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Posted with permission:

THE NEW AMERICAN -- July 25, 1994
Copyright 1994 -- American Opinion Publishing, Incorporated.
P.O. Box 8040, Appleton, WI  54913   414-749-3784

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ARTICLE: American Opinion Extra

TITLE: "Electronic Fascism"

AUTHOR: William F. Jasper

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The White House folks who want to bring you socialized medicine under 
the rubric of "managed competition in health care" are pushing hard 
to socialize cyberspace under the guise of "managing the transition" 
to the new "information age." In his campaign manifesto, Putting People 
First, Bill Clinton called for: "A national information network to link 
every home, business, lab, classroom and library by the year 2015. To 
expand access to information, we will put public records, databases, 
libraries and educational materials on line for public use."

Vice President Al Gore has been given the role of pitch man for this 
effort and has taken to it with the same gusto that Hillary has shown 
for promoting her brand of fascist medicine. Assisting Gore in this 
undertaking is Commerce Secretary Ron Brown, chairman of the Information 
Infrastructure Task Force, and Laura D'Andrea Tyson, chairman of Mr. 
Clinton's Council of Economic Advisers. That is certainly a trio to 
inspire confidence in a national effort to harness and promote dynamic 
new technologies: a vice president who authored one of the most 
embarrassing, technophobic, Luddite diatribes ever written (Earth in 
the Balance); a Commerce Secretary who has hopped from one corruption 
scandal to another involving charges of influence peddling and bribery; 
and a socialist economist from the People's Republic of Berkeley.

HYPEMEISTER IN ACTION

Al Gore was the logical choice to lead the fedgov charge into the 
electronic frontier. While still a senator, he authored the High 
Performance Computing and Communications Act, a five-year, $3 billion 
boondoggle signed into law in 1991, ostensibly for the purpose of 
advancing our nation's high-tech research and development. He has been 
nearly as passionate about the need for federal intervention into, and 
management of, the exploding technological revolution as he has been 
for UN regulation of the global environment.

In a speech at the National Press Club in Washington, DC on December 22, 
1993, Gore stated: "Today more than ever, businesses run on information. 
A fast, flexible information network is as essential to manufacturing as 
steel and plastic. If we do not move decisively to ensure that America 
has the information infrastructure we need, every business and consumer 
in America will suffer."

"To understand what new systems we must create though, we must first 
understand how the information marketplace of the future will operate." 
And the "marketplace," you can be sure, always takes on interesting new 
meaning when discussed by anyone from Clinton, Gore & Co. The Vice 
President continued: "Some highways will be made of fiber optics, others 
of coaxial cable, others will be wireless. But this is the key point: 
They must and will be two-way highways so that each person will be able 
to send information in video form as well as just words, as well as 
receiving information."

No, here is the key point: For all it's disingenuous bows to the "market" 
and "private sector initiative," the Clinton Administration is determined 
to dictate the development of the exciting new frontier of interactive, 
multimedia communications. It doesn't trust consumers and producers (and 
state and local governments) to work out solutions to the challenges 
presented by the new technologies. It cannot countenance the idea of this 
huge and lucrative new arena of human activity being outside of its 
control. Why must the new highway be two-way, i.e. interactive? Is there 
any proof that consumers even want such services? If so, at what cost? 
Private companies are already racing feverishly and spending billions of 
dollars to develop a host of new technologies that promise to deliver a 
vast assortment of services -- including interactive capabilities -- to 
individuals, businesses, schools, hospitals, and other institutions.

But Mr. Gore is undaunted by reality in this crusade. "This Administration 
intends to create an environment that stimulates a private system of 
free-flowing information conduits," he says. "It will involve a variety 
of affordable and innovative appliances and products, giving individuals 
and public institutions the best possible opportunity to be both 
information customers and providers."

"But how do we get from there to here?" asks Mr. Technoveep. "That is 
the key question facing government." Indeed it is. "It is during the 
transition period that the most complexity exists and that government 
involvement is most important," says Gore. And then he gives the 
Administration's bottom line: "We want to manage the transition." 
Of course. The Clintonistas are big on "managing" and on government-
business "partnerships." They realize full well that in most such 
"partnerships" there is a built-in tendency for the "transition" to 
become permanent and for government control to increase rather than 
decrease. National industrial planning is another name for it. Corporate-
state fascism (government control without outright government ownership) 
is another.

There are plenty of statists in Congress who support this Clinton-Gore 
"vision." According to Senator John D. Rockefeller IV (D-WV), government 
has "a unique, essential role in making sure that the private sector is 
involved in developing new technologies, turning them into commercial 
products, exporting and selling those products, and putting people to work 
in jobs that pay good wages." He made that statement earlier this year in 
announcing his support for the Clinton-favored National Competitiveness 
Act. "This legislation will help our future Thomas Edisons," he asserted. 
Rather, it will help our technological dinosaurs who can't convince private 
investors of the worth of their products and services, but who have 
sufficient political clout to force taxpayers to fund their projects.

FREE MARKET BATTLE

Government is ill-equipped to make any worthwhile market decisions, let 
alone those affecting cutting-edge technologies with potential global 
markets. Titans of the computer industry such as IBM and Apple have faced 
several years of tough times with staggering financial losses and loss of 
market share to more aggressive, nimble, and market-savvy upstarts. Armies 
of electronic engineers, computer wizards, and financial geniuses are 
pulling out their hair over decisions on which technologies to invest in. 
Some of their decisions will be wrong and many entrants into the 
"information superhighway" race will be weeded out by consumers who will 
reject their products and services for one reason or another. That is the 
way of the marketplace.

The Clinton-Gore-Rockefeller way, by contrast, would have government 
bureaucrats, not consumers, pick the winners and losers. This is a sure 
prescription for havoc, bureaucratic inertia, and total frustration of 
the potential benefits offered by new technologies. An excellent example 
of this is the federal government's subsidies to manufacturers of flat-
panel display screens for computers, one of the critical areas now 
dominated by the Japanese. The federal government continues to pour 
hundreds of millions of dollars into producers of flat-panels using the 
nearly 30-year-old liquid crystal display, or LCD, technology, when there 
are other American companies that have developed entirely new technologies 
far superior to -- and less costly than -- the Japanese flat-panel screens.

But besides intervening to make sure that industry provides consumers with 
the products they want and need, says Mr. Gore, it is fedgov's 
responsibility to guarantee that all people have equal access. The sacred 
cow of equality goes under the title of "universal service" in 
telecommunications jargon. In building the "national information 
infrastructure," Gore explains, we want to avoid creating "a society of 
information haves and have-nots." And he correctly notes that "the most 
important step we can take to ensure universal service is to adopt policies 
that result in lower prices for everyone." "But," he goes on to say, "we 
will still need a regulatory safety net to make sure that virtually 
everyone will be able to benefit." Which is a little like saying that 
unless the federal government controls and manages food production and 
distribution we will end up as a society of food "haves" dining on caviar 
and "have-nots" surviving on dog food.

Dr. George A. Keyworth II of the Hudson Institute tells those fretting 
about the information "have-nots" to just "look at the PC [personal 
computer] revolution." "The PC revolution happened at an absolutely 
explosive rate," he reminds us, "taking place in approximately six years. 
It went from around ten percent market penetration to perhaps 50 percent 
practically overnight, and it penetrated down deeply into American 
society." And it continues to penetrate deeper, as technological advances 
and market forces drive down prices of computers, software, and on-line 
services.

The same can be said for cellular phone technology. When AT&T launched 
its venture into the infant cellular phone universe it hired a consulting 
firm, McKinsey & Co., to research the potential cellular market. The 
consultants predicted that by the year 2000 there would be 900,000 
cellular phone users. Another research firm, Herschel Shosteck Associates, 
predicted 1.5 million by the end of the century. They slightly misjudged 
the market; by the end of 1993 there were already 13 million cellular 
customers, and predictions now are that by the year 2000 there will be 
60 million mobile telephone users, not 900,000.

Technology and market forces are throwing just as many uncertainties 
into the interactive, multi-media arena. Fiber optics are giving us 
virtually unlimited communications capabilities for voice, data, and 
video transmissions. The drawback with fiber is cost; laying fiber-optic 
cable to every community is labor- and capital-intensive. Which is one 
big reason wireless technologies are so hot. Another reason is portability. 
Huge advances in microchips and software have freed phones, faxes, and 
computers from wires, allowing telecommunications technology to move 
from conventional analog transmissions to digital, which converts speech 
and data to a stream of ones and zeros understood by computers. Digital 
transmissions are less susceptible than sound waves to static interference 
and can be compressed or transmitted in bursts to make greater use of the 
broadcast spectrum. New computer software programs have made new 
transmission technologies such as cellular digital packet data (CDPD) 
feasible. Existing cellular systems work at only 60 percent efficiency, 
say CDPD developers, leaving a large amount of unused "dead" time. CDPD 
breaks voice and data transmissions into bits that can be squeezed into 
the "dead" spaces between sentences, words, or even syllables in the 
electronic stream -- and then reassembles the transmission at its 
designated destination.

New cellular telephone technology is also freeing up the previously jammed 
frequency spectrum. The U.S. is now covered with thousands of cells, many 
of them miles in diameter, using the same spectrum frequencies. By making 
the cells smaller -- say, thousands or even hundreds of feet across -- and 
covering the country with hundreds of thousands of these cells, it is 
possible to dramatically increase transmission capacity through the re-use 
of currently crowded frequencies and the use of very high frequencies that 
presently have few users. In fact, with emerging technologies making 
frequency spectrum a much less precious and crowded commodity, and making 
signals much less vulnerable to interference, the federal regulation of 
spectrum is becoming harder and harder to justify.

BUREAUCRATIC OBSTACLES

Unfortunately, the regulators and the politicians are unwilling to yield 
any of their power. Instead, they are throwing road blocks onto the 
information highway. Industry giants and new entrepreneurs alike are being 
stymied in their efforts to bring consumers the technologies the Clinton 
Administration says it is all for. In February, a $26 billion buyout of 
cable television giant Tele-Communications Inc. (TCI) by Bell Atlantic 
Corp. fizzled largely because of the Federal Communications Commission's 
(FCC) 17 percent rate roll-back of cable television rates, which caused 
TCI's stock to fall. In April, Southwestern Bell Corp. and Cox Enterprises 
called off a proposed $4.6 billion partnership, citing the FCC's new cable 
television rate cutbacks as the culprit responsible for souring the deal. 
At the same time, AT&T's planned $12.6 billion purchase of McCaw Cellular 
Communications was nixed by Federal Judge Harold Greene, who presided over 
the breakup of AT&T in 1982 and still holds tight control over nearly 
every move AT&T and the "Baby Bells" make toward interactive communications.

The Wall Street Journal reported on April 8th that the FCC's bureaucratic 
morass has created a "logjam." "The agency has approved just five trials 
for interactive video services. Another 17 requests are pending, and some 
of them have languished at the agency for more than a year," said the 
Journal. According to Journal reporters John J. Keller and Leslie Cauley, 
"the FCC uses an approval process that dates back to the early 20th century 
and originally applied to railroad requests to extend their tracks. Today 
it is a fractious affair. One Bell Atlantic filing alone has had more than 
50 pleadings, as consumer advocates, potential competitors, incumbent cable 
operators, and municipal officials weigh in with their conflicting views." 
So much for Mr. Gore's cutting-edge government.

Even when the FCC tries to be helpful to industry, it gets it wrong. Earlier 
this spring, the agency sent cable television operators computer disks with 
the new mandated rate reductions. "But the agency used the Excel spreadsheet 
program instead of Lotus, which is used by almost every accounting department 
in the industry," the Journal reported. "The FCC is now working on a Lotus 
version." Nice, but a little late to do much good.

GET OUT OF THE WAY!

The best thing for the federal government to do is simply to get out of the 
way and let the consumers, inventors, innovators, and producers -- rather 
than bureaucrats and politicians -- build the information autobahn. There is 
no shortage of interested private parties willing to undertake the task. 
Long-distance phone giant MCI has unveiled plans to invest $2 billion to 
build "the nation's first transcontinental information superhighway." In 
Orlando, Florida Time Warner says it will have its Full Service Network 
(FSN) up and running to 4,000 homes by year's end. Customers will be able 
to call up movies on demand, carry out electronic banking and shopping, 
and have access to government agencies. In Omaha, U.S. West is test-
marketing a similar service. Cable operators are seeking permission to 
compete with local phone companies in offering access to computer data 
bases and services. Hundreds of companies are forming alliances and 
consortiums to pool resources for the effort.

END OF ARTICLE

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THE NEW AMERICAN -- July 25, 1994
Copyright 1994 -- American Opinion Publishing, Incorporated.
P.O. Box 8040, Appleton, WI  54913

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