INTERNATIONAL TELECOMMUNICATION UNION Vancouver, 22 February 1995 FROM NATIONAL TO GLOBAL INFORMATION HIGHWAYS: EVOLUTION OR REVOLUTION Video presentation to the Executive Forum on National and Information Infrastructures INTERCOMM 95 Dr Pekka Tarjanne Secretary-General, International Telecommunication Union (ITU) 1. The vision of the GII In his inaugural address to the first ITU World Telecommunication Development Conference, which took place in Buenos Aires Argentina in March 1994, United States Vice- President Al Gore presented his vision of the "Global Information Infrastructure" -- or GII -- which would provide the basis for the information economy and society of the twenty-first century. He described the GII as a planetary information network that transmits messages and images with the speed of light from the largest city to the smallest village on every continent and as networks of distributed intelligence which will allow us to share information, to connect, and to communicate as a global community. He proposed a set of principles to guide the development of the GII, to be built largely by the private sector, and called on the 184 member countries of the ITU to assist in its creation. Visions of information superhighways have captured the imagination of policy makers and business leaders around the world. Information highway initiatives have been launched in North America, Europe, and the Asia-Pacific. Representatives of the "group of seven" leading industrial countries will meet later this week at the invitation of the European Union to discuss how the initiatives they have undertaken can be brought together. However, there is still a great deal of uncertainty surrounding the concept of the GII as well as such practical questions as who will build it, how this will be done, what services it will offer, and how its benefits will be extended to the great mass of humanity who do not yet have ready access to even basic telephone service. 2. The networks of the future began yesterday No one would seriously contemplate re-creating the world's public telephone network from scratch. If the information infrastructure is going to come anywhere near being "global" in nature, it will need to be used in conjunction with existing national telecommunication networks, most of them copper-based and some of which contain parts more than fifty years old. In the same way that driving onto a multi-lane highway it is usually necessary to pass first through several smaller, slower, feeder roads; so it is when navigating the "infobahn", many of the routes to and from individual entry points will be through plain old copper wire. Also, it is probably inaccurate to talk about infrastructure in the singular. While it is certainly to be hoped that networks of the future will be fully interconnected into a seamless whole, it is nevertheless likely that in the near terms they will remain as separate infrastructures in terms of their construction, ownership, operation and regulation. But in taking a somewhat sceptical view of the hype surrounding the term GII it is important that we do not miss the vision. What makes the current discussion different from earlier waves of enthusiasm for infrastructure projects is that it is more concerned with the services and applications running over the network than the network itself. Furthermore, the discussion is taking place as much outside the relatively closed world of telecommunications experts as within it. Not surprisingly, the GII looks rather different, depending on whether you look at if from the perspective of the computer industry, the telecommunications industry, the broadcasting, cable-TV or entertainment sector. At one level the GII is seen as a high performance computer network which will facilitate high speed data access and retrieval. In this model, the Internet is sometimes seen as the precursor for a Global Information Infrastructure in that it is widely used (more than 20 million users) and is widely diffused. If the Internet can be successfully extended from the academic and research communities it currently serves to a broader commercial marketplace, and if this process could be achieved without losing the openness and innovation that have been a critical part of the Internet's success, then perhaps the Internet could form the basis for a new model of network development. The Internet suffers from the problems that are common to many resources that are in common ownership: widescale misuse, security problems, lack of structure. Nevertheless, the spirit of co-operation, information-sharing and voluntarism that has characterised the development of the Internet should certainly be co-opted in creating the GII; An alternative definition of GII is as a multimedia network for which the primary use will be conveying video datastreams in conjunction with data, image (fax), text and voice. According to this vision, many of the potential applications will be in the entertainment, education and health care sectors as well as the business market. In the US public policy statements, it is this vision of providing access to schools, universities, hospitals and public libraries which predominates, though this is the least commercial aspect of the undertaking. It is understood that residential and business users will be the major market, but the emphasis is on achieving universal service goals whereby the public sector can participate alongside the private sector. A third definition is as a medium for interactive television, in which it is the intelligent television set rather than the home computer or the videophone which is the main communication channel. The battle for the television set-top is likely to be every bit as dynamic as the battle for the desktop over the coming years as different technological solutions are proposed to help consumers cope with a rich diet of multiple new television channels, video- on-demand, home shopping and other services. Teenagers playing video games could be using the network alongside multinational corporations holding video-conferences. Entertainment would be the driver service, but many other education and business services could come aboard for the ride. 3. What will an information infrastructure look like? It is not surprising that these three visions of what the Global Information Infrastructure could become come from different parts of the information industry as it currently exists: the computer industry, the telecommunications industry and the broadcasting/entertainment industry. But the beauty of modern technology is that a single network of networks can, in theory, accommodate each of these different applications. There are certain common elements to each definition: The network will be digital. The process of digitisation began in the computer industry, it is already well-advanced in the telecommunication industry and it is now spreading to the broadcasting sector. As the three sectors converge, it will become increasingly difficult, and unnecessary, to distinguish between the different parts of the bit business. Information should, in theory, be able to flow from any source to any destination, providing the network is digital, and some form of switching is available. The network will be high capacity. The obstacle of scarcity, which has shaped the network architectures and history of the information industry to date, could be largely overcome, at least in the developed nations. Data compression technologies, the development of high capacity fibre-based networks, and the use of digital transmission is eroding capacity constraints. Until now, scarcity has dictated the number of TV channels that can be transmitted, the number of mobile communication users that can be accommodated and the rate at which new telecommunication users can be added to the network. As these constraints disappear, attention will shift to demand stimulation rather than demand management. This will require fresh approaches to the way services are tariffed, marketed and regulated. The new services offered will be personal. This implies that the basic user will be the individual rather than the residential unit or the work unit. This process happened in the computer sector with the arrival of Personal Computers; it is happening in the telecommunications sector with the development of personal mobile communications and portable numbering; it will happen in the broadcasting sector as individual viewing -- on video, through video-on-demand, through specialised channels -- increasingly supersedes programme schedules. These three characteristics portend a very different public network from that which currently exists and one in which few, if any, services will be provided on a monopoly basis. But what form will the industry take? 4. What will the telecommunication industry look like? The ITU's 1994 World Telecommunication Development Report envisaged three quite different scenarios of how the global information infrastructure would develop. In the most conservative scenario, the telecommunications industry would continue to evolve along the lines that have guided it in the past. The GII would not exist as such. Instead, global telecommunication services would be jointly provided by national operators which would continue to dominate their home markets, but not have significant presence in other countries. In a more radical second scenario, there would be a significant rationalisation of the international telecommunications industry. This would lead in telecommunications, as it has in a number of other industry sectors, to the emergence of a small number of dominant global carriers that would be present in all major markets and provide GII services in competition with each other, and in partnership with second-tier local operators. In a revolutionary third scenario, the structure of the telecommunications industry would be completely transformed. Multiple, diverse players would enter an increasingly fragmented marketplace. Carriage would become a low value-added commodity, and market power would shift to system integrators and content providers. GII services would be provided through constantly shifting networks of networks. Will the transition from national to global information highways be evolutionary or revolutionary? In large part, the answer to this question depends on the success of entrepreneurs and established industry players in developing and marketing global telecommunication services. However, since telecommunications is a regulated industry, the answer to this question also depends on the actions of government policy makers and regulators. 5. GMPCS: A case study of global networks One way to test evolutionary and revolutionary perspectives is to examine the case of Global Mobile Personal Communications Services. GMPCS services will be provided by a new generation of multi-satellite systems encircling the earth in low earth, middle earth and highly elliptical orbits (LEOs, MEOs and HEOs). These systems are the first telecommunication systems that are intrinsically global -- they provide global coverage, and their commercial viability depends on access to global markets. GMPCS systems are therefore often considered to epitomise the approaching era of global telecommunications, and are closely associated with the concept of the GII. In November 1994, an international group of regulatory experts met in Geneva to discuss whether the issues raised by GMPCS could be dealt with by existing regulatory structures in an evolutionary manner, or whether GMPCS technology is so revolutionary that a completely new approach would be required -- for example, the constitution of some sort of global regulatory body. The conclusion of the experts was that GMPCS systems do not raise any fundamentally new regulatory issues, providing well-established international principles are respected by national administrations when licensing space segments for GMPCS systems. The conclusions reached in the case of GMPCS at the third ITU Regulatory Colloquium tend to support the evolutionary perspective on the transition from national to global information infrastructures. However, the discussions which took place at this meeting also revealed the enormous complexity of the issues entrepreneurs and regulators will face in constructing global information highways. It was clear from the colloquium proceedings that important transformations will likely be required if the world is to fully benefit from GMPCS. At a certain point, even an evolutionary process becomes revolutionary. Rather than being alternative futures, the different scenarios described in the previous section may represent a natural historical progression. 6. The challenge of the GII and the role of the ITU In considering the forthcoming transition from national to global information highways, it is natural that the attention of those involved with telecommunications as entrepreneurs, service providers or regulators should be focused on questions of technology, market opportunity, industry structure, investment risks and potential returns. However, there is another perspective on this transition which should not be overlooked. The old system of "inter-national" telecommunications failed to provide universal access to basic telecommunications. The right of access and the right to communicate will be more important in the information society of the future than they were in the past. From this point of view, we must also ask whether the GII will be evolutionary -- in the sense that it perpetuates and possibly exacerbates the information inequalities of the past -- or whether it will be revolutionary and lead us toward McLuhan's "global village". The goal of the ITU is to play a "catalytic role" in facilitating the development of truly global information superhighways. There are four main ways this will be done: by developing standards that will enable the different networks that are likely to make up the GII interoperate; by allocating spectrum for innovative services such as GMPCS and helping manage its use; by providing policy and technical assistance to developing countries in partnership with the private sector and other international organizations; and by providing a forum where government and industry can discuss policies and strategies for making the vision of the GII a reality. The time is ripe for such discussions. Here in Vancouver this week the APEC/OECD summit on the GII is taking place virtually at the same time as your INTERCOMM meeting. Later this week in Brussels the G7 summit is taking place to discuss a similar set of issues. I hope that the discussion in this executive forum, which I regret that I will not be able to attend in person, will contribute to the emerging understanding of the opportunities and challenges that lie ahead of us on the road to the information superhighway. *******