In 1991, most Americans had not yet heard of the internet. But all of France was online, buying, selling, gaming, and chatting, thanks to a ubiquitous little box that connected to the telephone. It was called Minitel.
Minitel was a computer terminal. It housed a screen, a keyboard, and a modem—but not a microprocessor. Instead of computing on its own, Minitel connected to remote services via uplink, like a 1960s mainframe or a modern Google Chromebook. Terminals were given out, for free, to every French telephone subscriber by the state (which also ran the phone company).
Minitel was a huge success. With free terminals at home or work, people in France could connect to more than 25,000 online services long before the world wide web had even been invented. Many services of the dotcom-and-app eras had precursors in 1980s France. With a Minitel, one could read the news, engage in multi-player interactive gaming, grocery shop for same-day delivery, submit natural language requests like “reserve theater tickets in Paris,” purchase said tickets using a credit card, remotely control thermostats and other home appliances, manage a bank account, chat, and date.
Minitel was decommissioned in 2012 after 30 years of distinguished service. The terminals still functioned, but they could not handle advances in graphics technology, their modems were outdated, and the French had long since moved on to the internet.
But Minitel’s lessons live on, and with new relevance. In the U.S., the Federal Communications Commission’s Open Internet Order made network neutrality law in 2015. But this year, it has come under attack by both cable internet operators and the current FCC chairman. The American implementation of a network derived from Minitel was done by private industry alone. It failed in part because its usage was not regulated by the government. For this reason, it offers a view from the past on why the FCC’s move today might be misguided. It turns out that regulated networks might offer better market opportunities.
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In Silicon Valley, Minitel is often derided as a “backwards system,” the epitome of state centralization and bureaucracy. As the enemy of creative agility. But Minitel was the only online service to reach mass-market penetration to reach mass-market penetration before the late 1990s. Similar systems in the U.S., such as The Source, DowJones, Compuserve, and AOL, were only accessible to the wealthy, geeky few. These American systems were also centralized networks, gated communities where all content was curated by the service provider. They were the computer versions of a cable-television bundle.
By contrast, Minitel didn’t operate as a closed network. Unlike AOL or Facebook, the French state made Minitel an open and neutral platform, which allowed users to connect to privately run services. The state telecom built and operated the underlying infrastructure for the network, and it then allowed anyone to provide services atop it, so long as they registered to do so. Minitel merged state intervention (build and maintain the marketplace) with market-neutrality (anyone can sell legal products and services). That combination catalyzed the boom of Minitel services.
In 1991, France Telecom tried to reproduce their domestic Minitel success in the U.S. through a San Francisco-based venture called 101 Online. It seemed like a match made in heaven. What was then the world’s most successful public computer network was set to meet the world’s hippest tech crowd. For an extra cool factor, France Telecom hired John Coate, the guy who had turned San Francisco’s online bulletin board system, The WELL, into the world’s most influential online community at the time.
As community manager, Coate distributed the little Minitel box to technology and culture leaders such as Alan Lundell of Byte magazine and Mondo 2000. He also took terminals to rave parties such as Oakland’s 1992 Woopy Ball, where hip crowds chatted in digital chill rooms, all in an effort to build a new digital community. The ravers loved it.
But curiosity alone wasn’t enough to spur American adoption of Minitel. It needed a community with intrinsic value. And communities arise when people can meet and exchange goods, services, and ideas freely.
Consider a farmers market. If a city builds and runs one, it must let all types of legal goods to be sold there for the infrastructure to provide maximum value. If citizens can only buy tomatoes and oranges, but not kale nor lettuce, then the value of the market is limited. The same is true of computer networks: If an internet service provider does not let content providers freely access the infrastructure that the user has rented (through a cable or cellphone subscription), the value of the internet as a whole becomes depleted. That’s why the American Minitel failed—and why people should be concerned about ISPs being able to restrict the traffic on broadband and wireless networks.
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On paper, 101 Online understood the distinction between an open, online platform and a cable TV bundle. In a press release, it outlined its mission: to provide Bay Area residents “with a powerful and efficient new way to communicate with each other.” The 101 Online forum, their rebranding of the Minitel network, was said to be “an electronic ‘meeting place’… the first widely available and cheap electronic medium that allows society to talk directly with itself without TV, radio and newspapers acting as a go-between.”
But in practice, 101 Online acted as a go-between for online content. Instead of letting content providers manage their own services, as France Telecom had done, it replicated the dominant model for U.S. online networks of the era: curating all the content itself. Individuals and companies couldn’t plug into the network and sell their content, goods, and services like their French counterparts had done, and as dotcom startups would soon do on the web. Instead, they had to travel to 101 Online’s office in downtown San Francisco, hand a floppy to an operator, and wait for its content to be converted to 101 Online’s proprietary format and uploaded to the company’s server.
As 101’s head of marketing would later admit, “we did not create an ecosystem enabling anyone but us to make money.” It wasn’t anything new for online systems available to Americans at the time. In a 1983, for example, the online version of the World Book Encyclopedia was removed from the CompuServe online platform and replaced with the Grolier electronic encyclopedia—probably the result of some behind-the-scenes licensing deal. The same year, The Source announced a new policy for curating the content on its platform: “new products are receiving close scrutiny based on likely long-term usage rates, as opposed to ‘attention getter qualities.’” It shouldn't come as a surprise that The Source chose to act as a curator, since it was the online arm of Reader’s Digest, itself a master curator. No more than it should startle anyone that AT&T, Comcast, or Verizon—all network providers who also own content companies—might want to do the same with the internet.
What might surprise a proponent of private enterprise over state-run services, however, is that it was private-sector operators who curtailed these early online platforms—whereas in Minitel’s case, the state had remained agnostic. 101 Online used exactly the same technology that the French had implemented across the Atlantic. But when the private sector was fully in charge of administering the platform, it chose to limit rather than facilitate the marketplace.
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When Comcast slows down Netflix, when AT&T forces Apple to block VOIP services, or when Verizon blocks its customers from using tethering apps on their phones, they do nothing different from what CompuServe, The Source, and 101 Online did in the 1980s and 1990s. Acting as private curators, the companies that own the infrastructure through which users seek content can control that content.
By contrast, when an operator treats its infrastructure as neutral, as Minitel had done, its marketplace invites a greater diversity of content and services. That diversity creates more value for users and businesses alike. In Minitel’s case, openness and neutrality were guaranteed by the state, an agent bound by a duty to act in the public interest.
Today, cable internet lobbies have claimed that further regulation of internet services inevitably leads to an internet doomsday that will “increase consumer costs, slow investment and innovation and cause years of uncertainty.” Senator Ted Cruz has even called net neutrality “Obamacare for the internet,” urging against online services that “operate at the speed of government.”
But Minitel offers an unusual historical endorsement for state intervention in commercial computer networks. Government involvement can benefit both public and private enterprise, whereas unbridled reliance on the private sector can restrict innovation, as it did for 101 Online.