The Road Ahead

12 CRITICAL ISSUES

This is an exciting time in the Information Age. It is the very beginning. Almost everywhere I go, whether to speak to a group or to have dinner with friends, questions come up about how information technology will change our lives. People want to understand how it will make the future different. Will it make our lives better or worse?

I’ve already said I’m an optimist, and I’m optimistic about the impact of the new technology. It will enhance leisure time and enrich culture by expanding the distribution of information. It will help relieve pressures on urban areas by enabling individuals to work from home or remote-site offices. It will relieve pressure on natural resources because increasing numbers of products will be able to take the form of bits rather than of manufactured goods. It will give us more control over our lives and allow experiences and products to be custom tailored to our interests. Citizens of the information society will enjoy new opportunities for productivity, learning, and entertainment. Countries that move boldly and in concert with each other will enjoy economic rewards. Whole new markets will emerge, and a myriad new opportunities for employment will be created.

When measured by decades, the economy is always in upheaval. For the past few hundred years, every generation has found more efficient ways of getting work done, and the cumulative benefits have been enormous. The average person today enjoys a much better life than the nobility did a few centuries ago. It would be great to have a king’s land, but what about his lice? Medical advances alone have greatly increased life spans and improved standards of living.

Henry Ford, in the first part of the twentieth century, was the automotive industry, but your car is superior to anything he ever drove. It’s safer, more reliable, and surely has a better sound system. This pattern of improvement isn’t going to change. Advancing productivity propels societies forward, and it is only a matter of time before the average person in a developed country will be “richer” in many ways than anyone is today.

Just because I’m optimistic doesn’t mean I don’t have concerns about what is going to happen to all of us. As with all major changes, the benefits of the information society will carry costs. There will be dislocations in some business sectors that will create a need for worker retraining. The availability of virtually free communications and computing will alter the relationships of nations, and of socioeconomic groups within nations. The power and versatility of digital technology will raise new concerns about individual privacy, commercial confidentiality, and national security. There are, moreover, equity issues that will have to be addressed. The information society should serve all of its citizens, not only the technically sophisticated and economically privileged. In short, a range of important issues confronts us. I don’t necessarily have the solutions, but, as I started off the book saying, now is a good time for a broad discussion. Technological progress will force all of society to confront tough new problems, only some of which we can foresee. The pace of technological change is so fast that sometimes it seems the world will be completely different from one day to the next. It won’t. But we should be prepared for change. Societies are going to be asked to make hard choices in such areas as universal availability, investment in education, regulation, and the balance between individual privacy and community security.

While it is important that we start thinking about the future, we should guard against the impulse to take hasty action. We can ask only the most general kinds of questions today, so it doesn’t make sense to come up with detailed, specific regulations. We’ve got a good number of years to observe the course of the coming revolution, and we should use that time to make intelligent rather than reflexive decisions.

Perhaps the most widespread and personal anxiety is, “How will I fit into the evolving economy?” Men and women are worried that their own jobs will become obsolete, that they won’t be able to adapt to new ways of working, that their children will get into industries that will cease to exist, or that economic upheaval will create wholesale unemployment, especially among older workers. These are legitimate concerns. Entire professions and industries will fade. But new ones will flourish. This will be happening over the next two or three decades, which is fast by historical standards, but may turn out to be no more disruptive than the pace at which the microprocessor revolution brought about its changes in the workplace, or the upheavals in the airline, trucking, and banking industries over the last decade.

Although the microprocessor and the personal computer that it enabled have altered and even eliminated some jobs and companies, it is hard to find any large sector of the economy that has been negatively affected. Mainframe, mini-computer, and typewriter companies have downsized, but the computer industry as a whole has grown, with a substantial net increase in employment. As big computer companies such as IBM or DEC have laid people off, many of those workers have found employment within the industry—usually at companies doing something related to PCs.

Outside the computer industry it is also hard to find a complete business sector hurt by the PC. There are some typesetters who were displaced by desktop-publishing programs—but for every worker in that situation there are several whose jobs desktop publishing created. All the change hasn’t always been good for all the people, but as revolutions go, the one set in motion by the personal computer has been remarkably benign.

Some people worry that there are only a finite number of jobs in the world, and that each time a job goes away someone is left stranded with no further purpose. Fortunately, this is not how the economy works. The economy is a vast interconnected system in which any resource that is freed up becomes available to another area of the economy that finds it most valuable. Each time a job is made unnecessary, the person who was filling that job is freed to do something else. The net result is that more gets done, raising the overall standard of living in the long run. If there is a general downturn across the economy—a recession or a depression—there is a cyclical loss of jobs, but the shifts that have come about as a result of technology have tended, if anything, to create jobs.

Job categories change constantly in an evolving economy. Once all telephone calls were made through an operator. When I was a child, long-distance calls from our home were made by dialing “0” and giving an operator the number, and when I was a teenager, many companies still employed in-house telephone operators who routed calls by plugging cables into receptacles. Today there are comparatively few telephone operators, even though the volume of calls is greater than ever. Automation has taken over.

Before the Industrial Revolution, most people lived or worked on farms. Growing food was mankind’s main preoccupation. If someone had predicted back then that within a couple of centuries only a tiny percentage of the population would be needed to produce food, all those farmers would have worried about what everyone would do for a living. The great majority of the 501 job categories recognized in 1990 by the U.S. Census Bureau didn’t even exist fifty years earlier. Although we can’t predict new job categories, most will relate to unmet needs in education, social services, and leisure opportunities.

We know that when the highway connects buyers and sellers directly, it will put pressure on people who are currently acting as middlemen. This is the same sort of pressure that mass merchants such as WalMart, Price-Costco, and other companies with particularly efficient consumer-merchandising approaches have already put on more traditional stores. When Wal-Mart moves into a rural area, the merchants in the local towns feel the pinch. Some survive, some do not, but the net economic effect on the region is modest. We may regret the cultural ramifications, but warehouse stores and fast-food chains are thriving because consumers, who vote with their dollars, tend to support outlets that pass their productivity savings along in the form of lower prices.

Reducing the number of middlemen is another way of lowering costs. It will also cause economic shifts, but no faster than the changes happened in retailing in the last decade. It will take many years for the highway to be utilized so widely for shopping that there will be significantly fewer middlemen. There is plenty of time to prepare. The jobs those displaced middlemen change to might not even have been thought of yet. We’ll have to wait and see what kinds of creative work the new economy devises. But as long as society needs help, there will definitely be plenty for everyone to do.

The broad benefits of advancing productivity are no solace for someone whose job is on the line. When a person has been trained for a job that is no longer needed, you can’t just suggest he go out and learn something else. Adjustments aren’t that simple or fast, but ultimately they are necessary. It isn’t easy to prepare for the next century, because it’s almost impossible to guess the secondary effects of even the changes we can foresee, much less those we can’t. A hundred years ago, people saw the automobile coming. It was sure to make fortunes, and also to run over some jobs and industries. But specifics would have been hard to predict. You might have warned your friends at the Acme Buggy Whip Company to polish up their résumés, and perhaps learn about engines, but would you have known to invest in real estate for strip malls?

More than ever, an education that emphasizes general problem-solving skills will be important. In a changing world, education is the best preparation for being able to adapt. As the economy shifts, people and societies who are appropriately educated will tend to do best. The premium that society pays for skills is going to climb, so my advice is to get a good formal education and then keep on learning. Acquire new interests and skills throughout your life.

A lot of people will be pushed out of their comfort zones, but that doesn’t mean that what they already know won’t still be valuable. It does mean that people and companies will have to be open to reinventing themselves—possibly more than once. Companies and governments can help train and retrain workers, but the individual must ultimately bear principal responsibility for his education.

A first step will be to come to terms with computers. Computers make almost everyone nervous before they understand them. Children are the primary exception. First-time users worry that a single misstep will cause them to ruin the computer or lose everything stored in it. People do lose data, of course, but very rarely is the damage irreversible. We have worked to make it harder to lose data and easier to recover from mistakes. Most programs have “Undo” commands that make it simple to try something, then quickly reverse it. Users become more confident as they see that making mistakes won’t be catastrophic. And then they begin to experiment. PCs provide all kinds of opportunities for experimentation. The more experience people have with PCs, the better they understand what they can and can’t do. Then PCs become tools instead of threats. Like a tractor or a sewing machine, a computer is a machine we can use to help us get certain tasks done more efficiently.

Another fear people express is that computers will be so “smart” they will take over and do away with any need for the human mind. Although I believe that eventually there will be programs that will recreate some elements of human intelligence, it is very unlikely to happen in my lifetime. For decades computer scientists studying artificial intelligence have been trying to develop a computer with human understanding and common sense. Alan Turing in 1950 suggested what has come to be called the Turing Test: If you were able to carry on a conversation with a computer and another human, both hidden from your view, and were uncertain about which was which, you would have a truly intelligent machine.

Every prediction about major advances in artificial intelligence has proved to be overly optimistic. Today even simple learning tasks still go well beyond the world’s most capable computer. When computers appear to be intelligent it is because they have been specially programmed to handle some task in a straightforward fashion—like trying out billions of chess moves in order to play master-level chess.

The computer has the potential to be a tool to leverage human intelligence for the foreseeable future. However, information appliances won’t become mainstream for publishing information until almost everyone is a user. It would be wonderful if everyone—rich or poor, urban or rural, old or young—could have access to one. However, personal computers are still too expensive for most people. Before the information highway can become fully integrated into society, it must be available to virtually every citizen, not just the elite, but this does not mean that every citizen has to have an information appliance in his house. Once the majority of people have systems installed in their homes, those who do not can be accommodated with a shared appliance at a library, school, post office, or public kiosk. It’s important to remember that the question of universal access arises only if the highway is immensely successful—more successful than many commentators expect. Amazingly, some of the same critics who complain the highway will be so popular it will cause problems also complain it won’t be popular at all.

The fully developed information highway will be affordable—almost by definition. An expensive system that connected a few big corporations and wealthy people simply would not be the information highway—it would be the information private road. The network will not attract enough great content to thrive if only the most affluent 10 percent of society choose to avail themselves of it. There are fixed costs to authoring material; so to make them affordable, a large audience is required. Advertising revenue won’t support the highway if a majority of eligible people don’t embrace it. If that is the case, the price for connecting will have to be cut or deployment delayed while the system is redesigned to be more attractive. The information highway is a mass phenomenon, or it is nothing.

Eventually the costs of computing and communications will be so low, and the competitive environment so open, that much of the entertainment and information offered on the highway will cost very little. Advertising income will allow a lot of content to be free. However, most service providers, whether they are rock bands or consulting engineers or book publishers, will still ask that users make a payment. So the information highway will be affordable, if used judiciously, but it won’t be free.

A large portion of the money you will spend on highway services you spend today for the same services in other forms. In the past you may have shifted money you spent on records to buying compact discs, or from movie tickets to videotape rentals. Soon your spending for videotape rentals will go to video-on-demand movies. You will redirect part of what you now spend on printed-periodical subscriptions to interactive information services and communities. Most of the money that now goes to local telephone service, long-distance service, and cable television will be available to spend on the highway.

Access to government information, medical advice, bulletin boards, and some educational material will be free. Once people are on the highway, they will enjoy full egalitarian access to vital on-line resources. Within twenty years, as commerce, education, and broad-scale communications services move onto the highway, an individual’s ability to be part of mainstream society will depend, at least in part, on his or her using it. Society will then have to decide how to subsidize broad access so that all users will be equal, both geographically and socioeconomically.

Education is not the entire answer to the challenges presented by the Information Age, but it is part of the answer, just as education is part of the answer to a range of society’s problems. H. G. Wells, who was as imaginative and forward-looking as any futurist, summed it up back in 1920. “Human history,” he said, “becomes more and more a race between education and catastrophe” Education is society’s great leveler, and any improvement in education goes a long way toward equalizing opportunity. Part of the beauty of the electronic world is that the extra cost of letting additional people use educational material is basically zero.

Your education in personal computers can be informal. As I’ve said, my fascination began with game playing, as years later Warren Buffett’s did. My dad got hooked when he used a computer to help him prepare his taxes. If computers seem intimidating to you, why not try doing the same sort of thing? Find something a personal computer does that will make your life easier or more fun and latch on to that as a way of getting more involved. Write a screenplay; do your banking from home; help your child with her homework. It is worth making the effort to establish a level of comfort with computers. If you give them a chance, you will most likely be won over. If personal computing still seems too hard or confusing, it doesn’t mean you aren’t smart enough. It means we still have work to do to make them easier.

The younger you are, the more important this is. If you are fifty or older today, you may be out of the workforce before you’ll need to learn to use a computer—although I think if you don’t learn, you’ll be missing out on the chance for an amazing experience. But if you are twenty-five today and not comfortable with computers, you risk being ineffective in almost any kind of work you pursue. To begin with, finding a job will be easier if you have embraced the computer as a tool.

Ultimately, the information highway is not for my generation or those before me. It is for future generations. The kids who have grown up with PCs in the last decade, and those who will grow up with the highway in the next, will push the technology to its limits.

We have to pay particular attention to correcting the gender imbalance. When I was young, it seemed that only boys were encouraged to mess around with computers. Girls are far more active with computers today than twenty years ago, but there are still many fewer women in technical careers. By making sure that girls as well as boys become comfortable with computers at an early age we can ensure that they play their rightful role in all the work that benefits from computer expertise.

My own experience as a child, and that of my friends raising children today, is that once a kid is exposed to computing, he or she is hooked. But we have to create the opportunity for that exposure. Schools should have low-cost access to computers connected to the information highway, and teachers need to become comfortable with the new tools.

One of the wonderful things about the information highway is that virtual equity is far easier to achieve than real-world equity. It would take a massive amount of money to give every grammar school in every poor area the same library resources as the schools in Beverly Hills. However, when you put schools on-line they all get the same access to information, wherever it might be stored. We are all created equal in the virtual world, and we can use this equality to help address some of the sociological problems that society has yet to solve in the physical world. The network will not eliminate barriers of prejudice or inequality, but it will be a powerful force in that direction.

The question of how to price intellectual property, such as entertainment and educational materials, is fascinating. Economists understand a lot about how the pricing of classical manufactured goods works. They can show how rational pricing should reflect cost structure in a very direct manner. In a market with multiple competing qualified manufacturers, prices tend to drop to the marginal cost of making one more of whatever they are selling. But this model doesn’t work when applied to intellectual property.

A basic economics course describes the curves of supply and demand, which intersect at the price appropriate for a product. But supply-and-demand economics gets into trouble when it comes to intellectual property, because ordinary rules regarding manufacturing costs don’t apply. Typically there are huge up-front development costs for intellectual property. These fixed costs are the same regardless of whether one copy or a million copies of the work are sold. George Lucas’s next movie in the Star Wars series will cost millions to make, regardless of how many people pay to see it in theaters.

The pricing of intellectual property is more complicated than most pricing because today it is relatively inexpensive to manufacture copies of most intellectual property. Tomorrow, on the information highway, the cost of delivering a copy of a work—which will amount to the same thing as manufacturing it—will be even lower, and dropping every year because of Moore’s Law. When you buy a new medicine, you’re paying mostly for what the drug company spent for research, development, and testing. Even if the marginal cost of making each pill is minimal, the pharmaceutical company still may have to charge quite a bit for each, especially if the market is not huge. The revenue from the average patient has to cover a sufficient share of the development expenses and generate enough profit to make investors glad they took the substantial financial risks involved in developing a new drug. When a poor country wants the medicine, the manufacturer faces a moral dilemma. If the pharmaceutical company doesn’t waive or drastically reduce its patent-licensing fees, the medicine won’t be available to poor countries. However, if a manufacturer is to be able to invest in R&D, some users must pay more than the marginal cost. Prices for drugs vary greatly from country to country and discriminate against poor people in rich countries except where governments cover medical costs.

One possible solution, a scheme whereby a rich person pays more to buy a new medicine, to see a movie or to read a book, may seem inequitable; however, it is identical to a system already in place today—taxation. Through the income tax and other taxes, people with high incomes pay more for roads, schools, the army, and every other government facility than the average person does. It cost me more than $100 million last year to get those services because I paid a significant capital gains tax after selling some Microsoft shares. I have no complaint, but it is an example of the same services being provided at vastly different prices.

The pricing for highway access may be set politically rather than on the basis of costs. It is going to be expensive to enfranchise people in remote locations because the cost of bringing wiring to far-flung homes and even small communities is very high. Companies may not be eager to make the necessary investment, and the geographically disenfranchised may not be in a position to make the investment on their own behalf. We should expect heated debate about whether the government should subsidize connections to rural areas, or impose regulations that cause urban users to subsidize rural ones. The precedent for this is a doctrine known as “universal service” which was created to subsidize rural mail, phone, and electrical services in the United States. It dictates a single price for the delivery of a letter, a phone call, or electrical power regardless of where you live. It applies even though it is more expensive to deliver services in rural areas, where homes and businesses are farther apart than in areas of concentrated population.

There was no equivalent policy for the delivery of newspapers or radio or television reception. Nonetheless, these services are widely available, so clearly under some circumstances government intervention isn’t necessary to ensure high availability. The U.S. Postal Service was founded as part of the government on the assumption that that was the only way to provide truly universal service. UPS and Federal Express might disagree on this point, however, because they have managed to provide broad coverage and make money. The debate as to whether, or to what degree, government needs to be involved to guarantee broad access to the information highway is certain to rage on for many years.

The highway will let those who live in remote places consult, collaborate, and be involved with the rest of the world. Because many people will find the combination of rural lifestyle and urban information attractive, network companies will have an incentive to run fiber-optic lines to high-income remote areas. It is likely that some states, or communities, or even private real estate developers will promote their areas by providing great connectivity. This will lead to what one might call the “Aspen-ization” of parts of the country. Interesting rural communities with high marks for quality of life will deliberately set out to attract a new class of sophisticated urban citizen. Taken as a whole, urban areas will tend to get their connections before rural ones.

The highway will spread information and opportunity across borders to developing nations, too. Cheap global communications can bring people anywhere into the mainstream of the world economy. An English-speaking Ph.D. in China will be able to bid against colleagues in London for consulting work. Knowledge workers in industrialized countries will, in a sense, face new competition—just as some manufacturing workers in industrialized countries have experienced competition from developing nations over the past decade. This will make the information highway a powerful force for international trade in intellectual goods and services, just as the availability of relatively inexpensive air cargo and containerized shipping helped propel international trade in physical goods.

The net effect will be a wealthier world, which should be stabilizing. Developed nations, and workers in those nations, are likely to maintain a sizable economic lead. However, the gap between the have and have-not nations will diminish. Starting out behind is sometimes an advantage. It lets those who adopt late skip steps, and avoid the mistakes of the trailblazers. Some countries will never have industrialization. They will move directly into the Information Age. Europe didn’t adopt television until several years after the United States. The result was higher picture

quality, because by the time Europe set its standard a better choice was available. As a result, Europeans have enjoyed better-looking television pictures for decades.

Telephone systems are another example of how starting late can provide an advantage. In Africa, China, and other parts of the developing world, many citizens who have phones use cellular instruments. Cellular telephone service is spreading rapidly in Asia, Latin America, and other developing regions, because it does not require that copper wires be strung. Many people in the cellular industry predict that improvements in technology will mean that these areas may never get a conventional copper wire-based telephone system. These countries will never have to cut down a million trees for telephone poles or string a hundred thousand miles of telephone lines only to rip them all down and bury the entire network. The wireless telephone system will be their first telephone system. They will get increasingly better cellular systems wherever they can’t afford a full broadband connection.

The presence of advanced communications systems promises to make nations more alike and reduce the importance of national boundaries. The fax machine, the portable videocamera, and Cable News Network are among the forces that brought about the end of communist regimes and the Cold War, because they allowed news to pass both ways through what was called the Iron Curtain.

Now, commercial satellite broadcasts to nations such as China and Iran offer citizens glimpses of the outside world that are not necessarily sanctioned by their governments. This new access to information can draw people together by increasing their understanding of other cultures. Some believe it will cause discontent and worse, a “Revolution of Expectations,” when disenfranchised people get enough data about another lifestyle to contrast it with their own. Within individual societies, the balance of traditional versus modern experiences will shift as people use the information highway to expose themselves to a greater range of possibilities. Some cultures may feel under assault, as people pay greater attention to global issues or cultures, and less to traditional local ones.

“The fact that the same ad can appeal to someone in a New York apartment and an Iowa farm and an African village does not prove these situations are alike,” commented Bill McKibben, a critic of what he sees as television’s tendency to override local diversity with homogenized common experiences. “It is merely evidence that the people living in them have a few feelings in common, and it is these barest, most minimal commonalties that are the content of the global village.”

Yet if people choose to watch the ad, or the program the ad supports, should they be denied that privilege? This is a political question for every country to answer individually. It will not, however, be easy to filter a highway connection so that it selects and takes in only some elements.

American popular culture is so potent that outside the United States some countries now attempt to ration it. They hope to guarantee the viability of domestic-content producers by permitting only a certain number of hours of foreign television to be aired each week. In Europe the availability of satellite and cable-delivered programming reduced the potential for government control. The information highway is going to break down boundaries and may promote a world culture, or at least a sharing of cultural activities and values. The highway will also make it easy for patriots, even expatriates, deeply involved in their own ethnic communities to reach out to others with similar interests no matter where they may be located. This may strengthen cultural diversity and counter the tendency toward a single world culture.

If people do gravitate to their own interests and withdraw from the broader world—if weight lifters communicate only with other weight lifters, and Latvians choose to read only Latvian newspapers—there is a risk that common experiences and values will fall away. Such xenophobia would have the effect of fragmenting societies. I doubt this will happen, because I think people want a sense of belonging to many communities, including a world community. When we Americans share national experiences, it is usually because we’re witnessing events all at the same time on television—whether it is the Challenger blowing up after liftoff, the Super Bowl, an inauguration, coverage of the Gulf War, or the O. J. Simpson car chase. We are “together” at those moments.

Another worry people have is that multi-media entertainment will be so easy to get and so compelling, some of us will use the system too much for our own good. This could become a serious problem when virtual-reality experiences are commonplace.

One day a virtual-reality game will let you enter into a virtual bar and make eye contact with “someone special,” who will note your interest and come over to engage you in conversation. You’ll talk, impressing this new friend with your charm and wit. Perhaps the two of you will decide, then and there, to go to Paris. Whoosh! You’ll be in Paris, gazing together at the stained glass of Notre Dame. “Have you ever ridden the Star Ferry in Hong Kong?” you might ask your friend, invitingly. Whoosh! VR will certainly be more engrossing than video games have ever been, and more addictive.

If you were to find yourself escaping into these attractive worlds too often, or for too long, and began to be worried about it, you could try to deny yourself entertainment by telling the system, “No matter what password I give, don’t let me play any more than half an hour of games a day.” This would be a little speed bump, a warning to slow your involvement with something you found too appealing. It would serve the same purpose as a photo of some very overweight people you might post on your refrigerator to discourage snacking.

Speed bumps help a lot with behavior that tends to generate day-after regrets. If someone elects to spend his or her free hours examining the stained glass in a simulation of Notre Dame, or chatting in a make-believe bar with a synthetic friend, that person is exercising his or her freedom. Today a lot of people spend several hours a day with a television on. To the extent we can replace some of that passive entertainment with interactive entertainment, viewers may be better off. Frankly, I’m not too concerned about the world whiling away its hours on the information highway. At worst, I expect, it will be like playing video games or gambling. Support groups will convene to help abusers who want to modify their behavior.

A more serious concern than individual overindulgence is the vulnerability that could result from society’s heavy reliance on the highway.

This network, and the computer-based machines connected to it, will form society’s new playground, new workplace, and new classroom. It will replace physical tender. It will subsume most existing forms of communication. It will be our photo album, our diary, our boom box. This versatility will be the strength of the network, but it will also mean we will become reliant on it.

Reliance can be dangerous. During the New York City blackouts in 1965 and 1977, millions of people were in trouble—at least for a few hours—because of their dependence on electricity. They counted on electric power for light, heat, transport, and security. When electricity failed, people were trapped in elevators, traffic lights stopped working, and electric water pumps quit. Anything really useful is missed when you lose it.

A complete failure of the information highway is worth worrying about. Because the system will be thoroughly decentralized, any single outage is unlikely to have a widespread effect. If an individual server fails, it will be replaced and its data restored. But the system could be susceptible to assault. As the system becomes more important, we will have to design in more redundancy. One area of vulnerability is the system’s reliance on cryptography—the mathematical locks that keep information safe.

None of the protection systems that exist today, whether steering-wheel locks or steel vaults, are completely fail-safe. The best we can do is make it as difficult as possible for somebody to break in. Despite popular opinions to the contrary, computer security has a very good record. Computers are capable of protecting information in such a way that even the smartest hackers can’t get at it readily unless someone entrusted with information makes a mistake. Sloppiness is the main reason computer security gets breached. On the information highway there will be mistakes, and too much information will get passed along. Someone will issue digital concert tickets that prove to be forgeable, and too many people will show up. Whenever this sort of thing happens, the system will have to be reworked and laws may have to be revised.

Because both the system’s privacy and the security of digital money depend on encryption, a breakthrough in mathematics or computer science that defeats the cryptographic system could be a disaster. The obvious mathematical breakthrough would be development of an easy way to factor large prime numbers. Any person or organization possessing this power could counterfeit money, penetrate any personal, corporate,

or governmental file, and possibly even undermine the security of nations, which is why we have to be so careful in designing the system. We have to ensure that if any particular encryption technique proves fallible, there is a way to make an immediate transition to an alternate technique. There’s a little bit of inventing still to be done before we have that perfected. It is particularly hard to guarantee security for information you want kept private for a decade or more.

Loss of privacy is another major concern about the highway. A great deal of information is already being gathered about each of us, by private companies as well as by government agencies, and we often have no idea how it is used or whether it is accurate. Census Bureau statistics contain great amounts of detail. Medical records, driving records, library records, school records, court records, credit histories, tax records, financial records, employment reviews, and charge-card bills all profile you. The fact that you call a lot of motorcycle shops, and might be susceptible to motorcycle advertising, is commercial information that a telephone company theoretically could sell. Information about us is routinely compiled into direct-marketing mailing lists and credit reports. Errors and abuses have already fostered legislation regulating the use of these databases. In the United States, you are entitled to see certain kinds of information stored about you, and you may have the right to be notified when someone looks at it. The scattered nature of information protects your privacy in an informal way, but when the repositories are all connected together on the highway, it will be possible to use computers to correlate it. Credit data could be linked with employment records and sales transaction records to construct an intrusively accurate picture of your personal activities.

As more business is transacted using the highway and the amount of information stored there accrues, governments will consciously set policies regarding privacy and access to information. The network itself will then administer those policies, ensuring that a doctor does not get access to a patient’s tax records, a government auditor is not able to look at a taxpayer’s scholastic record, and a teacher is not permitted to browse a student’s medical record. The potential problem is abuse, not the mere existence of information.

We now allow a life insurance company to examine our medical records before determining whether it chooses to insure our mortality. These companies may also want to know if we indulge in any dangerous pastimes, such as hang gliding, smoking, or stock car racing. Should an insurer’s computer be allowed to examine the information highway for records of our purchases to see if there are any that might indicate risky behavior on our part? Should a prospective employer’s computer be allowed to examine our communications or entertainment records to develop a psychological profile? How much information should a federal, state, or city agency be allowed to see? What should a potential landlord be able to learn about you? What information should a potential spouse have access to? We will need to define both the legal and practical limits of privacy.

These privacy fears revolve around the possibility that someone else is keeping track of information about you. But the highway will also make it possible for an individual to keep track of his or her own whereabouts—to lead what we might call “a documented life”

Your wallet PC will be able to keep audio, time, location, and eventually even video records of everything that happens to you. It will be able to record every word you say and every word said to you, as well as body temperature, blood pressure, barometric pressure, and a variety of other data about you and your surroundings. It will be able to track your interactions with the highway—all of the commands you issue, the messages you send, and the people you call or who call you. The resulting record will be the ultimate diary and autobiography, if you want one. If nothing else, you would know exactly when and where you took a photograph when you organize your family’s digital photo album.

The technology required is not difficult. It should soon be possible to compress the human voice down to a few thousand bits of digital information per second, which means that an hour of conversation will be converted into about 1 megabyte of digital data. Small tapes used for backing up computer hard disks already store 10 gigabytes or more of data—enough to record about 10,000 hours of compressed audio. Tapes for new generations of digital VCRs will hold more than 100 gigabytes, which means that a single tape costing a few dollars could hold recordings of all the conversations an individual has over the course of a decade or possibly even a lifetime—depending on how talkative he is. These numbers are based only on today’s capacities—in the future storage will be much cheaper. Audio is easy, but within a couple of years a full video recording will be possible as well.

I find the prospect of documented lives a little chilling, but some people will warm to the idea. One reason for documenting a life will be defensive. We can think of the wallet PC as an alibi machine, because encrypted digital signatures will guarantee an unforgeable alibi against false accusations. If someone ever accused you of something, you could retort: “Hey, buddy, I have a documented life. These bits are stored away. I can play back anything I’ve ever said. So don’t play games with me” On the other hand, if you were guilty of something, there would be a record of it. There would also be a record of any tampering. Richard Nixon’s taping of conversations in the White House—and then the suspicions that he had attempted to alter those tapes—contributed to his undoing. He chose to have a documented political life and lived to regret it.

The Rodney King case showed the evidentiary power of videotape and its limits. Before long every police car, or individual policeman, may be equipped with a digital video camera, with nonforgeable time and location stamps. The public may insist that the police record themselves in the course of their work. And the police could be all for it, to guard against claims of brutality or abuse on one hand and as an aid in gathering better evidence on the other. Some police forces are already videorecording all arrests. This sort of record won’t affect just the police. Medical malpractice insurance might be cheaper, or only available, for doctors who record surgical procedures or even office visits. Bus, taxi, and trucking companies have an obvious interest in the performance of their drivers. Some transportation companies have already installed equipment to record mileage and average speed. I can imagine proposals that every automobile, including yours and mine, be outfitted not only with a recorder but also with a transmitter that identifies the car and its location—a future license plate. After all, airplanes have “black box” recorders today, and once the cost drops, there is no reason they shouldn’t also be in our cars. If a car was reported stolen, its location would be known immediately. After a hit-and-run accident or a drive-by shooting, a judge could authorize a query: “What vehicles were in the following two-block area during this thirty-minute period?” The black box could record your speed and location, which would allow for the perfect enforcement of speeding laws. I would vote against that.

In a world that is increasingly instrumented, we could reach the point where cameras record most of what goes on in public. Video cameras in public places are already relatively commonplace. They perch, often concealed, around banks, airports, automatic-teller machines, hospitals, freeways, stores, and hotel and office-building lobbies and elevators.

The prospect of so many cameras, always watching, might have distressed us fifty years ago, as it did George Orwell. But today they are unremarkable. There are neighborhoods in the United States and Europe where citizens are welcoming these cameras above streets and parking lots. In Monaco, street crime has been virtually eliminated because hundreds of video cameras have been placed around the tiny principality. Monaco, however, is small enough in area, 370 acres (150 hectares), that a few hundred cameras can pretty much cover it all. Many parents would welcome cameras around schoolyards to discourage or help apprehend drug dealers, child molesters, and even playground bullies. Every city streetlight represents a substantial investment by a community in public safety. In a few years it will require only a relatively modest additional sum to add and operate cameras with connections to the information highway. Within a decade, computers will be able to scan video records very inexpensively looking for a particular person or activity. I can easily imagine proposals that virtually every pole supporting a streetlight should also have one or more cameras. The images from these cameras might be accessed only in the event of a crime, and even then possibly only under court order. Some people might argue that every image from every camera should be available for viewing by everyone at any time. This raises serious privacy questions in my mind, but advocates might argue that it’s appropriate if the cameras are only in public places.

Almost everyone is willing to accept some restrictions in exchange for a sense of security. From a historical perspective, people living in Western democracies already enjoy a degree of privacy and personal freedom unprecedented in all of human history. If ubiquitous cameras tied into the information highway should prove to reduce serious crime dramatically in test communities, a real debate would begin over whether people fear surveillance more or less than they fear crime. It is difficult to imagine a government-sanctioned experiment along these lines in the United States because of the privacy issues it raises and the likelihood of constitutional challenges. However, opinion can change. It might take only a few more incidents like the bombing in Oklahoma City within the borders of the United States for attitudes toward strong privacy protection to shift. What today seems like digital Big Brother might one day become the norm if the alternative is being left to the mercy of terrorists and criminals. I am not advocating either position—technology will enable society to make a political decision.

At the same time technology is making it easier to create video records, it is also making it possible to keep all your personal documents and messages totally private. Encryption-technology software, which anyone can download from the Internet, can transform a PC into a virtually unbreakable code machine. As the highway is deployed, security services will be applied to all forms of digital information—phone calls, files, databases, you name it. As long as you protect the password, the information stored on your computer can be held under the strongest lock and key that has ever existed. This allows for the greatest degree of information privacy any individual has ever had.

Many in government are opposed to this encryption capability, because it reduces their ability to gather information. Unfortunately for them, the technology can’t be stopped. The National Security Agency is a part of the U.S. government defense and intelligence community that protects this country’s secret communications and decrypts foreign communications to gather intelligence data. The NSA does not want software containing advanced encryption capabilities to be sent outside the United States. However, this software is already available throughout the world, and any computer can run it. No policy decision will be able to restore the tapping capabilities governments had in the past.

Today’s legislation that prevents the export of software with good encryption capability could harm U.S. software and hardware companies. The restrictions give foreign companies an advantage over U.S. competitors. American companies almost unanimously agree that the current encryption export restrictions don’t work.

Each media advance has had a substantial effect on how people and governments interact. The printing press and, later, mass-circulation newspapers changed the nature of political debate. Radio and then television allowed government leaders to talk directly and intimately with the populace. Similarly, the information highway will have its own influence on politics. For the first time politicians will be able to see immediate representative surveys of public opinions. Voters will be able to cast their ballots from home or their wallet PCs with less risk of miscounts or fraud. The implications for government may be as great as they are for industry.

Even if the model of political decision making does not change explicitly, the highway will bestow power on groups of citizens who want to organize to promote causes or candidates. This could lead to an increased number of special-interest groups and even political parties. Today, organizing a political movement on an issue requires an immense amount of coordination. How do you find the people who share your view? How do you motivate and communicate with them? Telephones and fax machines are great for connecting people one-on-one but only if you know whom to call. Television lets one person reach millions, but it is expensive and wasteful if most viewers are not interested.

Political organizations require thousands of hours of volunteer time. Envelopes have to be stuffed for direct-mail appeals, and volunteers must go out and contact people by whatever means possible. Only a few issues, the environment being one, are potent enough to overcome the difficulties involved in recruiting enough volunteers to operate an effective political organization.

The information highway makes all communication easier. Bulletin boards and other on-line forums allow people to be in touch one-to-one, or one-to-many, or many-to-many, in very efficient ways. People of similar interests are able to meet on-line and organize without any physical overhead. It will become so easy to organize a political movement that no cause will be too small or scattered. I expect the Internet will be a significant focus for all the candidates and political-action groups for the first time during the 1996 U.S. national elections. Eventually, the highway will become a primary conduit of political discourse.

Direct voting is already used in the United States for specific issues at the state level. For logistical reasons these ballot propositions can occur only when a major election is already taking place. The information highway would allow such votes to be scheduled far more frequently, because they would cost very little.

Someone will doubtless propose total “direct democracy,” having all issues put to a vote. Personally, I don’t think direct voting would be a good way to run a government. There is a place in governance for representatives—middlemen—to add value. They are the ones whose job it is to take the time to understand all the nuances of complicated issues. Politics involves compromise, which is nearly impossible without a relatively small number of representatives making decisions on behalf of the people who elected them. The art of management—whether of a society or a company—revolves around making informed choices about the allocation of resources. It’s the job of a full-time policymaker to develop expertise. This enables the best of them to come up with and embrace nonobvious solutions direct democracy might not allow, because voters might not understand the trade-offs necessary for long-term success.

Like all middlemen in the new electronic world, political representatives will have to justify themselves. The information highway will put the spotlight on them as never before. Instead of being given photos and sound bites, voters will be able to get a much more direct sense of what their representatives are doing and how they’re voting. The day a senator receives a million pieces of e-mail on a topic or is able to have his beeper announce the results of a real-time opinion poll from his constituents is not far away.

Despite the problems posed by the information highway, my enthusiasm for it remains boundless. Information technology is already touching lives deeply, as evidenced by a piece of electronic mail a reader of my newspaper column sent me in June of 1995. “Mr. Gates, I am a poet who has Dyslexia, which basically means I can not spell worth a damn, and I would never have any hope of getting my poetry or my novels published if not for this computer Spellcheck. I may fail as a writer, but thanks to you I will succeed or fail because of my talent, or a lack of talent, and not because of my disability”

We are watching something historic happen, and it will affect the world seismically, rocking us the same way the discovery of the scientific method, the invention of printing, and the arrival of the Industrial Age did. If the information highway is able to increase the understanding citizens of one country have about their neighboring countries, and thereby reduce international tensions, that, in and of itself, could be sufficient to justify the cost of implementation. If it was used only by scientists, permitting them to collaborate more effectively to find cures for the still-incurable diseases, that alone would be invaluable. If the system was only for kids, so that they could pursue their interests in and out of the classroom, that by itself would transform the human condition. The information highway won’t solve every problem, but it will be a positive force in many areas.

It won’t roll out before us according to a preordained plan. There will be setbacks and unanticipated glitches. Some people will seize upon the setbacks to proclaim that the highway never really was more than hype. But on the highway, the early failures will just be learning experiences. The highway is going to happen.

Big changes used to take generations or centuries. This one won’t happen overnight, but it will move much faster. The first manifestations of the information highway will be apparent in the United States by the millennium. Within a decade there will be widespread effects. If I had to guess which applications of the network will be embraced quickly and which will take a long time, I’d certainly get some of them wrong. Within twenty years virtually everything I’ve talked about in this book will be broadly available in developed countries and in businesses and schools in developing countries. The hardware will be installed. Then it will just be a matter of what people do with it—which is to say, what software applications they use.

You’ll know the information highway has become part of your life when you begin to resent it if information is not available via the network. One day you’ll be hunting for the repair manual for your bicycle and you’ll be annoyed that the manual is a paper document that you could misplace. You’ll wish it were an interactive electronic document, with animated illustrations and a video tutorial, always available on the network.

The network will draw us together, if that’s what we choose, or let us scatter ourselves into a million mediated communities. Above all, and in countless new ways, the information highway will give us choices that can put us in touch with entertainment, information, and each other.

I think Antoine de Saint-Exupéry, who wrote so eloquently about how people came to think of railroad locomotives and other forms of technology as friendly, would applaud the information highway and dismiss as backward-looking those who resist it. Fifty years ago he wrote: “Transport of the mails, transport of the human voice, transport of flickering pictures—in this century as in others our highest accomplishments still have the single aim of bringing men together. Do our dreamers hold that the invention of writing, of printing, of the sailing ship, degraded the human spirit?”

The information highway will lead to many destinations. I’ve enjoyed speculating about some of these. Doubtless I’ve made some foolish predictions, but I hope not too many. In any case, I’m excited to be on the journey.