While free services are a defining feature of the Internet, from an economist’s perspective they may encourage inefficient use of resources. As there is no direct monetary charge for utilization of many information resources, their value will be reflected in the time users are willing to invest in waiting due to congestion. It can be assumed that users will invest time in trying to gain access to a service up to the point that their time plus the cost of the service equals the value of the service. Waiting is a non-productive investment of resources. Perhaps if this value was captured by information providers through fees, it could be applied to upgrading equipment … We are just now getting to the point that congestion is causing significant consumption of resources; whether this becomes an increasing problem will be a function of both technology and pricing policies.
Predictor: Keller, James
Prediction, in context:The 1995 book “Public Access to the Internet,” edited by Brian Kahin and James Keller carries the chapter, “Public Access Issues: An Introduction” by Keller, a research associate and coordinator of the Information Infrastruture Project at Harvard University. He writes: ”As the network grows, the culture of sharing is increasingly challenged. Servers supporting free information resources are becoming congested and in some cases virtually inaccessible during certain times of the day. It is no longer clear whether it will continue to be viable for many institutions to support free public-access computers … Ironically, tools such as Gopher that have rationalized the distributed and heterogeneous environment of the Internet are now becoming victims of their own success. While free services are a defining feature of the Internet, from an economist’s perspective they may encourage inefficient use of resources. As there is no direct monetary charge for utilization of many information resources, their value will be reflected in the time users are willing to invest in waiting due to congestion. It can be assumed that users will invest time in trying to gain access to a service up to the point that their time plus the cost of the service equals the value of the service. Waiting is a non-productive investment of resources. Perhaps if this value was captured by information providers through fees, it could be applied to upgrading equipment … We are just now getting to the point that congestion is causing significant consumption of resources; whether this becomes an increasing problem will be a function of both technology and pricing policies.”
Date of prediction: January 1, 1995
Topic of prediction: Information Infrastructure
Subtopic: Cost/Pricing
Name of publication: Public Access to the Internet (book)
Title, headline, chapter name: Public Access Issues: An Introduction
Quote Type: Direct quote
Page number or URL of document at time of study:
Pages 40, 41
This data was logged into the Elon/Pew Predictions Database by: Guarino, Jennifer Anne