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Communications of the ACM

Communications of the ACM

The Open Information Society


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The time will come when the cost of protecting information is so high, and computer networks proliferate so widely, that individuals and organizations will for the most part give up the effort to protect their private databases. By then, electronic information will be accessible to everyone, be it an individual, a firm, or a government. This eventuality will usher in a new erathe open information era. After accommodating to this change, society will become an open information society.

Try to imagine life without secrets.

George Orwell predicted something similar in his science fiction classic, 1984, but the 21st century provides some powerful tools Orwell couldn't even imagine: the modern computer and Internet connectivity.

A well-known rule in cognitive psychology, "Seven Plus or Minus Two," coined by G.A. Miller in 1956, asserts a person can absorb about seven chunks of data at a time. Applied to Orwell's 1984, where monitors were installed all over, about one-seventh of the population would be required to watch the monitors. But assuming they have to rest and therefore work in shifts, say three shifts, three-sevenths of the population has watched over the other four-sevenths. Add to that some managers and supervisors and the result is thatunder Orwell's terrifying fantasynearly half the population would have observed the other half.

If we set this notion of life without secrets against the 21st century, as the world rapidly positions itself to exploit the universal connectivity offered by the Internet, it isn't hard to imagine things Orwell never even considered (see the accompanying sidebar). But this article isn't a doomsday depiction of a future where spies lurk everywhere. It describes what the world might resemble once it reaches a comfortable equilibrium on a road whose path has already been chosen. The imminent open information society (OIS) has potential to be good for the world; much depends on how individuals, business, and government shape its evolution. But one thing is certain: it is essentially already here. The various facets of OIS, as related to individuals, businesses, financial institutions, and legislators are portrayed here.

We find catalogs and "special offers" in our mailboxes every day of the week, from just about every company with something to sell. It's a straightforward business: your name and address are purchased based on your buying patternsbut it's amazing nonetheless to see how fast marketing departments seem to get your label.

Leading direct-mail marketers spend millions of dollars on systems to determine who should get which mailings. The Franklin Mint, which sells hundreds of millions of dollars worth of merchandise, has led the way with its sophisticated AMOS program, which helps the company's market researchers choose which mailing addresses belong on which lists. When you phone in your orders to these companies, you're often surprised to find the operator needs only your name or an identification code; the company's computer already knows the rest of your particulars: address, ZIP code, telephone number, credit card number, and even a record of your previous purchases.

How did all of that information get there? That's what the OIS is all about. You may not have noticed, but the world knows many things you might think are no one else's business. A citizen in a developed country leaves trails of digital footsteps from birth to death, which multiply by orders of magnitude with e-commerce, online banking, and m-commerce using mobile phones.

Do you really think you have a private life? Some institutions possessing detailed personal records include Departments of Motor Vehicles, the Internal Revenue Service, the Social Security Administration, the Franchise Tax Board, VISA, Mastercard, American Express, TRW, every bank you've ever worked with, your travel agent, any airline whose frequent flyer program you've ever joined, telephone and electric companies, all sorts of professional organizations, local governments, boards of education, utilities, and more.

Soon your privacy will only decrease. Hundreds, even thousands, of mail-order offers won't be delivered by a mail carrier anymore, but will be transmitted directly to your home computer. It is already possible to browse through thousands of screens of catalog items, compare the offerings of rival companies, get extra information about products that interest you (through smart agents), place your order electronically, and transfer funds from home. Mail carriers will still be needed in the future to deliver your purchases, except when you buy information, music, video, or software, which can be transmitted electronically the moment your payment is confirmed. This is the essence of the rapidly developing world of e-commerce. In the 21st century, one can acquire goods and services by mail, phone, computer, or by visiting the mall and browsing in stores. The social price is a loss of privacy. As e-commerce, cellular companies, and governmental databases are integrated together, the notion of OIS is becoming very concrete.

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Business Leads the Way to the OIS

Let's get back to our overflowing mailboxes. Much as we have little or no control over what gets into our mailbox, large and small companies have little control over who gets into their computer system and what they do there. Most try to build electronic barriers (firewalls) around databases and online information, but hackers who want to get in tend to be quicker. For years, hackers, industrial espionage agents, and spies have been cracking codes and breaking into the computer systems of companies, governments, and military agencies. As soon as they sense a breach in computer security, these entities all rush to pad the layers of protection guarding secret information. But the attackers are determined, and they have the upper hand. Regardless of how much money is spent on computer security, the infiltrators always seem to get what they're after.

How long can this go on? As long as companies and public agencies refuse to let go of the notion that secrecy is of the utmost importance, and as long as the public refuses to relinquish some of the privacy that has been elevated to a God-given right in some Western countries.

In the early PC years, software manufacturers invested millions in various copy-protection mechanisms. Major software vendors used to protect their products from illegal copying by means of physical protection, such as laser "burn," or software protection, such as limiting the number of times the package could be loaded onto a hard disk. It took the vendors a few years to understand that no matter what kind of protection they used, people would always find a way to get around it.

Today, most vendors use a different strategy. Rather than protecting software, they copyright it and reduce the price so most people prefer to buy an original package with the accompanying documentation literature and online help, rather than copying the software and not getting the literature, or photocopying hundreds of pages. In many cases, software packages are distributed free of charge due to various vendor considerations. Despite reduced prices, software vendors usually make money, and, thanks to increased sales volume, some are making more money than ever.

Sometimes a security problem can be remedied by economic means. If you reduce the financial incentive to steal, people are more likely to take the honest route. The same thing happened in the video movie market. Back when a VCR was still a novelty, a price of $99 wasn't unusual for a popular movie. What happened? Millions of people copied movies from their friends. Distributors didn't make the huge profits their inflated prices would have indicated. By lowering prices significantly they lessened the incentive to make illegal copies.

Society wastes billions of dollars each year trying to restrict curious people from information. But the barriers just pique the interest of hackers and saboteurs. Eventually, advocates of computer security will relent. Not only is protection too expensive, but by opening up their databases, companies can tap into a lucrative source of cash flow: access fees charged to outside users. Many commercial banks now charge their customers for electronic statements and other information services.

The main barrier to the OIS is psychological, but it can be overcome. The solution is simple: remove most barriers, open information to anybody who wants it, charge access fees for useand watch the business world transition into an OIS.

Outrageous? Impossible? But this isn't an Orwellian fantasy. Just look at the range of signposts on the road to the OIS:

  • Anyone can subscribe to a computerized database of military information that includes explicit detail about some of the latest U.S. military developments. Teldan Advanced Systems Ltd. sells the data in a CD-ROM format for approximately $5,000.
  • More and more people clock in and out of work by running a magnetic card through a machine. The information gets recorded on a central computer and from there it's essentially accessible to all sorts of authorized or unauthorized users. Not outside your company, perhaps, but surely within it. As the OIS approaches, the scope of access will broaden (see the "scenario" sidebar), and the IRS may ask for the figures to determine how many hours you really worked last year.
  • Most banks around the world are connected through an electronic network called SWIFT, which went online in 1977 with 270 banks from 15 countries, and now serves over 6,000 financial institutions in approximately 180 countries. A bank operating in the international market can't do business without subscribing to SWIFT, hence the banking system was building an international information superhighway of its own long before the Internet came into the picture. Similarly, airline companies had operated international networks long ago.
  • Most institutions and many individuals around the world are connected through the Internet. Faculty, staff, and students at most academic institutions can exchange email, messages, and research material via the Internet. Companies and individuals can subscribe to hundreds of data services and an endless list of other offerings. Users can access a large variety of public databases and Internet sites containing commercial, industrial, and scientific information.The Internet, which began essentially as a tool for academics, has changed the way academics engage in collaborative research, share data, co-author articles and books, and schedule conferences. However, the Internet has since diffused from academia to the rest of the world.

Many organizations have installed worldwide networks to support their international operations, and most of the internal correspondence of international companies such as IBM now flows through email. In some multinational companies, more than 90% of internal correspondence is conducted electronically. Systems integrating computers and satellite communications are proliferating. Some nationwide trucking companies, as well as some military forces, install inertial location systems (ILS) in each vehicle. Through satellite communications, the location of a car or truck can be pinpointed within a few yards. The ILS helps companies locate each truck in their fleets or track the productivity of any employees who spend a lot of time on the road. In military applications, ILS can provide the central command with exact knowledge of its force deployment. For a few hundred dollars, you can have a transmitter hidden in your car. If it gets stolen, all you do is report your membership number and the company locates your vehicle in seconds.

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The Evolution of Monopolies

It took about 80 years to reach our present level of advanced telecommunications, first through human operators, then mechanical switchboards, and finally through digital communications and satellites. Will it take another 80 years to link all computers around the world into one huge network? No, the infrastructure already exists, and it will be just a few years before nearly all computers around the world will be able to connect to each other.

Without ever voting or making a formal decision, the world seems to have opted for the OIS, although this shift makes business competition much more complex. The moment you make your move on the Net, by discounting prices or introducing a new product, your competitor can react promptly. This development applies in particular to banking. Customer loyalty to a specific branch has decreased. Banking from home over the Internet increases competition as expressed in interest rates, variety of services offered, and the friendliness of user interfaces.

However, the competitive scenario could have been written very differently. Suppose two large competitive firms (such as Pepsi Cola and Coca-Cola) realized they shared an essential part of their assets, namely information. Rational economic behavior would lead them to consider merging. Creating such monopolies violates current law, but who can be sure legislators will resist demands to relax antitrust laws, when demands come simultaneously from conglomerates in many industries? Suppose concerted political pressure is exerted by the large automobile companies, food companies, computer companies, and banks? The change will not be instantaneous and dramatic but may take years of slow "grinding" of existing laws until the world is governed by monopolies. During the 1990s there were several mergers of communications, entertainment, telephone, ISPs, banks, and others; these were only early indications of a trend.

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The Building Blocks of OIS

We are certainly beyond the point of no returnthe OIS revolution is here, driven by a number of technological forces, including:

  • Computers, which are almost as pervasive as telephone. In 1999, 54% of the U.S. population had access to a home computer.
  • Communication networks. Millions of computers are linked together via networks, and the numbers are increasing rapidly. The global village isn't future shock; it's reality. In 1999, 32% of the U.S. population subscribed to online services at home.
  • Literacy. Computer users are becoming computer literate, while software and hardware are getting user-friendlier. These two developments converge to make basic interaction with computers as easy as driving a car for hundreds of millions of people.
  • Commerce. People and organizations work together by linking their computers. Data is shared all over. B2C e-commerce will increase from $20 billion market in 1999 to an estimate of $150 billion in 2003. B2B as well as m-commerce are expected to develop rapidly.
  • Increased access. Preventing unauthorized access to computers becoming increasingly difficult and expensive.
  • Satellites, which along with advanced intelligence gathering and transmission instruments, are changing the way we live.

In addition, the world is leaning toward more openness and more exposure of facts and events. Governments fail time and again to hide information they don't want the public to learn about. This is due to various developments, including the following:

  • The media is growing more and more aggressive in its pursuit of "truth," or scoops. Journalists and the Internet play an important role in breaking down walls of secrecy and spreading information (for example, Watergate, the Gulf War, the Lewinsky scandal).
  • Moral codes have undergone major revision in recent years. Just consider how many people speak freely about sex (the Lewinsky scandal, for instance), and issues that were previously considered to be deviant.
  • Democracy has proved to be the contagious rage of the late 1980s and the 1990s. From the East Bloc to the Far East and Africa, democratic reforms are bringing unprecedented freedom to millions of people around the globe.

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The Future is Now

While Orwell's 1984 was a fantasy rooted in massive control exerted over the masses, OIS is an outgrowth of democracy. Western society has lived with barriers for hundred of years. Secrecy, suspicion, and a degree of seclusion have been three often unspoken, but always present, tenets of life. Today, the world is undergoing dramatic, fundamental change. After years of tightly guarded borders, countries throughout Western Europe are all but eliminating the presence of customs and immigration officials at borders. The idea of European unity is on its way to being fulfilled.

This new openness extends to the information frontier and, as in all spheres, is driven by self-interest. Increasing numbers of companies are conducting cost/risk analyses of securing data. Once they find that they'll lose less by loosening security measures than by spending a fortune on security, the cards will fall into place. Economic realitynot ideological forces or the hallowed principle of secrecywill be the reason the business sector will relax its security efforts.

The OIS future is getting closer every day. It is becoming increasingly difficult to find a company or a bank that doesn't embrace OIS by establishing a site and offering services over the Internet. Anyone who tries to ignore it will be left wandering along the old country roads, while the world whizzes by on the Information Superhighway.

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Author

Niv Ahituv (niva@tauex.tau.ac.il) is The Marko and Lucie Chaoul Chair for Research in Information Evaluation in the Faculty of Management at Tel Aviv University, Israel.

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©2001 ACM  0002-0782/01/0600  $5.00

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