<nettime> The Commercial End of the Net

[Frederick Noronha <fred@goa1.dot.net.in>]

>From the Political Literacy Course from Common Courage Press
************************************************

Information about this email course appears at the bottom. 

Does Infinite Spectrum Promote Infinite Democracy? 

First, let's answer a basic question: what would a democratic process look
like in evaluating a new communications technology? Then let's look at
whether it's needed, given that anyone is free to set up a web site. 
McChesney writes:

"What would be a truly democratic manner to generate communication policy
making? The historical record points to two basic principles which should
be made operational. First, in view of the revolutionary nature of the new
communication technologies, citizens should convene to study what the
technological possibilities are and to determine what the social goals
should be. At this point several alternative models of ownership and
control should be proposed, and the best model selected. In short, the
structural basis of the communication system should be decided after the
social aims are determined. THE KEY FACTOR IS TO EXERCISE PUBLIC
PARTICIPATION BEFORE AN UNPLANNED COMMERCIAL SYSTEM BECOMES ENTRENCHED. Is
such public participation an absurd idea? Hardly. In the late 1920s,
Canada, noting the rapid commercialization of the U.S. and Canadian
airwaves, convened precisely such a public debate over broadcasting that
included public hearings in twenty-five cities in all nine provinces. The
final decision to develop a nonprofit system was adopted three years after
a period of active debate.

"Second, if such a public debate determines that the communications system
needs a significant nonprofit and noncommercial component, the dominant
sector of the system must be nonprofit, noncommercial, and accountable to
the public. The historical record in the United States is emphatic in this
regard. In addition, it is arguable that commercial interests, too, must
always be held to carefully administered public service standards.

"The U.S. policy making experience with the Internet follows the
undemocratic historical pattern prevalent since the mid-1930s. A crucial
difference between the Internet and the previous new communication
technologies since AM radio has been that the Internet's interactive,
decentralized structure has not lent itself to any existing regulatory
model, making it more difficult to know exactly how the Internet should be
handled. This environment should have called for deliberation, study,
experimentation, and debate; instead the door has been opened to letting
commercial interests exploit the new medium to see where the most money
could be made."

As industry lobbyists entrenched themselves, "By the late 1990s, the
sentiment of many, perhaps most, 'Internet experts' was that the
'government had little choice but to leave the meatiest decisions up to
private industry.'

"Although this crystallization of opinion--and utter lack of
debate--concerning the Internet accords with the general trajectory of
U.S. communication policy making over the past sixty-five years, it is
nonetheless striking when one considers the origins of the Internet. All
historians of the Internet recognize that it is a product of the public
sector, and that it was closely associated with the military. But every
bit as important, many, perhaps most, of the university scientists who
designed the architecture of the Internet did so with the explicit intent
to create an open and egalitarian communication environment. … The
Internet could never have been produced by the private sector; not only
would the long-term wait for payoff have been unacceptable but the open
architecture would have made no sense for a capitalist to pursue, since it
makes 'ownership' of the Internet and profitability much more difficult."

But why not let the free market be the regulator? Competition will create
a cornucopia, which leads to, as McChesney describes the argument, "the
withering, perhaps the outright elimination, of the media giants and a
flowering of a competitive commercial marketplace the likes of which have
never been imagined, let alone seen." 

But while the premise of the free market is competition, "The simple truth
is that for those atop our economy success is based in large part on
ELIMINATING competition. I am being somewhat facetious, because in the end
capitalism is indeed a war of one against all, since every capitalist is
in competition with all others. But competition is something successful
capitalists (the kind that remain capitalists) learn to avoid like the
plague. The less competition a firm has, the less risk it faces and the
more profitable it tends to be. …

"It is safe to say that some new communications giants will be established
during the coming years, such as Microsoft attained gigantic status during
the 1980s. But most of the great new fortunes will be made by start-up
firms who develop a profitable idea and then sell out to one of the
existing giants…. Indeed this is conceded to be the explicit goal of
nearly all the start-up Internet and telecommunication firms, which are
founded with the premise of an 'exit scenario' through their sale to a
giant…. For every new Microsoft, there will be a thousand WebTVs or
Starwaves or Netscapes, small technology firms that sell out to media and
communication giants in deals that make their largest shareholders rich
beyond their wildest dreams." 

The free market mythology serves to obliterate public debate about
regulation with a barrage of rhetoric about competition, which protects
the wealth of those at the top. "My point," writes McChesney, "is not that
the market is an entirely inappropriate regulatory mechanism in a
democracy; whatever its flaws there may well be some--even many--areas
where the market can be deployed effectively. My point is that to the
extent the market rules in communication, it should be as a result of
public debate based on informed and wide-ranging participation, not as the
result of secretive deliberation wrapped in a bogus mythology." 

Is McChesney right? Or could he be little more than a crank, trapped in
the twilight of early twentieth-century communications history? Stay tuned
tomorrow when, in the spirit of Internet time, where everything goes
faster and faster and is always available, we will send a special Saturday
email that reveals surprising insights from business leaders and the
business press.

 For more, see "Rich Media, Poor Democracy" at
http://www.commoncouragepress.com/richmedia.html 
 and Herman and Chomsky’s "Manufacturing Consent" at
http://www.commoncouragepress.com/manufacturing.html

 This is the free Political Literacy Course from Common Courage Press: A
backbone of facts to stand up to spineless power. Email 34, October 22
1999. Week 7: The Political Economy of the Internet

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