Anthony J. Pennings, PhD

WRITINGS ON DIGITAL STRATEGIES, ICT ECONOMICS, AND GLOBAL COMMUNICATIONS

Five Generations of Wireless Technology

Posted on | February 8, 2021 | No Comments

The ubiquity, ease, and sophistication of mobile services have proven to be an extraordinarily popular addition to modern social and productive life. The term geckobeach“generations” has been applied to wireless technology classifications as a way to refer to the major disruptions and innovations in the state of mobile technology and associated services. These innovations include the move to data and the Internet protocols associated with the convergence of multiple forms of communications media (cable, mobile, wireline) and the wide array of services that are becoming increasingly available on portable devices like laptops and smartphones. We are now on the cusp of the 5th generation rollout of wireless services with intriguing implications for enterprise mobility, “m-commerce,” public safety, and a wide array of new entertainment and personal productivity services.

By 1982, the Federal Communications Commission (FCC) had recognized the importance of the emerging wireless communications market and began to define Cellular Market Areas (CMA) and assigning area based radio licenses. It split the 40 MHz of radio spectrum it had allocated to cellular into two market segments; half would go to the local telephone companies in each geographical area and the other to interested non-telephone companies by lottery. Although AT&T’s Bell labs had effectively begun the cellular market, it had estimated the 2000 market to be slightly less than a million subscribers and consequently abandoned it during its divestiture of the regional phone companies. Meanwhile, financier Michael Milken began a process of helping the McCaw family buy up the other licenses, making them multibillionaires when they sold out to AT&T in the mid-1990s.

The first generation (1G) of wireless phones were large analog voice machines and their data transmission capability was virtually nonexistent. This initial generation was developed in the 1980s through a combination of lotteries and the rollout of cellular sites and integrated networks. It used multiple base stations with each providing service to small adjoining cell areas. Its most popular phone was the Motorola DynaTAC known sometimes as “the brick”, now immortalized by financier Gordon Gecko’s early morning beach stroll in Wall Street (1986). 1G was hampered by a multitude of standards such as AMPS, TACs, and NMT that competed for acceptance. The Advanced Mobile Phone System (AMPS) was the first standardized cellular service in the world and used mainly in the US.

The second generation (2G) of wireless technology was the first to provide data services of any significance. By the early 1990s, GSM (Global System for Mobile Communications) Motorola introduced the StarTAC in 1996was introduced first in Europe and in the U.S. by T-Mobile and other countries worldwide. GSM standards were developed in 1982 by the Groupe Spécial Mobile committee, an offshoot of the European Conference of Postal and Telecommunications Administrations (CEPT). GSM was the standard that would allow national telecoms around the world to provide mobile services. Although voice services improved significantly, the top data speed was only 14.4 Kbps.

The second generation also marked the introduction of CDMA (Code Division Multiple Access techniques). Multiple access technologies cram multiple phone calls or Internet connections into one radio channel. AT&T utilized Time-Division Multiple Access techniques (TDMA)-based systems, while Bell Atlantic Mobile (later Verizon) introduced CDMA in 1996. This second generation digital technology reduced power consumption and carried more traffic while voice quality did improve, and security became more adept. The Motorola StarTac phone was originally developed for AMPS but was sold for both TDMA and CDMA systems.

Innovations sparked the development of the 2.5G standards that provided faster data speeds. The additional “half” a generation referred to the use of data packets. Known as the General Packet Radio Service (GPRS), the new standards could provide 56-171 Kbps of digital service. It has been used for Short Message Service (SMS), otherwise known as “text messaging” and MMS (Multimedia Messaging Service) services, WAP (Wireless Application Protocol), as well as Internet access. Being able to send a message with emojis, pictures, video, and even audio content to another device provided a significant boost to the mobile phone’s utility.

An advanced form of GPRS called EDGE (Enhanced Data Rates for Global Evolution) was used for the first Apple mobile phone, considered the first version using 3G technology.

Third generation (3G) network technology was introduced by Japan’s NTT DoCoMo in 1998. Still, it was adopted slowly in other countries, mainly because of the difficulties obtaining additional electromagnetic spectrum needed for the new towers and services. 3G droidxtechnologies provided a range of new services, including better voice quality and faster speeds. Multimedia services like Internet access, mobile TV, and video calls became available. Telecom and application services such as file downloads and file sharing made it easy to retrieve, install and share apps. 3G radio standards have been largely specified by the International Mobile Telecommunications-2000 (IMT-2000) of the International Telecommunication Union but the major carriers continued to evolve their own systems such as Sprint and Verizon’s CDMA 2000 and AT&T and T-Mobile’s Universal Mobile Telecommunications System (UMTS), an upgrade of GSM based on the ITU’s IMT-2000 standard set, but an expensive one as it required new base stations and frequency allocations.

A 3.5 generation became available with the introduction of High Speed Packet Access (HSPA) with promises of 14.4Mbps although 3.5-7.2 were more likely.

Fourth generation wireless technology sought to provide mobile all-IP communications and high-speed Internet access to htc-evo, the first 4G phonelaptops with USB wireless modems, smartphones, and other mobile devices. Sprint released the first 4G phone in March of 2010 at the communication industry’s annual CTIA event in Las Vegas. With a 4.3 inch screen, two cameras, and Android 2.1 OS the new phone was able to tap into the new IP environment Fourth generation (4G) technology is being rolled out in various forms with a dedication to broadband data and Internet protocols with services such as VoIP, IPTV, live video streams, online gaming, and multimedia applications for mobile users.

While 3G was based on two parallel infrastructures using both circuit-switched and packet-switched networking, 4G relied on packet-switching protocols. 4G LTE (Long Term Evolution) refers to wireless broadband IP technology developed by the Third Generation Partnership Project (3GPP). “Long Term Evolution” meant the progression from 2G GSM to 3G UMTS and into the future with LTE. The 3GPP, an industry trade group, designed the technology with the potential for 100 Mbps downstream and 30 Mbps upstream. Always subject to various environmental influences, data rates could reach 1 Gbps speeds in the next ten years.[2]

4G phones were developed by Apple (iPhone 5-7), Samsung, and others to access WiMax (Worldwide Interoperability for Microwave Access) using the IEEE Standard 802.16 with a range of some 30 miles and transmission speeds of 75 Mbps to 200Mbps.

4G WiMax provides data rates similar to 802.11 Wi-Fi standards with the range and quality of cellular networks. The difference in technology has been the softer handoffs between base stations that allow for more effective mobility over longer distances. Going to IP enables mobile technology to integrate into the all-IP next-generation network (NGN) that is forming to offer services across broadband, cable, and satellite communication mediums.

In October 2020, Apple unveiled the first iPhones to support 5th generation (5G) connectivity with the iPhone 12. This meant Apple had to add new chips, antennas, and radiofrequency filters into the new phone. 5G wireless communications represent a major new set of challenges and opportunities. The frequencies used require higher levels of power and more base stations because the range of transmission is shorter than LTE. It will also afford new opportunities such as faster connections up to 10x faster than LTE and reduced latency. Faster speeds mean new and enhanced cloud-based services to games and videos, virtual and augmented realities, IoT in the homes and factories, and enhanced telemedicine applications.

5G uses frequencies that are 10 to 100 times higher than the radio waves used for 4G and WiFi networks. We need to know more about the power dynamics of 5G and under what conditions, if any, it can break molecular bonds or provide health risks from long-term exposure.

Notes

[1] For a history of wireless communications.
[2] This is a great review of the 4 generations of wireless technologies.

Share

© ALL RIGHTS RESERVED



AnthonybwAnthony J. Pennings, Ph.D. is Professor at the Department of Technology and Society, State University of New York, Korea. From 2002-2012 was on the faculty of New York University. Previously, he taught at Hannam University in South Korea, Marist College in New York, Victoria University in New Zealand. He keeps his American home in Austin, Texas and has taught there in the Digital Media MBA program atSt. Edwards University He joyfully spent 9 years at the East-West Center in Honolulu, Hawaii.

US Internet Policy, Part 3: The FCC and Consolidation of Broadband

Posted on | February 5, 2021 | No Comments

In this post, I look at the transition of Internet data communications from a competitive market structure to a few Internet Service Providers (ISPs). As digital technology allowed cable and telecommunications companies (telcos) to transition from traditional telephony to packet-switched Internet Protocol (IP) services, deregulation allowed them to dominate broadband services. It also allowed them to not only move data, but diverge from the traditional “common carriage” communications policy that separated the transfer of data from providing content like entertainment and news.

In Part I of this series, I looked at the emergence of the ISPs and the regulatory framework in the USA that classified them as “enhanced services.” This designation was based on the Federal Communications Commission’s (FCC) Second Computer Inquiry in 1981 that exempted online services from a number of requirements that had been imposed on telephone networks. Part II discussed the transition from dial-up modems in the early days of data communications to high-speed Digital Subscriber Lines (DSL). These “broadband” connections accelerated the business and consumer adoption of the Internet in the late 1990s. In Part 4, I will address issues of net neutrality facing the Biden administration in an era of “smart” or “edge technologies” that includes the Internet of Things (IoT) and “connected” cars.

Despite the design and the efforts of the Clinton-Gore administration to create a competitive environment, the Internet came to be increasingly controlled by a small number of ISPs. It is important to understand the policy environment and administrative actions that changed the Internet into the oligopolistic market structure that dominates broadband today. Policy changes allowed telcos to transition from the neutral transmitters of communication to the communicators themselves.

Broadband services in the USA is dominated by large integrated service providers such as AT&T, Comcast, Sprint, and Verizon. These companies have pursued “triple play” service bundles, combining high-speed Internet, cable TV, and IP phone services. Some also provide mobile services. These companies have been merging with content providers to distribute entertainment, education, and news, as well as move all the other Internet traffic. AT&T merged with Time-Warner, giving them access to Warner Bros., HBO, and Turner/CNN. Comcast has completed its merger with NBC, and Verizon bought AOL and Yahoo! Unfortunately, these deals have failed to return the huge rewards they were aiming for and deterred sufficient broadband rollout.

The highly competitive Internet services provider environment during the 1990s was significantly compromised by the Bush administration’s Federal Communications Commission (FCC). Their decisions favored cable companies and telcos and led to a consolidation of control over the Internet. The FCC’s actions raised concerns that powerful ISPs could influence the flow of data through the Internet and discriminate against some content providers or users to the detriment of consumers.

In 2002, the FCC ruled that “cable modem service” was an information service, and not a telecommunications service. Cable companies like Charter, Xfinity, Cox, and Time-Warner became unregulated broadband providers and were exempted from the common-carrier regulations and network access requirements imposed on the telcos. The Supreme Court decision in National Cable and Telecommunications Association vs. Brand X Internet Services meant that cable modem services would become Title I “information services” despite major criticism by Justice Scalia who argued that cable TV clearly offered both content services and telecommunications services. The Justice had no hesitation in calling it “bad law.”[2]

Then in 2005, another FCC decision effectively made telcos unregulated ISPs. FCC WC Docket 02-33 allowed their DSL broadband services to also become unregulated “information services.” This effectively allowed a few telcos such as Verizon and BellSouth to take over what had previously been a competitive ISP industry. The ruling allowed them to offer broadband fiber and DSL Internet access transmission while presenting challenges to previous requirements such as allowing other ISPs “access to facilities” and interconnection. Smaller ISPs had been allowed to physically connect to the “common carrier” telco facilities so that their customers could access the larger Internet.

Internet innovation came from other sources and distracted the public from broadband carrier issues. Facebook and Flickr were launched in 2004. Twitter, Microsoft’s Xbox Live, and online music streaming Spotify went online in 2006. Google bought Android in 2006 and YouTube the next year. Netflix started its streaming service in 2007, and the first iPhone was also released that year.

The success of these innovations did not escape the telcos’ view, who wanted a piece of the action. They wanted to move beyond being just carriers of information to providers of entertainment and informative content. This was evidenced by Verizon’s introduction of FIOS (Fiber Optic Service) TV service in 2005 and AT&T’s U-verse in 2006. ISPs looked to dominate home broadband service by bundling TV, Internet, and telephone voice service over their high-speed IP networks.

In 2003, Columbia Law professor Tim Wu coined the term ‘net neutrality’ to stress the importance of allowing the free flow of data for the Internet’s future. It is based on the notion of “common carriage,” a legal framework developed to ensure that railroads would serve all businesses and municipalities. It basically means that the network should stay neutral and let the bits flow interrupted from device to device at the highest speeds available. This is how the Internet was designed, but the networks have been around since the telegraph and telephone and have developed their own legal and technical ways to survive.

The Internet’s political and social impact was becoming more apparent with the presidential campaign of Barack Obama in 2008. It was recognized by the Pew Research Center that some 74% of Internet users interacted with election information. A significant number of citizens received their news online, communicated with others about elections, and received information from campaigns via email or other online sources.

In 2010, the Obama administration began to write new rules dealing with Internet providers that would require ISPs to treat all traffic equally. In what were called the “Open Internet” rules, the new administration began to design a framework to restrict telecom providers from blocking or slowing down specific Internet services.

In the next post, I will look at the development of net neutrality rules under the Obama. The Trump administration renewed attempts to rid the ISP’s from net neutrality interference. A major question for the Biden administration is the possible return to Title II rules.

Ⓒ ALL RIGHTS RESERVED



AnthonybwAnthony J. Pennings, PhD is Professor at the Department of Technology and Society, State University of New York, Korea. Originally from New York, he started his academic career Victoria University in Wellington, New Zealand before returning to New York to teach at Marist College and spending most of his career at New York University. He has also spent time at the East-West Center in Honolulu, Hawaii. When not in the Republic of Korea, he lives in Austin, Texas.

Korea in a Post Covid-19 World, Part 3: The Green New Deal

Posted on | January 29, 2021 | No Comments

This post is my third on the Korean New Deal as a response to the COVID-19 pandemic. In the first post, I discussed the origins of the New Deal in the US and its reemergence as the Green New Deal in the UK and US. In the second, I discussed Korea’s Digital New Deal and its emphasis on “DNA” – Data, Network, and Artificial Intelligence (AI) to strengthen Korea’s industrial, education, and transportation infrastructure. In a future post, I will look at Korea’s efforts to build a more extensive social safety net.

In this post, I examine Korea’s concerns about its quality of life and some of its plans for addressing related economic and environmental issues. Despite impressive economic growth and infrastructure development, the country suffers from congested highways, industrial waste, and regular occurrences of high particle content in its air. Consequently, the Moon administration embraced a Green New Deal in mid-July 2020 to address these issues and pursue opportunities for green growth industries with export potential.

President Moon presented the argument:

    The Government will pave the way toward sustainable growth through the Green New Deal. We will create new markets, industries and jobs while actively responding to climate change as a responsible member of the international community.

Areas of particular concern are low-carbon and decentralized energy, urban and water infrastructure, and green solutions that can be commercially viable.

The Korean Green New Deal recognizes the calls for climate and environmental action as well as the opportunities inherent in the transition to a green economy. Bouts of air pollution due to its reliance on coal, heavy vehicle traffic, and proximity to industrial centers domestically and in China plague the country. Consequently, it wants to support green industries and achieve a better balance between the economy and nature.

The Moon administration plans to make way for the new generation of renewable-powered and connected vehicles. These include electric vehicles (EVs) and hydrogen cars. It wants to take over a million diesel vehicles off the road to reduce emissions and support the transition to renewable energy vehicles. Korea has to run to catch up with Chinese and Tesla EVs, but it has the devotion of its domestic car consumers. More than 90% of the cars currently on their roads are produced domestically.[1]

Its “fast-follower” economic strategy and capabilities will be put to the test to keep Korean manufacturers relevant in the rapidly evolving automobile market. But it could also mimic its Android strategy and have Hyundai or Kia team up with Apple or Google for automobile data and software expertise for energy management and higher levels of autonomous driving.

Hydrogen is another automobile technology under consideration. To be viable, it needs to address issues of cost, safety, and infrastructure. Hydrogen can be produced from hydrocarbons with gasification, high heat, or the addition of carbon monoxide to water. It can also be produced with fermentation or through electrolysis, the separation of water into hydrogen and oxygen with electricity. Producing this simple fuel can be expensive but idle capacity in its nuclear power facilities at night has been one strategy to produce the non-toxic fuel. Renewable sources with low marginal costs like solar and wind can ideally be used to make the gas in the future.[2] Despite the tragedy of the Hindenburg balloon explosion, hydrogen is still safer than gasoline in most environments. It can be vented quickly and disperses away from a vehicle in case of an accident.

The big issue has been hydrogen for combustion or hydrogen for fuel-cell electricity. Although hydrogen combustion only produces water, the heat of the reaction can subsequently produce dangerous nitrous oxides. This does not occur in a fuel cell that uses a chemical transition involving hydrogen to release electricity that drives an electric motor. Both strategies would require pumping hydrogen into an automobile’s fuel tank and both would emit water. From the Korean Ministry of Economy and Finance keynote speech on the Green New Deal

Green New Deal

The refueling infrastructure presents a “chicken or egg” dilemma for both electric and hydrogen-based vehicles. Many consumers have concerns that they will not be able to obtain the needed fuel conveniently and in a timely manner. A network of electric charging stations are springing up in unusual places. The shopping center next to my university campus has a Tesla charging station in the basement parking lot so their high-end consumers can shop at local boutiques and frequent the restaurants. As they do not emit toxic fumes, EV charging stations can be located in a wide variety of locations. High-speed recharging and wireless charging capabilities will hasten the transition to electric vehicles.

Hydrogen is increasingly used in industrial applications and is a key ingredient in decarbonization strategies. However, its future in automobile propulsion is still questionable due primarily to the lack of refueling infrastructure. Unlike electric recharging, hydrogen requires “gas stations” for refueling due to storage issues and potential dangers due to its volatility. Hydrogen can be transported in small quantities as compressed gas in pressurized cylinders on “tube trucks” to refueling stations for light-duty vehicles. Liquefaction is expensive and requires extremely low temperatures (-253 degrees C). Compared to the US, Korea has few hydrogen gas pipelines or natural gas pipelines into which they can blend hydrogen. Producing hydrogen at the refueling station with alternative energy may be the best strategy for widespread utilization of the gas.

A crucial green response includes building smart electric grids for the energy management of eco-friendly, low-carbon, and decentralized power generation systems around the country. Smart grids (and microgrids) consists of new innovations in the management of energy production, energy storage, as well as energy transmission and distribution systems.

Smart grids need to skillfully manage the intermittent sources of electricity to maintain steady flows to communities and industries. Traditional coal, oil, and nuclear power plants are notable for producing a consistent and precise “baseload” amount of electricity throughout the day.[2] While some renewables like hydroelectric power from dams provide consistent electricity, other renewables may require “smart” solutions to know when to store and integrate additional electricity from alternative sources.

One problem that needs to be continuously addressed is the transmission facilities to incorporate electricity from solar and wind projects that are rural. Particular emphasis is on drawing power from the 42 small island regions surrounding the peninsula that might be suitable for large-scale wind farms, solar, or wave power. Hanwha is one of the largest solar cell producers in the world as well as solar power-plant construction and project financing.

Korea also hopes to capitalize on new greenhouse gas (GHG) reducing technologies and desalination process efficiencies that could come with cheap energy. While GHG capture technologies are not being used to any significant extent, other technologies can reduce emissions. The green remodeling of buildings with LEED (Leadership in Energy and Environmental Design) certified technologies will bring both jobs and savings. This includes smart meters in public housing and clean green factories and industrial complexes.

Some are concerned that the Korean New Deal is likely to be heavy on government involvement and lite on government spending. President Moon updated the spending figures recently when he addressed the World Economic Forum at Davos:

The move to a post-carbon society will present many problems and opportunities. One of the challenges of the carbon economy will be to replace the taxes on petroleum imports that helped build an extraordinary road infrastructure throughout Korea. On the other hand, economies prosper by taking on challenges and finding innovative ways to engage citizens and companies in valuable activities. The Green economy offers possibilities for cleaner air, land, and sea while ultimately producing more energy for mobility, production, and comfort.

In the next post I will focus on Korea New Deal’s attempt to build a jobs and a social safety net.

Notes

[1] Lee, E. (2019, July 15). Car ownership in Korea hit 23.44 million in June 2019. Less than 10 percent are imports. Import share of cars where at 9.7% – Pulse by Maeil Business News Korea.
[2] Near-zero marginal costs is an economic concept that refers to the eventual production of a good or service at a very low costs per unit.
[3] Benjamin Matek, Karl Gawell, The Benefits of Baseload Renewables: A Misunderstood Energy Technology, The Electricity Journal, Volume 28, Issue 2, 2015, Pages 101-112,
ISSN 1040-6190, https://doi.org/10.1016/j.tej.2015.02.001.

Ⓒ ALL RIGHTS RESERVED



AnthonybwAnthony J. Pennings, PhD is Professor at the Department of Technology and Society, State University of New York, Korea. Originally from New York, he started his academic career Victoria University in Wellington, New Zealand before returning to New York to teach at Marist College and spending most of his career at New York University. He has also spent time at the East-West Center in Honolulu, Hawaii. When not in the Republic of Korea, he lives in Austin, Texas.

Korea in a Post Covid-19 World, Part 2: Merging Digital and Green New Deals

Posted on | January 3, 2021 | No Comments

I’ve been lucky enough to ride out most of the Covid-19 epidemic here in the Republic of Korea. I miss being home in Austin, TX, but I’ve been safe and relatively free to travel and shop, even if I have to wear a mask everywhere I go. It’s a small price to pay for the relative freedom of going out to eat and exercise on my bike in the parks that are regularly available. Korea, for the most part, has avoided major lockdown measures and still led the OECD in economic growth during the pandemic.

Green New Deal

This is the second post on the Korean New Deal that was recently reiterated by President Moon at the 2021 Davos World Economic forum. In the first post on the Korean New Deal, I introduced the initial New Deal and looked at the emergence of the Green New Deal in Europe and the USA. In the third post I will go into the Korean Green New Deal in more detail.

This post discusses the recent responses by Korea to the COVID-19 pandemic and its economic repercussions by examining the Digital New Deal. These posts are not policy analyses as much as they introduce some of the goals and rationale involved with the Korean New Deals. Case studies are difficult to generalize. Still, these examinations are meant to be suggestive of some strategies worth examining by other countries.

The Korean New Deal was proposed to the public by President Moon Jae-in’s administration after a convincing spring 2020 election win in the National Assembly by the ruling Democratic Party of Korea (DPK). The Korean New Deal was designed and is being implemented with a potential new wave of the COVID-19 pandemic in mind. The notion of “sleeping with the enemy” was invoked to caution a premature return to normal activities and accelerate a transition plan to a greener, smarter, and more sustainable growth model with a major goal of being carbon-neutral by 2050.

Korea’s New Deal has two components: a Digital New Deal and a Green New Deal. President Moon explained:

    This Korean New Deal is a new national development strategy to leap from being a fast-follower to a pace-setter. In the belief that our country’s future hinges on it, we will resolutely push ahead with the Korean New Deal, which will erect two pillars – a Digital New Deal and Green New Deal – side by side atop the foundation of an inclusive nation and of values that put people first.

Left without North Korea’s natural resources by the Armistice Agreement in 1953 that split Korea at the 38th parallel, South Korea pursued an export model with a significant emphasis on science and technology. This meant improving on products that were already familiar to western society: ships, cars, semiconductors, televisions, etc. This is the “fast-follower” strategy mentioned in the quote above by President Moon. More recently, smartphones and popular music and film have added to the economic mix as well as the soft power helpful for smooth economic and political relations.

Now South Korea wants to expand its development strategy to be a “pace-setter” by leveraging its highly trained human resources with innovation. Earlier work addressed the prospects of a Fourth Industrial Revolution (FIR) – new products and processes based on innovations in digital, biological, and materials science. The Presidential Committee on the Fourth Industrial Revolution (PCFIR) was set up after Moon was elected in 2017 and started to drive consensus-building. This would mobilize economic strategies that commercialize and implement advances in artificial intelligence (AI), the Internet of Things (IoT), 3D printing, robotics, genetic engineering, nanotechnologies, quantum computing, and other technologies. This was ideal for a high tech society like Korea’s but as the COVID-19 crisis emerged, the New Deal signaled a more people-oriented approach and not just economic growth.

In this post, I again draw on the keynote speech by Dae Joong Lee from the Ministry of Finance and Economy. In “Linking the Korean New Deal with Innovation and Technology in the Post Covid-19 Era”, presented at the Korea Workshop on Innovation and Digital Technology in a Post-Covid-19 World held in November 2020. It was sponsored by the World Bank’s International Development Agency (IDA) and the Korean Ministry of Economy and Finance.

The Digital New Deal

Dae Joong Lee’s presentation on the Digital New Deal introduced an acronym that was new to me – “DNA.” Not the biological Deoxyribonucleic Acid in each of our cells, but “Data, Networks, and Artificial Intelligence.” One of the Digital New Deal’s first objectives is to find ways to feed data into AI. This includes disclosing data from the public sphere and introducing an incentive system to gather data from other sectors to feed AI development.

All ministries were ordered to release non-sensitive public data over the coming year to “usher in a data economy that opens the free flow of information and ideas.” Korea, like most countries, is struggling with privacy issues and needs to improve on the Personal Information Privacy Act (PIPA), which is vague and lacks punitive strength.

Networks are one of Korea’s core digital strengths and provide the foundation for many other infrastructure endeavors. Broadband speeds are some of the highest in the world at averages of 168.26 Mbps (12th) for fixed landlines and 166.70 Mbps (2nd) for mobile, after the United Arab Emirates. 5G continues to roll out across the nation for consumer and industry use.

With relatively high incomes and literacy, it is no surprise that the country has one of the highest mobile use rates in the world. A complication for Korea is that it is both an important supplier of 5G equipment as well as a chip producer for other 5G equipment manufacturers.

Reminiscent of Vice-President Gore’s E-rate in the US during the late 1990s, digitalization of education infrastructures is a high priority. Gore’s plan taxed landline telephone users to update schools with important equipment and infrastructure. The Digital New Deal will provide Wi-fi to schools, re-supply new computers for faculty, and replace old servers and network equipment in educational environments. Students in some 1,200 schools are targeted to get 240,000 tablet PCs. Online content, particularly on the 4th Industrial Revolution (FIR), will also be developed.

A more complicated development is the integration of “DNA” in smart communities and industrial applications. These include the goals of producing 108 smart cities and governance outfitted with 5G, connected management centers, cloud computing for public information, and protected by advanced cybersecurity.

The Digital New Deal includes ten new industrial complexes with computerized control centers and 12,000 smart factories with another 10,000 workshops and 100,000 stores equipped with the newest process management technologies.[1] Korea is already a leader in industrial robotics, and, recently, Hyundai acquired Boston Dynamics, an innovator in robot manipulation, mobility, and vision.

Logistically, they want to build major smart distribution systems like Amazon, with associated certification systems. These logistical centers would be shared by many SMEs and be part of the support infrastructure for over 300,000 microbusinesses that would also have access to teleconferencing centers and commercial space for offices and design studios.

As part of a new infrastructure for autonomous vehicles, they propose to develop a Cooperative Intelligent Transport (C-ITS) system to upgrade their roads. These control systems would coordinate pedestrians, bicycles, automobiles, and commercial vehicles for road safety and enhanced traffic flow. Already a major automobile manufacturer, Korea is producing “automatrix” road management models for domestic use and export. Registered cars in South Korea hit nearly 23.5 million units by the summer of 2019.[2] But these will eventually be replaced with connected cars powered by electric batteries or hydrogen.

Korea also set out to develop a public safety network for first responders such policemen, firefighters, public officials and others involved in emergency management and disaster risk reduction. Several disasters, including the Sewol ferry sinking on April 16, 2014, that killed 304 people, mainly students on a field trip, as well as train fires, were exacerbated by poor communications. Technical standards, guided by the Safe-Net Forum, have led to a new public safety (PS-LTE) network with versions for railroads (LTE-R) and maritime (LTE-M) communications.

In the next post on this topic, I will discuss the Korean Green New Deal.

Notes

[1] Just to reiterate, these are the goals of the Moon administration.
[2] Lee, E. (2019, July 15). Car ownership in Korea hits 23.44 mn by June, import share at 9.7% – Pulse by Maeil Business News Korea.

Ⓒ ALL RIGHTS RESERVED



AnthonybwAnthony J. Pennings, PhD is Professor at the Department of Technology and Society, State University of New York, Korea. Originally from New York, he started his academic career Victoria University in Wellington, New Zealand before returning to New York to teach at Marist College and spending most of his career at New York University. He has also spent time at the East-West Center in Honolulu, Hawaii. When not in the Republic of Korea, he lives in Austin, Texas.

The Two Santa Claus Theory of Economic Growth and the Prospects of Modern Monetary Theory (MMT)

Posted on | December 27, 2020 | No Comments

So, when someone says to me how do we pay for the Green New Deal? I say well Congress appropriates the money and then the Treasury instructs the Fed to credit the appropriate accounts. And that is how it is paid for. And then the Green New Deal people say, “yeah that!” – Warren B. Mosler, Founding MMT theorist and author of Soft Currency Economics

This quote is slightly tongue-in-cheek due to its understatement and matter of fact-ness. However, it is a procedural and factual statement of how the US government pays its bills. It does not tax or float bonds to pay for government spending. Likewise, it does not “print” any meaningful amounts of money, although all those activities raise money that is added to the government’s balance sheets.

The government spends money like most of us now, with online banking. The difference is, they don’t really have to “balance their checkbook.” That doesn’t mean they can spend indiscriminately and without consequence, as will be discussed below. But economic theory has largely ignored the dynamics of money and the crucial role of government spending in kickstarting the economy. The quote above does hint at a solution or a strategy to address some significant economic policy issues and environmental problems facing contemporary society.

I remember babysitting my car one January morning in 2003 (it’s a New York City alternative parking thing) and reading the Wall Street Journal. The article was disparaging the government spending surpluses that had been built up during the Clinton administration. This wasn’t a total surprise, as I was teaching economics down the street at New York University at the time, but we hadn’t had many surpluses to critique in the last several decades and the article challenged many reigning economic myths. The crux of the argument as I remember it was that debt is a significant player in global finance.

This post examines that contention and its implications for government fiscal policy. It looks at the role of federal spending and the implications of both debt and deficits for infrastructure spending and action against climate change and global pollution. We also need to confront unemployment due to automation and new technical innovations such as artificial intelligence and the Internet of Things (IoT). It examines the historical spending and tax practices of both Democrat and Republican parties and the implications of a relatively new theoretical focus called Modern Monetary Theory (MMT).

So, the Bush administration proceeded to navigate the return to deficits and reverse the surplus with a variety of spending measures, including expanding Medicare to pay for drugs and wars in Afghanistan and Iraq. As US Vice-President Dick Cheney used to say, “Reagan proved deficits don’t matter.” The former Secretary of Defense and CEO of Halliburton, a major defense logistics contractor, did know that they matter to the private sector.

President Ronald Reagan faced a tough economy when he was elected, much like President Obama would inherit 28 years later. Reagan drastically cut taxes and increased government spending, primarily on defense. As a result, he nearly tripled the federal debt during his two presidential terms. Consequently, by policy or default, he followed the “Two Santa Claus Theory.”

deficits

This perspective was set forward in “Taxes and the Two Santa Claus Theory” by Wall Street Journal editorial writer Jude Wanniski. He argued that the Democrats should be the spending “Santa Claus” and redistribute wealth while the Republicans should be the tax reduction “Santa Claus” and help spur income growth.

The theory gained traction in Republican circles as Watergate came to a head and the country struggled with vestiges of the Vietnam War. Wanniski had a meeting in 1974 with Dick Cheney, Donald Rumsfeld, and Arthur Laffer, the creator of infamous “Laffer Curve” that hypothesized that lower tax rates would increase government revenues. A consensus was forming that would be known as “trickle-down economics” and even nicknamed “Voodoo economics” by the first President Bush. The official face of the theory was known as “supply-side economics” as it was meant to reward “suppliers” of goods and services with lower taxes and decreased regulation.

It also became conflated with a new type of market fundamentalism promoted by Chicago school Nobel Prize winners Frederick Hayek and Milton Friedman. Hayek wrote The Road to Serfdom at the end of World War II that was a popular critique of the role of government in the economy. Friedman was also known for his anti-government stance. He championed markets and the price mechanism as more efficient forms of economic activity. His major contribution was in establishing a direct relationship between the quantity of money in the economy and price levels.

As the economy went into the deep “stagflation” recession of the late 1970s due to the two oil crises and the subsequent growth of Eurodollar markets, Hayek and Friedman found their ideas to be very popular, immortalized by Ronald Reagan’s classic inaugural line in 1981, “In this present crisis, government is not the solution to our problem, government IS the problem.”

The Federal Reserve increased interest rates to 20% by June 1981 and the prime interest rate, an important economic measure, exceeded 21% by the summer of 1982. It squashed the inflation but created a an even worse recession. In response, Reagan embraced both Santa Claus strategies: lower taxes and increase spending. The nation loved him for it.

It was politically expedient for Reagan to combine the two strategies. While criticizing “liberals” for their “tax and spend policies” Reagan did little to cut overall spending. He did shame “welfare mothers” – code for unmarried black women and in 1981, and cut Aid to Families with Dependent Children (AFDC) and other programs that targeted the poor. But the move was largely symbolic and more of a political message to his base, including Reagan Democrats, who resented the black migration to the North and the employment competition they faced as the automobile and other industries suffered competition from Germany and Japan.

Reagan also spent heavily on the military as he proceeded to create a post-détente Cold War II. He championed the MX nuclear missile and “Star Wars” that funded artificial intelligence and eventually the Internet (NSFNET) in an attempt to create a space-based defensive shield around the USA. The new deficit spending helped the economy recover and also create a global financial superstructure with US treasury bonds as a major hedge for the protection for traders’ positions.[1]

Reagan also pushed two of the most extensive tax cuts in American history. Following Kennedy’s cut of top marginal tax rate from 90% to 70%, Reagan cut them to 50% in his early years; in 1986, he further reduced the rate to 28%.

That latter point may not be that much of a positive, as Reaganomics set the conditions for massive wealth inequalities and the transfer of public wealth to private hands. Starting with the striking air controllers, Reagan aggressively shut down union activities. Still, Reaganomics did create a new set of economic conditions that rewarded entrepreneurship and “suppliers,” as well as stimulate technological development.

The 1980s economy was ripe to commercialize the technological developments of the Cold War and Space Race. Intercontinental ballistic missiles and NASA’s Apollo Moon program helped launch communications satellites and refined the transistor for their guidance systems into the microprocessor “chip.” By the 1980s, CNN and MTV were using satellites to equip cable TV with new 24/7 content. Apple was started by kids from Silicon Valley because it was initially a community or “industrial cluster” built on military spending and they grew up with electronics as part of their culture. Bill Gates quit Harvard as soon as he saw that the first Intel microprocessors were being used to create the Altair microcomputer.

Fiscal policy (tax adjustments and government spending) has a significant impact on the economy. John Maynard Keynes largely laid out the theories on fiscal and macroeconomic policy in the years between the great wars. The British economist and financial trader had been very concerned about the austerity measures imposed on Germany after World War I. He had been on the British Treasury team that went to the Versailles Peace Treaty but soon resigned in disgust, fearing the results of the austerity measures placed on Germany.

The Allies imposed crushing reparations on Germany that drove the country into a frenzy of inflation, starvation, and disillusion. His book Economic Consequences of the Peace (1919) was an extraordinary economic policy analysis and warned of major problems if the German economy was not stabilized. Keynes all but predicted the rise of Nazi Germany.

Keynes followed policy analysis with economic theory in his crowning achievement, The General Theory of Employment, Interest, and Money, published in 1936 during the height of the Great Depression. This classic book provided the rationale for government intervention in the economy. President Franklin Delano Roosevelt (FDR) was already deeply committed to the set of interventionist policies that would become known as the “New Deal,” but Keynes legitimized that intervention and provided a set of conceptual tools for analysis and policy formulation. Subsequent industrial mobilization for World War II solidified the importance of government spending, and in its successful wake solidified Keynes’ role as the dominant voice in economics. Keynesianism became the guiding star for managing the economy.

A variant “Santa Claus” policy perspective has circulated in Democratic circles for the last few years called Modern Monetary Theory (MMT). It argues that governments have a monopoly on the production of their money, and with it, the responsibility to use it effectively for policy purposes, even if it leads to larger deficits. Barring excess inflation in the economy, governments that can produce their own money should be willing to spend generously to ensure high levels of employment and a growing economy.

MMT was envisioned early in the 1990s by financial trader Warren Mosler and championed politically more recently by Stephanie Kelton, a Public Policy and Economics professor at Stony Brook University in New York. Unlike most economists who tend to marginalize money and central bank operations, Mossler’s and other traders’ financial viability depended on understanding the Fed’s monetary policy. Kelton, a former Bernie Sanders policy advisor, recognized the implications of Modern Monetary Theory for progressive objectives.

Everyone who played the board game Monopoly knows that the game starts with money handed out to each player. Likewise, the MMT argument is that government has consistently led economic development by spending money into the economy, which then can be used for various economic activities. Government spending creates money and expands the economy and rarely “crowds out” additional investment, as is one of the usual criticisms of MMT.

Mosler argues that the economy starts with a nation-state that “wants to provision itself.” It wants to pay for education, healthcare, infrastructure, military spending, etc., depending on the political consensus. So it creates a “tax liability,” which has to be paid in a specified currency. The government then creates that currency, and people look for opportunities and work to pay the tax, as well as build some savings and wealth.

This process creates “unemployment,” what MMT calls people looking for paid work in the currency they can use to pay the tax. Many people don’t work in modern society; they could be jail, or managing a family, or retired. These are not unemployed people because they are not looking for sources to pay their taxes.

The government’s ability to ensure a currency’s acceptance as a viable form of payment, and primarily through their taxability, makes spending US currency a likely mechanism for economic growth and guidance. The dollar is accepted as currency because it is the only tender that can be used to pay US taxes, but it is also desirable because it has ingrained itself in the market dynamics of society.

This charges government with a significant responsibility to survey the economy and the money supply effectively and responsibly. It means that the government has to spend and monitor the economy. It is not a household that has to live within its means, the same limitations do not constrain it. Just like the Monopoly game, it has to put some currency on the table to keep the game going.

MMT is not a license to spend indiscriminately as inflation is a significant concern. Inflation occurs when too much economic demand or too little supply of a good or service causes an increase in prices. But inflation coming from too much money is relatively easy to manage. Most hyperinflation cases come from disruptions in supply, such as the loss of manufacturing in the Weimar Republic after WWI or the decline of agriculture in Zimbabwe. Increases in taxes and regulations on business and finance can counter most inflation cases if spending deficits trigger price increases.

Other concerns about government spending involve exchange rates and debts to other countries. Dealing with the first means ensuring that the currency can float in regards to other currencies. The Nixon shock of the 1970s meant going off the gold standard and transiting to what Walter Wriston, the former CEO of Citibank, called the “Information Standard,” a global surveillance system based on international news and virtual financial markets. These systems allowed exchange rates to float and enable a currency to make certain adjustments by letting its value change in relation to other currencies.

Countries should also avoid going heavily in debt to other countries, and especially avoid borrowing money that requires repayment in a foreign currency. Walter Wriston used to say the “countries never go bankrupt.” Maybe not, but it creates a set of other critical dynamics. These include the temptation of creditor nations to continually extend credit to avoid economic declines. The absence of a bankruptcy mechanism also means they exert pressure on debtor countries to “structurally adjust” their economies to adjust to the concerns of creditor nations.

An example is the “Third World Debt Crisis” that recycled OPEC petrodollars into developing countries in the 1980s. Debt resulted in pressure to privatize public assets into securities that could be listed on global financial markets. Curiously, this led to the transition of government telecommunications agencies into private or semi-state corporations and facilitated the adoption of Internet Protocols that led to the World Wide Web. However, it also led to the privatization of water and other public resources and pressure to increase taxes and reduce social services.

As Kelton points out, MMT challenges our contemporary conceptions of money, deficits, and debt. One of the most dangerous metaphors we use to conduct our public policy is the notion of a “fiscal house.” This metaphor is based on the conflation of government finances with household finances and the idea of “living within our means.” And primarily, this means recognizing government is not a household that has to reconcile its checkbook. Governments should not live within their “means” but expand the realm of economic possibility.

MMT is not a socialist or utopian panacea for the economy; it is essentially an understanding of central bank operations and the role of money in the economy. However, it provides an opportunity to examine whether the Green New Deal or other Post-Covid-19 plans to address climate change’s challenges will be a drain on economic growth or an opportunity to create thriving sustainable economies.

Carbon-based combustible fuels are no longer the most efficient energy sources, but they require new smart grids and other infrastructure to be readily available. To mitigate climate change and pollution while ensuring low unemployment in an age of automation and artificial intelligence, it will be important to understand government spending. Engaging with MMT can provide insights into the fiscal spending process and challenge public policy to develop plans for sustainable economic growth and prosperity, while avoiding inflation and other negative effects of government spending.

Notes

[1] Remember that Alexander Hamilton traded New York City’s status as the nation’s capital for the opportunity to assume the state’s Revolutionary War debt as the basis for a Bank of the United States. As a result, the government moved to a swamp in Virginia that would become Washington DC and New York City became the nation’s financial center. Likewise, in a digital financial environment that trades globally everywhere and all the time, Treasury bonds play a crucial role in coordinating wealth and as a hedge against risk in volatile markets.

Ⓒ ALL RIGHTS RESERVED



AnthonybwAnthony J. Pennings, PhD is Professor at the Department of Technology and Society, State University of New York, Korea. Originally from New York, he started his academic career Victoria University in Wellington, New Zealand before returning to New York to teach at Marist College and spending most of his career at New York University. He has also spent time at the East-West Center in Honolulu, Hawaii. When not in the Republic of Korea, he lives in Austin, Texas.

Korea in a Post-Covid-19 World, Part 1: The Korean New Deal

Posted on | December 6, 2020 | No Comments

In early November 2020, I attended the World Bank IDA – Korea Workshop on Innovation and Digital Technology in a Post-Covid World. Sponsored by the World Bank’s International Development Agency (IDA) and the Korean Ministry of Economy and Finance, it was held at The World Bank Group Korea office here in Songdo, Korea. I was too busy to go across town to attend in person, but found the virtual proceedings to be quite interesting. (Best to “fast-forward” to 30 minutes).

The conference covered many relevant issues dealing with technology in a post-Covid-19 world. For this series of posts, I am primarily interested in the vision of the future for the Republic of Korea that draws on the American “New Deal” and its intersection with technology and sustainable development. Below, I discuss the New Deal and its rhetorical reincarnation as the “Green New Deal” in the US and Korea in the wake of the financial crises of 2008 and the Covid-19 pandemic of 2020-21. I am also intrigued by Korea’s merging of the Green New Deal with a “Digital New Deal,” which I will cover in a future post.

The New Deal was the name given to President Franklin D. Roosevelt’s (FDR) strategies in the 1930s to recover from the Great Depression and its influence that continued well into the latter half of the 20th century. It unabashedly used the power of government to reform the economy for industrialization and World War II mobilization, and later the containment strategies for global finance and Communism after WWII.

The World Bank is not a United Nations agency but instead came out of the New Deal’s Bretton Woods Agreements at the end of World War II that designed the new global finance and international trade regime. The World Bank’s IDA is managed by its 173 shareholder countries that guide its investment portfolio from more than 50 donor countries to promote economic growth and reduce poverty. So, the introduction of Korea’s New Deal at the jointly sponsored conference seemed appropriate.

The New Deal term has circulated extensively in the wake of concerns about climate change and, more recently, in thinking about the COVID-19 epidemic and its repercussions. Its (re)emergence has been traced to “A Green New Deal” report by the New Economics Foundation released in the United Kingdom in July 2008 and intended to initiate a comprehensive national plan to revive the economy and combat climate change. Written by the Green New Deal Group, it outlined a series of policy proposals to tackle the financial crash, global climate change, and the limits of an oil-based economy. But the Tories won in the UK in 2009, and the ideas were largely marginalized.

Likewise, in the US, the Obama administration focused on a general stimulus and healthcare in 2009. The American Clean Energy and Security Act died in the Senate before the Republicans swept the 2010 midterms. The idea of the Green New Deal died as well, except among progressive left politicians such as the Green Party’s Jill Stein and independent Bernie Sanders. Both waged 2016 presidential campaigns that included a GND. It became an issue in the 2018 midterm campaigns and helped propel Alexandria Ocasio-Cortez (AOC) into a Congressional seat (D-NY).

AOC then joined with Sen. Ed Markey (D-MA) in early 2019 to introduce the H.R. 109 resolution on February 7 in the 116th Congress. It recognized climate warnings due to greenhouse gas effects and called on the US to use its technological expertise to reduce harmful emissions. It also recognized that the New Deal and World War II mobilization created the biggest middle class in US history and that the Green New Deal should strive to create economic security, especially for vulnerable groups. Among the remedies for these problems, it suggested meeting “100 percent of the power demand in the United States through clean, renewable, and zero-emission energy sources” and distributing electricity through “smart grids.” This chart on the Green New Deal by the Data for Progress shows the uptick in interest in the term.

I was particularly struck by presentations on the Korean New Deal by the Ministry of Economy and Finance, introduced first by Deputy Minister for International Affairs Taesik Yoon and in more detail in the Keynote Speech by Dae Joong Lee. In “Linking the Korean New Deal with Innovation and Technology in the Post Covid-19 Era”, the ministry’s Director of Development Finance first reviewed the Republic of Korea’s response to the COVID-19 pandemic.

Korea was hit hard and early but effectively reduced the adverse health effects and by September had restored a good amount of its economic growth. This was due mainly because of its effective “test, trace, and treat” strategy to the virus.

But given the lingering effects of the pandemic around the world, Director Lee laid out the general plan for a Post-Covid Korean New Deal. It stresses a Digital New Deal and a related Green New Deal – within the context of a national “safety net” and an emphasis on employment and concern for the training of human resources.

Now, it’s one thing to put together some fancy PowerPoint slides and another to enact a nation-wide transformation of the political economy. But Korea tended to “walk the walk” recently and not just “talk the talk,” so I think its worth keeping an eye on Korea’s strategy for digital and sustainable development. The Korean digital strategy, as researched by my colleague James Larson, has paid off handsomely so far for the small peninsula nation.

In the next post I continue the discussion of Korea’s New Deal and its inclusion of a Digital New Deal and a Green New Deal.

Ⓒ ALL RIGHTS RESERVED



AnthonybwAnthony J. Pennings, PhD is Professor at the Department of Technology and Society, State University of New York, Korea. Before joining SUNY, he taught at Hannam University in South Korea and from 2002-2012 was on the faculty of New York University. Previously, he taught at St. Edwards University in Austin, Texas, Marist College in New York, and Victoria University in New Zealand. He has also spent time as a Fellow at the East-West Center in Honolulu, Hawaii.

Starlink and the Return of Satellite Internet Service

Posted on | December 2, 2020 | No Comments

Arthur C. Clarke’s extraordinary vision and engineering analysis of “rocket stations” circling the Earth and providing global radio service has been challenged and surpassed over the years. It was an extraordinary vision, but technological innovations have continued to offer new designs and solutions. The current Starlink satellite system is a radical departure from Clarke’s original vision to put satellites into geosynchronous orbits along the equator. This post looks at a new satellite system being put into place by Elon Musk and his SpaceX operations and how it can reach remote locations traditionally underserved by traditional Internet Service Providers (ISPs).

Musk’s new company hopes to eventually launch as many as 42,000 satellites providing data services throughout the world from orbits as low as 400 km. In 2018 Space X received approval from the FCC for 7518 Ka-band and V-band (40 to 75 gigahertz-GHz) satellites at 335-kilometer orbits in addition to the 4425 satellites initially approved.

Clarke’s vision was achieved in the mid-1960s as part of the Apollo Space Program when three Intelsat satellites were put into geosynchronous orbit. It provided a telecommunications footprint over most of the world that could facilitate many telephone calls or a television broadcast. Many satellites followed, and global services such as CNN became available. The Iridium satellite system was designed and rolled out in the 1990s to provide mobile services. Its business model had difficulty competing with wireless companies and went into bankruptcy by 2000. It uses 66 active satellites in LEO (781 kilometers) for service to mobile phones and special antennas and has found its niche with government and international organizations.

Starlink connects its smaller, low earth orbit (LEO) satellites with laser communications. Light moves faster in the vacuum of space than through the glass conduits of fiber optic cables. Undersea cables transmitting light signals have largely replaced satellites for global communications, so connecting these smaller spacecraft provides a significant threat to the status quo.

Speed is very attractive for financial companies and other industries that need to move data with little latency. Transmitting across continents and oceans is much faster by light, and the lower altitudes make radio communications with earth-based antennas quicker. Significant customers are expected to be banks, hedge funds, and other financial operations that engage in high-frequency trading. eSports game competition is one area that I expect will take off globally as the diminished latency will literally create a “level playing field” between gamers around the world.

One of the benefits of satellite communications has been its ability to bypass borders of geography and nationality. It holds new promise for people in rural areas that have trouble accessing internet service providers. The man in this video, Brett Batie in Idaho, installs a Starlink antenna on his home and shows the process of “unboxing” and setting up the satellite connection.

The Starlink antenna is part of the beta testing of the satellite service, and the data is still being collected about the quality of the service. In this case, the service allows him to download data at 40 to nearly 100 Mbps and uplink at 10-25 Mbps. Quite a difference from the 2Mbps that he struggled to get previously from his ISP.

Musk announced the satellite program on Jan 18, 2015, with the launch of SpaceX. He had to file plans and get approval from the International Telecommunications Union (ITU) and the Federal Communications Commission in the USA. The plan was to initially serve Northern US and Canada. Those testing the Starlink service report that their antennas end up pointing north, so I expect that a string of satellites have been placed in in along a northern latitude. Geosynchronous satellites are placed exclusively along the equator.

Musk also announced that the Starlink program is designed to produce cash for SpaceX’s missions to Mars.

© ALL RIGHTS RESERVED



AnthonybwAnthony J. Pennings, PhD is Professor at the Department of Technology and Society, State University of New York, Korea. Before joining SUNY, he was on the on the faculty of New York University. Previously, he taught at Hannam University in Korea and Marist College in New York. He started his career at Victoria University in New Zealand. He spent a decade as a Fellow at the East-West Center in Honolulu, Hawaii researching ICT4D. Originally from Goshen, New York, he now keeps a home in Austin, Texas.

The International Politics of Domain Name Governance, Part Two: ICANN and the Clinton-Gore Administration

Posted on | November 12, 2020 | No Comments

This post is the second in a series about the global politics of domain name registration and management. Domain names are critical identifiers of web resources that facilitate easy access for users. Part One about Jon Postel discussed the heroic but ad hoc process of managing addresses in the earliest days of the Internet. As the World Wide Web (WWW) emerged with the invention of the hypertext transfer protocol (HTTP), management of the domain name system became crucial for e-commerce. It also became a controversial issue for international politics. The Clinton-Gore administration saw the Internet as a major opportunity but also a historically tricky infrastructure to manage, including complications with other countries.

The monopoly for the domain name registry system was turned over to InterNIC (Internet Network Information Center) in 1995. It was a subsidiary of Scientific Applications International Corporation (SIAC), a private company heavily engaged in activities for the Pentagon and the National Security Agency (NSA). Led by a board of ex-NSA, CIA, and DoD officials, the company made money from issuing customized Internet addresses.

These domain names became very valuable as the WWW and its “dot.com” economy started to expand rapidly in the mid-1990s. The commercialization of the NSFNet in 1992 and the introduction of the Mosaic browser in 1994 spread the hope of a “new economy.” The following year, the highly successful Netscape IPO, based on another successful browser, unleashed new investment in high technology and Internet stocks.

The Clinton-Gore administration became particularly aggressive in creating the Internet’s policy framework for domestic and international expansion and commerce. Branded initially in 1993 as the National Information Infrastructure (NII) and later the Global Information Infrastructure (GII) in 1994, the new vernacular by Vice-President Gore allowed for a government interventionist approach. The GII was a conceptual framework to challenge telecommunications companies worldwide to pave the way for data communications and all the related services promised by ISDN.

At home, they pushed an enabling framework for the NII that encouraged private investment; promoted and protected competition; and provided open access to the Internet by consumers and service providers. This approach also emphasized advancing universal service to avoid the digital divide – a society of information “haves” and “have nots.”

Internationally, their work to set up the World Trade Organization (WTO) facilitated the modernization of telecom networks worldwide and broke down the tariff barriers to global IP. In his speeches to the ITU and the GATT (General Agreement on Tariffs and Trade) in 1994, Gore set up the conditions for the World Wide Web we know today. Gore traveled to Marrakesh, Morocco, and at the closing meeting of the Uruguay Round of the GATT negotiations called for creating a World Trade Organization.

The WTO was one of the original objectives of the New Deal’s Bretton Woods agreements at the end of World War II but never received US Congressional approval. However, on November 29, 1994, a bi-partisan vote in Congress allowed the bill to move to the Senate that year and the WTO was approved 76-24 on December 1. The WTO would quickly conclude two historical agreements that liberalized global trade in information technology (1996) and telecommunications trade (1997).

In 1996, Ira Magaziner had set up an interagency group to study domain names as part of his responsibility in the Clinton-Gore administration for international trade. Magaziner’s position paper was released as “A Framework for Global Electronic Commerce” announced by President Clinton and Vice President Al Gore at a public event on July 1, 1997 and became the basis for the Administration’s policy of managed liberalization for e-commerce and the management of the domain name system.

The Clinton-Gore administration wanted to hold off efforts by the United Nations and its International Telecommunications Union (ITU) to manage the Internet. They valued the international organizations but felt the Internet required a more dynamic organizational structure to facilitate its complex growth. Other nations, particularly the BRICs (Brazil, Russia, India, China), questioned the efficacy of US management of the World Wide Web. The US stood its ground however, and staked its claim for control over the Internet.

Magaziner reflected on the problems facing a growing Internet at the time. Governments wanted to tax transmission bits, place tariffs on electronic commerce, and censor the Internet. Debates on digital signatures, regulating prices, and intellectual property (IP) issues such as domain name trademarks were also coming to the fore.

“For this potential to be realized fully,” the draft report stated, “governments must adopt a nonregulatory, market-oriented approach to electronic commerce, one that facilitates the emergence of a transparent and predictable legal environment to support global business and commerce. Official decision makers must respect the unique nature of the medium and recognize that widespread competition and increased consumer choice should be the defining features of the new digital marketplace.”

The ITU had been an essential “club” for the world’s telecommunications agencies to coordinate technical standards for telephony and electromagnetic spectrum allocations. But as a one country, one vote organization, the U.S. was vulnerable to ITU decisions. And that meant its businesses were vulnerable too. On May 1, 1997, eighty organizations supported a Memorandum of Understanding (MoU) addressing the way generic Top Level Domains (gTLDs) were allocated and managed. An International Ad Hoc Committee (IAHC) was established to address perceived problems with the current method of registering generic top level domains on the Internet.

In July 1997, President Clinton issued an executive order to privatize domain name management and in September 1997, Network Solutions (NASDAQ: NSOL) had an initial public offering (IPO) and became a public company. In the first five months of 1998, Network Solutions Inc. (NSI) registered more than 340,000 domain names, an increase of 73 percent from the same period in 1997.

But the company was overwhelmed by the extraordinary growth of the Internet. Registration systems and billing lacked the ability to keep up with volume of domain name requests. NSI was losing its near-monopoly over the domain name business and the company began preparing for a new competitive environment. Still at issue was whether Internet oversight was going to eventually move from U.S. control to an international body.

In late 1998, The U.S. Clinton-Gore administration introduced a new domain name system to encourage competition and effectively manage the DNS. The U.S. Department of Commerce took ownership of the process. Ira Magaziner and others helped design a new organization called ICANN, the Internet Corporation for Assigned Names and Numbers (ICANN). ICANN was created as a not-for-profit company to administer and help set policy from the bottom-up for the Internet name and address system.

ICANN received preliminary approval from the Commerce Department to manage the Internet domain name system (DNS) in November 1998. The two organizations signed a Memorandum of Understanding (MOU) that provided for the DNS management’s gradual privatization. This involved deploying a network of computer database/servers worldwide to keep track of IP addresses and facilitate the quick connection of domain names to requested sites. Also, a dispute resolution system to resolve issues regarding the ownership of a domain name was set up.

In the next post, I explore ICANN’s transition to a global multistakeholder community management and the end of the Commerce Department’s National Telecommunications and Information Administration (NTIA).

Notes

[1] Drezner, D. (2004). The Global Governance of the Internet: Bringing the State Back In. Political Science Quarterly, 119(3), 477-498. doi:10.2307/20202392
[2] Drezner, Daniel W. All Politics Is Global: Explaining International Regulatory Regimes. Princeton, N.J.: Princeton U, 2008. Print. Chapter on “Global Governance of the Internet.” http://press.princeton.edu/titles/8422.html

Share

© ALL RIGHTS RESERVED



AnthonybwAnthony J. Pennings, PhD is a Professor at the Department of Technology and Society, State University of New York, Korea. Before joining SUNY, he taught at Hannam University in South Korea and from 2002-2012 was on the faculty of New York University. Previously, he taught at St. Edwards University in Austin, Texas, Marist College in New York, and Victoria University in New Zealand. He has also spent time as a Fellow at the East-West Center in Honolulu, Hawaii.

keep looking »
  • Referencing this Material

    Copyrights apply to all materials on this blog but fair use conditions allow limited use of ideas and quotations. Please cite the permalinks of the articles/posts.
    Citing a post in APA style would look like:
    Pennings, A. (2015, April 17). Diffusion and the Five Characteristics of Innovation Adoption. Retrieved from http://apennings.com/characteristics-of-digital-media/diffusion-and-the-five-characteristics-of-innovation-adoption/
    MLA style citation would look like: "Diffusion and the Five Characteristics of Innovation Adoption." Anthony J. Pennings, PhD. Web. 18 June 2015. The date would be the day you accessed the information. View the Writing Criteria link at the top of this page to link to an online APA reference manual.

  • About Me

    Professor at State University of New York (SUNY) Korea since 2016. Moved to Austin, Texas in August 2012 to join the Digital Media Management program at St. Edwards University. Spent the previous decade on the faculty at New York University teaching and researching information systems, digital economics, and strategic communications.

    You can reach me at:

    apennings70@gmail.com
    anthony.pennings@sunykorea.ac.kr

    Follow apennings on Twitter

  • About me

  • Calendar

    March 2021
    M T W T F S S
    1234567
    891011121314
    15161718192021
    22232425262728
    293031  
  • Pages

  • March 2021
    M T W T F S S
    1234567
    891011121314
    15161718192021
    22232425262728
    293031  
  • Flag Counter
  • Disclaimer

    The opinions expressed here do not necessarily reflect the views of my employers, past or present.