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1 egovernment, Internet & Policy Agendas William Lehr MIT
2 Our Vision at the Communications Futures Program (CFP) is to define the roadmap for communications and its impact on adjacent industries. CFP is a cross cutting partnership between academia and industry, with industrial partners from across the value chain. Multidisciplinary : technology, business strategy/economics and policy Cross Value Chain : across industry chips to boxes to services to apps, across functions R&D to strategy to operations, industry to academia to policy Open Communications : focus on destabilizing shifts of intelligence and control between network owners and end users
3 Some areas of research interest Vision of the Wireless Broadband Future Broadband Internet as the new PSTN Economic Impacts of ICTs & the Metrics challenge 3
4 Vision of the ICT Future Vision of the Wireless Broadband Future Phase 1: Universal telephone service, computing everywhere (in business) PCs on every desktop, LANs to tie them together Phase 2: Internet and mass market data services: computing everywhere in society Mobile telephony and personalization of communications Phase 3: Broadband: uncork the last-mile speed bottleneck Mobile + Internet convergence Personalization, everywhere/always connected, mixed/multi-media Social networking, social media Phase 4(?) : M2M, Sensors, Ambient/context-dependent (AI-enabled) computing Automation and Cyber-mechanical integration Cloud computing : connectivity, computing/storage resources,.. 4
5 Vision of the Wireless Broadband Future Convergence à Pervasive Computing. Communications -- mobile Internet -- everywhere/always connected Control -- Sensors/RFID Computing -- Internet of Things -- Everything connected -- Smart - healthcare - energy grids - highways - buildings 5
6 Transition to Liquid Value Chains SOLID PHASE Vision of the Wireless Broadband Future -- vertical value/production chains -- hierarchical -- standardization -- rigid organizational structure -- well-defined industry boundaries -- public utility regulation e.g., Traditional telecoms Retail trade Broadcasting/media content Product design/marketing LIQUID PHASE -- flexible/dynamic organizations -- distributed, peering, outsourcing -- interfaces -- interactive -- industry convergence -- market competition e.g., Internet ecommerce, ebay Blogs, Wikipedia, YouTube Viral marketing 6
7 faster Clockspeed Data Processing Internet Real Time (Still Happening) Vision of the Wireless Broadband Future Weeks Batch Megabytes Punch Cards Few People Days Request/Reply Terabytes Human Many People Minutes Automated Exabytes Event Driven Beyond People -- more competition (faster entry/exit, geographic mobility) -- shorter product (firm/industry) lifecycles -- more systemic uncertainty (volatility, complexity) -- competitive advantage more ephemeral e.g., Just-in-time organization, outsourcing, plan for unexpected, IT-intensive 7
8 End-user Empowerment Vision of the Wireless Broadband Future End-users have the options -- ICT saavy generation -- Rising discretionary income -- Communication intensive They control the platform -- Cell phone, ipod, PC -- Application (and OS) -- Lease or buy? They control the time/place -- Stream or Store/forward -- Internet is everywhere Collectively, they control the info -- Wikis, Blogs, Social networks -- Viral networking -- Flash mobs What do businesses need to do? -- proactive customer engagement -- interactive, open, truthful -- churn accelerates (fast and fickle) Opportunities: -- self-service economy -- partners in risk/capital management -- continuous innovation 8
9 Broadband is basic infrastructure Broadband Internet as the new PSTN Roads, water, electricity,.. telecommunications Basic infrastructure is -- Ubiquitously available (affordably) -- Pervasively used (adopted) -- Publicly-provided (often), regulated Telecom a bit special -- Mostly private investment (regulated utility => managed competition) -- Rapid technical change, complex/changing value chain (convergence) -- More heterogeneous services (uses/needs) Broadband is future of Internet (and it s an eeconomy) -- Facebook, podcasting, YouTube, Web2.0, -- SmartX (X=business, infrastructure, grids, healthcare) -- ecommerce (B2B, B2C), ehealth, eeducation, eentertainment, egovt 9
10 Broadband Internet becoming the new PSTN Three separate trends. (1) From Telephone to Internet Voice telephony silo è Async data hour-glass 4KHz VG circuit è best effort packet data over anything (2) From Internet to Cloud Computing Utility Transport è Services (VoIP, Netflix, Facebook,.) E2e Peers è Cloud services (storage, CDN, trust) (3) From Public Utility Regulation to Markets Command & Control è Market discretion Broadband Internet as the new PSTN 10
11 Internet s evolution and policy implications Broadband Internet as the new PSTN Internet (old): e2e, best-effort, switched packet-data network (future): cloud utility computing platform Internet is new PSTN: THE platform for all electronic comms -- Basic essential infrastructure for economy (like water, roads, electricity ) -- Enduring public interest: USF, public safety, economic development, telecom -- Markets instead of public utility regulation Challenge is increased: -- Heterogeneity -- Dynamism -- Complexity (no one size fits all) (flexible provisioning) (adaptability, evolvability) (not just telephone) (shared resources (lots more functionality; by diverse QoS apps; new players/uses; bursty traffic) faster clockspeed) 11
12 Some core areas for policy concern Broadband Internet as the new PSTN Transitioning legacy telecom Universal service: affordable access for all Interconnection/Open access : competition, choice Content/broadcast : diversity, speech Spectrum policy future From C&C to markets: flexible licensed & unlicensed, auctions Spectrum sharing across uses, users, and networks/infrastructures Public safety Next generation wireless broadband networks Security, trust, privacy Other stuff Privacy protection quandary Reliability, safety Tax policy : VAT and the ecommerce Trade policy : ITU, WIPO Intellectual Property : Patents, Copyright Economic development : ICT as tool for development 12
13 Broadband Internet as the new PSTN Changing face of broadband & policy implications Past Fixed 0.2-1Mbps DSL, cable Web ecommerce Value-added Service -> better Internet access Present Fixed 5-50Mbps DSL, cable Mobile 0.1Mbps 3G Web2.0 Media convergence Social media Essential Service -> BB and triple play Future Fixed 100Mbps+ FTTx Mobile 5-10Mbps 4G LTE, WiMax Pervasive computing Mobile BB Cloud resources, IoT, Essential platform -> New PSTN Availability Adoption Usage Infrastructure investment Pricing, Universal Service subsidies, Choice, QoS Skills, Verticals (SmartX), Complementary assets 13
14 Economic Impacts of ICTs & the Metrics challenge Broadband contributes to economic growth ICT adds to productivity (and BB critical component of ICT) -- Supply-chain management/just-in-time/flexible production -- Complements labor (skill-biased, value-added) -- Expand markets & competition (death of distance, globalization) -- Changes how we work: org change, outsourcing, process innovation Broadband critical to key sectors (drivers) -- ecommerce: B2B (supply chain), B2C (retail) -- Education: information sharing/acquisition, skills enhancement -- Healthcare: aging population, patient mgmt/empowerment, home care -- Environment: energy efficiency, smart grids, telecommuting -- egovernment: government efficiency But how do we know above hypothesis is correct? -- How much is enough? 14
15 ICT engine for economic growth, growing in importance Economic Impacts of ICTs & the Metrics challenge Source: Emerging Digital Economy, Department of Commerce,
16 Economic Impacts of ICTs & the Metrics challenge ICT employment growth & wage premium Source: Emerging Digital Economy, Department of Commerce,
17 Economic Impacts of ICTs & the Metrics challenge Information Productivity Paradox a measurement issue Information Technology yields significant excess returns! Jorgenson (2001): ICT added 1.18% to GDP growth and accounted for 2/3rds of total factor productivity growth Jorgenson, Ho, Stiroh (2007): ICT contributed 59% of growth in labor productivity from , and 33% from Fuss and Waverman (2006): 60% of the slower productivity growth experienced by Canada (relative to US) in 2003 attributed to less intensive ICT use. Varian, Litan, Elder, Shutter (2002): US firms have adopted Internet business solutions more intensively than European firms. Crandall, Lehr, and Litan (2007) : 1% increase in BB penetration results in % higher job growth over one year, or ~300k additional jobs. Lehr, Osorio, Gillett, and Sirbu (2005) : BB added 1-1.4% to job growth 17
18 Internet metrics challenge Economic Impacts of ICTs & the Metrics challenge Markets & Policy need data - esp. if goal is light-handed regulation - most of investment is private (but some public investment needed) It s an Information Economy - BB < Internet < Information Economy < Economy - BB is basic infrastructure à economy, society, public safety Economic Development, Regulation, & Network Mgmt - Economic impact à Public Funds à Investment - Regulation à telecom, content, antitrust - Network Mgmt à architecture, provisioning, operational (congestion) Internet will continue to evolve - BB a moving target - Mobility is future - Lots other stuff clouds, smartx (grids, homes, cars),. 18
19 Data, data everywhere Economic Impacts of ICTs & the Metrics challenge Internet as measurement platform -- sensors, mobile platforms, social-networking, and cloud resources to measure anything/every thing, automating decision-making Big Data challenge -- PB data sets require new tools such as cloud services & parallel processing -- Skills deficit in how to work with large data sets. Need new theory, metrics, analytic approaches. Democratizing the data game -- What s the truth when anyone can play? Skills/understanding gap -- Crowdsourcing, experts, and validation Policymaking: more public-private partnerships -- From custodian to curator -- From publisher to communicator -- Inherently multidisciplinary, multi-stakeholder engagement 19
20 Summing up Future is pervasive computing : always on/everywhere connected Convergence communication, computing & control Broadband (rich media), Wireless (mobile) Intelligent edges (distributed, AI-enabled, context aware) Personalized (individual is center, customizable, adaptive) Heterogeneous (hw/sw, competition, networks/equip, wired/wireless) Implications: Liquid value chains (adaptive, fluid organization/markets structures) Faster clockspeed (just-in-time, real-time, outsourcing) End-user empowerment (self-service economy) Greater complexity (choice, options, flexible architectures) BB Internet as the new PSTN BB as basic infrastructure è Enduring public interest Markets instead of Public Utility Regulation Transitioning of traditional regulatory policies Metrics challenge Economic impacts in usage è SmartX Measuring the Internet economy is multidisciplinary, evolutionary Data everywhere è Big Data challenge, real-time control 20
21 Thanks for your attention! Questions: Websites: http//csail.mit.edu/~wlehr 21
22 References Lehr, W., S. Bauer, and D. Clark (2012), "Measuring Broadband Performance when Broadband is the New PSTN," MITAS Working Paper, May Lehr, W. (2012), Measuring the Internet: the data challenge," Organization for Economic Cooperation and Development (OECD) Digital Economy Working Paper 184, ISSN , April 2012 Chapin, J. and W. Lehr (2011) "Mobile Broadband Growth, Spectrum Scarcity, and Sustainable Competition," 39th Research Conference on Communications, Information and Internet Policy ( Alexandria, VA, September
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