"In a recent interview, Howard Rheingold (author of Smart Mobs) discussed the possibility of a 'new economic system' born of 'unconscious cooperation' embodied by such technologies as Google links and Amazon lists, Wikipedia, wireless devices using unlicensed spectrum, Web logs, and open-source software. Rheingold speculates that 'the technology of the Internet, reputation systems, online communities, mobile devices...may make some new economic system possible....We had markets, then we had capitalism, and socialism was a reaction to industrial-era capitalism. There's been an assumption that since communism failed, capitalism is triumphant, therefore humans have stopped evolving new systems for economic production.' However, Rheingold is worried that established companies with business models that are threatened by these new technologies could 'quash such nascent innovations as file-sharing -- and potentially put the U.S. at risk of falling behind the rest of the world.'
Q: If so, it's a good bet not all companies will be happy with the changes.Full Article: MSNBC -
A: New digital technologies are creating a crisis in the business models of the companies that depend on having a monopoly on distribution. Look at MP3 blogs: We're now seeing bands that are saying, "Please pirate my material. Here it is." They make money from that. They get bookings from that. They build an audience on that.
Q: Are there more such conflicts and opportunities to come?
A: Assigning frequencies to license holders...is an old-fashioned scheme...based on technologies of the 1920s. We now have technologies that make it possible to use the spectrum the way packets use the Internet. Instead of having a circuit-switched analog system in which you have to have an end-to-end connection, you just send your packets out with their addresses through this network and they find their way. It's much more efficient. It makes for millions more broadcasters in the Internet space. This is all pointing to a kind of voluntary sharing of your property.
Q: Does the pushback by companies threatened by these trends, such as the record and movie companies, threaten innovation?
A: Yes. Never before in history have we been able to see incumbent businesses protect business models based on old technology against creative destruction by new technologies. And they're doing it by manipulating the political process. The telegraph didn't prevent the telephone, the railroad didn't prevent the automobile. But now, because of the immense amounts of money that they're spending on lobbying and the need for immense amounts of money for media, the political process is being manipulated by incumbents.
Q: What might keep these powerful incumbents from holding back this tide?
A: You've got to have some huge force outside of the United States, where it's getting locked down. What if China says, "The FCC doesn't rule us. We're going to stop assigning frequencies within our borders. We're going to regulate devices so that they play fair with each other, and we're going to open up spectrum." That's going to make the U.S. an economic and technological backwater.
Then there's always the idea that maybe we're just beginning to see disruptive technologies. Maybe something is just going to blow it away. Certainly we've seen that over and over again in recent decades."
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