textfiles/politics/isdn-tes

ISDN as an Enabler of Innovation
Statement of Mitchell Kapor
Electronic Frontier Foundation, Inc.
June 13, 1991


	My name is Mitchell Kapor.  I am the founder and former chief
executive of Lotus Development Corporation and the designer of Lotus 1-2-3,
the world's most successful business software application.  I am here today
representing the Electronic Frontier Foundation, Inc., a non-profit
organization concerned with the development of information and
telecommunications policy which promotes innovation and free enterprise.

	It is often said that computer and communications technologies are
converging to the point that it is no longer meaningful to speak of two
separate industries.  At the same time, I can tell you from my own personal
experience that while the the microelectronics revolution may be providing
a common technical base that unifies computing and telecommunications, the
cultures and industrial dynamics of the two are still alien to each other.
This is a shame, because unless the cultural gulf which separates the two
is successfully bridged, society as a whole will be the loser.

	I believe there are substantial and vastly under-appreciated
entrepreneurial opportunities which would arise out of the wide-spread
availability of ISDN at affordable prices.  To understand why, it's helpful
to appreciate a bit of history of the personal computer field.

	The most important contribution of the PC field is not a product,
but an idea.  It is the idea that a good computer system is simply a
platform upon which other parties can exercise their ingenuity to build
great applications.  When Steve Jobs and Steve Wozniak conceived of the
Apple II computer in a Silicon Valley garage in the mid-1970's, they had no
clear idea what it would be used for.  But they went to great trouble to
make it attractive for software developers to use.  They added graphics,
sound, a low-cost disk drive, and a host of other capabilities.  In 1979
Dan Bricklin invented the first spreadsheet, Visicalc, for the Apple II.

	In 1981 IBM followed Apple's lead with the introduction of the IBM
PC, an "open architecture" machine for which anyone could develop programs.
The explosive growth of the PC industry which followed the introduction of
Lotus 1-2-3 for the IBM PC can be directly attributed to the widespread
availability of inexpensive personal computers.

	Perhaps ten thousand separate commercial programs were introduced
in the span of a few short years.  Only a few were successes, but it was
the market and the market alone which was capable of selecting the winners
out of the multitude.  And it was only the conditions of low barriers to
entry for software companies which made it possible to mount the vast
numbers of offering necessary to spawn the small number of eventual
winners.

	In short, it was the existence of open platforms for innovation,
such as the Apple II and the IBM PC, which catalyzed the development of
vast amounts of software necessary to the process of market-mediated
innovation.  Today, with the desktop PC a commonplace in business and the
home, it's important to remember the basic dynamic by which this PC
revolution occurred.

	Just as the desktop personal computer represented the revolutionary
platform for innovation of the 1980's, it is my belief that ubiquitous
digital communications media, such as are enabled by ISDN, represent the
hope of the 1990's.  With the proper ISDN platform, we can have another
generation of explosive growth of services, led by a generation of
information entrepreneurs.

	Today these information entrepreneurs enjoy a margin existence in
the largely non-commercial world of bulletin boards and on the national
research and education network called the Internet.  Give them a commercial
information infrastructure which can reach large numbers of people
inexpensively, and I believe we will all be truly amazed at the results.

	The telecommunications industry, unlike computers, is, as you know,
a highly regulated one, for very good reasons of social policy.  In this
regard, its heritage and the heritage of computing could not be more
different.  While Jobs and Wozniak could create the Apple II as a platform
for innovation in a garage, without let or hindrance from anyone, creating
the ISDN platform will require the wise administration of policies set by
bodies such as this Department of Public Utilities.

	In order to become ubiquitous, ISDN access must be priced low
enough that the average consumer finds it affordable.  As a practical
matter, this means that there must be a residential tariff comparable to
the unlimited local calling plans available to residential customers.  This
is not the case with the tariff filed by New England Telephone which is
under consideration here.

	It is my understanding that while ISDN access itself would be
available for a fixed monthly fee to business and residential subscribers,
there would always be a "metered" usage fee.  Circuit-switched connection
would be charged under the "Switchway" tariff, which carries a substantial
per minute usage charge.  Packet-switched connections would be charged
under the "Infopath" tariff, which carries a substantial per kilopacket
charge.

	It may well be the case that the usage assumed by New England
Telephone in the preparation of the tariff under-estimates the demand surge
which would be created by an appropriately low price.

	I therefore ask the Department to take appropriate action, not to
approve the tariff, but require its reconsideration.

	It is also my understanding that fee-based information service
providers who wished to provide packet-switched connections to business or
residential ISDN customers would be required to connect to N.E. Tel's
Infopath packet-switch network.  This bundling of another telephone company
service with ISDN unfairly restricts the ability of third parties to offer
services competitive with Infopath at lower prices or with different
arrangements, such as flat-fee connections.  Private inter-networking
carriers should be able to connect to ISDN access lines either in central
offices or other access points in the network and should be able to set
their own rates for charging service providers.

	If the Department acts now to insure the availability of ISDN
services at an affordable price to consumers, it will help Massachusetts
and the entire New England economy by helping create a new platform for
telecommunications innovation.