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LEAD STORY

Volume 14 Number 3

The Way to a Www.onderful World?

01 June 2001

The Internet is already changing many people's lives, but the IT revolution is only just starting. Should the world be grateful or worried, asks Mike Lowe.
If, like me, you routinely use the Internet to exchange emails, find information on the World Wide Web and occasionally take advantage of other on-line services, then you are part of a massive wave of change that is sweeping the world. Marketing firm Global Reach estimates that 391 million people worldwide already use the Internet, and the figure is projected to reach 774 million by 2003. Of those currently 'wired', 169 million are US citizens--over 60 per cent of the population. In Britain, half of all adults have Internet access either at work or home, with numbers still rising rapidly. But the fastest take-up is in China--currently 40.7 million, and set to quadruple in the next two years.

The technology too is rapidly advancing. A phenomenon in the computing industry known as 'Moore's law' states that every 18 months the computing power per dollar doubles.

As with the advent of the telephone, the value of the service rises as more people join. In developed countries, it seems realistic to assume that almost everyone will have access to the Internet in the not too distant future, though there is concern about the minority who, for lack of money or skills, are left out.

A report for the British Government by Booz-Allen and Hamilton Associates in March 2000, recommended setting targets to ensure that at least 70 per cent of individuals in the UK used the Internet on a regular basis by 2003. They wrote: 'While the UK has become Europe's leading e-commerce market, research shows an emerging "digital divide" that threatens to leave 20 million people excluded from the "knowledge economy" in three years time, a gulf with severe economic, educational and social implications.' (www.number-10.gov.uk/default.asp?PageId=1203)

Once universal access is more or less achieved, what kind of world will emerge? Is the Internet any different from previous tools of communication? According to Brian Reid, one of the pioneers of the Internet and author of The Church and the Internet, (justus.anglican.org/resources/tracts/nc/) there are some fundamental differences. For example, psychological studies have shown that people feel less inhibited typing into a computer than when meeting people face to face, so they are more likely to share secrets, or write offensive things. And because messages can easily be copied and passed on, it is more difficult to keep secrets on the Internet (though it is often easier to trace the leak).

Dr Reid also notes that the Internet makes it easy to communicate simultaneously with many others, no matter how far away they are; to import material that is illegal or obscene; to pose as somebody that you are not (paedophiles try to attract real teenagers by posing as teenagers online while police try to catch the paedophiles by posing as teenagers).

As Reid points out, technology itself doesn't change things but it 'changes the possibility or price of things, and people then change the world'.

The Internet is already greatly increasing the mobility of money and investments. The stock markets, once the preserve of the wealthy, are now open to anyone at little cost through online brokers.

Many individual savers, the big banks, pension funds and all the players on the financial services market are also using the Internet. The result is that money is being moved around the world at a greater rate than ever before as the 'electronic herd', to use a phrase of Thomas Friedman in The Lexus and the olive tree*, chases the best return. He writes, 'If the herd comes your way, it can, in short order, rain billions and billions of dollars on your country's stock and bond markets, as well as directly into the plants and factories.' But when the herd gets worried about its investments it 'can transform what might have been a brutal but limited market adjustment downward into something much more painful and exaggerated, and it can also transmit instability much more quickly between markets, and from bad markets to good markets.'

Such a panic hit Mexico in 1995, sending the currency into free-fall as investors pulled out of the country almost overnight.

The 'herd' doesn't like surprises. Nowadays, South Korea's Ministry of Finance, for example, sends out an e-mail to global investors detailing its currency reserves at the end of each business day. Greater transparency, standardized accounting procedures and the possibility for any Tom, Dick or Harry to look at the books are what the electronic herd likes, and when, by 1998, Mexico had got it right, it attracted the herd's billions once again.

The Internet also gives people in developing countries a chance to speak directly to investors. Ghana, for example, has a website (www.sdnp.org.gy/goinvest/InvestGuide_investOpor_incent.htm) outlining investment opportunities as well as information about Ghana's accounting standards and regulatory framework.

Governments will increasingly find that as well as needing to satisfy foreign investors they will have to be more open with their own citizens. Where governments manipulate their country's media, people will go online and get their news elsewhere. And when they don't like what their government is doing, they will use the new technology to organize themselves. The downfall of Philippines' President Estrada's regime in January this year was made possible by cell-phone text messaging. Professor Alex Magno, one of the leaders of this popular uprising was quoted as saying, 'In revolutions people used to say "keep your powder dry", now they say "keep your cell-phone charged".'

For those who want it, the Internet gives access to the best information, and the possibility of communicating with others locally or around the world. It enables what Friedman calls 'super-empowered individuals' who can campaign effectively on a variety of issues. He cites the example of the Pantanal, a vast nature reserve in Brazil. Local environmentalists who were concerned about some potentially destructive development plans used the Internet to engage US environmentalists. They in turn pressurized the Inter-American Bank into withdrawing investment so that the plans had to be shelved.

In the developing world only a small proportion of people have access to the Internet. This has led to concern about a world-wide digital divide. But at a conference in October 2000 on 'Creating Digital Dividends', sponsored by the Washington, DC-based World Resources Institute, Microsoft boss Bill Gates made the point that other priorities come first. 'About 99 per cent of the benefits of having [a personal computer] come when you've provided reasonable health and literacy to the person who's going to sit down and use it.'

Gates has set up a charitable foundation (www.gatesfoundation.org) which gave $1.2 billion last year to health projects in developing countries, and another billion to projects designed to overcome the digital divide in the USA.

The digital divide in developed countries will become increasingly significant as more and more access to public services is routed through the Internet. Governments have been quick to grasp the potential benefits of the Internet and it is now possible to access many public documents and even fill in licence applications and tax-returns online. The primaries for the recent US Presidential election saw the world's first legally binding Internet voting in Arizona and Alaska.

John Chambers, President of Cisco, which makes much of the technology that powers the Web, predicts that the Internet will 'level the playing field' of the next Presidential election. Candidates will be able to reach people with their message using much smaller amounts of money. (www.brook.edu/comm/transcripts/20000120.htm)

For the ordinary citizen there are already many new opportunities to engage in the democratic process. In Britain, both local and national government websites give detailed information about policies and proposals and invite participation in the debate.

Business, too, faces big changes. Information and communications technology has reduced the edge that large companies used to enjoy, as even the smallest company can now advertise its products cheaply. Small advances in know-how have become all important as they can give the edge over rivals--giving rise to the 'knowledge economy'. One positive result is that it is possible to have economic growth without actually producing more things (thus reducing the environmental impact).

The knowledge economy may look a little different from traditional economies. The authors of The cluetrain manifesto, (www.cluetrain.com) possibly the first case of a website spawning a best-selling book, proclaim 'the end of business as usual'. Their premise is that markets are conversations, and that people will increasingly want to conduct that conversation in a human voice, rather than listening to 'corporate-speak'. Indeed, it is already happening as people communicate in the informal language of e-mail. People buy services not because they have read the glossy brochure, but because they have a relationship with someone in the company who listens to suggestions about how to make the product better. More than that, 'to speak with a human voice, companies must share the concerns of their communities. But first, they must belong to a community. Companies must ask themselves where their corporate cultures end. If their cultures end before the community begins, they will have no market.'

This theme of community exercises Steven McGeady, Vice President of Intel's New Business Group. At a Harvard University conference on the Internet and society, he compared surfing the Internet with 'wandering around a shopping mall that has been neutron-bombed. There are beautiful store windows and all this beautiful merchandise enclosed behind glass... but there are no other people there. It's a very spooky, very lonely feeling to be in this place where you see lots of rich information but have no idea whether there's a crowd of people around it or whether it's completely vacant.' Certainly there is a risk that the seductions of computers can lead to individuals becoming isolated, and perhaps the vast market for Internet porn is a sign of this.

Yet the Internet can also enhance community. Last year, Britain's Channel 4 TV channel conducted a ground-breaking experiment. It gave the residents of a street in Sunderland computers and Internet access for two weeks, equipped them with a web-site and chat room and observed what happened. Interestingly, although opinion polls have found that 80 per cent of people over the age of 55 think they'll never use the net, it was the older people in the experiment who found it most useful. (www.channel4.com/nextstep/dispatches/internet_street.html)

Residents used the Internet to buy things, to pursue particular hobbies and even to search for romance. But, encouragingly, it also enabled them to meet others in the street they had previously only exchanged greetings with. As common interests were discovered, meetings in cyberspace led to meetings in the pub. One resident reported, 'There's a better atmosphere in the street and everyone's walking around with a smile on their face.'

The Internet will certainly change our lives, and probably those of our children even more. Above all it gives greater possibilities to exercise freedom, and with that goes a corresponding increase in responsibility. Sometimes the responsibility will not be of our choosing--the father who finds his 10-year-old son's e-mail bombarded with pornographic junk-mail will have to talk to him about sex, money and exploitation sooner than he would have wished.

Ultimately it will be us who determine whether the Internet is a force for good or evil. Those who are pessimistic about human nature have grounds to be gloomy about the Internet. As for me, I'm one of the optimists.

* 'The Lexus and the olive tree' by Thomas Friedman, Farrar, Straus and Giroux, USA, 1989

DO YOU COPY ME?

Intellectual property is a notion that has existed since the renaissance. The idea that the inventor of an idea, an artist, author or a composer can 'own' (and thereby profit from) the fruits of his or her creativity is enshrined in a variety of laws around the world.

Unfortunately, once intellectual property exists in a digital form--whether computer software, books, music, video or still pictures--it becomes all too easy to copy. Digital copies are almost cost-free and suffer no loss of quality.

When DVD technology was launched the entertainment industry, concerned about potential copying, encrypted it so that DVD movies could be played but not copied. Inevitably it was only a short time before someone hacked the code and now you can freely download 'DVD ripping software' and copy the movie.

When copying onto video or audio cassettes first became possible there were plenty of prophets of doom who forecast the end of revenues from music or films. Yet this has not happened because it does not cost much more to buy legal (nicely packaged) products than illegal copies.

Software producers are learning from this. The next generation of Microsoft Windows, for example, will be sold on a subscription basis: after a low initial payment you keep paying and get up-grades and customer support in return. Publishing and the entertainment industry might take a similar route. Instead of selling a once-only product, they may enter into a relationship with their customers so that books, for example, may be published in instalments on a subscription basis--possibly with regular up-dates based on customer feedback.

CHANGING THE CULTURE

Computers enable us to work faster, more efficiently and do jobs that previously we had to employ other people to do. But are we getting too dependent on them? When the server goes down on a company network it can paralyse the business for hours, sometimes days. We can come to rely on our PCs to such an extent that an unexpected hard disk crash and consequent data loss can be a personal disaster.

The younger generation particularly have seized on the extraordinary communication possibilities of the Internet. Using Telnet, my son joins chat groups on philosophy which he is studying for A-level. He conducts live conversations by keyboard with, for example, a friend in Japan. By opening a second and third 'window' on his computer screen he conducts simultaneous conversations with correspondents in Los Angeles and India--global communication, at the speed of light and all for the price of a local phone call.

The media is full of stories of the romantic possibilities of the Internet and again the younger generation have not been slow in exploiting its potential. However there are pitfalls for the unwary. The son of a colleague conducted a long and passionate exchange of e-mails with a girl in Ohio which concluded with her flying over to the UK at her mother's expense to meet the boy. Almost as soon as they met at Heathrow airport they realized to their dismay that they had totally misread each other over the Internet. Much of the subtlety of human-to-human communication is lost in electronic messages.

Even in this era of e-mail and video-conferencing, politicians, businessmen and diplomats travel the world for important meetings because hearts and minds can only be changed by talking face to face.

To negotiate with a fellow human one has to understand needs, motivations and aspirations which can so easily be misunderstood over electronic networks. Shame on those who use e-mail or faxes to break off a relationship or fire their staff. Technology is not inherently a good or a bad thing, but it is changing our culture and our habits at a whirlwind pace. We have to stand back sometimes and try to be aware of where it is leading us in our personal lives.

Philip Carr

SECRET SERVICES

With increasing amounts of sensitive information passing through the Internet, security becomes an important issue. People buying products or services need assurance that their credit-card details will not be intercepted. Companies and governments need to be secure from high-tech espionage.

The use of an early computer to crack the German secret codes during WW2 sounded the death knell for traditional methods of cryptography which depended on substituting different characters or words for others.

In 1975 Whitfield Diffie and Martin Hellman invented an encryption system that used two related 'keys'--a 'public' one which could be sent to anyone who wanted to send something to you, and a 'private' one which was not distributed, and was used to decode the information sent through your public key.

This was still not totally secure as the public key could be used to crack the private key by going through all the possible combinations (in the same way that a safe is cracked). 'Strong encryption', which is harder to crack, uses large keys, with a correspondingly large numbers of possible combinations. (DES, a commonly used strong system, has 10 to the power 17 possible combinations. In January 1999, a group of computer enthusiasts cracked a DES key in 22 hours.) As computers get more powerful, it becomes easier to crack previously secure systems.

Because criminals have also embraced the use of encryption to organize themselves over the Internet, governments have been concerned about public access to this technology. For several years the US government banned the sale of strong encryption software. But it could easily be bought and downloaded from websites in other countries. Britain has taken a different tack: The Regulation of Investigatory Powers act (1999) gives the government powers to force anyone using encryption to hand over their keys or face a two-year prison sentence--legislation that caused an outcry among civil liberties campaigners.

COMBATING E-FRAUD

Problem. You receive an e-mail from your boss asking you to send the results of all your company's top-secret research to a certain address. How do you know that the e-mail is really from him and not a forgery?

The value of a signature is that it is easily recognizable, but not easily produced by anyone else. Similar technology to that used in encryption has created 'digital signatures'--mathematical procedures which produce an easily verifiable result without the procedure itself being copied.

At present, digital signatures are little used, but this could change because of credit-card fraud. According to PriceWaterhouseCoopers, $16 billion worth of fraudulent transactions were made over the Internet in 1999--roughly half of all credit-card fraud for that year. Alvin Cameron, Credit/Loss Prevention Manager for an Internet credit-card clearing house, estimates that 20-40 per cent of online purchases are fraud attempts. 'Doing business on the Internet is the equivalent of having someone walk into your store wearing a ski mask without any ID and offering a bank counter cheque to purchase a $2,000 stereo system,' he says. (www.ecommercetimes.com/perl/story/2771)

INTO THE FUTURE

If the Internet looks strange now, it's nothing compared to what is coming. With computing power ever increasing the main limitation now is 'bandwidth' -- the speed at which information can be transmitted along telephone lines into your home. But, with the merging of telephone and television technologies, bandwidth will soon increase dramatically. Conventional television and radio may be replaced by the Internet. Instead of waiting for, say, the 10 o'clock news on the BBC, you will be able to download video news bulletins any time you want, and select just the bits that interest you. There will soon be hundreds of such sites constantly being updated.

Rapid advances in screen technology are making it possible to read books, magazines, and newspaper articles electronically. Some books are already published electronically but this will increase dramatically. As the cost of publishing electronically is very low, it will be easy for anyone to self-publish.

The technology for video mobile-phones is well underway, though whether anyone will want to use it remains to be seen. What is more disturbing is the development in video manipulation technology which will make it possible to create realistic video entirely on computer. The unscrupulous could create a video of President Bush, for example, doing or saying anything they wanted. Or you could use a 'filter' on your video phone to iron out those wrinkles and make you look younger than you really are. Seeing is no longer believing!

All of which means that people will not choose to get their news on the basis of national loyalty or which TV station has the glossiest presentation but because they know from experience that they can trust a particular news service. Establishing trust will become increasingly important for institutions like the BBC competing in the world market.

The wallet, diary, mobile phone and address book may all be replaced by little hand-held computers linked to the Internet which will carry our digital ID and our electronic money. These may also be linked to global positioning satellites enabling us (and perhaps others) to know where we are at any time. This raises the spectre of 'Big Brother'. Already vast amounts of information about us are stored on various computers: what we earn, what we spend our money on, where we live, what socio-economic group we fall into. Without adequate regulation we could find 'smart advertisers' sending us messages whenever their computer tells them a potential customer is walking by their shop.

Link: Global Reach (www.euromktg.com/globstats/index.php3)

Mike Lowe