At a gathering of computer barons our correspondent samples visions of the future

by James Fallows

COMPUTER shows are fun because they give you a look at products everyone will be using in six months or a year. They are valuable because they give you some idea of the arguments those products will provoke. This spring I had both experiences —the gee whiz of seeing new products, and the premonition of future debates—at PC Forum, a computer-industry gathering that has been held annually since 1978.

PC Forum is produced by Esther Dyson, a onetime journalist who during the past decade has become one of the world’s most frequently quoted authorities on trends in the computer business. (Disclosure: Dyson and I were friends in college.) Her influence stems partly from her monthly newsletter, Release 1.0, which discusses long-term technical developments and their impact on business and private life, and which costs its 1,300 subscribers $495 a year. PC Forum, usually held in Arizona in February or March, has established a reputation as an exclusive meeting place and dealmaking venue for the barons of the computer industry, in part because the registration fee is so high. This year the fee for industry participants was $2,500 for three days, not counting hotel expenses.

Bill Gates, of Microsoft, who has often attended the forum in past years, did not come this spring, but many people one step down from him in wealth and celebrity did show up. As I walked across patios and through restaurants in the Arizona Biltmore, in Phoenix, where this year’s conference was held, I constantly came across little knots of people apparently discussing buyouts, takeovers, strategic alliances, and assorted other deals. On the last night of the meeting several computer big shots took the stage in a hotel nightclub to play sixties-era rock music in a jam session. Among other performers, an official of the Prodigy on-line service was on drums and a former Lotus executive played guitar, as did Paul Allen, who co-founded Microsoft with Bill Gates and is one of three billionaires the company has produced. (The third billionaire is Steve Ballmer, an executive vice president of Microsoft.) Allen, whose many assets include the Portland Trail Blazers basketball team, was wearing droopy polyesterish brown slacks that appeared to have come from a thrift store. I could not help thinking that if I had several billion dollars, I would splurge on some nicer pants. Maybe thoughts like these are what keep me from being a mogul.

THE gee whiz of the conference involved advances in “interactivity,” a dull-sounding concept that became vivid and real as products were demonstrated. “Interactivity” includes all means of exchanging information or issuing requests by computer—E-mail, electronic bulletin boards, office networks, computer shopping or banking systems, and so on. The computer industry will have to battle the video-game industry, led by Sega and Nintendo, for control of the interactivity business: the game companies are about to release fast and powerful machines that can be connected to phone lines to transfer data and that produce sharper, more dramatic visual images than normal computers do. But for the moment the highest hopes (and biggest doubts) about interactivity concern the Internet.

In the past year millions of people have heard about the Internet, but few people outside academia or the computer industry have had a clear idea of what it is or how it works. The Internet is, in effect, a way of combining computers all over the world into one big computer, which you seemingly control from your desk. When connected to the Internet, you can boldly prowl through computers in Singapore, Buenos Aires, and Seattle as if their contents resided on your own machine.

In the most riveting presentation of the conference, John Gage, of Sun Microsystems, demonstrated the World Wide Web. the gee-whizziest portion of the Internet, in which electronic files contain not only text but also graphics and sound and video clips. Using Mosaic, a free piece of “navigator” software that made moving around the Web possible, Gage clicked on icons on his screen exactly as if he were choosing programs or directories on his own hard disk. He quickly connected to a Norwegian computer center that had been collecting results during the Winter Olympics in Lillehammer and checked out a score, duplicating what Internet users had done by the millions every day during the games, when CBS-TV was notoriously late and America-centric in reporting results.

Gage clicked on another icon and was connected to a “home page,” or introductory screenful of material, set up by a high school in Illinois. To be sure, this was not just any randomly chosen high school but one near the National Center for Supercomputing Applications, in Champaign and Urbana. The page listed each member of the high school’s most recently graduated senior class. Clicking on a name would take you to that student’s “home page” at the university where he or she was enrolled. Gage clicked on one of the names (not, I suspect, for the first time), and up popped a screenful of information about a student now at Harvard. It included his photo, bits of his life philosophy, and qualities he desired in a mate; the computer’s speakers played a short digitized selection of his favorite music. With another click Gage left this young man behind, and we were in a computer somewhere in the tropics, checking information about the rain forest. Half a dozen other clicks made it seem as if any information we might want was within reach.

This may sound frivolous and gimmicky, but when the demonstration was over, most people in the room seemed to have the same thought: I want it! Asking the seemingly logical question “What do you want it for?" would be as pointless as asking people when they first saw automobiles “But where would you want to go in a car?”

For average users, however. Gage’s demonstration would be something of a tease. Taking full advantage of the Mosaic navigator and the World Wide Web’s many thousands of graphicsand soundrich documents requires you to have a high-speed, high-bandwidth direct connection to the Internet rather than a “dialup” connection over normal phone lines. A few years ago people who worked at universities, research centers, and a few other organizations had the exclusive benefit of direct Internet connections. Now companies of all sorts are getting into the act, investing tens of thousands of dollars in exotic telecommunications systems.

Individuals and businesses of all sizes may eventually be able to have affordable high-speed connections, from cable-TV operators or from schemes now pulling out of the dream stage. In the meantime, several halfway solutions allow the use of Mosaic at less-than-ideal speeds. The most popular of these is a “SLIP” or “PPP" connection from an Internet service provider or a digital “ISDN” line from the phone company. For most people, though, a dial-up connection is adequate. You won’t get real-time graphics and sounds, but even using a simpler navigator than Mosaic you’ll easily find help in searching out what you need. Like the graphical user interfaces made famous by Macintosh and Windows, a navigator program is an easy-to-use “front end" that covers up the unsightly innards of the Internet, sparing users from learning the obscure commands of the Unix operating system in order to send or receive files. The many frustrations of Unix have so far kept many people away from the Internet—which, of course, has made its longtime residents happy.

A growing number of Internet service providers, including The Pipeline, in New York, offer built-in point-and-click navigators, and many other services will begin doing so in the coming months. But for now one of the easiest ways to experiment with the Internet is through America Online, a service that has grown quickly because of its simple graphical interface. America Online’s gateway to the Internet does not give access to enough of the Internet, but it will give you a good taste of bulletin boards and other textbased Internet documents.

THE age of the Internet and interactivity raises long-range questions too. One is how to build the new transmission capacity it will require. At PC Forum two radically different answers to the question were discussed, reflecting the contradictory themes of decentralization and economies of scale which pull at the computer business.

One possible approach to the transmission-capacity challenge is centralized and capital-intensive. Even as the conference was getting under way, Bill Gates and Craig McCaw, another youthful billionaire, who made his money in the cellulartelephone business, announced a grandiose plan to create a network of 840 satellites that would provide wireless voice, data, and video transmission to any point on the globe. The scheme, known as Teledesic, would cost some $9 billion to complete, and by the year 2001 would account for about a quarter of the active satellites circling the earth. (Approximately 2,150 active satellites are now in orbit.)

Had Teledesic been proposed by people other than Gates and McCaw, who have after all earned the right to make big plans, it might never have been taken seriously. “God save us, it’s the stupidest damn thing I’ve ever heard of,” John Pike, the director of the Federation of American Scientists’ Space Policy Project, told The Wall Street Journal when he first learned of the plan. Getting the satellites into orbit would require a (successful!) launch once a week for several years, a pace no nation has ever tried to maintain. For some time Motorola has been raising money and laying plans for a smaller network, called Iridium, which would require “only” sixty-six satellites.

Ten years from now the planners of Teledesic could, of course, look like brilliant visionaries. At the moment, their proposal must contend with a lower-cost, more decentralized approach to expanding data networks. At PC Forum a small California company called Metricom demonstrated a guerrilla alternative to a vast network of satellites.

The basic unit of Metricom’s technology is a radio transmitter about the size of a fat hardcover book. The radios broadcast with less than one watt of power, which in combination with special signaling techniques permits the Metricom network to operate without licensing by the Federal Communications Commission. Metricom hangs the radios on light or telephone poles in cities, at intervals varying from half a mile to two miles or more. The system allows computer users in the vicinity to connect to the Internet and other data networks even without a telephone line. The user buys a small wireless modem from Metricom, for less than $500, and then gets unlimited connect time at prices ranging from $2.95 a month for slow transmission (2,400 bits per second) to $19.95 a month for unlimited-speed transmission (in practice, up to 56,000 bits per second).

The Metricom approach differs from today’s networks in significant ways. The price paid by the user is much lower. The “modularity” of the system means that it can be expanded in a cheap, controllable way: each of the transmitters costs the company about $700, and can handle as many as a hundred users within a radius of several miles. As demand grows, Metricom simply hangs another radio and brings more users on-line— rather than having to wait until a full complement of satellites is in place. Paul Allen, he of the Trail Blazers and the electric guitar, is the leading investor in Metricom, with a stake worth $27 million. Although less of an oracle than his former partner Bill Gates, Allen may have made a shrewder choice about communications systems.

THE other big questions that rumbled through the conference involved the role of government. As a rule, computer people are libertarians. This is especially true of those from software companies, as most of the attendees at PC Forum were. (Officials of semiconductor companies often turn to the government for help in fighting trade battles.) To raise a cheer at these conferences, one need only denounce clumsy government regulation or oppressive government censorship— especially any control over the free flow of human creativity across the Internet.

Yet the computer crowd is not particularly honest or introspective about the role that government has played in making their industry what it is now. Ed McCracken, the chairman of a fast-growing and much-admired firm called Silicon Graphics, dampened spirits by offhandedly mentioning in a speech that Pentagon contracts had provided the oomph for the computer and software industry through most of its history. The initial money for faster chips and breathtaking graphics programs had often come from the military, which was always looking for ways to soup up its fighter planes, tanks, and submarines. Those days were over, McCracken said—so who would take the Pentagon’s place in funding high tech? His nominee was the entertainment business—movies, records, and TV. This made sense for his own firm, whose computers produced the virtual dinosaurs for the movie Jurassic Park, but it seemed to disappoint the crowd, which was looking for a nobler definition of its purpose.

A further inconvenient truth is that the Internet has historically been subsidized by the federal government. It was founded in the early 1960s as a mainly military network, and its transmission and computing costs are still underwritten by grants and contracts from the Departments of Defense and Energy, the National Science Foundation, and other federal agencies. Although these subsidies are being phased out and, some experts say, provide only small help with the expenses of running today’s Internet, the federal government’s contribution continues to be in the tens of millions of dollars each year.

This subsidy matters because unlike any other phone or data system, the Internet does not cost most individual users anything. It works like a giant 800 number for data transmission, with operating costs covered by the government, universities, and a fast-growing number of companies. It has also been almost completely free of constraints on standards or expression. The content of a bulletin board like “” would, I believe, make even Howard Stern uncomfortable.

As the network expands, something will have to give: either the government will stop paying, or politicians will notice that the government is paying and will impose controls, like those imposed by school boards on textbook content or by the FCC on radio and TV broadcasts. The internet’s low-visibility era of subsidized innocence will end, and the network will become as complicated and controversial as everything else. But traveling around it will still be fun, and in the not very distant future the Internet will be as familiar and as much a part of our cultural furniture as television.