Economic structure; introduction



"Globalization is to no small extent based upon the rise of rapid global communication networks. Some even go so far as to argue that "information has replaced manufacturing as the foundation of the economy". Indeed, global media and communication are in some respects the advancing armies of global capitalism."

(Robert McChesney, author of "Rich Media, Poor Democracy")

"Information flow is your lifeblood."

(Bill Gates, founder of Microsoft)

The usefulness of information and communication technologies increases with the number of people who use them. The more people form part of communication networks, the greater the amount of information that is produced. Microsoft founder Bill Gates dreams of "friction free capitalism", a new stage of capitalism in which perfect information becomes the basis for the perfection of the markets.

But exploitative practices have not disappeared. Instead, they have colonised the digital arena where effective protective regulation is still largely absent.

Following the dynamics of informatised economies, the consumption habits and lifestyles if customers are of great interest. New technologies make it possible to store and combine collected data of an enormous amount of people.

User profiling helps companies understand what potential customers might want. Often enough, such data collecting takes place without the customer's knowledge and amounts to spying.

"Much of the information collection that occurs on the Internet is invisible to the consumer, which raises serious questions of fairness and informed consent."

(David Sobel, Electronic Privacy Information Center)

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Internet Advertising

The advertising industry has always relied on media to transport their messages and disseminate them to the public. Depending on the product or service advertised and the audience targeted different media are used. Besides cinema and outdoor advertising (posters etc.) the huge majority of ads is placed within the classical media landscape, which includes TV, newspapers, magazines and radio.

Whereas in most cases only a relatively small fraction of advertising budgets is spent on cinema, outdoor and radio advertising, newspapers, magazines and TV account for more than two thirds of the money spent on ads. Still with the growing popularity of new media advertisers and marketers have recently also discovered digital networks and especially the Internet for their purposes.

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"Stealth Sites"

"Stealth sites" account for a particular form of hidden advertisement. Stealth sites look like magazines, nicely designed and featuring articles on different topics, but in reality are set up for the sole purpose of featuring a certain companies products and services. "About Wines" for example is a well-done online magazine, featuring articles on food and travel and also publishes articles on wine, which surprisingly all happen to be from Seagram.

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Acessing the Internet

The Net connections can be based on wire-line and wireless access technolgies.

Wire-line access

Wire-less access

copper wires

Satellites

coaxial cables

mobile terrestrial antennas

electric power lines

fixed terrestrial antennas

fiber-optic cables







Usually several kinds of network connections are employed at once. Generally speaking, when an E-mail message is sent it travels from the user's computer via copper wires or coaxial cables ISDN lines, etc., to an Internet Service Provider, from there, via fibre-optic cables, to the nearest Internet exchange, and on into a backbone network, tunneling across the continent und diving through submarine fibre-optic cables across the Atlantic to another Internet exchange, from there, via another backbone network and across another regional network to the Internet Service Provider of the supposed message recipient, from there via cables and wires of different bandwidth arriving at its destination, a workstation permanently connected to the Internet. Finally a sound or flashing icon informs your virtual neighbor that a new message has arrived.

Satellite communication

Although facing competition from fiber-optic cables as cost-effective solutions for broadband data transmission services, the space industry is gaining increasing importance in global communications. As computing, telephony, and audiovisual technologies converge, new wireless technologies are rapidly deployed occupying an increasing market share and accelerating the construction of high-speed networks.

Privatization of satellite communication

Until recently transnational satellite communication was provided exclusively by intergovernmental organizations as Intelsat, Intersputnik and Inmarsat.

Scheduled privatization of intergovernmental satellite consortia:

Satellite consortia

Year of foundation

Members

Scheduled date for privatization

Intelsat

1964

200 nations under the leadership of the USA

2001

Intersputnik

1971

23 nations under the leadership of Russia

?

Inmarsat

1979

158 nations (all members of the International Maritime Organization)

privatized since 1999

Eutelsat

1985

Nearly 50 European nations

2001



When Intelsat began to accumulate losses because of management failures and the increasing market share of fiber-optic cables, this organizational scheme came under attack. Lead by the USA, the Western industrialized countries successfully pressed for the privatization of all satellite consortia they are members of and for competition by private carriers.

As of February 2000, there are 2680 satellites in service. Within the next four years a few hundred will be added by the new private satellite systems. Most of these systems will be so-called Low Earth Orbit satellite systems, which are capable of providing global mobile data services on a high-speed level at low cost.

Because of such technological improvements and increasing competition, experts expect satellite-based broadband communication to be as common, cheap, and ubiquitous as satellite TV today within the next five or ten years.

Major satellite communication projects

Project name

Main investors

Expected cost

Number of satellites

Date of service start-up

Astrolink

Lockheed Martin, TRW, Telespazio, Liberty Media Group

US$ 3.6 billion

9

2003

Globalstar

13 investors including Loral Space & Communications, Qualcomm, Hyundai, Alcatel, France Telecom, China Telecom, Daimler Benz and Vodafone/Airtouch

US$ 3.26 billion

48

1998

ICO

57 investors including British Telecom, Deutsche Telecom, Inmarsat, TRW and Telefonica

US$ 4.5 billion

10

2001

Skybridge

9 investors including Alcatel Space, Loral Space & Communications, Toshiba, Mitsubishi and Sharp

US$ 6.7 billion

80

2002

Teledesic

Bill Gates, Craig McCaw, Prince Alwaleed Bin Talal Bin Abdul Aziz Alsaud, Abu Dhabi Investment Company

US$ 9 billion

288

2004


Source: Analysys Satellite Communications Database

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An Economic and therefore Governmental Issue

While the digital divide might bring up the idea that enterprises will be able to sell more and more computers during the next years another truth looks as if there was no hope for a certain percentage of the population to get out of their marginalization, their position of being "have nots".

Studies show that the issue of different colors of skin play a role in this, but more than "racial" issues it is income, age and education that decides about the have and have nots.

There exist ~ 103 million households in the USA.
~6 million do not even have telephone access. Why should they care about computers?

The digital divide cuts the world into centers and peripheries, not into nations, as it runs through the boarder between the North and the South as well as through nations.

http://www.digitaldivide.gov/
http://www.digitaldividenetwork.org/
http://www.pbs.org/digitaldivide/
http://news.cnet.com/news/0-1005-200-344552.html
http://racerelations.about.com/newsissues/racerelations/msubdigdivide.htm
http://www.techweek.com/articles/11-1-99/divide.htm
http://www.ntia.doc.gov/ntiahome/net2/falling.html

The most different institutions with various interests in their background work in that field; not rarely paid by governments, which are interested in inhabitants, connected to the net and economy.
see also: http://www.washington.edu/wto/digital/

Searching information about the digital divide one will find informations saying that it is growing all the time whereas other studies suggest the contrary, like this one
http://news.cnet.com/news/0-1005-200-341054.html

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Virtual cartels, introduction

Among the most striking development of the 1990s has been the emergence of a global commercial media market utilizing new technologies and the global trend toward deregulation.
This global commercial media market is a result of aggressive maneuvering by the dominant firms, new technologies that make global systems cost-efficient, and neoliberal economic policies encouraged by the World Bank, IMF, WTO, and the US government to break down regulatory barriers to a global commercial media and telecommunication market.

A global oligopolistic market that covers the spectrum of media is now crystallizing the very high barriers to entry."

(Robert McChesney, author of "Rich Media, Poor Democracy")

The network structure of information and communication technologies means that even deregulated markets are not "free". The functional logic of global networks only tolerates a small number of large players. Mergers, strategic alliances, partnerships and cooperations are therefore the daily routine of the ICT business. They bypass competition and create "virtual cartels".

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Internet Architecture Board

On behalf of the Internet Society, the Internet Architecture Board oversees the evolution of the architecture, the standards and the protocols of the Net.

Internet Society: http://www.isoc.org/iab

http://www.isoc.org/
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FEED

http://www.feed.com/

http://www.feed.com/
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Internet Protocol Number (IP Number)

Every computer using TCP/IP has a 32 bit-Internet address, an IP number. This number consists of a network identifier and of a host identifier. The network identifier is registered at and allocated by a Network Information Center (NIC), the host identifier is allocated by the local network administration.

IP numbers are divided into three classes. Class A is restricted for big-sized organizations, Class B to medium-sized ones as universities, and Class C is dedicated to small networks.

Because of the increasing number of networks worldwide, networks belonging together, as LANs forming a corporate network, are allocated a single IP number.

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RIPE

The RIPE Network Coordination Centre (RIPE NCC) is one of three Regional Internet

Registries (RIR), which exist in the world today, providing allocation and registration services which support the operation of the Internet globally, mainly the allocation of IP address space for Europe.

http://www.ripe.net

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Barnes and Noble

Massive online retail bookstore housing more than a million titles. Includes a book recommendation "personalizer,", a comprehensive list of The New York Times bestsellers, a "live" community events calendar with a daily survey and several forums, "highlighted" books from 19 subject areas, browsable categories such as antiques, ethnic studies, and pop culture, Books in the News, and weekly features such as reviews, excerpts, recommendations, interviews, events, "roundups" of popular titles, and quizzes.

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Intranet

As a local area network (LAN), an Intranet is a secured network of computers based on the IP protocol and with restricted access.

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Electronic Messaging (E-Mail)

Electronic messages are transmitted and received by computers through a network. By E-Mail texts, images, sounds and videos can be sent to single users or simultaneously to a group of users. Now texts can be sent and read without having them printed.

E-Mail is one of the most popular and important services on the Internet.

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