Utility computing and democratic participation

A few of the posters (Somers and James) have noted concerns about privacy with the move towards utility / cloud computing.  Specifically, large data centers will contain detailed information about consumers that will allow companies to market products to consumers with surprising precision.  I believe Wal-Mart already has terabytes of data collected on consumer shopping habits.

While these are certainly fair concerns, I argue that utility computing could lead to too much privacy for consumers.  The privacy I discuss is that of seclusion and solitude, which can be furthered by technological connectivity.  This seclusion is antithetical to our democratic notions of civic participation.  I also note that pervasive utility computing exacerbates net neutrality concerns, which may also have anti-democratic effects.  Combined with the likely outcome of a single, dominant firm in a natural monopoly situation, consumers may be hampered in their abilities to pursue free speech, interaction, and civic participation.  Finally, I argue that regulation may not be as effective in this arena.

Social Interaction and Democratic Participation

Utility computing may lead to“privacy” of viewpoints and of interactions.  Carr notes that cheap electricity, cars, and gas prompted an exodus of the American middle-class from cities to the suburbs.  (P.97) These Americans forfeited public entertainment through parks and theaters and opted instead for private entertainment through radio and television.  We see that trend continuing today with the growing use of the Internet.

Various commentators have begun to express concerns about the effects of technologies, from television to video games to the Internet, on general human interaction and more importantly civic participation.    The rush to suburbia began to seclude families from vibrant cities full of people engaging each other to living in single-family homes with little interaction.  The Internet has done so on a more micro scale.  Individuals now rarely interact with others, except maybe through an occasional email or bulletin board post.  Professor Picker even noted that he had considered conducting our seminar completely over the Internet.  One can go days without speaking to another human being thanks to the slew of technologies in our lives that have cut out the human middle man.  In Japan, for example, there has been an alarming increase in the number of teenagers who stay in their rooms for years—or even a decade—without ever coming out.  They are fearful of social interaction.

While there is certainly concern about the minimization of face to face contact in modern society, the more troubling aspect is little human interaction at all and the possible pernicious effects that may have on a democratic society.  The theory of republican government as in the US system relies on civic virtue—the willingness of citizens to subordinate their private interests to the general good.  (Stone, Con Law casebook, p.12) Dialogue and discussion among the citizenry were critical features in the governmental process.  (Id.)  The model for government was the town meeting, with such political participation (in the form of discussions and not just voting) inculcating virtue that would allow subordination of the private interest to the public good.  (Id.)  The expansion of the Internet and thus solitary lives runs counter to this entire political foundation for a democratic nation.

The move to utility computing could easily worsen this facet of modern life.  Workers would not have to go to work.  With the availability of large amounts of bandwidth and terminals at home, there would be no need to.  Presumably, such unification would not just be related to work life.  At home, all things could be connected to each other and connected to some central computing unit.  A connected refrigerator would monitor items and automatically order relevant foods based on information stored at a central database about the user’s food purchases.  One would never need to leave the house or interact with another!  It’s not to say that most people have intellectual conversations about the state of the nation at the water cooler or when they visit their local grocery store, but the path to solitude is not always an obvious one.  Small amounts of removal may lead to a general distancing from society.  It would be a changing of social norms.  Just as increased availability of home appliances actually increased expectations about cleanliness in the home, increased levels of distancing from other humans in the smallest aspects of life would change expectations about general human interaction and discourse.

One could argue that the Internet and this general connectedness that Carr advocates would increase the amount of interaction and discourse.  The Internet allows people to meet and converse cheaply.  One can email, post on forums and blogs, etc.  Undoubtedly, the Internet may increase such interactions.  In my comment last week, I noted that the Internet had become a democratic forum for speech but probably could use some rules and limits, just as we have in the tactile world.  Without these limits, the type of interaction that would result on the Internet is unlikely to be beneficial for civic participation.  Sunstein, in Republic 2.0, noted the polarization effects of the Internet.  With so much data and information available at one’s fingertips, people generally only gather that data that fits their viewpoints and discard any opposing views, thus facilitating a move towards the extreme ends of a spectrum about some viewpoint.  With a two-way human interaction, each person is forced to confront the arguments of the other.  In a one-way interaction with technology, this simply does not occur.  Sure these large data centers could store all our information. But combined with the possible change in social norms toward solitude noted above, such information, for example, could only serve the one-way function of determining the ads we see.

Additionally, Strahilevitz has noted how the level of discourse plummets with the anonymization of speech on the Internet.  Those in the legal field saw these effects with websites such as AutoAdmit.com, where anonymous Internet speakers made vitriolic statements with little substantive value.  While utility computing does not require anonymous speech, it certainly makes it more possible technologically.  Anonymous speech certainly has its value, as with the Federalist Papers, but it also has its place.  That place may not be the whole of the connected realm.

Net Neutrality

There is one additional democratic concern relating to a connected world of utility computing: net neutrality.  Some worry that an Internet provider could limit the free flow of ideas on the Internet by controlling what content is delivered to the end user—either by slowing it down or charging more for access to it.  With utility computing, when many aspects of one’s life will be connected to a central server controlled by some single corporation, such worries are heightened.  If this company can control access to many different types of information depending upon its personal views, the ability of an end user to adequately participate democratically may be severely curtailed.  For example, if all our data is stored on central servers, what would prevent the company controlling this data to decide to limit access to political videos made by one’s friends?  Before, even if Comcast limited access through the Internet, the friend could still burn the video on a CD and share it.  With utility computing, the long term goal seems to be only to have “terminals” with all storage and processing happening on the backend.  That seems like quite a bit of control to hand over.

Natural Monopoly

One could argue that in a competitive marketplace, if consumers demanded net neutrality, companies would be unable to limit access in such pernicious ways.  The problem here is that utility computing, as others have mentioned, could plausibly lead to a natural monopoly.  Mr. Richardson and Mr. James have noted some of these monopoly concerns by pointing out that utility computing, just like electrical utilities, relies on large up-front fixed cost investments in capital with low marginal costs.  This situation is ripe for a natural monopoly.  The major non-economic concern here is that a single dominant firm is less likely to respond to consumer desires since it faces no competition.  Furthermore, the dominant utility computing firm need not worry about consumers substituting away to similar products or no products at all, since the society Carr envisions would be one with pervasive computing that touches on every aspect of people’s lives.

I am unconvinced by Mr. James’s counterargument that the hardware and know-how for utility computing could be widely distributed.  If there are real economies of scale here, as Carr argues, then this dispersion among firms will be inefficient and eventually uncompetitive in the face of one large, major competitor.  Likely, the outcome will be that this major competitor will simply buy up these small owners of capital.  Mr. James’s second argument is also unconvincing.  Assuming he is correct that providing of utility computing simply requires combining small individual pieces rather than purchase of a few large pieces, a natural monopoly is still likely to result.  Because this is a situation with seemingly large economies of scale, those who are able to combine the highest number of these small pieces into the largest central computing system will beat out any small competitors.  And those are able to do so will be those with the most amount of capital.  Therefore, only one firm is likely to survive. 

While the small pieces could spur entry, it is unlikely to because entrants know they will be unable to compete since they do not have the appropriate economies of scale.  With any threat of entry, the large, dominant firm could simply set a price below the costs of the entrant firm, since it has a large competitive advantage due to economies of scale.  There would be some concern about predatory pricing but that is unlikely to play out since the dominant firm could still be pricing above its own costs, which are so low due to economies of scale.  (See, for example, LePage’s.)  Finally, even if there were to be entry, it would lead to an overly competitive market similar to what happened in the railroad industry.  Firms would have undertaken large fixed cost capital expenditures but those would be seen as sunk costs.  Therefore, with competitiveness in the marketplace, they would price close to marginal cost and be unable to recoup any fixed costs, possibly leading to bankruptcy.

Regulation

The net neutrality and natural monopoly concerns point in one direction: regulation.  As Mr. Richardson notes, there are some standard regulatory tools such as rate regulation and price caps for dealing with natural monopolies.  I think, however, such regulatory fixes will be more difficult in the province of utility computing.  The appropriate rate would need to be set by determining costs of the monopoly and level of demand for its product.  Because of the pervasiveness of utility computing, the latter may be difficult to determine.  Demand will be influenced by so many different factors in the economy that I imagine it would be near impossible for an agency to be able to gauge.  Similar problems existed with electricity rate regulation, which was highly inefficient.  When secondary markets came about for the exchange of electricity, there was a large push for deregulation.  Rate regulation may also hamper adoption of utility computing in innovative ways and in new arenas.

It may also be difficult to determine costs because they are likely to be changing so frequently, as is often the case with computer hardware / software.  The bigger concern here, though, is that government regulation would hamper innovation that can lower costs for firms.  After all, if the rate is set to guarantee a rate of return given certain costs, where is the incentive to find new ways to lower them?

Conclusion

            Utility computing may be a great—and inevitable—march of progress in modern society, but there are several concerns that need to be tackled.  I have noted the specific one here about possibly changing social norms and consequently harming our democratic institutions.

Comments

[Claire Hausman]

I disagree that diminishing face-to-face contact is a serious worry for our system of governing. First, I'm highly skeptical that we are in fact heading for total isolation, or a society where people do everything from home--school, work, shopping, socializing. Even if that were the case, most humans inherently crave human interaction, and they would replace the lost interaction. Second, there are far greater threats to popular participation in government, for example, most people’s total unwillingness to inform themselves about current events or candidates. We live in an age where there is more information that is easier to access than ever before. Most people have internet access in their homes where it is simple to read online news, or go to a candidate’s website and browse his statements about his views. Yet, a dismaying percentage of our citizens know the barest facts about our country’s policies, or important national or international issues, or even who their elected officials are. Let me remind you that some people still think Barack Obama is muslim! How can people meaningfully participate in government if they have no idea what is going on? People’s failure to access widely available information on the internet shows that just because a new technology exists, it won’t necessarily shape the way people behave. Just as cheaply and easily available information has not led to people being more informed about politics, the opportunity to stay isolated in one’s apartment due to a computing utility does not mean that people will choose to do so.

[Edward Somers]

Vikas makes some interesting points about modern isolation of man, but I think the case is a little overstated- I think most workers will still have to go to work for practical reasons- most jobs still require physical presence.
I like that Wal-mart and Amazon.com collect consumer data. It helps them ensure that they stock products I’d like to buy. I generally favor things that benefit me. My comments were not a challenge that Carr’s vision is normatively less preferable from a privacy protection perspective- indeed, I think he notes in chapter 4 that extant data centers are at least as secure, if not more so than personal computer. If everything of concern is stored in a well-funded highly protected central data center, it might be harder for the curious, somewhat malicious teenager in his basement to infect my computer- that might be a preferable outcome.
What animated my comments was a consideration that the thriving black market of illicit computer usage would put downward pressure on the realization of centralized computing for personal uses. Given how many people like to break copyright laws, and how cheap computers are, they might pay the extra cash to protect their illegal uses- should the law impose some duty, or permit data centers to detect/remove illegal content. At $15 a piece, it doesn’t take long to accumulate enough illegal CD’s to cost-justify a more traditional machine. Whether or not the law creates incentives to make data centers remove offending uses, or permit the scanning of files as part of the terms of use, I think, it the interesting question.
Also, I’m not sure how these isolation issues aren’t a product of the internet generally, and not a consequence of utilitization of computing. For example, my fiancée is an architect and on occasion has worked at home, using the internet to access her firm’s private IT network- my understanding from interviews with law firms and talking to friends is that most companies in various fields already offer this option- i.e. its already cost justified under the current expensive regime, so it’s not clear to me how this problem would be measurably aggravated by computing becoming cheaper. Maybe it would be expanded into more industries, but to my knowledge it is already widely available.

[Ruben Rodrigues]

Claire's point about the pervasive misconception that Barack Obama is Muslim is interesting since it was the power of the internet itself that spread that misconception. I also think Vikas' point that "utility computing" might lead to greater solitude is interesting. But in both cases I think it's important to consider the benefits we as a society gain in contrast to the negative effects of greater connectivity.

While Vikas makes a valid points regarding the issues with solitude and lack of social engagement, I think he overlooks the benefits of a more networked world. Rather than reducing socialization, I think greater connectivity simply *changes* the way we socialize, and may in fact lead to a net *increase* in socialization. While someone might gain more "social utility" from a face-to-face conversation than from an E-mail conversation, the efficiencies gained through E-mail means one might be able to interact with 10 different people where they would previously only interact with one face to face. The value of those additional communications could well be worth more than the single face-to-face communication. I was talking to a buddy of mine in Iraq last week (perhaps the epitome of isolation, albeit involuntary). I'm pretty sure that wouldn't have happened in an analog world, where he'd reserve his phone calls to speak with family.

I think I also tend to disagree with Claire's statement that cheaper and more available information has not led to people being more informed about politics. The last two presidential elections in this country have seen a rebound in voter turnout, and I think (though have no real proof) that the connectivity provided by the internet and other modern technologies such as 24-hr cable news have greatly motivated more involvement. As one example, I would cite the record-breaking amount of online donations just this election cycle. Whether people are "well" informed I think is a different issue, but I definitely think connective technologies like the internet have brought more people into the civic process.

As for the Natural Monopoly concerns, I think I'm going to address these in a separate post, but to preview: I really don't buy Carr's analogies to the electric grid and his conceptualization of "utility computing", but software-as-a-service really is taking off. I think there will actually be a lot of competition in this arena, particularly since unlike most other utilities the "product" at issue here isn't homogeneous... but I think I'll elaborate further in a posting before this comment gets out of control.

[Max Schleusener]

I think one unaddressed issue in making and regulating this particular natural monopoly is the fantasy of autonomy fostered by the personal computer and the user interface.

Hewlett Packard has been running a series of ads recently with the tagline "The computer is personal again." The idea, the dream, that these commercials hinge on is that my computer is mine the way my paper diary is mine and that when I use it to search for something, it's like consulting the yellow pages. Of course some percentage of computer owners know how wildly this misdescribes computer use (given that your internet and computer usage is easily and closely tracked by, for instance, Google and DoubleClick), but to most users this description isn't that far off.

Like the yellow pages, like my diary, I can use my computer as much as I want. I buy internet access, and I'm on an "all I can eat/surf" plan. Computing as a utility breaks down the fantasy of the personal computer. The price of computing may vary: it could cost more to use at peak hours, etc.

Access to computing is no longer yours – it becomes a timeshare, a hotel room, a shared hippie commune. While we are all fans of efficiency, we are also fans of exclusivity. I like my computer being "mine" (even after admitting that "mine" is a fantasy because Google knows what I look up, what I might buy, what I might read).

You can replicate each user's particular set-up so there is no apparent difference between the interface on personal PC's now and in the future, where computing is a utility. Even with such replication, however, the curtain is pulled back by computing as a utility. I think computing's utilitization is a good thing, I think it may be practically inevitable, but even after the cost goes down, the debunking of the fantasy of autonomy will be a serious speed bump to many users.

[Frank_B]

I agree with Reuben that the "Obama = muslim" meme is probably spread by the internet and its polarizing effects. That's Vikas/Sunstein's point, which is a good one (and appears to make a strong showing in the second half of the book).

That said, I share Claire's skepticism that the internet will detrimentally isolate us.

Even if the internet *does* turn us into asocial creatures, I think it will whether we use terminals or PCs. Perhaps people wouldn't share burned DVDs using terminals, but on the other hand, people could access "their computer" from any terminal anywhere--including terminals in public locations.

And I want to add that I really like Max's point here. Even though (as I believe) utility computer isn't necessarily less private, it might shatter people's delusions of privacy. That can't be a good thing from the marketing standpoint.

[Vikas Didwania]

I just want to respond quickly to a few points.

Max's point goes to the heart of the age-old debate among legal scholars about how to define property rights--whether they are to be seen as a bundle of rights (the right to lease, sell, use, etc.) or as a discrete asset (a physical something that you have complete dominion over). Academics are conducting research about how framing of property rights between these two approaches changes the lay person's understandings about the property they own. That being said, I'm not sure I can contribute much more.

I want to disagree with Claire. I may have overstated my case, but my point was that the change in social norms result in changes in civic participating. It isn't about the availability of information, since we certainly have much more of it today. The exodus to suburbia changed norms about social participation. No longer did people feel as compelled to participate in regional or national civic activities, because they were separated from the concerns and plights of their neighbors. Similarly, even if connectedness and utility computing may increase information, the changes it creates in social namrs may still have pernicious effects on civic participation.

Additionally, I agree with Ruben that connectivity can certainly incrase communication. I just have concerns about the types and quality of communication that result. Those were the references to Strahilevitz and Sunstein. It just remains to be seen what the effects on communication are likely to be.

Finally, I agree with both Frank and Ed that it is unclear the extent to which utility computing will change the already seclusionary asepcts of the Internet. I provided a few examples, such as working from home and ordering groceries. It is hard for me to imagine in detail what the likely changes are to be, but I am just generalizing that if the trend of technological innovation has resulted in more solitude (from electricity to cars to the Internet) then more innovation through utility computing may result in much of the same.

[Chang Won Choi]

I would like to expand a little further on your comment on network neutrality but not for the political concerns as you pointed out. I believe that network neutrality is necessary, in technical sense, for Carr’s vision to be fulfilled.

The move to utility computing assumes that people can cheaply utilize computation powers over the network. However, the benefits of utility computing may disappear if the communication costs increase significantly. It is true that bandwidth is currently relatively cheap. Very few private individuals worry about the bandwidth they use in their homes. However, I believe that the current “abundance” of bandwidth is an aberration resulting from the excesses of the dot-com era where a large number of companies invested heavily on increasing network capacity. Given that most of those companies have gone under, it is unlikely that the surviving telecommunication companies will increase their capacity significantly in the future, as long as we do not pay by the bandwidth that we are using. On the other hand, it is likely that the demand for bandwidth will increase substantially with increase use of heavy multimedia applications such as streaming video. Consequently, it is likely that we will be facing a bandwidth “crunch” in the near future. If there is a bandwidth crunch, telecommunication companies will and have push for imposing the actual the end-user and the producer of the information based on the costs imposed onto the network. Therefore, the costs of bandwidth may overwhelm any benefits that a person may receive from utility computing.

If Carr’s vision of utility computing is one that we as a society should embrace, we should also look hard at how we will develop the technical infrastructure to support such vision and network neutrality should definitely be an important part of that discussion.

[prefab homes]

We’ ve heard of Slow Food , Slow Towns , Slow Design. Now we have an example of slow furniture. This stool epitomizes the Slow concept of taking time to create, enjoying the process, using natural ingredients, or materials in this case, and working with nature not against it. This stool is made from three sycamore saplings trained and grafted together around a plywood jig to form the tripod base of the seat. It takes 5 years to grow! Christopher Cattle’ s website Grown- Furniture clearly explains the process...

[Vikas Didwania]

Prefab homes makes some great points. I'll try to respond to a few of them.

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[Vikas Didwania]

My previous comment was taken from a random word generator (which doesn't seem to generate actual words).