relatively speaking, already well understood 
- the problem is simply to gain some influence over them.  The 
monopoly issue however deserves a few more words.

Preventing horizontal monopolies is a matter of insuring that 
competition exists in each market, and setting limits on the number 
of markets a single operator can enter.  Accomplishing this is not 
rocket science and has been done successfully before.  In fact, 
recent "reforms", in the case of the U.S., have largely amounted to 
undoing not-that-bad regulation.  

Alternatively, one could specifically sanction horizontal monopolies 
(as with the classic U.S RBOC's or pre-privatization BT), but 
implement regulation that insures sound operation, and same-price-
to-all ("common carrier") operation.

Preventing vertical monopolies is a matter of defining "layers" of 
service, and preventing cross-ownership across layers.  If content 
owners (media companies), for example, are not allowed to own 
transport facilities, and transport must be marketed on a same-
price-to-all basis, then there would be considerable hope of 
preserving open discourse in cyberspace.  Independent operators (eg, 
ISP's) could then afford (and be permitted) to interconnect to the 
network and offer affordable services to "the rest of us", as with 
Internet today.

I hope these considerations are found to be useful.


Posted by Richard K. Moore - rkmoore@iol.ie - PO Box 26   Wexford,
         http://www.iol.ie/~rkmoore/cyberjournal            (USA
  * Non-commercial republication encouraged - Please include this sig *

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