cj#506> CYBERSPACE INC & the Straits of Consumption

1996-03-21

Richard Moore


        CYBERSPACE INC & the Straits of Consumption

                   Richard K. Moore
                    20 March 1996


        There's only one point of natural scarcity in the architecture of a
commercialized cyberspace, and that is CONSUMER-HOURS.  There will be
nearly unlimited bandwidth and content offerings available to the
info-structure, but each user/consumer has only a limited amount of time
that can be spent each day consuming/viewing information products.

        The obvious and natural objective of the major corporate players,
assuming a goal of maximizing overall cyber-profits, would be to establish
monopoly control of the Straits of Consumption -- the local loops into the
home.  Thus, as with today's broadcast television, the true marketplace
becomes the selling of ACCESS-TO-CONSUMERS -- BY the straits-controllers TO
the information-product distributors.

        Thus Disney pays Southwestern Bell for the right to sell Bambi to
Bell subscribers.  This payment might be in the form of royalties on Bambi
sales, or it might be simply a stiff direct-charge for network access:
that's a matter of bi-lateral deal-making.  The consumer pays Disney to see
Bambi, or alternatively, an advertiser-pool pays Disney (more than Disney
pays Bell) for the right to sponsor a freebie Bambi broadcast.  Thus is
re-incarnated the market structures so profitably exploited in today's
broadcast-television and cable industries.  Artifically created scarcity
creates the conditions for maximum profit extraction from an
investor-producer-broker-distributor-outlet channel system.

        In order to implement this best-of-all-possible capitalist
scenarios, it is necessary to establish a laissez-faire
communications-regulatory framework which will give deep-pocket
corporations a free hand to lay down the rules of the cyber-road, and then
to systematically exploit the traffic.  The groundwork for such a
regulatory regime has been firmly established by the Telecom Deform Act of
96, and the jockying-for-position of the players is underway in the spate
of recent info-industry mergers.  Already the spectrum wars have begun,
with the probable outcome that wireless distribution will become
monopolizable, completing the corporate capture of the Straits of
Consumption.

        A consequence of this cyber regime is that the price of delivering
information to a user is set artificially high, since that's the
point-of-leverage that scales the overall profit-making operation.  The
price is not based on the cost of providing network bandwidth, but on a
maximize-overall-profit formula.

        Thus, due to corporate profit-seeking maneuvers, non-commercial use
of the info-structure will be prohibitively expensive.  Community
networking, access to government information, democratic discourse --
indeed the whole familiar Internet phenomenon -- will not be economically
viable in tomorrow's Cyberspace Inc regime.



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    Posted by Richard K. Moore  -  •••@••.•••  -  Wexford, Ireland
     Cyberlib:  www | ftp --> ftp://ftp.iol.ie/users/rkmoore/cyberlib
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