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George Gilder: When Bandwidth is Free

KK : There is a myth, a utopian hope, that all these electronic connections (what I call the "advent of the net") are going to eliminate hierarchy. The belief is that we will come into a peer world, where everything is on a peer-to-peer level. All the experimental work that I have seen shows that that's probably not very likely. On the contrary, anything complex self- organizes into nested hierarchies, just in order to manage itself.

GG : Right. The complexity of digital systems requires a hierarchical organization. It's the only way to deal with the kind of combinatorial explosions that attend interlinking of billions of nodes, all functioning in parallel. You need nested hierarchies, but the real miracle of micro-electronics is that these extraordinarily complex hierarchies can be incorporated into individual silicon chips, with virtual supercomputer capabilities. This fabulous supercomputer power can be ubiquitously distributed in the fibersphere. So hierarchies do indeed exist, but they are ubiquitously distributed, which renders them an egalitarian force. When everybody commands a supercomputer, you give the average owner of a work station the power that an industrial tycoon commanded in the industrial era, or that a TV station owner commands in the age of broadcasting. In other words, the hierarchy is in the silicon rather than in the human organization. So you have this incredible distribution of power. This is a period of transition that resembles the transition between railroads and automobiles.

KK : How's that?

GG : When you ride a train you go to the railway station at a scheduled time, you travel with the people that happen to be on the train, you go to preset destinations. This is what the current television world is like. You tune into the stations that have been prescribed through some collaboration between advertisers and TV executives in New York and Hollywood. Moving from broadcast model to the teleputer is like moving from a railroad model to automobiles. Automobiles are essentially egalitarian transportation systems. They aren't organized—like the Internet. A Ferrari, say, and a Toyota Tercel look like radically different machines, but the fact is that any car endows the average person with more freedom than any railroad.

KK : You are a tireless champion of small business. For the last 20 years or so, really big projects have been considered arrogant, incapable of working because they are big. Now there is talk of Motorola's global satellite project Iridium. Do you think that the fibersphere gives us permission to think big again?

GG : There are going to be a lot of big fiber projects in the next decade. They're already coming right now. I'm sort of worried that they're going to think too small. I hope that the government, with its National Research and Education Network (NREN) doesn't end up buying a lot of obsolescent telephone company fiber systems that make networks with a total power of a gigabit rather than a gigabit per terminal. The fibersphere is a big project, and it will take scores of thousands of small companies to do it.

KK : What about big companies?

GG : Sure. Laboratories where lots of people work on their own special visions, with the luxury of very long-term goals, are very valuable. Such places are usually supported by relatively big companies and consortia of companies. IBM, AT&T, and Bell Labs developed most of the components for all optical networks. When you're producing millions of something it becomes a commodity, and almost by definition you have a big company. MS-DOS and Windows are commodity products, so Microsoft is a big company. There are cycles in which companies get big exploiting commodity products with wide distribution, which then mature and then are displaced by new products. It's relatively rare that the company that's triumphant in the commodity phase can move back to the insurrection phase. Insurrections are ordinarily led by entrepreneurs. I don't see any likelihood that will change anytime soon.

KK : What else is the technology telling you?

GG : What the technology tells me is that, among other things, Clinton's going to get a bonanza. He doesn't know what's coming, but technology's just going to be breaking out all over. Bush did virtually everything that Clinton promises to do, and because Bush has done it already it doesn't leave Clinton much room except to play cock-a-doodle-do. He'll get up on the post and crow as the marvelous sunrise technologies come blindingly to the fore during his administration. They're going to have 50,000 technology programs and lo and behold, a million technologies will bloom and they will take credit for it all.

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