Jakarta's top executives discuss the Internet in detail

By Dean Carignan

JAKARTA (JP): When 90 of Jakarta's top executives gathered last Monday to discuss the future of Information Technology, the result was a shock: no discussion of databases, financial software, or even management information systems. Rather, the entire dialogue focused around a single recurring theme: the Internet. So pervasive has the Internet phenomenon become that no discussion of computers, communications, or business in general can escape it.

Last Monday's seminar, part of the Dow Jones Asian Dialogues series, was led by Nicholas Negroponte, founder of Wired magazine and Director of the Media Lab at the Massachusetts Institute of Technology. Negroponte opened by providing a surprisingly simple model for understanding the Internet. The Internet's tremendous impact on society, he explained, lies in the fundamental distinction between "atoms" and "bits".

Traditionally, most communication of information has employed atoms; information is printed into books made of atoms, distributed on newspapers made of atoms and stored on video tapes made of atoms.

With the arrival of computers, more and more information is being handled as "bits". Bits are the digital elements that reside in computer memory chips. They have the power both to store information (e.g. on a hard disk or floppy disk) and to transport it (e.g. over the Internet).

The difference is that bits manage information enormously more effectively than atoms. Atoms, for example, take up space, are costly to produce (think of the cost of printing a book), and are difficult to transport (consider shipping your personal library overseas). Bits, on the other hand, take up virtually no space (a few micrometers on a computer chip), cost nothing to modify and reuse (we change them every day on our computers), and can be transported over telephone lines at tremendous speed for almost nothing.

It is the remarkable efficiency of bits that underlies the growing interest in the Internet as a commercial and business tool. Consider the example of a company seeking to promote itself internationally. Traditionally the company would print and mail hundreds of reports at a cost of thousands of dollars and a delivery time of several weeks. To send the same information over the Internet -- that is, as bits -- would cost less then US$100 and would require only a few hours delivery time.

"The profound difference between bits and atoms", Negroponte concluded, "marks a radical change in the way people will store, organize, and distribute information". In the future, more and more communication will assume the form of bits, just as e-mail is already replacing physical letters and faxes.

After Negroponte's optimistic prelude, the questions came hot and fast on the Internet's much-publicized shortcomings. The most common inquiries concerned government censorship of the Internet, particularly Singapore's efforts to moderate content in Cyberspace.

Negroponte responded candidly that such efforts are ultimately futile. The Internet, which began as an American military experiment, was originally designed to ensure unbroken communications even in the event of natural disaster or all-out war. "Each message traveling the Internet is programmed to attempt every possible route to its destination," he explained. "Even if you censor every ground line in Singapore, transmissions will still find their way in via cellular phones."

The key is not to censor the Internet but "to make it self- policing, to encourage Internet Service Providers to monitor the content of what is placed on their servers." Only this strategy of 'decentralized' policing can moderate an entity as decentralized as the Internet.

Another recurring topic was the security risk of transmitting financial information like credit card numbers over the Internet. Negroponte responded by pointing to the comparative insecurity of the physical credit cards themselves. "People go to a restaurant and hand their credit card to a waiter they've never met before, who makes a copy of it and then disappears to the back room for several minutes. To be honest, I'm more comfortable typing my number into a computer!"

Financial information, it turns out, is actually safer in the form of bits than it is as atoms. As evidence Negroponte pointed to Swift, a European firm dealing in Internet financial transactions. "Swift has 19 levels of human security to protect the paper part of their transactions. They actually need less security once the information becomes bits and enters the Internet; they say that's the easy part to protect."

There is, however, one factor preventing perfect security of Internet transactions. "The greatest single impediment to secure transactions is the United States Government's ban on the export of encryption technology." Encryption tools, which encode Internet transmissions so they can be read only by the intended recipient, cannot currently be exported under a U.S. law. The law was intended to prevent encryption capability from falling into the hands of terrorists and drug-runners. But, Negroponte was quick to point out, "terrorist and drug runners already have this technology. They simply visit the U.S. and take it out with them." The real losers are the thousands of struggling Internet businesses worldwide that need to secure their transmissions through encryption.

A final topic running throughout the dialog was the impact of technological advances on developing countries. Will the growing influence of technologies like the Internet increase the gap between developed and developing nations?

Negroponte responded that the Internet could actually increase developing countries' access to information and technology. An Indonesian school, for example, would need only the simplest PC and a US$90 modem to access the full content of Cyberspace. The real obstacle these countries face is the inflated telecommunications costs endemic to the developing world. "This is a problem that can only be fixed by governments, not by technology."

The seminar closed with the elusive question of who would be the big winners and losers of the "digital revolution". Here even Negroponte was reluctant to venture a guess. The only certain thing, he concluded, is that the brightest future belongs to those who can embrace the brave new world of bits.

The writer works for International Communication Associates (ICA), a multimedia communications firm based in Jakarta.