Spring 1999

Wednesdays 2pm - 5pm

South Hall Room 110

This class meeting will feature an overview of the course as a whole and a glimpse of the research project that lies behind it. Administrative and organizational details will be addressed. The readings will provide an introduction to the political and economic context for the course.

• De Long, Brad "How New Is Today’s Economy?" available at http://econ161.berkeley.edu/Comments/How_New.html
• "A connected world: A survey of telecommunications," The Economist, Survey September 13, 1997
• Shapiro, Carl and Hal Varian "US Government Information Policy" July 30, 1997
• Varian, Hal and Jeffrey MacKie-Mason, "Economic FAQs About the Internet," from McKnight and Bailey eds., Internet Economics (Cambridge: MIT Press, 1997)

• Hobbes’ Internet Timeline http://info.isoc.org/guest/zakon/Internet/History/HIT.html

The history of American information policy begins in the U.S. Constitution, which defines "progress in the Useful Arts and Sciences" as the purpose of copyright. From the beginning, information policy has evolved in distinctly American ways from the Post Office through Telecommunications, and the concepts and methods evolved in the past are the template for the first attempts to make policy to govern the Internet economy. The readings give a brief history of this development, but also reveal some of the typical patterns and issues that surround the emergence of transformative technologies, problems in finding business strategies to use them productively, an policy strategies to regulate them.

• John, Richard R. "The Politics of Innovation" in Daedalus Volume 127 Number 4 Fall 1998
• David, Paul "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox" in American Economic Review 1990 (80)2
• David, Paul "Heroes, Herds and Hysteresis in Technological History: Thomas Edison and ‘The Battle of the Systems’ Reconsidered" in Industrial and Corporate Change 1992 (1)1.
• Noam, Eli "Beyond Telecommunications Liberalization: Past Performance, Present Hype, and Future Direction" from William Drake, ed. The New Information Infrastructure: Strategies for U.S. Policy (New York: 20^th Century Fund Press, 1995) pp.33-37
• Pool, Ethiel de Sola " Carriers and the First Amendment," in Technologies of Freedom (Cambridge: Belknap Press, 1983) Chapter 5.

• "A Wrinkle in Internet Time" and other documents on Internet history at http://www.ksg.harvard.edu/iip/stm308m/stp308m.html (Section Two: History of the Internet)

What do we mean by an information economy, E-commerce, or the Internet economy? The readings introduce some of the ways that contemporary scholars are answering the key questions: Do the changes brought about by information technologies require distinctly new concepts and methods of analysis and measurement? Do they raise new kinds of economic or political questions requiring new policy and political processes?

• Bar, François, Michael Borrus and Richard Steinberg, "Islands in the Bit-Stream: Mapping the Interoperability Debate," Industrial Economics and New Technologies, 1996
• Webster, Frank Theories of the Information Society (London and New York; Routledge, 1995) Chapter 2 "Information and the Idea of an Information Society"
• Sirbu, Marvin "Telecommunications Technology and Infrastructure", in Annual Review of the Institute for Information Studies - 1992, pp 155-180. (also available at http://www.cs.cmu.edu/afs/andrew.cmu.edu/usr9/sirbu/www/pubs/ipaper.html )
• Shapiro, Carl and Hal Varian Information Rules (Boston: Harvard Business School Press, 1999) Chapter One: "The Information Economy"

This class meeting introduces some of the key policy issues that will be examined in greater depth in the rest of the semester. The readings describe the role that politics and political actors are playing in the emergence of the information economy.

• Information Infrastructure Task Force, The Clinton Administration, "A Framework for Global Electronic Commerce," July 1997 at http://www-06.nist.gov/eleccomm/ecomm.htm
• Bar, François and Michael Borrus "The Future of Networking" BRIE Monograph, 1994.
• Andrew Davis, Telecommunications and Politics: The Decentralized Alternative (New York: Pinter Publishers, 1994) 19-84.
• Kahin, Brian "Beyond the National Information Infrastructure Initiative: Technology-informed policy and policy-enabling technology" in Investing in Innovation Branscomb and Keller eds. (MIT Press 1998)

The subject this week is the competition to control the key interface specifications that provide access to the Internet, and, potentially, to E-commerce. How far does competition in the market resemble the theories and historical experiences examined in the first few weeks of the course?

• Cusumano, Paul and David Yoffie Competing on Internet Time (New York: Free Press, 1998) Chapters 2, 3, and 6

• Explore an E-commerce site developed by the Organization for Economic Cooperation and Development: http://www.oecd.org/subject/e_commerce/

• Kenney, Martin, "E-Commerce: Implications for Firm Strategy and Industry Configuration," with James Curry, 1998.
• Kenney, Martin, "The Internet, New Firm Formation and Enterprise Patterns" with James Curry, 1998.

Recommended: explore a great e.cash site:

• Department of Commerce. 1998. "The Emerging Digital Economy: Electronic Commerce Between Businesses: Analysis and Case Studies" (includes Federal Express, Cisco, Dell, Boeing,GE, others)
• Borrus, Michael and John Zysman "Globalization with Borders: The Rise of Wintelism as the Future of Industrial Competition" in Industry and Innovation Volume 4 Number 2 December 1997

This week we explore the emergence of retail E-commerce, by focusing on the virtues and vices of retailing phenomenon Amazon.com. Does Amazon have a sustainable business model, or is it simply the beneficiary of being the early mover? What characteristics are likely to define on-line retail success, as practiced by firms like Dell? Can established retailers respond?

• "The State of Online Retailing" A Shop.Org study by the Boston Consulting Group, November 1998
• "Amazon.com- The Wild World of E-Commerce" Business Week Cover Story December 14, 1998
• Greenstein, Shane and Ed Jimeniz "The Emerging Internet Retailing Market as a Nested Diffusion Process" available at http://skew2.kellogg.nwu.edu/~greenste/research.html
• Explore the site http://www.uswebcks.com/

The readings ask: What is the role played by lead industrial users in shaping the trajectory of both technology and competition in the new economy? What role do users play, and how should they be integrated into provider strategies? Does information technology really enable competitive differentiation in the industries in which it is applied?

• Bar, François "Information Infrastructure and the Transformation of
• Manufacturing," in Drake, ed. The New Information Infrastructure: 55-74.
• National Research Council, Information Technology in the Service Society, "Summary and Overview", pp 1-23 (Washington DC: National Academy Press, 1994)
• Mulgan, G.J. Communication and Control, The Guilford Press, 1991. Chap11: "Transnational Corporate Networks" pp 220-242
• Rockart, John F. and James E. Short, "The Networked Organization and the Management of Interdependence," in Michael S. Scott Morton, ed., The Corporation of the 1990s: Information Technology and Organizational Transformation (New York: Oxford University Press, 1991): 189-219.

This is the first of several case studies in the impact of government policies on competition in the information economy. What constitutes access from an equity and development perspective?

• Kapor, "Where Is the Digital Highway Really Heading? The Case for a Jeffersonian Information Policy ", Wired Magazine, July/August 1993.
  http://www.hotwired.com/wired/1.3/features/kapor.on.nii.html
• Graham, Stephen, James Cornford and Simon Marvin, "The socio-economic benefits of a universal telephone network. A demand-side view of universal service" Telecommunications Policy, V.20, N. 1, Jan/Feb 1996, pp.3-10.
• Venturelli, Shalini "Information Liberalization in the European Union" in National Information Infrastructure Initiatives: Vision and Policy Design Kahin and Wilson eds. (Cambridge and London: MIT Press 1997)
• Review Pool from Week II, Bar Borrus and Steinberg from Week III

To return to the questions with which the course began- do the basic concepts, values and political institutions that have shaped American information policy in the past still work, or does information technology imply (and require) a new kind of politics as well?

• David R. Johnson and David Post Law and Borders - The Rise of Law in Cyberspace
• Computer Professionals for Social Responsibility, "Some Pointers on Internet Governance" available at http://www.cpsr.org/program/nii/links.html
• Batty, Michael "Virtual Geography" in Futures 29 (4/5): 337-352 (1997)
• Weiss, Linda "The Myth of the Powerless State" (Ithaca: Cornell University Press, 1998) Chapter One "The State is Dead- Long Live the State" and Chapter Two "The Sources of State Capacity"
• "Electronic Cash and the End of National Markets," Stephen J. Kobrin, Foreign Policy, Summer 1997.

How are national choices being joined to create an international network? What conflicts emerge along the way?

• Cowhey, Peter, "Building the Global Information Highway: Toll Booths, Construction Contracts, and Rules of the Road," in Drake, William J. ed., TheNew Information Infrastructure: Strategies for US Policy, 20^th Century Press, 1995 pp 175-204.
• Schneider and Volker, "Different Roads to the Information Society? Comparing the US and European Approahces from a Commparative Public Policy Perspective
• Cowhey, Peter TBA on the World Trade Organization

Who owns what on the Internet?

• Tyson, Laura D’Andrea and Edward F. Sherry "Statutory Protection for Databases:
• Economic and Public Policy Issues" available at http://www.infoindustry.org/ppgrc/doclib/grdoc016.htm
• Professor Pam Samuelson’s letter re: Tyson/Sherry Report, available at
• http://www.arl.org/info/frn/copy/psamlet.html
• Reichman, J.H. and Pamela Samuelson "Intellectual Property Rights in Data?" in
• Vanderbilt Law Review Volume 50 Number 1 January 1997

And finally, American information policy has prompted "progress in the Useful Arts and Sciences" through investment and subsidy, from the U.S. Post Office, to the founding of Land Grant Universities, to the National Science Foundation. What should be the role of the government in promoting innovation in the future?

• Branscomb, Lewis & James Keller, "Towards a Research and Innovation Policy,"
• Investing in Innovation, Branscomb and Keller eds., (Cambridge and London; MIT Press 1998) pp. 462-496.
• Perez, Carlota, 1983. "Structural Change and the Assimilation of New Technologies in the Social and Economic System," Futures 15(5), 357-375.
• Frug, Jerry "The City as a Legal Concept" in Harvard Law Review Vol. 93 Number 6 April 1980
• Bush, Vannevar, "As We May Think" available at http://www.theatlantic.com/unbound/flashbks/computer/bushf.htm