National Academies Press: OpenBook

Revolution in the U.S. Information Infrastructure (1995)

Chapter: The Promise of the National Information Infrastructure

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Suggested Citation:"The Promise of the National Information Infrastructure." National Academy of Engineering. 1995. Revolution in the U.S. Information Infrastructure. Washington, DC: The National Academies Press. doi: 10.17226/4944.
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Suggested Citation:"The Promise of the National Information Infrastructure." National Academy of Engineering. 1995. Revolution in the U.S. Information Infrastructure. Washington, DC: The National Academies Press. doi: 10.17226/4944.
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Suggested Citation:"The Promise of the National Information Infrastructure." National Academy of Engineering. 1995. Revolution in the U.S. Information Infrastructure. Washington, DC: The National Academies Press. doi: 10.17226/4944.
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Suggested Citation:"The Promise of the National Information Infrastructure." National Academy of Engineering. 1995. Revolution in the U.S. Information Infrastructure. Washington, DC: The National Academies Press. doi: 10.17226/4944.
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Suggested Citation:"The Promise of the National Information Infrastructure." National Academy of Engineering. 1995. Revolution in the U.S. Information Infrastructure. Washington, DC: The National Academies Press. doi: 10.17226/4944.
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Suggested Citation:"The Promise of the National Information Infrastructure." National Academy of Engineering. 1995. Revolution in the U.S. Information Infrastructure. Washington, DC: The National Academies Press. doi: 10.17226/4944.
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Suggested Citation:"The Promise of the National Information Infrastructure." National Academy of Engineering. 1995. Revolution in the U.S. Information Infrastructure. Washington, DC: The National Academies Press. doi: 10.17226/4944.
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Suggested Citation:"The Promise of the National Information Infrastructure." National Academy of Engineering. 1995. Revolution in the U.S. Information Infrastructure. Washington, DC: The National Academies Press. doi: 10.17226/4944.
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Suggested Citation:"The Promise of the National Information Infrastructure." National Academy of Engineering. 1995. Revolution in the U.S. Information Infrastructure. Washington, DC: The National Academies Press. doi: 10.17226/4944.
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Suggested Citation:"The Promise of the National Information Infrastructure." National Academy of Engineering. 1995. Revolution in the U.S. Information Infrastructure. Washington, DC: The National Academies Press. doi: 10.17226/4944.
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Suggested Citation:"The Promise of the National Information Infrastructure." National Academy of Engineering. 1995. Revolution in the U.S. Information Infrastructure. Washington, DC: The National Academies Press. doi: 10.17226/4944.
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Suggested Citation:"The Promise of the National Information Infrastructure." National Academy of Engineering. 1995. Revolution in the U.S. Information Infrastructure. Washington, DC: The National Academies Press. doi: 10.17226/4944.
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Suggested Citation:"The Promise of the National Information Infrastructure." National Academy of Engineering. 1995. Revolution in the U.S. Information Infrastructure. Washington, DC: The National Academies Press. doi: 10.17226/4944.
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Suggested Citation:"The Promise of the National Information Infrastructure." National Academy of Engineering. 1995. Revolution in the U.S. Information Infrastructure. Washington, DC: The National Academies Press. doi: 10.17226/4944.
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The Promise of the National Information Infrastructure ROBERT W. STEARNS There is a computer industry joke that is very relevant to a dis- cussion of the National Information Infrastructure (NII). It explains why God was able to create the universe in 6 days: He did not have an installed base. Creating the NII is certainly not as vast a task as creating the universe, although the concept does seem to have boundless poten- tial. The joke came to mind because realizing this potential will require careful navigation through the baggage of old technologies and partisan and entrenched points of view in industry, government, and academia. Underlying the sometimes overblown talk about the information superhighway is a widespread recognition that information technol- ogy has the potential to dramatically change many aspects of our lives. We also are recognizing that information systems have the potential to play a central role in reinvigorating many of the institu- tions of our society. Over the last decade, information technology has been an essen- tial tool for corporations. It has enabled the cost cutting, reorganiza- tion, and re-engineering that have helped re-establish the United States’ global competitiveness and rejuvenated many U.S. compa- nies. We are now discovering that this technology could have a similar effect on our noncorporate lives: It could change the ways we 25

26 ROBERT W. STEARNS educate our children and ourselves, interact with government, man- age our health, and entertain and socialize. At Compaq, we believe we play a central role in the development of the NII, particularly as the computer evolves from a device used principally for computation to one that is dominantly used for communication. There are, of course, many different definitions of the NII, de- pending on one’s business and/or political perspective. NII has been described variously as: a 500-channel interactive multimedia video/ cable network; numerous “edutainment” multimedia products and services; the natural evolution of today’s telephone system from one that is voice-oriented to one that supports voice, data, image, and video; an electronic marketplace for commercial and/or consumer products and services; a commercial version of the Internet; a public network for government information and services, medical informa- tion, and education; not a single network at all but a loose aggregate of many different networks and services with common or related access; a public-policy debate about social rights and access to infor- mation; a political battle in which the telecommunication and cable industries may attempt to reassert their monopolies in the name of universal service; and a government-funded initiative, created by the Clinton administration and modeled after the National Highway Project of the late 1950s and 1960s, which could easily turn into a new species of high-technology pork. Whatever the technical description, five key issues dominate policy discussions: Universal service. All Americans should have easy access to the NII, at least for some basic level of services yet to be defined. Interoperability. Legacy and future platform devices such as computers and phones, software applications, and databases should be able to “talk” to each other easily via the highway. Security, privacy, and protection of intellectual property. The content and nature of communications on the NII should be carefully protected from eavesdropping, misappropriation, or unauthorized use. Private-sector versus public-sector model. Should the NII evolve in a basically unregulated environment that responds to free- market forces, or should the federal government fund and guide its development? NII’s link to the GII. Is the global information infrastructure

NATIONAL INFORMATION INFRASTRUCTURE 27 truly a worldwide, unified system or the aggregate of individual ser- vice networks? With these issues as context, I would like to review the recent history of the information industry and attempt to characterize the probable nature of the industry in the future. I will also explain why the PC may well play a central role and give some examples of technol- ogy use that exemplify the fundamental promise of the NII. Finally, I will outline the key challenges to realizing the full potential of the NII and identify some principles that should guide us as we move forward. THE INFORMATION INDUSTRY Underlying the information revolution has been the dramatic pace of innovation in semiconductor technologies, fiber optics, voice and data communications, and software. These innovations have enabled a shift from incompatible analog technologies to inter- operable digital technologies and have brought about the conver- gence of computers, telecommunications, and media. The informa- tion user has received an unprecedented improvement in features and a sharp reduction in cost. The industry structure that is emerging, although confusing, can be divided into three basic categories: platform providers, conduit providers, and content providers. Platform providers include vendors of the hardware and software building blocks of personal and corpo- rate computing. Conduit providers establish the electronic highways through which the information flows. Content providers develop and commercialize the software applications, information, and entertain- ment that flow through the highways to and from the platforms. These three categories of providers are inextricably linked. The computer will increasingly be an access, processing, and storage point on the network. The network will increasingly be designed and built with a higher and higher percentage of the intelligence lying outside the conduit in the devices connected to the network. The content providers will increasingly develop their products in multiple ver- sions to be compatible with the multiple technologies that will be used to distribute these products. It is no longer possible for any one provider, by itself, to move the development of the information infrastructure. Innovations to the platform, without a supporting network and content that people want,

28 ROBERT W. STEARNS will not succeed. Equally useless are network developments without the corresponding platform and content innovations. In short, progress in the information industry now requires close partnerships. Companies in the computer industry have functioned in this type of partnership model for the last decade. During this time, we have made the transition from an industry that was dominated by vertically integrated players offering solutions that were often proprietary to a horizontally stratified one in which the players specialize in one or a few aspects of the total solution. In today’s computer industry, the processor vendors, operating systems vendors, applications develop- ers, and platform vendors all are highly interdependent. This model is being extended rapidly outside the computer industry to include all elements of the information industry. The real winners in this change have been the customers. They now enjoy a multiplicity of services and products, based on open standards, and offered at ever-lower prices. STAGED TRANSITION The popular vision of the 500-channel, high-bandwidth highway into the home has received an inordinate amount of attention in the press. I believe this vision is incorrect because it embraces a “couch- potato model” of the consumer and therefore misses the fundamental promise and essential appeal of what is possible. Recent studies suggest that the cost of installing high-bandwidth service are prohibitive—as much as $2,000 per home. To date, ex- perimental offerings of video-on-demand and home-shopping-type applications show that consumers are unwilling to spend what is needed to justify the investment. The most educated consumers, who can afford to pay, are the least interested in a steady diet of passive movie entertainment. At the same time, 28% of American households have PCs, people are subscribing to online services and using the Internet at an aston- ishing pace, and sales of multimedia PCs have exploded. The num- ber of new users of Internet is increasing at the rate of 10 percent per month. Remarkable applications are being developed and utilized in the areas of health care, education, government, and business, all based on today’s infrastructure. Customers are using the widely available narrow-band technology and a PC with a modem and CD- ROM drive for communication, information access and dissemina-

NATIONAL INFORMATION INFRASTRUCTURE 29 tion, transaction-oriented tasks, and various “edutainment” activities. The compelling aspect of these applications is their interactivity. This is the element that is grossly underestimated in the couch-potato view, which promotes an array of one-way downloads of linear enter- tainment and advertisements to a passive consumer whose options are limited to ordering a pizza and a video. Connectivity will allow users to participate actively in commu- nities of interest. Online services and the Internet provide links for chatting and information sharing that are easily accessed and can be precisely focused to the user’s particular interests. Children who have been brought up with interactive games are especially drawn to this type of application. They use the technology to connect to others around the world. Parents report that children will spend hours chat- ting online, playing interactive games, and accessing various network resources. These same children are bored by passive television. A recent study cited in the Wall Street Journal reported that the amount of TV viewing declines in homes that subscribe to an online service such as America Online, CompuServe, or Prodigy. These young customers of tomorrow view the computer as a portal to a connected life in which a computer-chat pal in Japan is as normal as a friend across the street. It appears that many of the adults developing pas- sive systems do not understand the key perceptual and behavioral differences that are now shaping our children. These factors suggest that the development of the information infrastructure will proceed in measured stages. We will develop and use information technology applications in layers, starting with basic networked services. The evolution will be driven by applications that provide new levels of interactivity and connectivity rather than appli- cations that are simple extrapolations of the passive models of the past. Instead of one or two individual “killer applications” attracting users to the information highway, a large number of diverse applica- tions that touch many different parts of our lives will drive the de- mand for incrementally higher and higher levels of bandwidth and service from the infrastructure. THE PC WILL LEAD THE WAY Many people believe that the TV will be the focus for all services in the home. I doubt that will be the case. Today’s TV is an old

30 ROBERT W. STEARNS analog design that receives broadcast signals and displays them using interlace scan. This is hardly a device designed to accommodate the digital world. I believe the PC will play the central role in the NII because it is a multifunctional platform that is well-suited to the mosaic of uses that people are demanding. A PC in the home can be used as a node on the office network, an educational tool for children, a tool for managing personal finances, the place to play entertaining CD-ROMs, as well as a connection to the Internet. The platform is open to all kinds of hardware and software additions and upgrades. These factors make the PC, as it is currently configured, the platform of choice for the near term. One might say the PC is the “ultimate driving machine” on the information highway. As the infrastructure develops, the PC will evolve with it. It will take new forms that will be adapted for even broader uses. PCs will be made to fit distinct lifestyle needs and to fit more gracefully into specific environments. For example, one could envision PCs for the living room with a large screen and a wood-grained enclosure or a kitchen PC that has integrated telephony, a sophisticated messaging system, a touch sensitive screen, and links for electronic commerce. We might one day see PCs loaded with CD-ROM reference “juke- boxes” and linked to office computers and databases used for home- based study or a playroom PC with multimedia and “edutainment” peripherals such as joy sticks and virtual reality helmets. Or imagine a home mobile PC with embedded wireless communications and voice recognition used in the yard for how-to applications such as planting flowers or building a deck. These various devices could be linked to each other via a home local area network (LAN) that would allow individual devices to share components such as software, hard drives, and modems. This home LAN would provide access to the information infrastructure with its array of services. Computers would be linked to other smart products in the home such as security and energy-management sys- tems. The sharing of components across all of these elements would make the cost of the total system competitive with what people are spending today on the various separate devices that provide these functions. Increasingly, what we today call a TV and a PC will merge into the same powerful programmable digital device, and at that point, the TV-versus-PC argument will become moot.

NATIONAL INFORMATION INFRASTRUCTURE 31 APPLICATIONS OF NII TECHNOLOGIES What are some of the near-term, practical applications of “high- way” technology? Each of the following applications of information and communications technologies could have impressive economic and social benefits. Health Care We have had a long debate on health care in this country. One point of agreement is the great potential for streamlining the adminis- trative and service aspects of medical care. Information technology holds great promise for this type of cost reduction and has the poten- tial to improve fundamentally the patient-clinician relationship and allow the patient to be a much more informed and active consumer of health services. Systems are being designed that allow patients to access their own medical records, including information on treatment options. Some health care providers are offering online question- response services and publishing online journals that summarize the latest medical research to make it useful for the average patient. These systems supplement and expand patients’ knowledge, allow- ing them to participate more directly in their care. Telemedicine is another exciting application. This technology is giving rural communities access to specialists in leading medical centers. Using videoconferencing systems with high-speed, high- resolution imaging, the specialists consult with the doctor in remote locations, review X-rays, interview the patient, and offer their expert advice on treatment options. In places where these systems have been tested, users find that the technology not only brings better medicine to the remote areas, but it also enriches rural doctors’ lives by giving them access to the knowledge and counsel of world-class specialists. Business The continuing importance of information technology to busi- nesses cannot be overstated. The knowledge and expertise of a company’s workforce and the ability to access and mobilize this information are two of the basic elements of competitive advantage in today’s marketplace and will probably be the most important de-

32 ROBERT W. STEARNS terminants of success in the future. Realizing the power of the tech- nology lies in shifting our view of information from something that is stored or resides in specific experts to something that has its greatest value when it is fluid and shared for the purposes of problem solving. Companies are learning how to get the right products to market faster by using information technology. They are using communica- tion technologies to shorten the distance between groups inside the company and to bring the right teams of experts to bear on a given project. Team members are linked for the duration of the project and are easily redeployed upon completion of their work. These technologies have revolutionary implications for the struc- ture of organizations. They flatten hierarchies, eliminating levels of middle managers whose role was to gather information and move it up or down the organizational pyramid. The new organizational structures use teams of implementers connected via information net- works to those who set policy, thus reducing the need for internal intermediaries. The need for external intermediaries is also reduced. Customers and producers and producers and suppliers are linked more directly, significantly reducing cost and greatly increasing the utility and currency of the information passed back and forth. Information technology also has the potential to allow a better balance between our home and work lives. Telecommuting allows employees to spend more time at home with their families, and it will benefit the environment as auto exhaust emissions fall with reduc- tions in commuting. As the infrastructure develops, it will spawn a more efficient operating environment that rewards innovation and high-quality, low- cost products. It will also alter fundamentally many of the current business models. For example, as home shopping on a PC super- sedes shopping at the mall or through a catalog, this new channel will earn “rent” for its virtual “shelf space.” While it is not clear at this point how the conduit and platform vendors will share this income, we can be certain that providing access to the home shopper will earn a return. Government We all believe that many aspects of government are unwieldy, uncoordinated, and expensive. We try repeatedly to reorganize gov-

NATIONAL INFORMATION INFRASTRUCTURE 33 ernment but fail to get the results we want. Information technology, if applied properly, could be an essential part of the solution. It may even help us return to a more democratic society by bringing people together electronically. The most notable effort in this arena is the Reinventing Govern- ment initiative, championed by Vice President Albert Gore. The initia- tive, which uses information technology to reduce paperwork and streamline administrative processes, already is starting to show results in terms of greater government efficiency, faster processing, increased accuracy, improved service levels, and reduced administration costs. The new information technologies are also allowing the govern- ment to provide new potentially valuable services. For example, the Department of Commerce collects and makes available online reams of market data that companies can use to operate in a more informed manner. Also exciting is the potential for involving more people in the political process. Information technology can closely link the electorate and the elected at the local, state, and national levels. Education The decay of the American educational system is a great social tragedy. It may be the single biggest threat to the future social and economic health of the nation. While the information superhighway will be only part of the solution to this problem, it has a major role to play. Information technology frees us from the traditional but tired model of learning: an “expert” teacher in the front of a classroom intent on dispensing knowledge to a captive group of students. Infor- mation technology encourages other modes of classroom teaching— teachers and students do not have to be in the same place at the same time, and learning does not have to stop when the student joins the workforce but can occur throughout one’s life. For example, the National Technological University (NTU), a collaborative effort by a number of leading schools of engineering, is using a satellite TV system to bring the best teachers into corpora- tions around the country. This is extremely affordable for corpora- tions, and it minimizes or eliminates travel time for professors. Equally exciting benefits are becoming available to young learners. In Tennessee, educators are using a network link that allows high

34 ROBERT W. STEARNS school science students to ask questions and get answers from 70 college science professors. This capability complements learning in the classroom. Teachers themselves are benefiting. Incorporating information technology in the pursuit of learning frees teachers from having to know it all. Instead, they can be facilitators, helping students in their quest for learning. Taking this approach, many teachers find the classroom a less intimidating place. Technology is helping teachers in other ways as well. In Texas, teachers in remote locations are linked via the Texas Educational Network. They use the network to share lesson plans and ideas on new ways to teach old subjects. In the process, they enrich both their work experience and their students’ learning. The same network offers similar advantages in the administrative area. With increasing cost pressures in academia and the demand for ongoing education in an information-based society, information tech- nology provides an innovative, less-costly way to meet the nation’s educational needs. Entertainment The implications of new information technologies for entertain- ment can be profound, but the vision of what might be has been clouded by a focus on a passive rather than interactive model. The interactivity offered by new technologies will allow networked games, full-motion feeds of customized videos, and virtual reality experi- ences, all available in the home. Either these services will be avail- able using narrow-band technology with processing and compression to allow a near-wideband experience, or they will wait until the invest- ment in higher bandwidth communication is economically justified. In the near term, communities of interest will meet in cyberspace to interact and enhance each other’s knowledge. This new form of entertainment and social activity is the likely forerunner of the enter- tainment world to come. No couches here. GUIDING PRINCIPLES FOR GOING FORWARD Moving forward will require us to overcome various technical challenges. However, the products and services that are on hand

NATIONAL INFORMATION INFRASTRUCTURE 35 today, combined with the technical innovations that will be available shortly, will provide most of the core technology needed to realize the next stage. The more pressing challenges are to identify the embodiments of technology that the consumer will find truly compel- ling and to ensure the creation and protection of a commercial and academic environment conducive to real innovation. Meeting these challenges requires the development of respon- sible public policy. As Vice President Gore stated in a September 1994 speech: “Government has an indisputable and appropriate role in develop- ing the GII. By reducing the regulatory barriers and promoting private sector involvement, by identifying the public interests that must be served, and by aggressively using the GII to provide edu- cation, health care and other public services, governments can play a key role in developing the GII in cooperation with industry and others in the private sector.” His emphasis on reducing regulatory barriers and on the strong role of the private sector is correct. Untangling the regulatory legacy of the telecommunications and cable industries is critical. These efforts should be directed at opening up access to the networks and to the devices that interface to the networks. We cannot permit tele- communication companies to reassert a de facto monopoly power over access to the home or the equipment used in the home. Nor can we allow the cable companies to act as rigid gatekeepers controlling the content of services they provide. If the conduit providers are allowed to assert monopoly control over access to the home, or if they are directed to do so in the name of universal service, this will seriously stifle progress in the development of the infrastructure. The government will also need to work to assure interoperability. Here we should encourage straightforward, open standards whose effect is to encourage competition among compatible solutions. The opportunity for missteps is significant. For example, the idea of requiring interoperability not only with new technologies but also with all antecedent systems is potentially paralyzing. There are al- ready many industry, national, and international organizations that have a long history of debating, creating, and promulgating standards for information technology. We do not need to impose another or higher-level standards-setting process. Finally, forcing standards that

36 ROBERT W. STEARNS are too rigid or pervasive risks locking in inferior, unworkable, and uneconomical approaches. We must also avoid pressures to turn this into a government entitlement program. Because the Clinton administration has shown such a strong interest in this issue, some parties are recommending poorly conceived technical visions in hopes of winning government funding for ill-considered research activities that tend to complicate fairly simple facts and practices. They suggest problems that exist only in the minds of over-reaching central planners and over-zealous academics. Let’s not overstudy this, particularly in an academic vacuum. Many individuals advocate universal service to ensure that we do not stratify our society into “information haves and have nots.” They promote special support for needy individuals to allow them access to the information infrastructure. Careful thought should be applied to the priority we place on information access relative to other needs in our society. In our zeal to provide access to advanced information services for individuals, we must be careful not to place higher value on the highway than we place on food, shelter, and basic medical care. Adherents of universal access look to the health care, education, and government sectors to support widespread involvement in the information infrastructure. This is a worthy objective, but I recom- mend we examine closely the rationale and methods for such fund- ing. John Browning, in a superb article in the September 1994 Wired magazine, writes: “Universal service cross-subsidies are a tax—albeit a tax buried in the price of services and beneath layers of obscure allocation and pricing regulation. They are a particularly inefficient and wasteful tax. And worst of all, they are a deceptive and distorting tax, a tax that makes it hard to see the real costs of the building blocks of tomorrow’s networks and thus the real opportunities in building the networks that will change the world.” Since health, education, and government represent a sizable pro- portion of our economy, this tax would be substantial, could obscure the true costs of providing a specific service, and as a result could hinder and distort the development of this enterprise. In general, the less subsidy, the better. We should subsidize the consumer, not the provider.

NATIONAL INFORMATION INFRASTRUCTURE 37 CONCLUSION A free-market approach to the development of the infrastructure is critical to the appropriate development of products and services. This point of view was strongly supported in a 1994 report issued by European Union Commissioner Martin Bangemann that led to the Commission’s recent “action plan.” Allowing market forces to guide the computer industry, and more recently the telephone industry, has worked well for industry, government, and the consumer. The Internet is an excellent demonstration of what can be achieved through unconstrained, unregulated innovation. With a minimum of government funding and a lot of collaboration between government and academia—and most of all by letting a balance develop between what people want and what they are free to supply—the Internet has grown and will continue to develop at an astonishing pace. The Internet points to a future in which the information infrastructure is not a highway but a web of interrelated public and private networks, platforms, and services. A market approach will allow the infrastruc- ture to continue to grow while addressing real needs today, will cre- ate an atmosphere that encourages experimentation and rapid learn- ing, and will permit good ideas to flourish and bad ideas to die. A word of caution: we must not underestimate the population of future users. By this I mean we should not develop the NII and all the related products with an inactive user in mind. What is exciting is not the ability to deliver more passive entertainment products. Instead, the focus should be on new forms of entertainment, new connections, and new ways of learning. The NII is based on technologies in which American industry leads the world. If we creatively pursue this opportunity with the right goals in mind, there will be significant benefits to both the public and private sectors. Moreover, we will lead the world into a new and truly exciting era.

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While societies have always had information infrastructures, the power and reach of today's information technologies offer opportunities to transform work and family lives in an unprecedented fashion. This volume, a collection of six papers presented at the 1994 National Academy of Engineering Meeting Technical Session, presents a range of views on the subject of the revolution in the U.S. information infrastructure. The papers cover a variety of current issues including an overview of the technological developments driving the evolution of information infrastructures and where they will lead; the development of the Internet, particularly the government's role in its evolution; the impact of regulatory reform and antitrust enforcement on the telecommunications revolution; and perspectives from the computer, wireless, and satellite communications industries.

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