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Roger Clarke's 'Networked Nation' Ch. 5

Information Infrastructure for The Networked Nation
Chapter 5

Roger Clarke

Principal, Xamax Consultancy Pty Ltd, Canberra

Visiting Fellow, Department of Computer Science, Australian National University

Version of 25 November 1994

© Xamax Consultancy Pty Ltd, 1994

This is chapter 5 of a multi-part Monograph whose contents-page is at http://www.rogerclarke.com/II/NetNation.html

This document is at http://www.rogerclarke.com/II/NetN5.html


5. Policy Considerations

This section brings together important facets of the information infrastructure movement which may, depending on the way in which it develops, require intervention by government. These include not only resource-related considerations, but also such matters as the stimulation of growth and creativity, access, equity and privacy. The conditions under which intervention may be needed, and the forms which it might take, are then discussed.


5.1 Public Fears About Information Infrastructure Initiatives

From the perspective of the general public, serious concern exists about the shape of the infrastructure which may emerge from the current wave of enthusiasm.

(1) Inappropriate Orientation or Scope

The debates have been dominated by the Clinton Administration's 'National Information Infrastructure' initiative. The discussions that are proceeding apace in Washington DC are very interesting, and the material that is becoming available from United States sources is highly valuable. There is a danger, however, that assumptions may be made in Australia that the nature of the debate, and the conclusions reached, in the United States are directly relevant to Australia's needs. There are significant differences between the situations in the two countries, and Australia needs to determine its own priorities.

At the other extreme lies another danger. In pursuing what it perceives to be its own best interests, Australia may adopt too parochial an outlook. The PSTN's inter-connections with the telephone systems of other countries and access to film libraries and 'newsfeeds' controlled by organisations outside Australia are just some of the important elements of Australia's inter-connectedness with the rest of the world. The Internet is increasingly important, and is inherently superordinate to national jurisdictions. It is vital that Australia conceive of its information infrastructure as being a component within the emergent 'global information infrastructure', and ensure continued two-way access to and from people, and data and processing resources, throughout the world.


(2) Dominance of the Agenda by Corporate Interests

It was suggested earlier that the large players in the information infrastructure arena include corporations in the telecommunications, entertainment and news industries, government agencies, and 'high-science'. These organisations have a natural desire to dominate and control - in the case of corporations, that's the role they are expected to play; and in the case of regulatory agencies, that's the role that Parliament has created them for.

Schumacher (1973) argued that 'small' was beautiful, desirable, and possible. Information technology is making 'small' at least probable, and maybe inevitable. Outsourcing is the currently most popular catchcry which reflects that trend, but the advantages of small, agile, imaginative and adaptive organisational units over large ones, is manifesting itself in many other ways as well. Toffler (1972-1985) argued that an 'adaptive corporation' must comprise small modules coordinated through relatively subtle processes. Toffler (1993) provides various examples of corporations which have undergone that transformation. To corporations and government agencies which continue to struggle against that trend, small-and-medium-enterprises (SMEs), and even unincorporated enterprises, sole practitioners, and part-time businesspeople, represents threats.

Several discussion fora have been established to assess needs, and recommend paths to the future. These have included the Australian Science and Technology Council's Working Group on Research Data Networks (ASTEC 1994), and the Broadband Services Expert Group, a task force within the Commonwealth Department of Communications and the Arts (BSEG 1994). These Groups comprised individuals with considerable, relevant background, energy and vision; and who were employed predominantly by large and very interested corporations and government agencies.

In this climate of (understandable) nervousness on the part of visionaries within large organisations, it is seriously problematical that the primary people who are invited onto government committees to deliberate on the development of the information infrastructure have a significant interest in maintaining the 'broadcast', authoritarian model of information infrastructure, and stunting the emergence of a relatively symmetrical, participative architecture.

It is, of course, appropriate that the information infrastructure debates provide appropriate opportunity for large organisations to seek to protect their interests. Policy decisions must, however, reflect the interests of the Australian public above all, and the interests of particular corporations only where they are shown to make a vital contribution to the public interest. The ethos of the Internet favours the general good of its electronic citizens, not sectional self-interest, and this ethos also needs to permeate the networked nation. For the public to have confidence in the information infrastructure, the decision-making process about its architecture needs to be undertaken with the maximum practicable degree of participation and visibility.


(3) Architecture Designed to Suit Supplier-Driven Services

A particular concern is that the architecture might reflect the hitherto common pattern of corporate-sender / passive-consumer. This was consistent with technologies which intrinsically supported only broadcast approaches to telecommunications (often because the capacity would support only a small number of senders). It is not consistent with the new environment, in which both two-way communications and consumer-initiated selective transmission are economically feasible. The architecture must facilitate participation by the public not only in the consumption of services, but also in their provision.


(4) Destruction of the Collaborative Community Through Commercialisation

The Internet has provided a basis for the emergence of new forms of community service, and existing services, such as The Samaritans and Lifeline, are now moving to harness it to their aims. In a number of senses, it can be seen as the modern equivalent of 'ham' radio operators and scout troops communicating with one another using short-wave radio. There is a real fear that charged services will not be complementary to such services, but will swamp them.

Commercial services must be able to develop, and even be encouraged to do so, but the architecture must be conceived and implemented so as to enable the non-commercial, mutual-service ethos of existing communities to be sustained, where sufficient voluntary energy and commitment are forthcoming. This implies formal recognition within the information infrastructure's architecture of both for-profit and not-for-profit sectors, and segments within sectors, the avoidance of biases against non-commercial electronic communities, and the ability of not-for-profit communities to keep themselves free from commercial incursions, where that is what they seek to do.


(5) Inequity of Access

The availability of access to the infrastructure may be differentially advantageous to some kinds of organisations and people at the expense of others. The primary grounds which may intentionally or unwittingly become bases for discrimination are:

In many cases, inequities in access to the information infrastructure are likely to compound existing discrimination.


(6) The Basis of Charging

One of the primary ways in which bias can come about against the public in general, and against particular classes of people, is through the selection of the basis for charging for the information infrastructure, connection to it, and its use.

It was argued in Clarke (1993) that the costs of networks are essentially stepped-fixed-cost in nature, with negligible variable costs per message. This has the implication that virtually all costing (i.e. attribution of costs to particular uses of the infrastructure) is arbitrary, in that different parties can argue quite rationally why another party should bear the greater share of the total costs. The greatest powers of persuasion lie with the corporations. There is accordingly a significant risk that the public may directly bear a significant share of the costs.

One approach which would be inimical to the public interest would be to 'front-end load' the charges to consumers, small groups and communities, incorporated associations and small business. This might involve high connection fees, high software or set-up costs for each small organisation, or high annual subscriptions. This would have the highly detrimental effect of discouraging a great many people from connecting to the information infrastructure, or from gaining access to particular services.

It is vital that entry costs to the public be kept very low. For most mainstream services, usage costs should also be kept to little or nothing. For other services, it may be appropriate for charges to be levied on a partial cost-recovery basis. In the case of 'luxury' services (such as what the French refer to as 'messageries rose'), high charges and cross-subsidies may be appropriate.

A related concern is that small organisations and people who are in remote locations may be forced to bear a large proportion of the costs involved in the outreach of the infrastructure and the services to them. This is contrary to the principles on which the Commonwealth of Australia was founded. Any per-transaction or data transmission volume charges which are levied should be distance-independent, at least for traffic within Australia, as is already the case with data transmission via the public packet-switched network, Austpac.


(7) A 'Tower of Babel' of Standards

Standards and protocols define the technical means whereby devices can be connected to the network, and messages can be interpreted by the receiving device. In the event that proprietary protocols were to dominate, inter-connectivity among services providers, and inter-operability among services, would be restricted. This is largely overcome in the Internet context. It is highly desirable that, as each new carrier-technology and each new service stabilises, standards be generally open and non-proprietary. Standardisation may require encouragement through government policies, and in extreme instances even mandating through legislation.


(8) The Information Infrastructure as a Weapon of Surveillance

There is a fear that the enthusiasm of security, law enforcement and other control-oriented agencies to use the information infrastructure as a means of monitoring the population will unduly influence its design. The Courts clearly need to be empowered to provide appropriate agencies with the legal authority to intercept and monitor flows. It would, however, be inappropriate to treat the interceptability and monitorability of traffic as a requirement of the information infrastructure. To do this would not only warp the architecture, but would also create political power even more dangerous than the criminal activities it would assist in detecting and prosecuting.

This concern about monitoring of network traffic is particularly pronounced in the United States, because its National Security Agency is seeking to sustain its ability to intercept communications by exercising control over the use of cryptographic techniques. This has led to the current controversy over the so-called 'Clipper-Chip' for telephones and 'Tessera-Chip' for data transmission. To date there have been no public signs of Australian security agencies seeking to control the use of cryptography, and whatever the outcome may be in the United States, that is the appropriate path for Australian society.


(9) Excessive Intervention by Government into Network Architecture

The worst-case scenario would be an attempt to create the information infrastructure by a government agency or a tightly regulated monopoly in the form of a government commission. Nearly as inimical to the public's interest in a diverse set of competing services would be tight government regulation of the shape which the infrastructure was to adopt, because this would result in a lack of diversity in carriers and in carrier-technologies. An example of such a mistake would be for the government to pick one or more winners among ISDN, ATM, fibre-optic versus various kinds of copper cable, geosynchronous-orbit satellite, low-orbit satellite, analogue cellular, digital cellular, and other technologies.

It is vital that government not intervene in relation to the choice among carrier technologies without very good reason, in particular unless and until it is clear that:

Although it may seem wasteful for multiple carrier technologies to be implemented, there are good reasons why each of several different approaches may find a sufficient market to justify the investment.


(10) Excessive Intervention by Government into Services and Traffic Content

In the United States, the first round of actions by government agencies in the information infrastructure issue has included moves to ensure that data flows can be readily eaves-dropped. In Australia, some of the first suggestions made have been for the censorship of data flows on the Internet, due to the scope for it to be used to disseminate pornographic and racist materials.

It is inconsistent with the notion of a free society to commence with a design requirement that the content of communications be subject to the purview of government agencies. That would be equivalent to designing public spaces like parks and street-corners in such a manner that conversations could be monitored, requiring all mail to be left unsealed to facilitate inspection, requiring prior submission of all published materials to the Chief Censor, and outlawing the use of vague language and unauthorised dialects on the telephone (or, indeed, anywhere else).

Controls over content should be post facto only, i.e. published material which comes to the notice of regulatory authorities should be prosecuted if it offends the law, and the law should be modified to ensure that the standards applied to other kinds of communication are also applied to network-based communications. But no pre-emptive powers should be built into the infrastructure. Pre-justified court-issued warrants should be necessary before tapping of network traffic is undertaken. The design of the infrastructure should not be subverted in order to facilitate interception.

Similarly, there is a concern that the provision of services might be permitted only subject to prior licencing of the service and/or the service-provider. This would be a boon to those corporations which were granted licences, because the barriers to entry by competitors would be established and maintained by the State rather than by a cartel of existing suppliers, freeing them at once of both the costs involved and the threat of trade practices intervention. Licensing would stultify creativity, and reduce diversity of supply, leading to lower quality services and higher prices. Some industries will undergo a revolution as a result of application of the information infrastructure (not least of them the publishing, entertainment and news industries), to the great benefit of the public, although not necessarily of the corporations presently active in those industries. Again, controls should be exercised post facto over services which breach the law; the force of the law should not be used to pre-determine which corporations will profit from the new order.


5.2 The Role of Government in Information Infrastructure

Historically, it has been normal for infrastructure to be established, and in many cases also maintained, partly or even entirely by government agencies. Ports, rail and road transport corridors, water, electricity and gas, health and education are common examples. In addition, in most countries of the world, the provision of basic telecommunications infrastructure is undertaken by government agencies.

In the context of the United States and the Internet, Reinhardt (1994) argued that: "The government is not planning to dig a trench from New York to San Francisco, fill it with fiber-optic cables, and call it a data highway. Rather, the information highway will be privately built, owned, and operated: the Feds will encourage its development only through research funding, standards efforts and changes in regulations". The United States has its own particular approach to the provision of infrastructure, which has had both significant successes and abject failures. Most countries recognise a rather larger role for government, and in many a substantial degree of cooperation exists between the public and private sectors. Australia is presently positioned closer to the United States approach than that of, for example, European countries, Japan and Singapore.

The conventional presumptions in Australia in the 1990s are that government has the responsibilities to:

BUT

This monograph adopts the position that, because it is so vital to Australia's future, the Commonwealth Government must adopt a very positive stance in relation to the information infrastructure. This raises the question as to whether the careful division between the governmental and private sectors, driven by the perceived need for propriety, is a luxury that Australia can no longer afford in a highly competitive and inter-locked world. The models of government-corporation partnership practised in Japan and in Singapore may be inappropriate to Australia, but some indigenous but effective form of teamwork between the public, private and research sectors may now be a national strategic necessity.

Policy cannot exist in a vacuum, but must be targetted at a particular setting. The proposals in this section are formulated specifically to address the circumstances which exist in Australia in the mid-1990s. Australia is an advanced nation, in relatively very calm transition from a strongly anglo-saxon-celtic towards a multicultural society. The distribution of income and wealth are less widely spread than in many nations, and there is a substantial welfare net, which may become increasingly important if the growth in productivity continues to outstrip the growth in demand, and unemployment remains high, or grows further. Secondary education is free to age 17 or 18, a considerable proportion of young people complete that stage, and tertiary education and training are very accessible.

Organisations and individuals throughout Australia are sophisticated users of information technology generally. In a number of areas, Australian organisations are among the world's leaders, including in the finance, mining and aviation industries, and in taxation, social security, customs and government budgettary management. The existing telecommunications infrastructure is among the best in the world in terms of availability, quality of service and cost. The means whereby the telecommunications infrastructure is provided has been progressively changed from a government commission along the lines of the European PTT model, by way of a government business enterprise, to a blend of monopoly, duopoly and open market, with further evolution planned.

Australia's population is heavily concentrated in a few urban centres, with small numbers scattered over the remainder of a vast continent. It is difficult to achieve equity in such a context, regionally, and even racially.

There are areas within the information technology industry in which market failure is occurring; for example, the author has called for constructive government intervention in relation to the application of electronic data interchange (EDI) to both purchasing and international trade (e.g. Clarke et al. 1990, Clarke 1994c, 1994d). The market failure is evident in that these applications of technology are regarded by all parties as being highly desirable, and even inevitable, but the breakthrough is not occurring, because the benefits do not accrue to the parties which must make the investment.

There has been, and continues to be, a great deal of energy and willingness on the part of not-for-profit organisations and altruistic individuals to provide data, software and services via the Internet. There appear to be many emergent opportunities for corporations to sell services on or via the Internet, especially to other corporations, but to some degree also to individuals.

There are, however, serious signs of concern at the level of the infrastructure itself. Very substantial long-distance and international capacity is installed, but is currently priced very high in order to ensure profit from the investment. These prices are falling only very slowly. There appear to be key areas in which monopoly conditions still exist, and hence direct intervention may be required. The conditions, however, are not such as to require governments to assume responsibility for the entire undertaking.

Consideration is needed as to whether the Internet represents the basis of the information infrastructure, or merely a prototype. Strengths and weaknesses of the Internet generally are well-described in CPSR (1993). The weaknesses are addressable, albeit in some cases slowly. It is therefore tenable to make either choice. Moreover, it does not appear to be unduly wasteful of resources if the decision is left to the marketplace. It would therefore be beneficial for both AARNet and alternative services to be allowed to develop in parallel. Hence basic telecommunications links should be readily available to intermediaries and end-users.

The underlying principles on which the remainder of the policy proposals are based are expressed in Exhibit 8.

Exhibit 8: Cornerstones of Government Information Infrastructure Policy

BUT

Some features of an entirely market-driven infrastructure are unlikely to satisfy the needs of Australian society, and some intervention is needed. Important public interests which need to be protected, and which are likely to require government action, are identified in Exhibit 9.

Exhibit 9: Public Interests in Need of Protection

To ensure that the market addresses these specific matters, the government has a range of approaches at its disposal. These are expressed in Exhibits 10a to 10d inclusive, in terms of leadership, stimulation, coordination and measured, not precipitate, regulation.

Exhibit 10a: Governmental Leadership Measures

Some kinds of what might be referred to as 'high-science' research need high-capacity tails, and synchronous transmission. These requirements are somewhat in conflict with the relatively low capacity and largely asynchronous needs which dominate the rest of the research, education and library sectors. The response in the United States has been the National Research and Education Network (NREN), which is to be a government-funded backbone specifically for this class of usage. Consideration could be given to the funding of such a network for Australian 'high-science' research.

Exhibit 10b: Governmental Stimulatory Measures

Exhibit 10c: Governmental Co-ordinative Measures

Exhibit 10d: Governmental Regulatory Measures

Adaptation of existing laws to deal with the new networked environment, and maintain an effective balance between the interests of originators and owners of data and services, and users of data and services. In extreme and well-justified cases, this might include licensing.

Particular areas in which activities may prove to be necessary include:

Another segment which has a requirement for high-capacity tails is distance education. An initiative in this regard is under development under the auspices of the Department of Employment, Education & Training (DEET). It is highly desirable that a pluralistic approach be taken to the emergence of the nation's information infrastructure, provided that individual initiatives do not undermine the need for a much broader range of access to services, and an adequate degree of commonality and inter-operability is designed into them.


5.3 The Role of Government in the Provision of Services

At the level of services, government again does not need to, and should not, adopt a general role of services provider, nor of services planner, nor of services regulator. The market appears to be, subject to a few provisos, sufficiently enthusiastic and dynamic to ensure appropriate development of services, and access by Australians to services available in other countries.

Individual agencies, however, should be active participants both as users and as providers of network services. Of especial importance are such services as electronic data interchange (EDI - structured business transactions transmitted electronically rather than using hard-copy documents). In this area a number of agencies of the federal government are already leaders, including the Australian Customs Service, the Australian Taxation Office, the Department of Finance, and Purchasing Australia; and considerable progress has also been made in some State Governments, especially in N.S.W. Public access to government-maintained databases must also be facilitated; the Australian Government Publishing Service's Government On-Line Directory (GOLD) is one example of such a service.

Care is needed in regard to the pricing policies adopted by agencies which offer services or data of interest to corporations, other government agencies, researchers, and the public generally. The recent trend towards 'user-pays' pricing has resulted in instances of data priced at an estimate of full cost, which has been above what the market would bear, and has significantly reduced its availability and use. It is important that the same policy be adopted as by the Clinton Administration in its NII initiative, viz. gratis availability of basic data, and pricing of the remainder at the cost of dissemination only, i.e. without any attempt to recover the costs of collection and maintenance.

Once again, some intervention is likely to be necessary in respect of some specific matters. In particular, action is likely to be necessary in relation to socially desirable services which are not emerging due to market failure, including:

These should be dealt with through targetted funding and subsidies.

In addition, enforcement is of course necessary in relation to services which break the law. Legislative amendments to ensure clarity of the law, and, in extreme and well-justified cases, licensing, may also be necessary in respect of some kinds of services provided using the networked nation's information infrastructure.


This is chapter 5 of a multi-part Monograph. Chapter 6 is at http://www.rogerclarke.com/II/NetN6.html.



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