Essay/Term paper: Internet access: flat fee vs. pay-per-use

Essay, term paper, research paper:  Internet

Internet Access: Flat Fee vs. Pay-Per-Use


Most Internet users are either not charged to access information, or pay
a low-cost flat fee. The Information SuperHighway, on the other hand, will
likely be based upon a pay-per-use model. On a gross level, one might say that
the payment model for the Internet is closer to that of broadcast (or perhaps
cable) television while the model for the Information SuperHighway is likely to
be more like that of pay-per-view T.V.

"Pay-per-use" environments affect user access habits. "Flat fee"
situations encourage exploration. Users in flat-fee environments navigate
through webs of information and tend to make serendipitous discoveries. "Pay-
per-use" situations give the public the incentive to focus their attention on
what they know they already want, or to look for well-known items previously
recommended by others. In "pay-per-use" environments, people tend to follow more
traditional paths of discovery, and seldom explore totally unexpected avenues.
"Pay-per-use" environments discourage browsing. Imagine how a person's reading
habits would change if they had to pay for each article they looked at in a
magazine or newspaper.

Yet many of the most interesting things we learn about or find come from
following unknown routes, bumping into things we weren't looking for. (Indeed,
Thomas Kuhn makes the claim that, even in the hard sciences, real breakthroughs
and interesting discoveries only come from following these unconventional routes
[Kuhn, Thomas, The Structure of Scientific Revolutions, Chicago: University of
Chicago Press, 1962]).

And people who have to pay each time they use a piece of information are
likely to increasingly rely upon specialists and experts. For example, in a
situation where the reader will have to pay to read each paragraph of background
on Bosnia, s/he is more likely to rely upon State Department summaries instead
of paying to become more generally informed him/herself. And in the 1970s and
1980s the library world learned that the introduction of expensive pay-per-use
databases discouraged individual exploration and introduced the need for
intermediaries who specialized in searching techniques.

Producers vs. Consumers

On the Internet anyone can be an information provider or an information
consumer. On the Information SuperHighway most people will be relegated to the
role of information consumer.

Because services like "movies-on-demand" will drive the technological
development of the Information SuperHighway, movies' need for high bandwidth
into the home and only narrow bandwidth coming back out will likely dominate.
(see Besser, Howard. "Movies on Demand May Significantly Change the Internet",
Bulletin of the American Association for Information Science, October 1994)
Metaphorically, this will be like a ten-lane highway coming into the home and
only a tiny path leading back out (just wide enough to take a credit card number
or to answer multiple-choice questions).

This kind of asymmetrical design implies that only a limited number of
sites will have the capability of outputting large volumes of bandwidth onto the
Information SuperHighway. If such a configuration becomes prevalent, this is
likely to have several far-reaching results. It will inevitably lead to some
form of gatekeeping. Managers of those sites will control all high-volume
material that can be accessed. And for reasons of scarcity, politics, taste, or
personal/corporate preference, they will make decisions on a regular basis as to
what material will be made accessible and what will not. This kind of model
resembles broadcast or cable television much more so than it does today's
Internet.

The scarcity of outbound bandwidth will discourage individuals and small
groups from becoming information producers, and will further solidify their role
as information consumers. "Interactivity" will be defined as responding to
multiple-choice questions and entering credit card numbers onto a keypad. It
should come as no surprise that some of the major players trying to build the
Information SuperHighway are those who introduced televised "home shopping".

Information vs. Entertainment

The telecommunications industry continues to insist that functions such
as entertainment and home shopping will be the driving forces behind the
construction of the Information SuperHighway. Yet, there is a growing body of
evidence that suggests that consumers want more information-related services,
and would be more willing to pay for these than for movies-on-demand, video
games, or home shopping services.

Two surveys published in October 1994 had very similar findings.
According to the Wall Street Journal (Bart Ziegler, "Interactive Options May be
Unwanted, Survey Indicates," Oct. 5, 1994, page B8), a Lou Harris poll found
that "a total of 63% of consumers surveyed said they would be interested in
using their TV or PC to receive health-care information, lists of government
services, phone numbers of businesses and non-profit groups, product reviews and
similar information. In addition, almost three-quarters said they would like to
receive a customized news report, and about half said they would like some sort
of communications service, such as the ability to send messages to others. But
only 40% expressed interest in movies-on-demand or in ordering sports programs,
and only about a third said they want interactive shopping."

A survey commissioned by MacWorld (Charles Piller, "Dreamnet", MacWorld,
Oct 1994, pages 96-105) which claims to be "one of the most extensive benchmarks
of consumer demand for interactive services yet conducted" found that "consumers
are much more interested in using emerging networks for information access,
community involvement, self-improvement, and communication, than for
entertainment." Out of a total of 26 possible online capabilities, respondents
rated video-on-demand tenth, with only 28% indicating that this service was
highly desirable. Much more desirable activities included on-demand access to
reference materials, distance learning, interactive reports on local schools,
and access to information about government services and training. Thirty-four
percent of the sample was willing to pay over $10 per month for distance
learning, yet only 19% was willing to pay that much for video-on-demand or other
entertainment services.

If people say they desire informational services more than entertainment
and shopping (and say that they're willing to pay for it), why does the
telecommunications industry continue to focus on plans oriented towards
entertainment and shopping? Because, in the long run, the industry believes that
this other set of services will prove more lucrative. After all, there are
numerous examples in other domains of large profits made from entertainment and
shopping services, and very few such examples from informational services.

It is also possible that the industry believes that popular opinion can
easily be shifted from favoring informational services to favoring entertainment
and shopping. For several years telecommunications industry supporters have been
attempting to gain support for deregulation of that industry by citing the
wealth of interesting informational services that would be available if this
industry was freed from regulatory constraints. Sectors of the industry may well
believe that the strength of consumer desire for the Information SuperHighway to
meet information needs (as shown in these polls) is a result of this campaign.
According to this argument, if popular opinion can be swayed in one direction,
it can be swayed back in the other direction

Popular discourse would have us believe that the Information
SuperHighway will just be a faster, more powerful version of the Internet. But
there are key differences between these two entities, and in many ways they are
diametrically opposed models.

Privacy

The metering that will have to accompany pay-per-view on the Information
SuperHighway will need to track everything that an individual looks at (in case
s/he wants to challenge the bill). It will also give governmental agencies the
opportunity to monitor reading habits. Many times in the past the FBI has tried
to view library circulation records to see who has been reading which books. In
the online age, service providers can track everything a user has bought, read,
or even looked at. And they plan to sell this information to anyone willing to
pay for it.

In an age where people engage in a wide variety of activities online,
service providers will amass a wealth of demographic and consumption information
on each individual. This information will be sold to other organizations who
will use it in their marketing campaigns. Some organizations are already using
computers and telephone messaging systems to experiment with this kind of
demographic targeting. For example, in mid-1994, Rolling Stone magazine
announced a new telephone-based ordering system for music albums. After using
previous calls to build "a profile of each caller's tastes ... custom messages
will alert them to new releases by their favorite artists or recommend artists
based on previous selections. " ("Phone Service Previews Albums" by Laura
Evenson, San Francisco Chronicle, 6/30/94, p D1) Some of the early experiments
promoted as tests of interactive services on the Information SuperHighway were
actually designed to gather demographic data on users. ("Interacting at the
Jersey shore: FutureVision courts advertisers for Bell Atlantic's test in Toms
River", Advertising Age, May 9, 1994)

Conclusion

No one can predict the future with certainty. But we can analyze and
evaluate predictions by seeing how they fit into patterns. And an analysis of
the discourse around the Information SuperHighway shows remarkable similarity to
that which surrounded cable TV nearly a quarter-century before. Though there is
no guarantee that the promises of this technology will prove as empty as those
of the previous technology, we can safely say that certain powerful groups are
more interested in promoting hype than in weighing the possible effects of the
Information SuperHighway.

The Information SuperHighway will not just be a faster Internet; in fact
it is possible that many of the elements that current Internet users consider
vital will disappear in the new infrastructure. Though the average consumer will
have many more options than they do from their home television today, attempts
at mass distribution will likely favor mainstream big-budget programs over those
that are controversial or appeal to a narrower audience. It is possible that
diversity available from all sources will decrease and independent productions
will be even further marginalized. And the adoption of an asynchronous
architecture (a ten-lane highway coming into the library or home with a tiny
path leading back out) would pose a significant barrier to those seeking to be
information providers, and would favor a model of relatively passive consumption.
And the kind of massification and leveling of culture that will follow is likely
to be similar to the effects of broadcast television on culture.