Information Is Oil

American Magic and Dread Information, the New Oil, and the Box Media power is political power. —Ben Bagdikian, The Media Monopoly This time around, the revolution will be television. Big, smart television. Before there is video-on-demand, before there are instant-access malls in your living room, before there is video-conferencing, there will be a restructuring, legal and philosophical, of your telephone and your TV. No grass roots revolution, this restructuring will begin at the highest levels with those whom this age has deified — fantastically wealthy men — and will end with the poorest family that owns a telephone. Welcome to the Information Revolution, part II. It is a revolution because traditional notions of information, locally generated, locally stored, are giving way to mammoth networks of databases, spewing forth all information, all the time. Part I brought us personal computers and touch-tone, cable television and cellular communications, VCRs and videocameras. Part II is larger, more expansive, holistic. This new Information Revolution will integrate the various elements invented and propagated in Part I. The resulting molecule is as follows: TV3VCR1PC2. Predictably, no one who is responsible for naming such creations has yet done so. I’ll call it The Box. The Media and Oil Conspiracy. The Box will be yours when several fantastically wealthy men make it so. These are the generals and prophets of the Information Age — people like John Malone, president of Tele-Communications, Inc. (TCI), and Ray Smith, chairman of Bell-Atlantic. Presiding over the world’s largest cable-TV company and the nation’s third largest phone company, respectively, these two men recently announced the merger of their corporations. This involves $33 billion. Malone and Smith could, in some way, decide what information one of every four Americans receives. Some see information as the latter-day oil, and Malone and Smith are in position to control communication just as Rockefeller effectively monopolized the oil industry. Like the oil business of the late 19th century, the information industry has its share of magnates, hostile takeovers, anti-trust concerns, and exploitable resources. The major, and perhaps most intriguing, difference between the two industries is that there is no limit to information. Information wells do not dry up; they multiply. Because information is an infinite resource, the amount of wealth and power a corporation can obtain is virtually limitless. As long as we make phone calls, use computers, and watch TV, giant corporations will profit from the information we require. By concentrating on just one medium, telephones, say, corporations throughout the twentieth century have amassed power unparalled in any other industry, except one: federal government. As our government defined and influenced our civil rights, so did Ma Bell control our telephone rights. Weary of losing authority, the government broke up the information monolith in the early 1980s, just as it had broken up Standard Oil in 1911. But now, communications firms and looking beyond the telephone and watching the television. The subsequent rise of “baby bells” is approaching the stature their mother once held. The smaller phone companies— Bell-Atlantic, Nynex, Southwestern Bell, etc. —achieved phenomenal growth but recently have become discontented with government

regulations which restrict them to telephone service. They argue that as part of the information business, not merely the telephone business, they are entitled to a hand in what we watch on TV, what computer programs we buy, what we do with The Box. They have merged with computer manufacturers, with cable companies, with film studios. In the past year, the phone companies have ventured into conglomerates with other communications firms in deals that rank among the largest ever. In fact, four of the ten largest mergers ever have involved communications corporations. All four have occurred in within the last three years. Trust and Anti-trust. Not surprisingly, the government has sought to slow these mergers. Fearing the second coming of Ma Bell, it has shut the door on many such deals. The primary method is a law that prevents phone companies from offering cable service in the same region as they offer phone service. But the prophets of the cable and telephone worlds, such as John Malone and Ray Smth, believe their industries are rising and must converge. They maintain that the ideas underpinning government regulations are outdated and will soon change to allow for a more rapid technological progress that will affect every citizen of the global village. As such, they promote controversial and mammoth deals such as the BellAtlantic / TCI merger. While few wish to see another full-blown communications monopoly, many industry analysts suggest that the projects on the scale of providing 500-channel cable systems, video-on-demand, and widespread video-conferencing, will take a lot more muscle than the local phone company has to offer. Unfortunately, while the government traditionally has been reluctant to participate in the construction of the information infrastructure, it heavily regulates the growth and regional concentration of communications firms. This hinders efforts among the various corporations to pool their resources to improve both local and global technology. The main role of government is to protect the interests of its citizenry. The government dissolved Standard Oil in part because Rockefeller controlled the price of oil for everyone, and now it seems too ready to approach Bell-Atlantic and other such corporations as though it were identical to an oil firm. Despite similarities between the two industries, they are not duplicates. Unlike oil, electronic information, whether television, film, computer data, or a longdistance voice is a renewable, inexhaustible resource, which a single corporation cannot entirely exploit and dispense. Information breeds too quickly for that. Businesses have control only over that information which they own and produce, and their primary method of control is what they charge for access to that information. By regulating only the rates, and not the mergers, of conglomerates, the government would promote technological progress without allowing giant communications firms to soak its customers. Information Hostages. Still, there are significant problems with media conglomerates. Corporations like Time-Warner, Gannett, and Viacom have engulfed much of the information we encounter each day. If Bell-Atlantic’s proposed mergers are successful, the product of the merger would control a giant phone system, America’s largest cable company, the Home Shopping Network, the QVC shopping network, and Paramount film studios. With all these assets, Bell Atlantic would be larger than Mobil Oil. Keep in mind that Paramount, one of the largest production companies in the world, is the smallest fish in this food chain. Whether we read the newspaper, listened to the radio, watched TV or went to the movies, we would be Bell Atlantic’s captive audience. A decade ago, fifty corporations owned most of newspapers, magazines, TV networks, book publishers, and film studios. As a result of recent mergers and projected mergers, that number is estimated to decrease to twenty by 2010. Twenty people will have authority for whatever we read, whatever we hear, whatever we see. Some

suggest we live in and will continue to live in what media commentator Ben Bagdikian termed “the Media Monopoly.” Without doubt, this will lead to suppressed or altered news, abuse of electronic power, shady partnerships between commodity-based corporations (like Coca-Cola) and information-based corporations (like Columbia Pictures), and public mistrust of commercial information. Media power will be political power. Information in the hands of so few likely will lead also to a technological and informational underclass, already beginning to develop in some areas of the country. Corporations cannot provide all services to all areas simultaneously, so certain regions will be left in the cold for several years. The children of that community will grow up without the same technology (and hence the same information) as those in another service area, and will lose something the other children gain. And because technology changes so rapidly, missing a step somehwere along the way could affect their practical knowledge well into their futures. They will be behind because of a phone/cable company’s inability or refusal to supply a particular region with the latest technology. A new computer network, for example, is much more likely to be installed in Eastern Pennsylvania than in suburban Massachussetts. This is not because the inhabitants of Massachussets are less affluent than those of Eastern Pennsylvania, but rather because the corporation may feel a certain loyalty to its home region. By the same token, residents of Fairfax County, Virginia, can expect to see the first fruits of giant communication conglomerates, primarily because Bell Atlantic (which owns C&P) and TCI (which owns DC’s Cablevision) need to convince Congress that information technology is worth the price of near-monopoly. This is a subtle, electronic method of lobbying, where the tool is not an elegant lunch at Zeibert’s, but an evening at home with the Congressman, his wife, and the Box. Taken to the extreme, this notion of the Informational Underclass, taken to its extreme, could lead to exploitation of second- and third-world nations. Communications conglomerates, investing with other conglomerates, could move into a poor country and overwhelm it with its corporate might. By taking a position as the dominant economic force, a communications firm would have control over telephones, television, newspapers, and even employment in a given country. It would be difficult for a small-time government in a small-time country to stand up to a mega-conglomerate with more money than France, and less good will. (Bell Atlantic, incidentally, has pledged to put $1 billion into developing “cellular communications” in Mexico. Make of that what you will.) Simply stated, information conglomerates are going to force Americans to consider many of the problems our predecessors faced in the late 18th century with Standard Oil. Probably, this will mean a rewriting of our anti-trust laws, the creation of an informational underclass, and fifty board chairmen remote-controlling 500 channels, eight movie studios, and 13,000 newspapers. The other 260 million of us will watch The Box, enraptured. Sources: The Washington Post. The Media Monopoly, Ben Bagdikian. 1671 words