Ethics and Law on the Electronic Frontier
December 14, 1994
Spurred by the current popularity of the World Wide Web (WWW) computer users are flocking to the Internet. People like the WWW because its simple graphical interface makes it easy to use services like FTP, GOPHER, and HTML to retrieve information[-Markoff-]. With the potential to reach a customer base that doubles each year, companies are rushing to create outposts on the WWW[-Denison-]. From Volvo, to Anheuser-Busch, to Burlington Coat Factory[-OSITES-], companies are entering the Internet at a rate of 1000 sites each month[-Lewis-]. While these companies can offer information like store locations, give their company history, and show pictures of their products, ties to physical goods prevent them from participating in full scale transactions on the WWW. But for the computer industry, the WWW provides limitless opportunity. The computer industry has taken notice of this opportunity, and is rushing to create services that satisfy this market of computer oriented consumers. In this paper I will discuss the services companies are currently supplying, problems with the WWW, winners and losers in this gold rush, and discuss future implication of the WWW on the Computer Industry.
Traditionally, computer companies communicate with their customers electronically through proprietary bulletin board systems and on-line services. Those with advanced customers even use FTP sites, and GOPHER to disseminate information. The problem is that these services are complicated. The WWW has tamed many of these difficult services to the point where common users are able to connect. This shift towards the Internet is causing most of the computer industry to evaluate their current Internet strategy.
On-line services like CompuServe feature forums operated by computer companies. These companies provide editors to manage file bases, discussion groups, and email. On-line service providers set rules of usage, and charge the companies for items like storage space. In order to draw users to their bases, these companies usually pay the bill for connect time while users are logged in.
In the days of old, this model of electronic interaction was fine. Computer companies dealt with on-line service providers because of the large user base, and expense of supporting proprietary bulletin boards. Today, these services are showing their age. Limited by the bandwidth of modems, speed is low. It can take hours to download files of meaningful size. This also limits the type and amount of advertising which can be sent to a user while they are on-line. Although they are under constant improvement, the user interfaces for these services are dated.
Until recent times virtually no one was connected to Internet. Today, both large on-line services and small startup firms are providing Internet connectivity to their customers through modems[-Lewis-]. This connectivity allows companies that operate forums to abandon them and start independent services on the Internet, without losing a base of customers.
What is the bottom line for computer companies? They can provide access to all member of the Internet for a comparable cost to supporting forums on a single on-line service. No more headaches over deciding which on-line service to base their operations from. No need to finance the on-line connect time to lure customers to their forums. And no more editorial constraints imposed by limitations and regulations of the on-line service.
Basing operations on the Internet instead of on on-line services is a smart business move since it entails reaching a larger customer base at higher speeds. On-line services only attract 6 million customers as opposed to 30 million people on the Internet[-Denison-]. Secondly, increased bandwidth to customers' bandwidth , allow Internet sites to sport graphic intensive interfaces and shortens the time for file transfer.
In conducting research for this paper, I visited WWW sites operated by many computer companies. A survey of the sites run by: Apple, Dell, IBM, Intel, Microsoft, and Novell yield a variety of services accessible through the WWW. These services include, but are not limited to: employment information, company history, stock trends, press releases, bug reports (including up to date division tips), product catalogs, price quotes, file patches, new software, product manuals, software development kits, user groups, product registration, email, and technical support[-CSITES-]. Of course, sites run by these companies are littered with advertisements and slogans.
Computer magazines, most notably the nine magazines in the family of Ziff-Davis Publications, and Wired Magazine have taken a leading role in creating outposts in the WWW. The base level of existence is to plug their physical magazines by providing outlets to order subscriptions and previewing feature articles. Another is to provide access to articles (usually editorials, but occasionally full featured articles complete with pictures) of past and present magazines. From these WWW sites, users can also interact with the editors and authors via email, and download benchmark tests to run on their own machines.
The picture I presented looks rosy from the outset, but is actually covered with thorns. There are a number of problems that will hinder mass acceptance of using the WWW for everyday business practices.
Right now, the companies who operate WWW sites are pioneers at the forefront of a new technology and are finding bumps and roadblocks. They are testing the waters before other flood to this medium. Its a good thing the Internet is filled with computer companies, because there are numerous technical problems. It is easy to find missing links from WWW documents. WWW sites never have the appearance of a finished product (there are often notices proclaiming the site is under construction). There are no commercial quality WWW servers. And companies are struggling to integrate WWW services with standard company operations.
Life is no ball the end user either. Those connected to the Internet through modem deal with slow connections. Yes, most viewers have options to delay the transfer of graphics, but since services rely heavily on these for content, users will lose the option to ignore graphics. Even users who have direct Internet connections face network delays during peak usage times. Each WWW viewer supports different subsets of the HTML standard. Lack of certain features like forms and picture mapping prevent the use of some features. Public domain WWW clients frequently crash. It can take days to receive responses from WWW based technical support staff. And even when everything is working properly, it is difficult to find resources on the WWW.
Another set of problems stems from deficiencies in the WWW. To solve these deficiencies, standards committees, most notably W3C, are working to retrofit changes to the original format[-MIT-]. Unfortunately, work is being done on the side by people who write viewers. Netscape has a document listing their experimental changes to the HTML standards[-Extensions-]. Other companies are sure to follow suit. The problems with these experimental changes are that not all will make it into the official standard. In turn, new features will be incompatible with viewers from competing companies.
Even more so than with the physical world, opportunities for fraud are abundant. Unscrupulous hackers can use network sniffers to steal private information such as unprotected credit card numbers as data flows between computers. Others can create services that are spoofs of the original, but undetectable by users.
As with any changes to established paradigms, the use of WWW for business interactions will help some people and harm others. The net value of the WWW is positive for the sum of the parties involved and will rise as the WWW rush continues and as we have time to iron out flaws.
Manufacturers of computer hardware and software have the most to gain by operating WWW servers. They have an unlimited amount of space for advertising, can reduce telephone based customer support staff by offering on-line FAQs, and offer other value added features. The only problem for companies is advertising their services. Anyone who has seen a URL (WWW address) can guess the name for Apple, IBM, and Microsoft, but the address for Quarterdeck is obscure. A fix for this problem is to write URLs in magazine advertisements.
The consumer wins too. No more long distance telephone calls or 900 numbers for product support. No more salesmen to hurry a selection. No more waiting until business hours for help. No need to choose an on-line service to find that only half the forums you need are offered there. In return for these conveniences, users must wade through terabytes of random data and propaganda looking for useful information.
Right now, to computer magazine publishers, the WWW is a win. These publishers have a new lease to explore ways to interact with their customers. They can test new methods of information presentation. They have better avenues to correct misprints. They can gauge which articles are actually read. They have a pain free way to survey their readers. Finally, they can offer services like take home computer testing and live articles. This means a reader can perform the same test on his computer and have the article use the resulting numbers.
The two problems that threaten computer magazines are pricing and free alternate information sources. Right now, each of these publishers offers the magazines for free. If it is determined that this practice interferes with magazine sales, the WWW sites will be curtailed. Seamless incorporation of advertisements and electronic money are solutions to this problem[-Thomas-]. A more serious threat to computer magazines is the general amount of information available through the WWW. Many groups already operate home pages that provide listings WWW sites operated by computer companies. If someone added to this listing, a set of new products from each vendor, the need for computer magazines could be undermined. A related source of problem deals with a new breed of pirates. When it becomes standard practice to sell information like magazine articles over the network, a free set of mirrored sites will appear. A first indication of this type of event is the Hot Wired login. Cypherpunks setup an account that has a name and password of Cypherpunk and let this out on the network.
Mass migrations to the Internet will cause a shakeup in the on-line industry. The Big 3 on-line services, America On-line, CompuServe, Delphi, and Prodigy, claim about 6 million customers, are rushing to provide gateways to the Internet[-Denison-]. The current lack of connectivity has opened the door for startup companies who provide Internet access to compete. Cloud 9 Consulting, NetCom, PSI, and SPRY each provide services that give businesses and individuals Internet access[-ISP-]. More serious threats to the Big 3 are forthcoming services from Apple, IBM and Microsoft. With strong ties to the inherit operating systems, and large monetary resources, their services, respectively eWorld, IBM Internet Connection[-IBM-], and the Microsoft Network pose the most serious threat to the traditional on-line services[-Berst-].
A clear loser in the rush to put services on the Internet are distributors and manufacturers. Ever since the introduction of computer and networks, people have the vision of a paperless office. During the 80s, the exact opposite has happened. People regularly generate reams of printouts, and the physical size of documentation, and quantities of disks required for new products continues to rise. Recently, the CD-ROM craze is reversing the trend of increasing materials used in manufacturing. As documentation goes on-line and software is available for FTP, distribution of physical good will spiral[-CSITES-]. Software stores, especially like CompUSA and MicroCenter, who offer minimal customer service, will flounder in a networked world where people can gather reviews and conduct transactions on-line.
More interesting that the short term implications the WWW will have on the computer industry are the future implications. Resulting from easy access to Internet services through the WWW, everyone will have access and there will be strong ties between the computer industry and the WWW. Electronic monetary transactions, personalized FAQs, computer reviews, tight integration of the Internet with operating systems, creation of polarized communities, and a new structure of on-line connection fees are on the horizon.
Right now, companies like DigiCash, Netscape, and VISA are all working on services that will allow people to securely make monetary transactions over the Internet. As these features are merged into the WWW, and vendors start accepting these new forms of payment, electronic distribution of software will take off. Companies will sell and distribute programs on-line and offer new pricing models based on per usage software fees. Computer magazine publishers will be able to charge readers per article[-Thomas-]. If the material can be transmitted electronically, you will be able to buy it over the WWW.
Virtually every topic discussed on the Internet has an associated list of Frequently Asked Questions (FAQ). The problems with FAQs are they are usually out of date, and they are a pain to manage. As neophytes join the Internet, it is more imperative to ever to quickly dissipate this information[-Spatula-]. People sorting through propaganda put out by computer companies will also need help to sort through relevant material. In the future, we can see independent consultants, either through ELIZA like programs or with live interactions, answering questions for a consulting fee[-Machrone-].
PC Magazine annually reviews the technical support staff of the companies whose products they review. The editors will come to expect these companies to offer product support through WWW servers. As they did with copy protection, editors wont issue top honor to companies that do not offer a full set of free Internet services.
The WWW will also affect individual applications on your computer in the near future. With the introduction of OS/2 v.3.0, IBM has push button Internet connectivity and a suite of Internet tools[-Ride-]. Microsoft will incorporate its on-line service, the Microsoft Network, with its forthcoming release of Windows 95. Both solutions provide a suite of Internet tools and a connectivity solution to all users that are within reach of a few mouse clicks. But these are just the start. Upcoming products like the Lotus Web Server, Internet Assistant to Microsoft Word[-Internet-], and a project at Apple called Cyberdog, will give applications connections to the Internet with simple operating system communication protocols. Help files and sample programs may all be located at remote resources. Patches and bug fixes may be applied automatically each time the application loads[-Katt-]. These tools will be a stepping stone for remote procedure calls and compound documents over the Internet. Right now, developers are waiting for remote OLE and remote OpenDoc for these features. The WWW provides a simpler solution, today.
Some people joke that in addition to standard utility fees like water, gas, and electric, people will have a monthly information bill[-Machrone-]. In a limited form, these days are here now, and have been so for the past 15 years. As software becomes dependent on the Internet for remote modules and data, people will be forced to join on-line services to gain connections. I dont know what the billing model for this will be (included in the price of the software package, per megabyte downloaded, extra for prime time network usage), but it is sure to come. Those who choose not to subscribe to these on-line services will have software packages deficient of cool features, or will have to pay more for physical copies of the disks and manuals and their local computer stores.
In the near future everyone will be connected with through a global computer network. Applications will work with one another, infinite computer resources will be available, and information will be at your fingertips. All this, as soon as the information superhighway comes through your house.
Today, the Internet and on-line services are prototypes for this vision. Led by the popularity of the Mosaic interface on top of the WWW, which makes services like FTP, Gopher, and HTML easy to use, everyone is excited about the possibilities of the Internet. Consumers are jumping on the Internet today through either direct network connections, or on-line services that provide gateways.
Businesses are seeing the opportunity to capitalize on this new market and are quickly laying stakes to their piece of this new frontier. Although companies like Volvo, Anheuser-Busch, and Burlington Coat Factory have set up posts on the Internet, companies that deal with physical goods are not suited for business on the Internet today. But for the computer industry, the time is now, and many have started acting. The computer industry has the technical whereabouts to setup sites on the WWW that are useful to their customers. From documentation, to product patches, to technical support, the operations on the Internet match those done by the company.
The computer industry benefits from reduced advertising costs, access to a large market, higher bandwidth, control of content, tighter relationship with their customers. Consumers benefit from reduced manufacturing and distribution costs, access to more information, and integrated services. On-line services gain from longer on times while people explore the WWW. For the computer industry, the time to experiment with the Internet is now. Not all the tools are available today, but as consumers jump to the WWW, companies with established sites will stick out. People will gain new loyalties based on today findings. The longer companies wait to join the WWW, the further behind their competition they will fall.