Kalba, Kas
Telecom in the Time of Crash
[41 pages; November 2002/Incidental Paper]
This paper offers a perspective on how the world’s telecom industry has evolved from a sleepy utility to a competitive marketplace to an industry afflicted by bankruptcy and breakdown. The author traces the origins of the modern industry from AT&T’s breakup to its recent "crash," fostered by aggressive CEOs and investment bankers as well as faulty entrepreneurial visions and business models. He also touches on Europe’s misguided government policies in the case of next-generation mobile licensing and spectrum auctions ("3G"). The paper examines the shift from the largely successful introduction of competition in North America, Europe and developed Asia during the 1980s to the new leadership and financing approaches that were introduced in the mid and late 1990s. It summarizes the twin tendencies of decentralized technology innovation and industry growth (both within the United States and on a world scale) and of centralized industry guidance by financial and government entities. The paper assesses which companies have been winners and losers through these dynamic changes, emphasizing how new entrants such as Vodafone, Nokia, Hutchison and Cisco were able to challenge entrenched incumbents, not to mention prevailing theories that a few players would soon dominate the industry. Focusing on the fiber and 3G arenas, the last part of the paper outlines alternative theories of the telecom crash, provides an overall explanation, and addresses where the industry may be headed. The author presents several scenarios of what may come next and discusses the prospects of a new expanded government role. He ends by raising some questions about whether regulatory intervention is necessary to curb recent excesses or whether the market can be assumed to have learned its lesson. ISBN 1-879716-85-2 I-02-2

Butcher, Joseph, David Sulek, Erin MacDougall, Katie Hines, Anna Kertesz, and David Svec
Digital Democracy: Voting in the Information Age
[95 pages; October 2002/Research Report]
On Election Night in November of 2000, the United States was spellbound by one of the most controversial moments in its history. Over the next days and weeks, events in Florida offered both riveting political theater as well as illumination of ordinarily transparent electoral processes. Serious flaws in the electoral system were exposed: poorly designed ballots, old and faulty voting machines, inadequately trained poll workers, and disparate types of voting equipment and means of voter access, which often varied from precinct to precinct. In the aftermath, policymakers and legislators faced the difficultly of determining how best to reform the U.S. electoral system. The prospects for reform were complicated by several factors, in particular, the competing interests and equities of federal, state, and local jurisdictions and policymakers and the high costs of acquiring new voting equipment and training poll workers. One issue within this debate was the use of advanced technologies, specifically Internet technologies and applications, as an alternative to the traditional polling booth. At the time of this election, experiments with Internet voting were already under way but questions remained. This study of Internet voting examines five broad issues: access, security, privacy, technology, and civic participation. Each of these is important in its own right, but four practical considerations are key to moving toward a digital democracy: (1) Policymakers, legislators, technologists, and others need to consider Internet voting holistically. Along with technical issues of Internet security, reliability, and scale are equally complex issues related to U.S. voting customs, electoral procedures, election law, budgetary constraints, questions of fairness, and federalism. (2) A distinction needs to be made between Internet voting and election reform. Events in Florida in 2000 captured public attention, but the push toward Internet voting had begun before the public knew of the “butterfly ballot” or “hanging chad,” and this technology gives rise to issues related to, though not identical with, those involved in election reform. (3) Each of the five issues identified in this study—access, security, privacy, technology, and civic participation—will need to be examined in light of electoral tensions that the framers of the Constitution (and later thinkers) tried to balance. And (4), the problems encountered in 2000, along with increased interest in and experimentation with Internet voting, may yield constructive results. ISBN 1-879716-83-6 P-02-7

Faughn, Anthony W.
Interoperability: Is It Achievable?
[61 pages; October 2002/Research Report]
During the invasion of Grenada in 1983, shortfalls in interoperability among U.S forces, publicized by the press, became catalysts for later legislation and changes in policy, guidance, and procedures, as well as for attempts to resolve issues that had blocked the long road toward joint interoperability. To those within the services, and perhaps especially to those outside, it has seemed nearly incredible that interoperability problems persisted fifteen years later in Kosovo. The issue has not gone unrecognized. Joint Vision 2020 (2000) mandates interoperability; the CINCs of the unified and specified commands, the four service chiefs, and members of Congress all espouse its importance. How did these problems evolve? Why are commanders-in-chief and service staffs still concerned with interoperability? Interoperability is also a key building block of “information superiority.” In the absence of hard documentation on which to draw, this report presents an accessible account of the major issues associated with achieving interoperability. ISBN 1-879716-84-4 P-02-6

Clemons, Dean R.
Interlocking Stakes in NATO Security: A Primer on Investment, Dual-Use Technologies, and Export Control for the Military Leader in NATO
[46 pages; October 2002/Research Report]
War and human life have been coupled since before antiquity. Ares, the Greek god of war, wielding fist and sword, battled with immortals and mortals alike. More recently, as economies and politics have become increasingly interdependent—globalized—Janus, the Roman deity of doorways and passageways who faces two directions at once, has begun to take center stage, looking at both international stability and security. This study examines globalization from the perspectives of several interlocking stakes: international military and commercial investment; dual-use technologies; and export control. As a primer on these stakes for the rising military leader within the North Atlantic Treaty, the study elucidates the issue of cooperation vs. competition intrinsic to NATO and the European Union as these organizations seek together to increase transatlantic security. The enormous potential of dual-use technologies is examined, with a focus on the angst of military leaders about increasing dependence on technologies widely available commercially to both friend and foe. Last, the competing demands of openness of markets and of international security involved in those two stakes lead to consideration of the economic instrument of export control of technologies. To be successful in future conflicts, the military leader of tomorrow will need to be fluent not solely in military affairs as well as in the languages of economics and politics. Like globalization, coalition warfare is here to stay. Although interoperability of both systems and organizations remains desirable, competing demands of national economies pose significant challenges to achieving it. Although military operations may prove inevitable, the military leader will need to learn to leverage investment, dual-use technology, and export control laws to mitigate actual bloodshed. ISBN 1-879716-82-8 P-02-5

Seminar on Intelligence, Command, and Control
Guest Presentations, Spring 2002
[June 2002/Seminar] ISBN 1-879716-81-X I-02-1

Plehal, James B.: The National Infrastructure Protection Center
Brannon, Robert B.: Human Intelligence
Radabaugh, Gregory C.: Information Operations
Rosenberg, Robert A.: Improved Application of Information to the Battlefield-Revisited
Salisbury, Gary L.: The C4ISR-Enabled Warfighter
Lenczowski, Roberta E.: The National Imagery and Mapping Agency
Rudman, Warren B.: Perspectives on National Security in the Twenty-First Century

Longstaff, P.H.
The Communications Toolkit: How to Build and Regulate Any Communications Business
[2002/Book] Cambridge, Mass,: The MIT Press ISBN 0-262-12246-4

Lavey, Warren G.
Making and Keeping Regulatory Promises
[64 pages; May 2002/Research Report]
Uncertainty about future regulatory requirements is a market condition affecting telecommunications operations worldwide. While some level of uncertainty about future regulations is inherent, regulatory uncertainty can diminish competition in telecommunications services, raise costs and prices, reduce investment in innovative services, limit network deployment and otherwise be adverse to the public interest. Regulators often respond to various legal, political, economic, technological and other factors by adopting orders of uncommitted duration without a well-defined sequence. However, under some conditions regulators have boldly made and kept (more or less) multiyear promises as to regulatory conditions. This paper examines examples of multiyear regulatory commitments in Mexico, Venezuela, Hungary and the United States, and analyzes the impacts of these regulatory conditions on telecommunications operators, consumers and governments. Multiyear regulatory promises can be made and enforced under some conditions, with resulting benefits to the public interest. This paper concludes with recommendations for legislators, regulators and judges to promote greater use of multiyear regulatory plans ISBN 1-879716-79-8 P-02-4

Daly, Peter H.
IT's Place in U.S. History: Information Technology as a Shaper of Society
[35 pages; April 2002/Research Report]
Every era embodies the conflict between inherited conditions and new ideas, and the “information age” is no exception. With the advantage of hindsight, history reveals patterns of cause and effect among an array of social and technological forces pitted at different times against one another. But, at the dawn of the twenty-first century and of the “information age,” events often may appear random and myriad stories are begun and interrupted. An observer can only speculate: What is holding it all together? What are the large themes? How can so many different impulses and pursuits amount to anything as coherent as a national direction? This report explores accommodation between inherited conditions in the United States, that is, a legacy of social structures, and the barrage of new ideas associated with the emerging information society. It reviews three historical periods—Colonization, the Enlightenment, and the Industrial Revolution—which influenced the formation of contemporary society and explores, in particular, what is called “the digital divide”—the gap between those who use computers and are connected to the Internet and those who do not and are not. The intention of the report is to help policymakers and others who must devise strategies and allocate resources on either a micro or macro scale to broaden their consideration of IT beyond mere connectivity and lead them toward a better understanding of the influences of IT on social structures in the future. ISBN 1-879716-68-2 P-02-3

Furst, Karen, William W. Lang, and Daniel E. Nolle
Internet Banking: Developments and Prospects.
[55 pages; April 2002/Research Report]
This report addresses significant gaps in knowledge about the Internet banking landscape. Using information drawn from a survey of national bank examiners, the authors find that although only 20 percent of U.S. national banks offered Internet banking in the third quarter (Q3) of 1999, these transactional Internet banks accounted for almost 90 percent of national banking system assets and 84 percent of the total number of small deposit accounts. All the largest national banks offered Internet banking, but only about 7 percent of the smallest banks offered it. Among institutions offering Internet banking, large banks are more likely than small ones to offer a broad range of services on the Internet. An exception to the superior performance of Internet banks versus non-Internet banks were de novo Internet banks, which were less profitable and less efficient than non-Internet de novos. The authors developed statistical models to explain why banks choose to adopt Internet banking and why some choose to offer a relatively wider array of Internet banking products and services. The report investigated whether offering Internet banking affects a bank’s profitability. Bank profitability was found to be strongly correlated with Internet banking, but offering Internet banking does not have a statistically significant impact on bank profitability. Rather, the more aggressive business posture of early adopters of Internet banking is more likely to explain both their relatively higher profitability and their decision to offer Internet banking. Among banks that offer Internet banking, larger banks and banks that offered the service for a longer time were significantly more likely to offer a wider range of services on the Internet. ISBN 1-879716-79-8 P-02-2

Kim, Seon-Jae
The Digital Economy and the Role of Government: Information Technology and Economic Performance in Korea
[37 pages; January 2002/Research Report]
This study presents an analysis of economic performance of the Korean economy during roughly 1971–2000 that recognizes the importance of information technology (IT) and knowledge capital. The growth contributions were calculated from standard input factors and characterized as follows. Most of the contribution to output growth comes from physical capital input, accounting for 73 percent, rather than labor capital, which accounted for only 15 percent. The business cycle is one of the determinants of the output growth rate, accounting for 8 percent of the total growth. The average annual growth rate of the total factor productivity (TFP) during the period 1971–2000 was about 0.3 percent, while that of the business cycle was about 0.6 percent, although between 1996 and 2000, it increased slightly. The report also examines the source of productivity growth, using the extended growth model and drawing attention to the role IT may have played. Although some shortcomings may limit the scope of the empirical work, the results appear worth consideration. ISBN 1-879716-77-1 P-02-1

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