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Program on Information Resources Policy PUBLICATION New Ways to Think About the Visions Called “Convergence”: A Guide for Business and Public Policy P. H. Longstaff April 2001 Program on Information Resources Policy Center for Information Policy Research Harvard University The Program on Information Resources Policy is jointly sponsored by Harvard University and the Center for Information Policy Research. Chairman Managing Director Anthony G. Oettinger John C. B. LeGates P. H. Longstaff is an Associate Professor at the Newhouse School of Public Communications, Syracuse University. Professor Longstaff is also a lawyer and consultant who has advised clients in the print, broadcast, and telecom- munications industries, and holds a Master’s of Public Administration from Harvard University (1994). Copyright © 2001 by the President and Fellows of Harvard College. Not to be reproduced in any form without written consent from the Program on Information Resources Policy, Harvard University, Maxwell Dworkin 125, 33 Oxford Street, Cambridge MA 02138. (617) 495-4114 E-mail: [email protected] URL: http://www.pirp.harvard.edu ISBN 1-879716-72-0 P-01-3 Note A version of this paper has appeared under the same title in The Harvard Journal of Convergence, volume 1 (Winter 2001), published at the John F. Kennedy School of Government, Harvard University. For further information, see URL: http://information.harvard.edu. Acknowledgements The author gratefully acknowledges the following people who reviewed and commented critically on the draft version of this report. Without their consideration, input, and encouragement, this study could not have been completed: Herbert E. Marks, Viktor Mayer– Schoenberger, Vincent Mosco, and Herbert Ungerer. These reviewers and the Program’s Affiliates, however, are not responsible for or necessarily in agreement with the views expressed here, nor should they be blamed for any errors of fact or interpretation. Executive Summary Convergence: Everyone talks about it but no one is sure what it means. This report is intended for those who need to sort out the meanings of convergence in order to decide about investments, career changes, or public policy in the communications and computer industries. There are many visions of what convergence will look like, some complementary, others contradictory. Will convergence mean the death of “old” communications media and the birth of new communications networks that will deliver all messages? Is convergence the migration of old media to new distribution platforms? Is it the addition of new platforms to old ones? Is it one box in every home, replacing telephones, computers, and television sets? Is it two or three multi- national companies that will rebundle communications services to sell them as a single package? The best answer appears to be “maybe,” because forces are also at work for divergence. This report examines both forces: those moving the communications and computer industries together and those moving them apart. Three categories can be posited for the visions of convergence: the Big Pipe, the Big Box, and the Big Company. Although the categories are not rigorously bounded (some visions include elements of the others), classification helps to clarify the identity of stakeholders and forces working for (or against) a particular vision of convergence. It allows a better focus, which is necessary for deciding business strategy and public policy. The report also identifies convergence theologies and their role in public debate (in government and in the stock market) on the future of the communications and computer industries. Believers, agnostics, and atheists all may see the same evidence but focus on different elements from which to predict the future. Based on research in Europe and North America in 1999, this report builds on the author’s prior publications to suggest the use of information theory to form analytical building blocks for the communications sector at a time when the old boundaries are changing. Contents Note ................................................................................................................................................iii Acknowledgements ....................................................................................................................... iv Executive Summary....................................................................................................................... v Chapter One Introduction................................................................................................... 1 Chapter Two A New Model for the Whole Communications Sector: Using the Common Ground .......................................................................................... 5 Chapter Three Three Visions of Communications “Convergence”.................................. 13 3.1 The Big Pipe .................................................................................................................. 14 3.2 The Big Box................................................................................................................... 17 3.3 The Big Company.......................................................................................................... 21 Chapter Four Convergence Theology................................................................................ 27 4.1 Believers ........................................................................................................................ 27 4.2 Agnostics ....................................................................................................................... 29 4.3 Atheists .......................................................................................................................... 31 Chapter Five Forces for Concentration and Diversity: Clues in Many Places ............. 35 5.1 Digitization: The Power of a Common Language ......................................................... 38 5.2 Globalization ................................................................................................................. 40 5.3 Concentration and Diversity in Biological Systems...................................................... 44 5.4 The Communications Sector as a Complex System ...................................................... 48 Chapter Six Government As a Force for Concentration and for Diversity................. 51 6.1 Government Policies That Move the Sector Toward Greater Diversity ........................ 53 6.1.1 Competition Policies ......................................................................................... 53 6.1.2 Regulation for a Unified Sector? A Unified World?.......................................... 54 6.1.3 Support for Research and Development............................................................ 55 6.1.4 Standards ........................................................................................................... 56 6.2 Policies That Move Things Toward Diversity ............................................................... 56 6.2.1 Promoting Competition ..................................................................................... 56 6.2.2 Promoting Many Channels ................................................................................ 57 6.2.3 Promoting Many Senders: The Politics of Culture............................................ 58 6.2.4 Promoting Many Senders by Mandating Access to Channels........................... 61 Chapter Seven Regulating for Concentration and Diversity: The Big Questions........... 63 7.1 Why Regulate? Old Goals in New Packages? ............................................................... 65 – viii – 7.2 Regulation of What? Communications or Competition?............................................... 69 7.3 Regulate How? Merged or Separate Regulations? ........................................................ 70 7.4 Who Should Regulate? Global or Local? ...................................................................... 72 7.5 When Will Convergence Happen? When Would Regulation Be Appropriate? ............. 74 Chapter Eight Conclusions.................................................................................................. 79 Acronyms...................................................................................................................................... 81 Illustrations Tables 2-1 Using Information Theory to Put Regulation into More Appropriate Boxes.................... 11 Figures 2-1 General Model of Communication ..................................................................................... 6 2-2 Point-to-Point Network....................................................................................................... 7 2-3 Point-to-Multipoint Network .............................................................................................. 8 2-4 The Information Business Map: Reality Matches Theory................................................ 10 3-1 With These Diagrams Negroponte Made the Case for the Creation of a Media Laboratory at MIT ............................................................................................................ 14 Chapter One Introduction One of the earliest recorded uses of the term “convergence” was by Johannes Kepler, a scientist in the early seventeenth century, as part of his work on optics, and by the eighteenth century the term had come into common English use.1 Convergence denotes a process in which two forces or things “bend or come together at a point.”2 At
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