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Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 44
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 45
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 46
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
×
Page 47
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
×
Page 48
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
×
Page 49
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 50
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
×
Page 51
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
×
Page 52
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 53
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 54
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 55
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 56
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 58
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 59
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 60
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 65
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 66
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 67
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 68
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
×
Page 69
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 70
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 71
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 72
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 73
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 74
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 75
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 76
Suggested Citation:"INTERNATIONAL ISSUES." National Research Council. 1981. Computers, Communications, and Public Policy: Report of a Workshop at Woods Hole, Massachusetts, August 14-18, 1978. Washington, DC: The National Academies Press. doi: 10.17226/18716.
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Page 77

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INTERNATIONAL ISSUES In most countries of the world today, an indigenous capac- ity to generate, process, store, disseminate, and use in- formation is viewed increasingly as a necessary resource for economic and social progress. Indeed, many believe there are potentially large benefits to be derived from providing many more nations much greater access than they now have to information technologies and services. Even a modest increase in the capacity of individual countries and groups of countries to cope with the seemingly intract- able economic and social problems that beset them could justify making sizeable investments in information resource development, both nationally and internationally. In fact, the paramount question today seems to be not whether such investments should be made, but how they should be made and, particularly, in what areas they should be made at a time when there appears to be disagreement over the specific objectives and priorities they should serve. THE EMERGING INTERNATIONAL CONTROVERSY OVER INFORMATION RESOURCE DEVELOPMENT Contrary to v/hat might have been predicted even five years ago, conflicts are beginning to arise over who should bene- fit from developing and using the information resources* *The term "information resources" as used in this discus- sion connotes the broad mix of technologies, plant, skills, and products that individuals and organizations can use to originate, transform, and distribute facts and ideas. Thus, "information resources" include the techniques of computing and telecommunications as well as investments in 41

42 of both the industrialized countries and the developing ones and, also, as a central part of the debate, over how such resources should be controlled and managed. These conflicts, some of which could grow into bitter confronta- tions, are directly related to the world-wide wedding of information resource development to prospects for economic and social development. Among the world's poorer countries, for example, many now seem to believe that their prospects for achieving full- fledged modernization may be adversely affected by the in- dustrialized nation's superior ability to generate, process, store, use, and disseminate information of all kinds. Some countries, moreover, complain that the information products of Western news gathering and broadcasting organizations, and of Western-oriented information storage and retrieval services, create a distorted image of their developmental experience and aspirations. As a result, they argue, the industrialized world tends to be much more aware of their failures than of their successes, and, perhaps worse, communications satellites, printing presses, and data bases. They include specialized workers with ability to discover, assemble, manage, and apply knowledge to fields of science, engineering, economic development, and public administration. And they include all the goods and services thereby made possible—telephones, radio, television, newspapers, com- puter data banks, educational courseware, engineering ad- vice, and so on. The term "information industry," in contrast, refers to the set of economic institutions that supply "information machines" and "information content" for use in developing a country's information resources. Currently, those eco- nomic institutions may be either indigenous or foreign, although for most countries today they tend to be mainly foreign—the industrialized nations being the principal suppliers of information and information technology to the rest of the world. For the purposes of this analysis, moreover, one should note that the demand for information machines often reinforces the demand for information con- tent and vice versa. While each has its own main complex of producers, methods, controls, users, and impacts, there is frequently a complex interplay between the two. New network facilities, for example, may enable the delivery of messages not previously possible and those messages, in turn, may create new demand for network facilities.

43 their ability to foster the robust sense of national pride and cultural identity on which successful modernization depends is being undermined.* To date, only a minority seems to view the information activities of the industrialized nations in such a light. Many, however, are challenging the conventional Western view that complex information resources, to be exploited effectively, require complex forms of economic and social organization. In their eyes, the technology of satellite communications systems and computer-based information retrieval services could be as usefully transferred to nations in the early stages of modernization as during the later ones.2 While they concede that the difficulty of effecting such transfers is due in part to economic and social impediments, they also believe that such im- pediments could be overcome were it not for the self- regarding and, some would argue, self-serving parochialism of the industrialized nations. Historically, the development of each nation's indige- nous information resources has been partially shaped by decisions made in international forums3 that the industri- alized countries, because of the weight of their interest, investment, and expertise, have dominated. Out of this a pattern of international resource distribution has emerged, which many developing countries now want to modify in ways that will reflect more directly their own special needs and concerns. Operating through various intergovern- mental forums, they are urging the United States, Canada, Europe, and Japan to take significant steps to make the industrialized world's information resources more useful and accessible to them. The various activities and posi- tion papers leading up to the August 1979 U.N. Conference on Science and Technology for Development reveal not only the objectives and strategies of the developing countries in this regard, but also the magnitude of the effort they are asking the industrialized nations to undertake. At the rhetorical level, there are calls for a "new world information order," and for "free" access and exchange of knowledge and experience—the latter a concept at odds with the U.S. preference, and that of most industrialized na- tions, for treating proprietary information as a marketable commodity. At a more pragmatic level, however, most devel- oping countries recognize that their information resource needs are extensive and are seeking guidance and assistance in developing their own information policies, in educating and training their own cadres of information users and

44 professionals, and in obtaining access to the relevant information technologies and sources of developmentally useful information. Further, they recognize the need for regional and international cooperation in these endeavors and look to the industrialized world not only for more extensive development and deployment of international in- formation systems and networks, but also for help in en- couraging regional approaches and technical cooperation among the developing countries.1* Unfortunately, however, the pleas for help from the developing countries are coming at a time when the indus- trialized nations are struggling to adjust to new and potentially divisive conceptions of the role that informa- tion technology and services will play in their respective futures. Today, most of the world's industrialized nations have economies in which an unprecedentedly large and growing share of their Gross National Product is in some way de- pendent upon being able to generate or retrieve information electronically. Many are also having to cope with unem- ployment and balance of trade problems exacerbated by the rising costs of energy and raw materials and by the inroads that some developing countries are making into the tradi- tional markets for their manufactured goods. This combina- tion of economic circumstances is challenging each of them to consider how its information resource policies can be used to increase productivity in a variety of established industries and also to stimulate the growth of new indus- tries. At the moment, how any one country or group of countries will respond to this challenge is hard to pre- dict, but many observers believe that more than a few of them may respond by lacing their information resource policies with subtle albeit powerful forms of economic protectionism. The prospects for economic friction among the industri- alized nations could also be heightened by the attempts they make to resolve political or social problems they see created by the information sectors of their economies. Maintaining the revenue base for existing postal, telephone, and telegraph services, safeguarding personal privacy, and protecting data processing workers from occupational haz- ards are objectives that many are now pursuing. Yet, to achieve such goals in an orderly manner, and with due re- gard for the extent to which the information sectors of their economies are already closely linked, the industri- alized nations may have to bridge differences among their

45 respective political systems and governmental priorities, and thus far those bridges have not been easy to construct. Consider, for example, the difficulties that many have encountered in attempting to harmonize their domestic poli- cies on the protection of personal privacy. The impetus for harmonization has come primarily because computer- based information technology has made it economically attractive for public and private organizations to pro- cess and store records about individuals in countries other than the ones in which the records were originally generated. Such "transborder flows" of data about iden- tifiable individuals challenge national requirements to protect personal privacy, which, as a practical matter, can be virtually unenforceable outside the country that establishes them and, in the opinion of some, might even induce business and government organizations to locate their data processing and storage operations abroad simply to avoid having to comply with them. To plug such gaps in their own "data protection" statutes, at least five countries—Sweden, West Germany, France, Den- mark, and Austria—have included clauses that empower gov- ernment regulatory authorities to decide whether the laws and regulations of other countries to which personal data may be sent for automated processing or storage adequately protect the privacy interests of the individuals concerned, and, if not, to keep such data from being exported. Sev- eral other countries are also considering such legisla- tion. Since enactments of this sort are at least poten- tially in conflict with the principle that information should flow unimpeded across national boundaries,9 and since many countries that do not now have such legislation may soon enact it, harmonization in the sense of getting all the industrialized countries to agree to legislate a minimum set of generally applicable privacy protection requirements has seemed highly desirable. At the moment, three such efforts are under way—one sponsored by the Council of Europe; one by the Commission for the European Communities; and a third by the Organization for Economic Cooperation and Development (OECD). In all three cases, the drafting task has been difficult, and substantial progress has been made only after several years of hard work. Although none of the industrialized countries seems opposed to the harmonization idea in principle, their dif- ferent levels of information resource development, their different legal traditions, and their different viewpoints on the desirability of government regulation have been formidable obstacles to overcome.

46 In the U.S., for example, any agreement that required a signatory government to enact a data protection statute along the lines of the European ones now in force could subject thousands of small businesses to detailed regula- tion simply because they use computer-based information technology to keep necessary records about their custom- ers.11 In other countries, where large government and corporate bureaucracies could remain the technology's primary users for some time to come, broad-gauge data protection laws, applicable in the main to automated record keeping operations, may have little effect on small business. In addition, some legal experts foresee consti- tutional obstacles to any U.S. legislation that attempted to assert federal jurisdiction over all of the automated personal data record keeping operations of state and local governments, and, if the European model were followed to the letter, it is possible that the U.S. would also be re- quired to establish a new federal regulatory authority at a time when both the Administration and the Congress are attempting to reduce rather than augment the regulatory burden on the private sector. Although these kinds of problems are sometimes por- trayed as unique to the United States, many other indus- trialized nations are also struggling to keep the push for harmonization of their domestic privacy protection policies from unduly constraining their pursuit of com- peting policy objectives. Thus, while the OECD harmo- nization project in particular appears to be making good progress through compromise and careful drafting, no one is able to say for sure whether harmonization will succeed or fail, or even how important success or failure will be for the countries involved. Some, however, believe that failure could lead to interruptions in the flow of data about identifiable individuals across national boundaries and thus to major changes in the way that particular countries develop, deploy, and manage their computing and telecommunications resources. Personal data, moreover, are only one small component of the flow of information across national boundaries. Information used in business and trade, scientific and technical information, and information of a cultural or political nature flows in much larger volume, and all such information has the potential to create controversy by virtue of its economic, social, or ideological sensitivity. One issue of growing concern centers on the proprietary rights that may attach to information assembled as a result of some commercial venture as contrasted with the public

47 nature of information assembled by governments.12 What policies ought to govern global access to each type? How should the availability of scientific, technological, or economic information be administered so as to facilitate the most efficient and equitable management of global resources? Such issues are increasingly a part of the emerging international controversy over information re- source development today, and unfortunately there are pres- sures to resolve them in ways that careful research and analysis would probably show to be not only wasteful but also unwise as a matter of principle. INFORMATION RESOURCE DEVELOPMENT AND ECONOMIC PROTECTIONISM: WILL THE JAPANESE MODEL BE EMULATED? Some U.S. observers of the debate over national and inter- national privacy protection policy suggest that it should be interpreted as a step toward legitimizing autarkical approaches to the control of computer-based information technology, and, if they are correct, that it will inevit- ably lead to a spate of protectionist measures aimed at insulating indigenous information industries of some countries from foreign competition. Although there is still little concrete evidence to support this view of the personal privacy laws, and although data protection regula- tions are surely among the clumsier devices for implement- ing discriminatory foreign trade policies, there apparently are reasons to be concerned about a general shift toward protectionism in the computing, telecommunications, and information services areas. In Europe, for example, including U.S. information ser- vices in EURONET, the new European scientific and techno- logical data network, has been strongly resisted.13 In addition, it appears that in virtually all parts of the world today, information flows across national boundaries are becoming vulnerable to the erection of so-called "non- tariff barriers to international trade." Typically, these take the form of preferential government procurement poli- cies, subsidies to industries whose products could not otherwise compete with foreign ones, and such bureaucratic obstacles as complex and lengthy licensing procedures, which, because of their cost and uncertainty, tend to take the competitive edge off products and services coming from abroad. Steel, chemicals, textiles, and shipbuilding are areas in which such nontariff restrictions are well known, but the computing, telecommunications and information

48 service areas are susceptible too. During the recent "Tokyo Round" of international trade negotiations, for instance, it was only with great difficulty that the U.S. prevailed upon Japan to include procurements by the Nippon Telephone and Telegraph Public Corporation among those open to U.S. firms. Indeed, the difficulties encountered in the "Tokyo Round" indicate not only how hard it can be to elim- inate nontariff barriers, once established, but also how easily new ones can be erected. It is the latter possibility, in particular, that ex- plains why many responsible people in the U.S. are now be- ginning to wonder whether the industrialized countries' efforts to mold the development and use of computer-based information technology might become a pretext for imposing protectionist constraints on "foreign" suppliers of comput- ing and telecommunications equipment and services. In the past, all of the industrialized countries, except Japan, have been chary of doing so. Today, however, some observ- ers believe that the disposition of the Western Europeans especially may be about to change, and their belief has been nourished by the conclusions of a report that a group of government officials and expert consultants submitted to French President Giscard d" Estaing. 11* This document, an analysis of the prospects for "computerizing" French society, recommends that the government of France begin immediately to establish various governmental author- ities and quasi-governmental corporations to plan, develop, and manage the weaving of computer-based information tech- nology into French economic and social life. The rationale for this recommendation can be roughly summarized as follows: The rising cost of imported energy has created a steady drain on the French balance of trade, while at the same time making French exports more costly to produce and thus less competitive in world markets. As a result, domestic economic growth has slowed and unemploy- ment has become a steadily growing problem. The obvious remedy for this situation, and perhaps also the only feas- ible one, is to use new applications of technology, and particularly new applications of computer-based information technology, to increase industrial and manufacturing pro- ductivity in areas that offer promising export opportuni- ties. Doing so, however, could lead in the short run to even more people being thrown out of work with little hope of finding employment in the service sector of the economy where joblessness will also be growing due to the inroads the technology is making there.15 These employment dislo- cations, the report contends, could lead to a resurgence of

49 the domestic instability that has plagued France in the past, and it is, therefore, incumbent upon the government to begin immediately to develop and execute a plan that will allow it to anticipate and manage the economic stresses that "computerization" seems destined to produce. The type of plan the report envisages has a variety of interlocking dimensions. It includes merging several gov- ernment telecommunications agencies into a single, national, telecommunications company capable of launching its own communications satellites.16 It includes revising govern- ment agency procurement practices so that French manufac- turers of computing hardware and software will have an advantage for their wares in the domestic market, and it calls for substantial government investments in basic and i ft applied research. Further, the proposed plan would "nationalize the demand" for computer-based information technology and the services it makes possible by looking to the government to decide where productivity increasing applications of it should be made. Once having made those basic allocation decisions, moreover, the report recommends that the government offset the resulting rise in unemploy- ment by subsidizing the creation of new jobs in areas such as transportation, education, health, culture, travel, and entertainment. These, the report states, are areas of eco- nomic activity "protected" from international competition and, and in addition, ones in which low levels of produc- tivity can be tolerated long enough while the technologi- cal underpinnings of the industrial and manufacturing sectors of the economy are transformed.1^ Reinforcing these concerns and prescriptions, one finds, in addition, a strong belief that even if the magnitude of the economic difficulties that lie ahead is somewhat over- stated, "computerization" will rekindle historic struggles over economic equality and political liberty in French society. This is virtually inevitable, the report argues, because the more highly institutionalized elements—the large corporations and the large government agencies—are the best equipped to use computer-based information tech- nology and can be counted on to do so in ways that will tend to consolidate their own hold on the levers of eco- nomic and political power. Thus, government intervention will be necessary if only to make sure that the technol- ogy is applied in ways that create counterweights to the centralizing and rigidifying tendencies that French economic and political institutions have historically exhibited.20 Finally, the report worries about the possible weakening

50 of French cultural identity if the government fails to stimulate the use of computer-based information technology to develop indigenous stores of basic and applied knowledge. Data banks, the report asserts, are often international, and the development of com- munications allows access to them without any exces- sive tariff penalty from any point on the globe— whence the temptation in some countries to use American data banks without setting up any on their own soil. Indifference to this phenomenon lies in the be- lief that this dependence would be no stronger and no more disturbing than for any other type of supply. But the risk is of a different nature. Data are in- separable from their organization, their mode of storage. In the long run, it is not a question only of the advantage which may be conferred by famili- arity with such and such a datum ... Leaving to others ... the responsibility for organizing this 'collective memory,' while being content to dig into it, is equivalent to accepting cultural alienation. From a U.S. perspective, one of the most interesting features of the French experts' analysis is their argument that changes in the structure of the U.S. information in- dustry, and particularly changes resulting from a proposed offering of direct satellite data communications services, threaten to deprive France of effective control over the development of its own, indigenous, information resources. The argument, in a nutshell, is that whereas governments until now have been able to control the way that computers are used by channeling the way that telecommunications are used, if a foreign-based multinational corporation is able to combine both technologies into a single equipment or service offering, governments will find themselves un- able to control the uses that are made of either one.23 Given the disruptions that the conjoint use of computing and telecommunications is believed to be capable of pro- ducing in a country like France, such a prospect is under- standably considered a poor one and is a principal justification in the report for urging the government to take steps to develop a wholly domestic information indus- try that will eventually make France self-sufficient in everything from computer manufacturing to satellite- launching facilities. The report's insistence on the need for government

51 measures to stimulate the development of a fully articu- lated French information industry, and the protectionist implications of many of the resulting recommendations, surely warrant attention. Although additional competition in the international market for high-technology information resources could be a strong force for innovation, and de- serves to be encouraged for that reason if no other, a com- petitive situation in which some players are subsidized by their governments while others are not seems unlikely to remain that way very long. In fact, for some U.S. ob- .servers, the French report's recommendations call forth the image of a protectionist industrial development program similar in effect to the one that the Japanese launched in 1970. In the Japanese case, the government, through its Min- istry of International Trade and Industry (MITI), has managed in less than 10 years to strengthen the Japanese information industry to the point where it may soon be cap- able of rivaling the U.S. as the world's leading exporter of computing and telecommunications technology. This has been achieved by a government policy that combines import quotas, tax incentives, cash grants, low-interest loans, and limitations on foreign ownership of Japanese firms, with preferential procurement rules, government-guided re- structuring of computer hardware and software production, and generous subsidies for research projects carried out cooperatively by Japan's leading computing and telecommuni- cations suppliers. Furthermore, although the Japanese, as part of the "Tokyo Round" of international tariff negotia- tions, have now backed away from the most severely protec- tionist of the measures, they are still far from adopting a policy of free and open competition. Most foreign com- petitors find their path into the Japanese domestic market blocked by what has been aptly described as an "impenetra- ble thicket of nontariff barriers," and, according to some analysts, Japanese computer manufacturers are now be- ginning to export at prices below what would be possible if their government were not helping them out at home.25 That such protectionism pays off, moreover, seems unde- niable. The Japanese domestic market for computer-based information technology is today the second largest in the world, and Japanese suppliers of the technology are pushing toward the government's export goal of $2 billion per year by 1985, or 16 percent of the country's hardware and soft- ware output.26 This compares favorably with the situation of the U.S. suppliers who are expected to export approx- imately $12 billion per year by 198l, or 39 percent of

52 their total shipments.27 In addition, even if the 1985 export target is not reached, some experts believe that by developing a large population of domestic users, Japan will so transform the productive base of its economy as to assure it a leading position in many fields of international commerce for decades to come. It should be noted, moreover, that France and Japan are not the only industrialized countries in which one finds strong voices in favor of strict national control over indigenous information resources. In Canada offi- cial policy strongly emphasizes the need to stimulate and preserve a distinct Canadian culture along with the role that domestically developed and controlled information resources can play in achieving that objective. Canadian officials also believe that planned development of such resources can foster internal economic stability and have set out to see that they do so. Since 1972, Canada has been diligently examining its information policy options in a series of task force and commission reports. These studies have cautioned, among other things, against the loss of Canadian data processing business to other countries, argued for effective domestic control over Canadian data banks, and stressed the impor- tance of data processing as a source of new jobs for Canadians. Furthermore, in the broadcasting and cable television fields, unequivocal policy now favors Canadian- owned systems that aim to help strengthen both Canadian culture and the Canadian economy. As a result, there have been numerous controversies in recent years over the airing of programs and commercials produced in the United States. Canada, in pursuit of its information resource goals, has also been unusually innovative in the development of communications satellites, cable television facilities, and videotex systems. Nonetheless, the extent to which the Canadian information industry is domestically owned, the industry's contribution to Canada's foreign trade, and the percentage of GNP devoted to pertinent research and development are still considered by the Canadian govern- ment to be less than satisfactory.31 THE DANGERS OF THE PROTECTIONIST APPROACH: A UNITED STATES VIEW Whether protectionist approaches to information research and development will become widespread remains to be seen. The French experts' recommendations are not official policy

53 of the French government and may never become so. As indi- cated, the "Japanese model" has to some extent been aban- doned even in Japan, and Japan's effort to reduce its trade surplus, coupled with the buying power of the yen abroad, may now force further departures from it.'32 The ultimate Canadian position will inevitably make some allowances for Canada's long-standing, special relationship with the United States and the outlooks that the two countries share. Yet, since each country's situation is somewhat different, and since France, Japan, and Canada are not the only ones that could find a protectionist development strategy ap- pealing, the possibility of more rather than less protec- tionism in the international market for computer-based information technology, and for the information processing services it makes possible, cannot be casually dismissed. To appreciate why, one need only consider a few of the undesirable conditions that could be created if the indus- trialized countries' efforts to stimulate and control the development of their indigenous information industries de- generated into a hodgepodge of restrictions on the utiliza- tion of "foreign" technology and services. One such condition, for example, could be the erasing of whatever economic and social benefits are still to be derived from internationalizing access to large segments of the industrialized world's accumulated store of basic and applied knowledge. No one can say how severe the eco- nomic and social consequences of balkanizing those knowl- edge resources might be, but neither can anyone reasonably expect them to be small. Scientific and technical information resources, moreover, are not the only ones that could be affected. Many busi- nesses, such as banks, airlines, credit card issuers, and multinational suppliers of data processing services could find themselves unable to take advantage of technological innovations and other cost saving efficiencies of poten- tial benefit to their customers. In fact, under some cir- cumstances, the pace of technological innovation could be slowed to the point where relying on it to provide oppor- tunities for substantial productivity gains in either the private or the public sector would no longer be advisable. These concerns about cost, efficiency, and innovation must also be arrayed alongside the impact that some indus- trialized countries' information resource strategies could have on the attitudes and aspirations of the developing ones. Particularly if the Western Europeans abandon their commitment to the idea that information resource develop- ment should proceed as freely and openly as possible, many

54 of the developing countries may see little reason why they should not abandon their commitment to it too. Furthermore, if the industrialized nations, including the United States, behave in ways that make their information resources even less accessible to others than they have been in the past, the developing countries could be prompted to retaliate in a manner that would inflict great hardship on the indus- trialized world. As indicated earlier, many of the developing countries have already shown a preference for modes of information resource development that legitimize government control over the flow of information and information technologies into and out of their respective jurisdictions. Although their principal interest to date has been in regulating the activities of foreign news gathering and broadcasting operations, the step from there to regulating all types of information resource development is not a large one. Brazil, for example, has moved to protect its indigenous computer hardware manufacturers by enacting legislation to restrict the importation of minicomputers, and nationaliza- tion or mandated local ownership of computer-supply houses and data processing facilities in other developing coun- tries is on the increase.31 * Some observers, moreover, are fearful that the develop- ing countries may eventually try to control the use and dissemination of information originating in the industrial- ized world by banding together to force major changes in the way access to the electromagnetic spectrum is allo- cated.35 By using their votes in international forums to obtain increased allocations of the spectrum's capacity, for example, the developing countries would be in a posi- tion to lease the use of it to the industrialized countries, pending their own ability to use it.36 While most experts doubt that a majority of the developing countries would support such a move, no one familiar with their concerns and objectives seems willing to rule out the possibility completely. Should the experts be wrong, the consequences for the way that the industrialized world develops and uses information technologies of all kinds could be profound. Depending on the portions of the spectrum most heavily affected, the communications systems that support air travel, overseas telephone calls, maritime navigation, strategic weapons systems, international funds transfer networks, and orbital intelligence gathering and environmental monitoring facilities might all have to be modified at substantial cost and, in some cases, perhaps even curtailed. Indeed,

55 just a decline in the quality of providable service could create a scarcity situation that might require governments like our own to charge a fee for using some portions of the spectrum, in contrast to the current system of cost-free licensing. The thought that any of these outcomes might be real- ized can seem preposterous until one considers that 10 percent of the world's population currently uses 90 per- cent of the spectrum's capacity. In fact, in the short- wave broadcasting spectrum, 1.5 percent of the world's nations use one-fourth of what is available and the imbal- ance is even greater for some other parts of the spectrum. Such striking disparities can give an aura of respectability even to those who advocate drastic reform regardless of cost. Most importantly, however, they can be, and appar- ently are being, used to frighten some of the developing countries into believing that unless they individually or collectively reserve sizeable portions of the spectrum's capacity now, the industrialized nations will intensify their utilization of it to the point where capacity short- ages will become a constraint on the rest of the world's 37 modernization ambitions. This, of course, need not be. There are alternatives, such as the concept of shared allocations, whereby flexible arrangements are promised for spectrum use by the developing countries as future need and technology evolve, while in the meantime the industrial- ized nations may have access to the unused portions. The problem, however, is how to assure that such alternatives will be given due consideration. Although no one can say whether or how an outbreak of protectionism in the industrialized world might affect the developing countries' restrictive inclinations, opportuni- ties for the one to reinforce the other are clearly apparent. Furthermore, even if it were possible to keep the two from becoming intertwined (and, in the short run at least, it may be possible to do so), there seems to be little doubt that the United States, in particular, should do all it can to promote modes of national and international infor- mation resource development that avoid, to the maximum extent possible, any resort to protectionist actions. Of all the countries that could suffer from a barrage of national and international initiatives aimed at restricting the utilization of "foreign" information technologies and services, the United States is surely the one that could suffer the most. Today, the United States is not only the world's leading producer and consumer of information tech- nologies and services; it is also the leading supplier of

56 them to other nations. As indicated in Chapter I,38 even a narrow definition of the U.S. "information industry" yields a sizeable and growing contribution to the nation's Gross National Product, and, in addition, an estimate of net annual exports in the billions of dollars. Compared to other countries' information industries, moreover, the U.S. one is among the few that have prospered without looking to government to fund the majority of its research and development efforts or to provide direct sup- port for the education and training of its skilled work force. Although the U.S. manned space program prompted important advances in semiconductor technology, and in the design and application of microcomputers, most of the rest of the government's research, development, and training support has come from the Department of Defense for needs specific to the military. Furthermore, the amount of the government's R&D contribution, in constant dollars, is declining, both in absolute terms, and as a percentage of the industry's independent research and development o q investments. 0-; Nor have government procurement policies been a major stimulus to industry development. Although the federal government was the first significant purchaser of electronic computing equipment, today it manages less than 10 percent of the nation's installed computing capacity, and much the same situation holds for telecommunications equipment and services. In short, the U.S. information industry is far more responsive to 1;he "pull" of the commercial market- place than to any government stimulus, and hence, it is from that marketplace, both domestically and internation- ally, that it derives not only the incentives but also the financial resources that allow it to sustain its unparal- leled rate of technological and service innovation. If the U.S. information industry had its "druthers," it would no doubt prefer even less dependence on government than it has had in the past. Today, however, it is facing market uncertainty both at home and abroad—at home because of the slowness with which government regulatory policy has been responding to technological change,1*1 and abroad be- cause of the restrictions on purchasing or using the U.S. industry's products that other governments seem to be con- templating. This situation is also being exacerbated by the U.S. government's continuing lack of organizational arrangements suited to assuring a close fit between the postures it takes on matters affecting the industry's de- velopment domestically and the postures it takes on mat- ters affecting the industry's performance outside the U.S.

57 Unlike many other governments, ours has been slow to recognize how a well developed information industry can contribute to the nation's economic health while also promoting efficient use of information technology and services elsewhere in the world. In recent years, the U.S. government's principal policy concern has been to make the information industry's domestic markets as competitive as possible. Because of the expected links among competi- tion, price, and innovation, that policy, all things being equal, should also be a boon to the industry abroad. The problem, however, is that all things will not be equal if other countries take steps that sharply constrain the U.S. industry's export opportunities. Figuring out how to foster healthy competition at home while protecting the industry from discrimination in its overseas markets is obviously a complex task. Regulatory policy is only one and, in the final analysis, perhaps not even the most important factor to be considered. Fiscal and monetary policies that seek to encourage or discourage economic growth generally; policies that commit the U.S. government to helping other governments harness information technology and services to the pursuit of shared economic and social objectives; anti-trust, tax, government-industry collaboration, and research and development policies that provide specific incentives for specific categories of in- dustrial and commercial activity such as innovation and trade; and policies that assure adequate coordination be- tween the government's domestic and foreign initiatives could all play crucial roles. Indeed, through modifications in these other policy areas, one might conceivably offset vulnerabilities created by unregulated competition in the information industry's domestic markets. At the moment, however, no one can say whether or how that might be done, since few in the U.S. seem to recognize that a problem exists and fewer seem prepared to begin tackling it systematically. THE ROLE FOR INDEPENDENT POLICY RESEARCH If the United States is to be in a position to influence the outcome of today's controversies over national and international information resource policy, it must be much better equipped than it now is to understand the factors that account for other countries' needs and aspirations and also, and most importantly, to understand how its own interest might be more or less at risk, depending on how

58 those needs and aspirations are satisfied. To acquire that understanding, many questions need to be answered. Six questions are of the utmost importance: (1) What classes of information ought to be treated as a public good1*2 and therefore available at the cost of access alone, and what classes ought to be treated as a valuable product and therefore available at prices determined by market mechanisms? (2) How can information technology and services be used to help assure sound management and fair allocation of other types of global resources? (3) How does the international market for information technology and services currently operate, and what are the economic factors in the current situation that might shape its future development? (4) How do other countries differentiate between pro- tectionist policies and free trade ones, and what do they perceive to be a reasonable justification for choosing protectionism in lieu of other alternatives open to them? (5) How can the U.S. improve its effectiveness in international negotiations involving information resource issues? (6) How do the U.S. government's domestic policies affect the international market for information tech- nology and services, and, particularly, how do they affect the market position of the U.S. information industry? These six questions and the specific lines of inquiry that each suggests are discussed briefly below. Information as Public Good and Marketable Commodity There is an important controversy today over where the dividing line should be between information treated as a public good and information treated as a marketable com- modity. The traditional view is that the dissemination of information in the public domain is so socially desirable that its price should be based on its marginal cost—i.e., the cost of supplying one more book or one more newspaper. Because of the non-depletable nature of information taken together with the techniques of mass production, this marginal cost approaches zero, a characteristic of one more unit of consumption of a public good, such as a park.

59 Notwithstanding, authors, artists, and inventors are allowed to profit from their works as an incentive to produce them, and as a result we have the private domain of publishing, motion pictures, television programming, technological know- how, and specialized data bases. There is an obvious ten- sion between the two notions: On the one hand, the public domain should be as large as possible to realize the sec- ondary benefits of wide information use. On the other hand, the ability of the private domain to profit from information products should be protected to encourage enterprise and innovation. The trade-offs between these policies are not well described and understood, especially as to how they produce either national income or world-wide developmental benefits. Consequently, this problem can add to the con- troversy over information resource development. Topics for research would include a comparative analysis of various national practices and philosophies with respect to the domain of information content. The system of incen- tives and remuneration for the production of information of various types would also be evaluated as to its effective- ness. Alternative pricing policies would be examined, tak- ing into account both the cost and the value of particular kinds of information, such as technological, economic, and demographic. Methods for tracing the benefits that flow from the application of information should be devised so that governments can make judgments as to whether a market economy or a subsidy economy would be likely to maximize the total benefits^relevant to national objectives. The results of this research would permit informed decisions about international access to public and private informa- tion sources, national and international support of infor- mation dissemination, and the relative cost and value of such support in pursuing foreign policy objectives. Information Technology for Global Resource Management One of the benefits that computer-based information tech- nology holds out to the world in general is the opportunity for individual countries and groups of countries to help solve their domestic and international problems using com- monly accessible stores of data and knowledge.1*3 Already a variety of international organizations, including the International Council of Scientific Unions (ICSU)1*1 * and its component unions and scientific programs, the United Nations'*5 and its specialized agencies such as the World Health Organization, the International Atomic Energy Agency,

60 the Food and Agricultural Organization, UNESCO, and the International Telecommunication Union itself, are using computer-based information technology to store and analyze data pertinent to their missions. Many more will surely want to do so as countries increasingly recognize the need to manage their respective material and intellectual re- sources through international agreements and institutions. Satisfaction with the quality of these services is mixed, however, and the pros and cons of expanding them under the aegis of a supranational bureaucracy need to be care- fully studied. While the United States is currently a leading partici- pant in many international data and knowledge sharing ar- rangements, its leadership role results in the main from other countries wanting to take advantage of its exper- tise. As a rule, the U.S. has not been an independent initiator of such arrangements and, in fact, is poorly equipped to be.1*'5 On one hand, the expertise necessary to harness computer-based information technology to global or regional resource management objectives tends in this country to be concentrated in the private sector, with a few important exceptions, like meteorology, earth resources sensing, and national statistics. On the other hand, few in the private sector are inclined to invest in high- technology information gathering and retrieval services so long as they face the possibility of competing with similar ones developed by government or international agencies. Furthermore, neither government nor the private sector in this country has much understanding of the kinds of formal institutional arrangements other countries may require be- fore they can benefit from what the U.S. has to offer, nor do they have the will and the resources to make a start. The current situation, in short, strongly suggests a need for research to identify key areas in which computer- based information technology could be applied to marshall- ing—from multiple national sources—information useful for international decision making on matters having to do with global resource management—information on mineral resources, for example, or on crops, or diseases, or popu- lation growth and environmental pollution. Such research should begin by assembling an inventory of what the U.S. is already doing, and what other programs exist that the U.S. is not participating in, and why; the organizational arrangements through which information about global re- source development is marshalled and exchanged; the level of technology being used; the amount of investment being made; the extent to which data and knowledge stores are

61 being duplicated unnecessarily; and the impediments created by nationally imposed restrictions on information gathering and dissemination. Once having illuminated those aspects of the question, the focus of the research should then be shifted to helping government policy makers decide what new types of information sharing arrangements ought to be initiated and, among those, which would be most advanta- geously developed by private institutions and which by government ones, including the international organizations. Finally, there is an urgent need for sound analysis of the relative benefits that may accrue to the rich nations and the poor ones as a result of new sharing initiatives and also of the advisability of taking initial design and dem- onstration steps unilaterally. The International Market for Information Technology and Services Most discussions of information resource policy today suf- fer from a paucity of facts as to the supply and demand for information, the nature of international information flows, and how the international market for information technology and services actually operates. Today, far more information of relevance to economic and social devel- opment flows from governmental sources than from private ones, and yet there is much that the private sector might usefully market. Also, as pointed out earlier, many devel- oping countries seem eager to exploit computer-based in- formation technology and other forms of information processing machinery during the early stages of moderniza- tion, but even they recognize how much needs to be done to pave the way for transferring such technology to them. Meanwhile, many of the industrialized nations contend that developing their own indigenous information industries is a necessary step toward assuring sustained economic growth, even though others claim equally strongly that restricting the use of "foreign" information technology and services, for whatever reason, will tend to undermine the economic health of the industrialized world generally. There are, in short, strong beliefs that affect the market, but few facts to characterize it, and almost no suggestions as to how the industrialized countries might proceed to identify and capitalize on opportunities for constructive, coopera- tive action. The empirical void is, in a word, gaping, and needs to be filled from several directions simultaneously. One line

62 of studies, for example, should aim to characterize exist- ing and future international information markets by types of products, types of users, growth potential, and so on. This, in turn, should be supplemented by studies mapping today's international information flows (characterized by type, direction, and intensity), so as to help policy makers determine (a) whether there is in fact more trans- fer of information content by commercial means than through public distribution and (b) whether and how any new re- strictions imposed by the industrialized countries might work to their own or others' disadvantage. Second, the economics of the international information market today need to be thoroughly analyzed in the light of the findings of research on information as a marketable commodity. What effect might alternative pricing policies have on the flow of information into and out of the U.S.? What balance should be struck between the information sup- ply role that governments play and the one that private sector entrepreneurs might sensibly play? Finally, little is known (although a great deal is sur- mised) about the role that information resources play (or might play) in enhancing the developing countries' ability to achieve their modernization objectives. What are their requirements and what do they need in the way of institu- tional arrangements if they are to make effective use of the information resources to which they now have access or might have access in the future? Understanding the Rationale for Protectionism Protectionism can have many motivations, and in the infor- mation resources area few of the ones so far identified are well understood. Yet, unless they are understood, the U.S. can be ill-equipped to participate in discussions and negotiations with other countries. Concern about personal privacy, for instance, has made "transborder data flow" an object of interest for many gov- ernments. In responding to that interest, the U.S. must be able to differentiate between genuine privacy concerns and concerns that are actually protectionist pleadings in dis- guise. Similarly, many governments today are legitimately concerned about how technical standards may affect their world trade position, the health of their domestic economy, or the quality of life of their people. Most Third World countries want to harness information technology to the pursuit of their economic development objectives, and both

63 the developing countries and the industrialized ones are sensitive to the idea that dependence on other countries' information technologies and services may subtly threaten the integrity of their national security and even their national culture. These economic, political, and cultural concerns are obviously pertinent to present and future U.S. trade rela- tionships and also to the prospects for maintaining a cooperative atmosphere in international policy making bodies. Hence, compromises must be reached, and they must be compromises that, while sensitive to sovereignty con- cerns, nonetheless permit an unimpeded flow of the kinds of information on which industry and commerce depend. To date, the U.S. has tended to deal with these issues piecemeal, and in terms of its own idiosyncratic reading of what other countries' motivations are or ought to be. Plainly, this approach will not suffice much longer, and thus it is important to establish, as expeditiously as possible, where we and other countries actually stand on the protectionism question. Three types of studies are needed. First, it is essential to identify the foreign regula- tions and standards that force unique requirements on imported information technology and services; that dictate the design of computer hardware and software; that impede the flow of information across national boundaries; that require that data bases be duplicated for domestic use; or that restrict the ownership or management of computer sys- tems or facilities. Second, a study should be made of what other countries consider evidence of economic or cultural domination by "foreign" information industries and of how such evidence affects their decisions on specific information resource issues. Is there, in fact, a predictable relationship between the positions they espouse rhetorically and the positions they take on specific policy questions, either domestically or internationally? Finally, existing efforts to harmonize national laws enacted for bona fide data protection purposes—efforts such as the ones currently being made by the Organization for Economic Cooperation and Development and the Council of Europe—need to be supported in some areas by compe- tent research. How, for example, can the U.S. contribute to the development of a body of international law that will enhance the utilization of computer-based information technology by providing for expeditious administration and adjudication of cases of alleged privacy invasion or

64 computer-related fraud involving the laws of more than one country? Improving U.S. Effectiveness in International Negotiations The processes by which the U.S. government prepares for international negotiations on information resource ques- tions too frequently fail to assess the national interest broadly and often get under way much too late. In part, this is because the policy making jurisdiction is splin- tered among several agencies of the Executive branch, the Congress, and a half-dozen regulatory agencies. In part, however, it also reflects a historic inattention to how the government's domestic and foreign policy initia- tives may interact in the information policy area. While being able to coordinate the positions and views of all the interested branches and agencies would be ideal, a process that would do no more than make each of them aware of what the others are doing could improve the current situation greatly.1*7 In addition, there are also many nongovernmental meet- ings and conferences that internationally recognized pro- fessionals attend as experts on specialized topics rather than as representatives of their respective governments. In information, computing, and telecommunications, these gatherings typically deal with the design and implementation of international research projects, reporting on the results of scientific and technical research, the development of technical standards and operating procedures, and the de- sign of education and training programs. Hence, they con- tribute to the overall representation of U.S. viewpoints and practices with regard to certain information policy questions, and U.S. attendees, therefore, should prepare themselves both in a timely manner and with an eye to how they can help to promote the national interest through prior coordination, consultation, and formulation of spe- cific objectives to be sought at such meetings. As a step toward strengthening the government's negoti- ating and representational capabilities, two studies would seem to be useful: first, a retrospective case study of U.S. preparations for a recent international conference on information resource questions, and, second, an analysis of how the pertinent U.S. government agencies and the private sector have worked together in preparing for international nongovernmental meetings of experts. The former might well focus on the 1977 and 1979 World Administrative Radio

65 Conferences (WARC). Since a competent study would reveal how U.S. positions were prepared and what problems were encountered in the course of doing so, such a study, if undertaken soon, could help in preparing for the next WARC conferences scheduled for 1982-83 on mobile radio and also for the 1982 Plenipotentiary Meeting of the International Telecommunication Union. Effects of U.S. Domestic Policy on the International Information Market Government policy makers and leaders in business and educa- tion need help in understanding the economic and social im- portance of a nation's information industry. In the U.S. in particular, failing to develop that understanding could lead not only to gross misuse of a valuable resource, but also to forfeiture of the U.S. industry's world preemi- nence. Thus, among the key questions to be studied are the following: (1) What accounts for the U.S. information industry's past success? (2) How is the U.S. information industry currently bene- fited or disadvantaged by government fiscal, monetary, tax, antitrust, procurement, and research and develop- ment policies, or by government positions on non-tariff barriers to trade with other countries (such as export licensing, for example)? (3) What is the likelihood that increased competition within the U.S. information industry will strengthen or weaken its competitive position abroad and thus its consistently significant contribution to the nation's foreign trade balance? (4) Would the industry benefit from stepped-up invest- ment in research and development and, if so, stepped-up by whom? (5) Are new sources of venture capital needed and, if so, for what segments of the industry?

66 NOTES AND REFERENCES 1. Official manifestations of this view first became prominent at the Fourth Conference of Heads of State or Government of the Non-Aligned Countries (Algiers, 1973). In their Action Program for Economic Coopera- tion (Articles 13 and 14) seventy-five member nations called for developing countries to: "reorganize exist- ing communication channels which are the legacy of the colonial past, and which have hampered free, direct and fast communications among them; initiate joint action for the revision of existing multilateral agree- ment with a view to reviewing press cable rates and facilitating faster and cheaper intercommunication; take urgent steps to expedite the process of collec- tive ownership of communications satellites and evolve a code of conduct for directing their use; promote increased contact between the mass media, universities, libraries, planning and research bodies and other in- stitutions so as to enable developing countries to exchange experience and expertise and share ideas; exchange and disseminate information concerning their mutual achievements in all fields through newspapers and periodicals, radio, television and the news media of their respective countries; and formulate plans for sharing experience in this field, inter alia through reciprocal visits of delegations from information media and through exchange of radio and television programs, films, books, photographs, and through cul- tural events and arts festivals." Similar concerns and calls for action were reiter- ated at ministerial and specialized conferences of the non-aligned nations in Lima (1975), Tunis, Mexico City, and New Delhi (1976), and at the fifth summit meeting of heads of state in Colombo (August, 1976), where eighty-four participating nations adopted a Political Declaration stating that "a new international order in the fields of information and mass communication is as vital as a new international economic order." These issues continue to occupy an important place in the deliberations of the non-aligned nations. These concerns have also been debated extensively within UNESCO, most recently by the International Com- mission for the Study of Communications Programs (com- monly known as the MacBride Commission). An extensive exposition of the issues in controversy is contained in the more than 100 working papers produced in this

67 2-year study in addition to its provisional Final Report (Paris: UNESCO), November 1979. For a useful overview of issues, developments and players involved in the debate on the "world informa- tion order," particularly as they relate to U.S. inter- ests, the reader is also referred to Jonathan F. Gunter, et al. The United States and the Debate on the World Information Order. Washington, D.C.: Academy for Educational Development, Inc., June 1979 (Revised). This study report, sponsored by the Ford Foundation and the International Communications Agency, and based on an extensive review of primary documents, as well as consultations with several industry, gov- ernmental and academic advisors, was prepared to assist the U.S. Government in preparations for the UNESCO General Conference in October 1978 and in its continuing deliberations on international communica- tions policy. The belief that modern information technologies are keys to, rather than the results of, economic and social development is a basic premise underlying many of the recommendations and calls for action by devel- oping countries at recent UN Conferences. See for example, the Main Working Document (SC/78/Conf. 210/ Col. 5, 1978) and the Final Report (SC/MD/64, March, 1979) of the Intergovernmental Conference on Strategies and Policies for Informatics, August 28-September 6, 1978, Torremolinos, Spain (Paris: UNESCO and the Intergovernmental Bureau for Informatics); the work- ing documents and proposals considered at the World Administrative Radio Conference, September 24-December 6, 1979, Geneva. Final List of Documents. Document #984, May 15, 1980 (Geneva: International Telecommu- nication Union); and The Vienna Program of Action on Science and Technology for Development, adopted by the United Nations Conference on Science and Technol- ogy for Development (UNCSTD) in August 1979. The voluminous UNCSTD documentation (reports of preparatory meetings, special reports, national pa- pers, and related studies) is replete with references to the need for these technologies and to the infor- mation access they will facilitate. See, for example, Analysis of UNCSTD Developing Country National Papers- Working Note, prepared by Barbara Lucas, Division of Policy Research and Analysis, National Science Foun- dation, August, 1979; and Science and Technology

68 for Development, International Conflict and Coopera- tion—A Bibliography of Studies and Documents Related to the 1979 UN Conference on Science and Technology for Development, prepared by the Research Policy Institute, University of Lund, Sweden, and the Program on International Science and Technology Affairs , Council on International and Public Affairs, New York, Vols. 1-6. Lund, April 1977-November 1979. See also, Heather Hudson, et al. The Role of Tele- communications in Socio-Economic Development: A Re- view of the Literature with Guidelines for Further Investigations, prepared for the International Tele- communication Union (ITU); (Keewatin Communications) , May, 1979, the reports of the UN Secretary-General on the Application of Computer Science and Technology to Development. New York: United Nations Department of Economic and Social Affairs, 197l, 1973, and 1976, and the 37 papers presented at the "Meeting on The Knowledge Industry and the Process of Development," held in Paris, June 9-12, 1980, under the sponsorship of the OECD Development Centre. 3. For example, the International Telecommunications Union (ITU) and its subsidiary bodies such as Consul- tative Committee on International Telephone and Tele- graph, International Telecommunication Union (CCITT) and World Administrative Radio Conference (WARC); Coordinating Committee of the NATO countries, plus Japan, minus Iceland, which deals with trade items having strategic implications (COCOM); United Nations Educational Scientific and Cultural Organization (UNESCO); Committee on European Posts Telecommunica- tions (CEPT); International Telecommunications Satel- lite Consortium (INTELSAT): (International Maritime Satellite Consortium (INMARSAT). 4. See for example, Tefko Saracevic, "Perception of the Needs for Scientific and Technical Information in Less Developed Countries" (A Review of the Literature from Developing Countries and International Organizations), in Vladimir Slamecka, (ed.), Scientific and Technical Information Services for Socioeconomic Development, prepared for the Agency for International Develop- ment. Washington, D.C.: International Science and Technology Institute, Inc.; April, 1979. Developing country positions on their information resource needs, and the assistance required to meet

69 these needs are also documented in the preparatory deliberations and reports of the U.N. Conference on Technical Cooperation among Developing Countries (Buenos Aires, Argentina), August-September, 1978; the Unesco Intergovernmental Conference on Scientific and Technological Information for Development, May 28- June l, 1979, and UNCSTD (see references in Footnote 2) 5. See, for example, the studies and concerns of the OECD Working Party on Information, Computer and Communica- tions Policy and of the Commission of the European Communities' Directorate for Scientific and Technical Information and Information Management. See also Paul G. Zurkowski, "Misconceptions About Information Costing the United States a Bundle," Publishers' Weekly, July 9, 1979, pp. 37-38. 6. See, for example. Marc Uri Porat, The Information Economy: Definition and Measurement, OT Special Pub- lication 77-12(1), Office of Telecommunications, U.S. Department of Commerce (Washington, D.C.: U.S. Gov- ernment Printing Office), May 1977; and Simon Nora and Alain Minc, L'Informatisation de la Societe, Rap- port a M. le President de la Republique (Paris: La Documentation Francaise), 1978. The latter has been translated into English by Transmantics, Inc. of Washington, D.C. 7. Rein Turn, (ed.), Transborder Data Flows: Concerns in Privacy Protection and Free Flow of Information [Volume 1: Report of the AFIPS Panel on Transborder Data Flow; Volume 2: Supporting Documents (Annotated Bibliography; National Laws; International Resolu- tions, Conventions and Guidelines)] (Arlington, Virginia: American Federation of Information Pro- cessing Societies, Inc.), 1979. 8. The text of these statutes can be found in various English-language sources. See, for example, U.S. Department of Commerce, Office of Telecommunications, Selected Foreign National Data Protection Laws and Bills. Washington, D.C.: U.S. Government Printing Office, March, 1978; Ulrich Dammann, Otto Mallmann, and Spiros Simitis (eds.), Data Protection Legisla- tion: An International Documentation. Frankfurt am Main: Alfred Metzner Verlag GmbH, 1977; and Trans- national Data Report, a bi-monthly report on

70 international information politics and regulation. Washington, D.C.: The Wayne Smith Company, 1978. 9. This principle has traditionally guided the work of, for example, the International Telecommunication Union (ITU) and its affiliated bodies. See, for example, International Telecommunications Convention: Final Protocol to the Convention; Additional Protocols to the Convention; Resolutions, Recommendations and Opinion. Geneva: General Secretariat of the Inter- national Telecommunication Union, 1959, especially Chapter IV relating to public use and establishment of channels. The principle of "free flow of information" across boundaries is also variously expressed in: 1) the U.N. Declaration on Freedom of Information, (1946) which notes that "all states should proclaim policies under which the free flow of information within countries and across frontiers will be protected. The right to seek and transmit information should be insured to enable the public to ascertain facts and appraise events ..." (U.N. General Assembly Resolu- tion 59(1)); 2) Article 19 of the Universal Declara- tion of Human Rights (1948) , which states that the right to freedom of opinion and expression includes... "freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers"; and 3) the International Covenant on Civil and Political Rights (1966), which stipulates that the right to freedom of expression "comprises the freedom to seek out, to receive and to communicate information and ideas of all kinds, regardless of frontier, whether in oral, printed or article form, or by any other means of the individual's choice" (emphasis added). Variations on this theme can also be found in UNESCO's Constitution, the Declaration of the Principles of International Cultural Cooperation (UNESCO, 1966; and the Final Act of the Conference on Security and Cooperation in Europe, Helsinki, 1975. 10. See, for example, Hans Peter Gassmann, "Data Networks: New Information Infrastructure," The OECD Observer, No. 95, (November 1978), pp. 11-16; and Phil Hirsch, "Europe's Privacy Laws, Fear of Inconsistency," Datamation, 25:2 (February 1979), pp. 85-88.

71 11. The impact of a broad-gauge, generally applicable privacy protection statute on small business was one of the reasons why the U.S. Privacy Protection Study Commission recommended against such legislation. The Commission also believed that the principal threat to personal privacy interests comes from the record keep- ing operations of public and private bureaucracies; that is, organizations that, unlike small businesses, tend to deal with individuals on the basis of records kept about them rather than on the basis of face-to- face contact. See Personal Privacy in an Information Society: The Report of the U.S. Privacy Protection Study Commission. Washington, D.C.: U.S. Government Printing Office, 1977. 12. This issue is one of several covered in the ongoing negotiations within the U.N. and its specialized agencies on international codes of conduct on the transfer of technology (United National Conference on Trade and Development); on transnational corporations (U.N. Commission on Transnational Corporations); and on the revision of the Paris Convention for the Protection of Industrial Property (World Intellectual Property Organization). This topic is also of concern to the OECD Working Party on Information, Computer and Communications Policies, and is likely to be considered in its forth- coming study of the legal and economic problems re- lating to the transborder flow of nonpersonal data, as well as in the deliberations of the proposed Con- sultative Group to assess OECD member countries' scientific and technical information programs for developing countries. 13. Roger K. Summit, "Euronet: Boon or Bomb," paper pre- sented at the Annual Meeting of the National Feder- ation of Abstracting & Indexing Services, Arlington, Virginia, March 6-8, 1979. 14. Simon Nora and Alain Minc, L'Informatisation de la Societe, op. cit. 15. Over the next 10 years, for example, the report en- visages the possibility of a decline on the order of 30 percent in the number of clerical and other types of low-to-mid-level white-collar jobs available in the private sector, and in certain areas of the

72 public sector. Ibid., pp. 35-38. This concern about the effects on white-collar employment is also found in British discussions of the impact of microproces- sors on productivity. See, for example, lann Barron, et al., The Future with Microelectronics—Forecasting the Effects of Information Technology. London: Frances Pinter Ltd.; May, 1979; Kenneth Owen, "Microelectron- ics: This Could be Man's Greatest Leap Forward," The Times, October 2, 1978; and Peter Large, "Micro- chip Report Warns of 5M Jobless—The Challenge and Threat of the Micro-chip Revolution," The Man- chester Guardian, October 6, 1978. 16. Nora and Minc, op. cit., pp. 86 ff. 17. Ibid., p. 14. 18. JMd. , pp. 95-97. 19. Ibid., pp. 44-49. 20. Ibid., pp. 15-16. 21. Ibid., pp. 71-72. 22. The report appears to be referring to Satellite Busi- ness Systems (SBS), a new corporation jointly owned by IBM, the Communications Satellite Corporation, and the Aetna Life and Casualty Company. Beginning in 198l, SBS will offer satellite-based data, voice, and video communications services to business enterprises in the United States. 23. Nora and Minc, op. cit., pp. 44-66. 24. Bro Uttal, "Japan's Big Push in Computers." Fortune, September 25, 1978, p. 66. 25. A segment of the U.S. semiconductor industry has recently urged Congress to deal with what it considers unfair Japanese competition. Semiconductor technology has been likened to "the crude oil" of electronics—as oil is key to the entire U.S. economy, semiconductors are key to computers and the growing range of elec- tronic products, consumer and industrial. See, Edward K. Yasaki, "Japan's Prowess in Semis", Data- mation, 25:8. July, 1979, pp. 64, 67, 68.

73 26. Uttal, op. cit., p. 65. 27. Philip S. Nyborg, et al. (eds.), Information Process- ing in the United States, A Quantative Summary. Washington, D.C.: American Federation of Informa- tion Processing Societies, Inc., October, 1977, Table 1-1. 28. Bro Uttal, "Exports Won't Come Easy for Japan's Com- puter Industry," Fortune, October 9, 1978, p. 146. 29. Oswald H. Ganley, The Role of Communications and Information Resources in Canada, Publication P 79-1. Cambridge: Harvard University Program on Information Resources Policy; June 1979. See also, "Canada Acts to Protect Sovereignty," Information World, 1:3. April, 1979, pp. 2, 13. 30. "VIDEOTEX" is a generic name recently applied (by the Canadians) to communications systems capable of delivering alphanumeric and simple graphic informa- tion to a home television receiver. In one variant, the information is encoded onto some of the vertical retrace lines of a broadcast or a cable television signal and decoded by a specialized circuit in the receiver. In another variant, the information is transmitted upon request, over a telephone line from a data bank dedicated to the VIDEOTEX service and similarly decoded by the receiver. 31. These preoccupations with the development and protec- tion of Canada's domestic information resources are often expressed as a concern about "national sover- eignty." The following quotation from a Canadian government news release captures the mood: "The Canadian communications system is in the midst of a crisis more profound than any that has affected it since the 1930's....Many have drawn special atten- tion to the need to safeguard Canada's cultural sovereignty....The recent hearings before the CRTC on the CBC license renewals, the spectacle of U.S. broad- casters seeking redress against Canadian legislation and tax laws, and the recent applications by the cable companies to deliver non-programming services (which are opposed by the telephone companies) provided other opportunities for the public and the media to add their voices to the chorus of concern.

74 "At the same time, developments in the areas of fibre optics, satellites, interactive television and computer technology threaten not only to exacerbate the existing problems, but also bring new ones and new opportunities in their wake. Among other things, these new technolo- gies could: radically increase the amount of American television programming entering into the country; further aggravate the balance of payments problem in electronic products; increase the difficulties being experienced by the Post Office, schools and universi- ties, publishing industries, and the clients they are meant to serve; and compromise the country's capacity to control future fundamental economic, political, social and cultural directions. On the other hand, these technologies could—if imaginatively and quickly applied—permit a significant re-patriation of the electronics industry; provide a new base for the development of the high technology area; stimulate the growth of a whole host of new programming and information-based services, and generate more private support for a revitalized cultural sector. It is apparent, therefore, that the new technologies con- stitute both threats and opportunities, which could be used either to further erode Canadian sovereignty or to strengthen it considerably." (See, Canada, Department of Communications, Independent Committee to Recommend on the Future of Telecommunications in Canada, News Release. Ottawa, November 30, 1978. 32. Uttal, "Exports Won't Come Easy ...", op. cit., p. 139. 33. Some experts believe that Japan and the Western Euro- pean countries, individually and collectively, are determined to build an information industry that will challenge U.S. leadership. An attempt was made a few years ago to form a combination of Siemens, CII, and ICH aimed at this result. Although it did not suc- ceed, the determination to succeed has not diminished. The Commission of the European Communities is actively fostering the development of a European information industry. As a means of further strengthening their competitive position, some European firms are now attempting to acquire American computer, peripheral, and software/systems companies. See, for example, Ralph Emmett, "France's Thomson Eyes U.S.," Datama- tion, 25:3 (March, 1979), pp. 85-87.

75 34. See, Angeline Pantages, "Cracking Brazil Nuts," Datamation, 25:8 (February 1979), pp. 78-79; and Angeline Pantages, "Erosion Extends Around the World," Datamation, 24:4 (April 1978), p. 182. 35. The New World Information Order, A Report by George Kroloff and Scott Cohen to the Committee on Foreign Relations, U.S. Senate, November, 1977 (mimeographed). 36. The "electromagnetic spectrum" is the complete range of radio waves that space is capable of transmitting. The term is derived from the familiar "spectrum" of colors displayed by the passage of white light through a prism. More precisely, however, the spectrum is a framework for describing various radio waves by one of their distinguishing characteristics—their frequency of oscillation—much as house numbers on a street are a framework for describing houses by their position. A large or small house can be located at a given num- ber, but two houses cannot be at the same number on the same street without producing congestion. Simi- larly, two radio waves of the same frequency cannot be at the same place without interfering with each other. It is thus necessary by the process of spec- trum allocation to restrict radio frequencies to certain localities, and also to certain uses, to pre- vent congestion and interference—much as zoning provides for orderly land use. Access to the spec- trum is allocated by the World Administrative Radio Conference (WARC), a subsidiary of the International Telecommunication Union. 37. Kroloff and Cohen, op. cit., pp. 33-34. 38. Pp. 1-1l, supra. 39. Amount Expended by Industry for R & D in the Office, Computing and Accounting Industries (SIC 357) Contributed by Contributed by Year Total Federal Government Industry 1975 2.220 B 486 M 1.734 B 1976 2.402 B 509 M 1.893 B 1977 2.758 B 546 M 2.212 B 1978 3.129 B 552 M 2.577 B

76 Source of the above information is: Research & Devel- opment in Industry, 1977, NSF 79-313. Washington, D.C.: National Science Foundation; 1979, pp. 13, 16, 19, and Research and Development in Industry, 1978, NSF 80-307. Washington, D.C.: National Science Foundation, 1980, pp. 1l, 14. 17. 40. Martha M. Gray, Computers in the Federal Government: A Compilation of Statistics—1978, NBS Special Pub- lication 500-46, Washington, D.C.: U.S. Department of Commerce, April, 1979. 41. See Chapter III, supra. 42. I.e., as that term is understood by economists. 43. International Institute for Applied Systems Analysis, Computer Science Group, Study of the Potential Use of Informatics Technology for Problems in Scientific and Technological Cooperation, prepared for UNESCO by the Computer Sciences Group, with the participation of the Management & Technology Area, Vienna, July, 1978. 44. International Council of Scientific Unions, Organiza- tion and Activities. (Paris), October, 1976. See also, International Council of Scientific Unions, Panel on World Data Centres, Fourth Consolidated Guide to International Data Exchange through the World Data Centres. Washington, D.C.: Secretariat, ICSU Panel on World Data Centres, June, 1979. 45. United Nations, Inter-Organization Board for Informa- tion Systems, Directory of United Nations Information Systems and Services. Geneva: United Nations, March, 1978. 46. National Science Foundation, Division of Policy Re- search s Analysis, U.S. Government Participation in the Science & Technology Programs of Selected Multi- lateral Organizations. Prepared by Eugene G. Kovach. Washington, D.C.: National Science Foundation, Febru- ary 1978. 47. The President's First Report to the Congress on Inter- national Information and Communications Issues (in press) represents progress along these lines. See,

77 Department of State, Reports Submitted to Congress Pursuant to the Foreign Relations Authorization Act, Fiscal Year 1979 (P.L. 95-426) [Submitted to the Committee on Foreign Relations, U.S. Senate and the Committee on Foreign Affairs, U.S. House of Rep- resentatives. 96th Congress, 1st Session]. Wash- ington, D.C.: U.S. Government Printing Office, July, 1979. pp. 79-95. Likewise, the formation of a new Interagency Working Group on Information, under the Office of Science and Technology Policy Committee on International Science, Engineering and Technology, bodes well in this regard.

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