Digital divide as a symptom
By Tim Clark
Staff Writer, CNET NEWS.COM
Don't ask Canadian futurist Don Tapscott about the small stuff. His consulting firm, Alliance for Converging Technologies,
recently launched the program "Governance in the
Digital Age," which asks whether government is obsolete in a networked society.
His quick answer--No. As Tapscott discusses in this conversation with CNET
News.com, the notion of an electronic town hall
polling the citizenry is not the model for the future. He calls that idea an
"electronic mob," putting him at odds with the Net's neolibertarians.
Government can become cheaper and more efficient using network
technologies, but he insists that we must address the broader issue of being
"e-citizens" in the networked age.
Tapscott spreads his views in books and lectures. His 1997 book, Growing Up Digital: The Rise of the
Net Generation, grew out of watching how easily his own children picked
up computer skills that baffled adults.
His most recent book, Blueprint to the Digital
Economy, builds on his 1996 book The Digital Economy.
He also has coauthored Paradigm Shift: The New Promise
of Information Technology (1992) and Who Knows: Safeguarding Your
Privacy in a Networked World (1995).
News.com: How do you define "convergence"?
Tapscott: Three previously separate technologies--computing, telecommunications,
and content--are converging, and for each of these three technologies
there's a corresponding industry. These industries are crashing together as
everyone attempts to exploit the middle of the triangle because that's
where you create value for customers. You don't create value on the corners.
If you're a computer company you don't create value by making computers.
Hardware has become a commodity, margins are razor thin. You create value
through software and services. Evidence is that IBM's services revenue in
the last eight years has gone from $2 billion to $28 billion. The most
valuable computer company in the world doesn't make computers--that's
The same is true for telecommunications. Long distance companies will not
get revenue from long distance telephony in seven or eight years. Given
that long distance is 80 percent of revenue today for some companies,
that's a problem. A long distance telephone call
has gone from $120 a
minute to 5 cents a minute. In 2005 it will be zero cents per minute
because when voice becomes bits, the voice bits get lost in the rounding
figure. So WorldCom can acquire
MCI no problem.
The same is true for content. Increasingly the action is not in content,
it's in the services. Movies, for example, are the billboard for ancillary
rights in Hollywood. You may make money off the movie if you're lucky, but
the real money comes not from Godzilla the movie--but from Godzilla the CD,
Godzilla the game, Godzilla the ad rights, Godzilla the fuzzy toy, and
Godzilla the popcorn and cappuccino. It almost outgrosses the movie.
What's your take on AT&T merging with TCI?
It makes a lot of sense for companies to seek new partnerships or
for AT&T to merge with TCI because the action is not just in the pipes, the
action is in the value-added software and services.
It makes sense for them to expand their pipes to create all kinds of new
value-added services. But arguably, the actual transmission will be a
commodity and possibly even not a source of revenue. It will just be a
platform for delivering other services.
Recently AT&T chairman Michael
Armstrong made a speech in New
York about major new investments in IP and IP telephony. How does that fit
into your analysis?
It's about time.
How does wireless fit into this convergence?
Wireless is just another transmission medium, but the benefits of
portability and access anywhere on the planet are huge. Imagine a youngster
in a remote area of Africa being able to communicate with the rest of the
world for the first time through a $50 telecommunications and Internet
appliance. This holds wonderful opportunity.
In Argentina, it used to be you couldn't make a phone call without extreme
pain. Now everyone's walking around with a cell phone.
Some developing nations can leapfrog over developed nations that are still
writing off their copper wiring and other traditional technologies.
Wireless and portable remote, ubiquitous communications will be really
Convergence was first discussed five or six years ago, and the symbol
was another merger--TCI and Bell Atlantic, which never happened. What's
The TCI/Bell Atlantic merger predated the real growth of the Web. The
Web, in particular the rise of Mosaic, leading to Netscape, made
interactive, multimedia communications real to people. That merger really
was an extension of cable television--downloading movies and fairly limited
Since then, the Web has changed user acceptance. We've seen costs dropping,
bandwidth exploding, the Net becoming more ubiquitous and rich in function.
So people don't just see an opportunity for on-demand programming, they see
an opportunity for all kinds of things. Not just shopping, but to do their
homework, communicate with office colleagues, participate in
videoconferences with clients from their summer place. A big technology
push and a demand pull positions this whole thing to fly now.
How important is deregulation?
Very, it's very uneven around the world. In Argentina, half of the
country has one telephone company that provides cheap access to the
Internet and the other half is still pay-per-minute. You pay for local
telephone charges, which is a huge demotivator to using the Net.
Is this convergence inevitable?
Paradoxically there's a counterforce, which is the growth of all kinds of
highly unique, proprietary, ubiquitous information appliances. Take the
PalmPilot. It's an example both of converging technologies (it's a
communication device, a computer, and a device for storing and
communicating content) but it's also divergent in that it's unlike any
What about other devices?
Your shirt will be an information appliance in a couple of years. Around
2000, it will have a chip in it. It'll know where it was manufactured and
how it moved through the distribution channel and where it was sold. If you
take the shirt back, it'll know about you--when you bought it, how much you
paid for it, where you bought it. So you're not a wearer of shirts--you're
In the year 2005, that shirt communicates with the washing machine. And if
you are Procter & Gamble, you have a big
interest in that conversation--you want the shirt to be saying something
like "Are we using Tide? Tide washes whiter. This doesn't feel right."
The implications for customers and for P&G are huge--P&G changes from being
a soap company to becoming a homemaker company. And it may not be the
molecular structure of Tide that gets the clothes whiter--it may be the
services that are bundled in with Tide on the Net. The Tide box probably
becomes an information appliance too--it probably makes sense to have a
chip in it, worth a few cents, that would help deliver services to the homemaker.
Look around your world. My car key--it's a smart communicating device. My
hotel room--the door is a smart communicating device. It's got a chip in it,
it's internetworked. My camera was stolen from a hotel room in Miami and
the door had knowledge--it knew about me. It knew who had been in and out
of the room.
Tires and logging trucks are smart. They know about the road because they're
linked through an onboard computer to a geographic positioning system. They
change their inflation level as they move. Payback period is half a year or
so because when the tire knows about the road and it has the proper level
of inflation, the truck has lower maintenance and can go faster.
So this extends increasingly out into our world--all these inert objects
have developed sensors. They become smart and internetworked.
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