CYBERYEAR IN REVIEW 1996 DECEMBER 25, 1996 TRANSCRIPT

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Betty Ann Bowser provides a background report, and Paul Solman of WGBH-Boston leads a panel discussion on how the Internet fared in 1996. Click here for a RealAudio version of this segment.

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RealAudio for this segment is available. Browse the Online NewsHour's Cyberspace Index for past programs and online forums.

PAUL SOLMAN: At the conclusion of the NewsHour every night we say, "We'll see you online." 1996, in other words, was the year "our" program made its first appearance in cyberspace. Now, that's not as fancy as it may sound. We simply have a computer on which the NewsHour posts scripts, pictures, discussion. Almost any of you can get to that information with a computer of your own by hooking up to an international system of cables known as the Internet. Was 1996 a breakthrough year for the Internet and cyberspace? Well, first some background from Betty Ann Bowser.

BETTY ANN BOWSER: It's been the busiest year ever in cyberspace. The Internet has become the place to find games, research, e-mail, and news. Eleven million households use the World Wide Web, the easily accessible part of the net. That's double what it was last year. Schools are coming online too, thanks to money set aside by the telecommunications act signed by President I in February. And more and more businesses have hooked into the Web, even developed their own "intranets," their own internal versions of the Internet. But people are doing more than just accessing the Web. They're also appearing on it. A few years ago only a few thousand businesses and individuals had pages on the Web, those familiar WWW. addresses at the ends of ads. Now there are 50 million Web pages. Here, people can do everything from sell CD's, advertise needlepoint, or show of f their pet guinea pig. News agencies from Microsoft NBC to the Wall Street Journal are making use of the web to reach news junkies.

SPOKESMAN: NBC News and Microsoft will revolutionize the way you get news.

BETTY ANN BOWSER: But the use of the Internet really took off last December, when Microsoft, which already dominated the software market, decided to throw much of its time and money into cyberspace. Microsoft's Brad Chase.

BRAD CHASE, Microsoft: A year ago we hardly had anybody working Internet-related technologies. Now, every product group in the company has a focus on Internet-related technologies.

BETTY ANN BOWSER: Foremost among its new products was a better Web browser, software that makes it easier to find one's way around the Web. It's Explorer program was supposed to take direct aim at the popular browser Netscape. Robert Andrew, Netscape's web master, says right now his browser gets the most hits or visits of any site on the web.

ROBERT ANDREW, Netscape: When we started out we were doing 6 million hits a day, and we're over 120 million hits a day now. And that's just unbelievable growth.

BETTY ANN BOWSER: All year, Netscape, whose workers put in 20-hour days to remain competitive, and Microsoft jockeyed back and forth with charges, counter-charges, newer programs, newer ideas. Both companies forecast immense changes and immense growth on the Internet.

ROBERT ANDREW: The technologies that we're going to be feeding out over onto the Net are going to be completely different in a year from now. And we have to take a good gaze into the crystal ball to understand exactly what we're going to be trying to feed out, and what we're trying to showcase to technologies to people who are just getting onto the Net.

BETTY ANN BOWSER: There also was growth in the number of Internet providers, companies that provide a path to the Internet. Corporate giants like AT&T, Sprint, and MCI joined three thousand to four thousand other Internet service providers competing for customers. But as the number of customers grew, so did the problem. In August, both Netcom and American On Line crashed, leaving millions of people without service for 17 hours. And every day there are busy signals and slowdowns as the Internet tries to adjust to more people spending more time online. Some people, like Prof. Helene Radovsky just give up.

HELENE RADOVSKY: It is frustrating. I have a couple of times just turned off--well, logged out of the Internet--turned off the computer and done something else because I couldn't get anything that I wanted.

BETTY ANN BOWSER: The Internet's popularity also caused some social problems as well. Politicians and parents became concerned about whether all the material on the Net was appropriate for children. Under the new telecommunications law it is now a felony to make indecent material available to children.

SEN. JAMES EXON, (D) Nebraska: It is not an exaggeration to say that the worst, most vile, most perverse pornography is only a few click-click-click away from any child on the Internet.

BETTY ANN BOWSER: In June a three-judge federal court in Philadelphia blocked enforcement of the act, saying it was unconstitutionally vague and too broadly written. The Clinton administration appealed, and this December the Supreme Court agreed to hear the case. The decision from the court is expected to be a landmark ruling on free speech in cyberspace. But despite concerns about allowing easy access, the Web gets more and more accessible daily. At the top of many wish lists this season, Web TV, bringing the World Wide Web into the living room.

PAUL SOLMAN: Now to our discussion. Esther Dyson is editor of the computer newsletter Release 1.0, and chairman of the Electronic Frontier Foundation, which studies Internet issues such as free speech and commerce. Jeff Beesos is founder and CEO of Amazon.com, and online book-selling business. Clifford Stoll is an astronomer and the author of the book Silicon Snake Oil: Second Thoughts on the Information Superhighway, and Steven Levy is a senior editor and technology columnist for Newsweek Magazine. Welcome to you all, and thanks for coming. First of all, Steven Levy, was 1996 a breakthrough year for cyberspace and the Internet?

STEVEN LEVY, Newsweek: (New York) Well, the last few years, every year has been a breakthrough year. And I think for the next few years every year will be a breakthrough year. The growth just keeps coming and coming, and as enabling technologies come online, it's going to get bigger and bigger. This year I think was the first year where pretty much anyone you meet in business was supposed to have an e-mail address. It asked them, what's your e-mail address, instead of asking, do you have an E-mail address?

PAUL SOLMAN: And e-mail is what for those of us who don't know, or those people who don't know?

STEVEN LEVY: It's simply an address in some sort of vaguely obscure computer code which enables you to accept and send out messages electronically. You know, it's actually a very effective and efficient way to communicate with each other. And next year I think the big enabling technology will be the ability to make transactions, you know, to send money online. And I think that will fuel the growth even more.

PAUL SOLMAN: Esther Dyson, ‘96, the year of the Internet for you?

ESTHER DYSON, Industry Analyst: (New York) Yes. It was--they're all breakthrough years, as Steven said. I think what really happened this year was the Internet became accepted. People understood--thought they understood what it was, even if they didn't use it. It was considered something normal. Now we need to go further and get people to understand what it actually does and what it does not do. For example, it doesn't send porn at children. It doesn't throw dirty pictures into your house. What it does do is enable you to choose what it is you want to watch. And that's why it's exciting.

PAUL SOLMAN: And so you mean that porn is out there, you can get it through the Internet, but it's not being pushed at you, is that--

ESTHER DYSON: Yeah. It's in bookstores too, but that doesn't mean people are throwing it at children as they walk by the books.

PAUL SOLMAN: But children can be using this in an unsupervised way, and that's the problem.

ESTHER DYSON: Yeah. That is a danger, and it's something parents should be aware of, not the government.

PAUL SOLMAN: Clifford Stoll, you were on the show just a year ago expressing considerable skepticism about the Internet, specifically with regard to education, as I remember. Has 1996 converted you to the--to cyberspace?

CLIFFORD STOLL, Astronomer/Author: (San Francisco) I'm impressed with how few people have questioned the phenomenal hyperboleant, self-promotion of the Internet, how so rarely do I hear anyone give any skeptical comments about the Internet. It seems to be oh, if you're not online, then the train of progress is leaving the station, and you're sitting back at the platform. I can't figure out why this big bubble of hyperbole keeps growing and growing, but it still has. So this is the year of the Internet. It is also the year of Internet hyperbole as well.

PAUL SOLMAN: Not a big deal? You don't think the Internet is a big deal, and 1996 was a big deal with respect to it?

CLIFFORD STOLL: Well, how many people listen to AM radio? What, maybe a hundred million people do every week? Well, that's ten times the number of people who log into the World Wide Web every week. How come you don't hear people talking about wow, AM radio, lots of people listen to it?

PAUL SOLMAN: Well, it's not new. It's not news. I mean, right?

CLIFFORD STOLL: Well, of course, and this year, it's news if your business is actually making money on the Web. You can--there's probably several dozen, maybe even fifty or a hundred businesses that are making money from the World Wide Web, despite hundreds of thousands investing quite big sums of money in Web page development. It strikes me as curious that few people ask obvious questions about, hey, why, why is so much ado about what seems to be not very profitable for a lot of people?

PAUL SOLMAN: Well, Mr. Beesos, you're profitable yet? This is Amazon, the bookseller. How do you size up ‘96, and is it--was it a good year for business on the Internet?

JEFF BEESOS, Amazon.com: (Seattle) It was a great year for business on the Internet. A lot of the transaction-based businesses on the Internet are just getting started. It's very early. It's day one. Somebody described this in a way that I think is just perfect, which is what's happened on the Internet so far is like the first ten seconds after the Big Bang. A lot has happened, but there's still a huge amount to come. There's no question but that while there has been a lot of hype about the Internet, there's also a lot of substance. It's not like some of the past technologies that have been over-hyped like artificial intelligence. The reason that this is different is because there are no technical breakthroughs that are necessary. So you don't have to look at the technical claims with the same sort of skepticism. The thing that's interesting about the Internet is that it's ubiquitous. The fact that there are so many people who can now use this technology that's been around for a very long time, and whenever networks start to get ubiquity, that's when they really take off and the growth is always exponential when that happens.

PAUL SOLMAN: I want to ask Esther Dyson, I want to ask you about the Communications Decency Act, which was the biggest legislative event of the year, with regard to the Internet. Could you explain that and where that stands now? Because you were talking about porn earlier.

ESTHER DYSON: Yeah. Very simply, it was an attempt by the Congress, some of it well meaning, some of it probably just politically cynical, to control the content on the Net by saying you can't make indecent stuff available to minors. It had the unfortunate side effect of any kind unavailable to anybody. And it set the principle that the government can control free speech.

PAUL SOLMAN: It also made some decent stuff unavailable to people, right?

ESTHER DYSON: Yes, things like various medical discussions. And, of course, we're afraid that it also means, well, now, if you have a medical treatment that's not sanctioned by the FDA, or so--this concept of government control, of content, is dangerous and scary, and the Electronic Frontier Foundation and a number of organizations, including the ACLU, challenged it in court. Now, you know, it's not that we're in favor of children seeing porn, or we like hate speech or dirty stuff. It is simply that we think this is the job of the individual and the parent to control, not the government. And there's a new technology out called the Platform for Internet Content Selection, which is called of like a smart and very flexible V-chip that allows people to specify exactly what they want their children to see or not to see, and then they can put it on their computer, and the parent gets to control what comes into the house.

PAUL SOLMAN: So where's the law now?

ESTHER DYSON: The law. Sorry about that.

PAUL SOLMAN: That's okay.

ESTHER DYSON: The law has been challenged in the court. It was overturned by a federal court but not by the Supreme Court. The government has appealed that. So now it's going to be heard in the Supreme Court sometime this spring or early summer. And any--any serious lawyer who looks at it agrees that it's unconstitutional. So we're fairly confident it's going to be overturned. A lot of--we talked to some of the Senators. They said this thing is ridiculous but I can't vote against it because I'd upset my constituents. So it was a lot of political maneuvering that made it happen.

PAUL SOLMAN: Steven Levy, you agree with Esther Dyson, the law will be overturned, the Supreme Court will just throw it out?

STEVEN LEVY: I think so. I attended the closing arguments of the challenge to the law on Philadelphia. And, you know, the lawyers, you know, opposing it made such a good case that the three-judge panel accepted it pretty much wholesale. Really what it was is a talk against free speech itself. And it's not just important to the Internet because sooner or later I think we're going to get almost all our media from some sort of successor to the Internet. So it really is a question of what kind of free speech we're going to have into the next century. And the way the case was decided, the Supreme Court is actually going to have to rule on the basic facts agreed to, you know, by that three-judge panel. So there's really an excellent chance that that provision is going to be overturned.

PAUL SOLMAN: What do you mean, a successor to the Internet? Most people are having trouble with even figuring out what the Internet is.

STEVEN LEVY: Well, you might wind up just calling it the Internet. But I think it's basically a system which is going to evolve as more and more people use it, and, you know, the things we use on it, there's not much video on the Internet now, but I think that's going to come, as it becomes more and more, it'll replace itself, just like the cells in your body replace themselves every seven years or so, I think the pipes of the Internet are going to get bigger and bigger and replace themselves. So--

PAUL SOLMAN: Cables, you mean, the way this information is currently sent?

STEVEN LEVY: That's right. The big problem on the Internet now is that, you know, there's not a big enough set of pipes to send enough information to make it run as fast as people would like.

PAUL SOLMAN: By pipes you mean cable--

STEVEN LEVY: Exactly.

PAUL SOLMAN: --that's laid under the ground.

STEVEN LEVY: Exactly.

PAUL SOLMAN: Like phone cable, except it's--

STEVEN LEVY: Exactly. And it's not just the cables. It's the devices people have within their homes or even their offices that allow the information to move fast enough. It's a big problem, but despite the problem, people, you know, love to use the Internet, and they're finding like a lot of real use to the Internet, and it's really not fair to criticize it, as Cliff does, to say, well, a hundred million people aren't using it now. When radio first came online, there were very few people using it. It turned out to be a significant medium, the same with television, and the same with the telephone. So, you know, this is something which I think has caught on actually quicker than those technologies, and the potential is really, you know, as significant.

PAUL SOLMAN: Mr. Stoll--

ESTHER DYSON: May I--

PAUL SOLMAN: I wanted to get Mr. Stoll to respond since he was just mentioned, that's Cliff. So, Mr. Stoll, any response to that?

CLIFFORD STOLL: Hey. I've been online. I've been on the Internet since 1973, ‘74. This is the 51st birthday of the invention of the digital computer. Computers have been around longer than color television, and boy, computing is famous as the land of the vaporware, it's land where everything is promised, just wait, real soon now all this wonderful stuff will happen. Well, it's always in the next release. Just wait, around the corner all this great stuff is going to happen. I have no doubts that one day there will be wide pipelines and fast cables going into everybody's home, but I doubt that I'm going to live to see that day. I doubt that many viewers of this station right now will live to see that day. It's always sometime in the future. As an astronomer when I hear people talk about the first 10 seconds after the Big Bang, I think, hey, you know, we're on the order of billions of years, ten or twenty billion years, since the Big Bang. Well, it may be that lots of businesses become profitable on the Internet, but it might take a long time, and that long time might be measured not in years or months but in decades.

PAUL SOLMAN: But I actually, trying to prepare for this, tried to buy a book on the Internet actually from Mr. Beesos's system there and was able to buy a book that I had been looking for for a very long time, just this afternoon, before coming and starting to do this. It seems to me there are a lot of uses to which this stuff has been put. Mr. Beesos, are you making money now on the Internet?

JEFF BEESOS: Well, we're actually--

PAUL SOLMAN: I don't count my recent transaction, please, but I mean--

JEFF BEESOS: Now we are. Thank you. We're actually investing in marketing and staffing, and other things at a rate that isn't commensurate with our size because we're such big believers in the Internet, and that costs us not to be profitable. But we're--our revenue growth and all the things that make sense for us to do strategically, all the indicators are that this is going to be a huge success. And we're not the only example of transaction-based businesses online that are going to be successful.

PAUL SOLMAN: So even you are not making money yet?

JEFF BEESOS: No. That's right.

PAUL SOLMAN: Ms. Dyson, what are people using this for that you might be able to convince Mr. Stoll makes it a good thing now as opposed to millions of light years, or millions of years from now?

ESTHER DYSON: Well, I don't want to be a missionary. I don't think you're a failure if you're not on the Internet, but it is a very powerful tool, both for good and for evil. The in terms of business thing, I think it's much more valuable not simply to do business on the Internet and create new businesses but as a means of making existing businesses more efficient. My favorite example is something real and simple. It's the Federal Express Web site. People think of the Net as a medium for advertising, but it's really a medium for customer support. It's closer to an 800 number. So if you want to know where your package is, you really don't care about Federal Express's brand image, you don't care about its beautiful airplanes, you don't care about its advertising, you care about personal information that's important to you. And what makes it so valuable is that it's a one-to-one medium, so you go to their Web site and find out where "your" package is. And so Federal Express is not considered an Internet company but it is vastly improving the business it delivers by using the Net.

PAUL SOLMAN: Mr. Stoll, you've talk about the Internet as "a guide of how to be anti-social in that it undercuts our schools, our neighborhoods, and our communities." What do you mean?

CLIFFORD STOLL: The Internet is a terrific way to waste time that would otherwise be difficult to waste. It's a great way to waste time at work, at home, and, as such, the cost of the Internet, the Internet promises omniscience. You can get any information anywhere promises a sort of omnipotence. You can do anything, but there's a very deep price, almost a Faustian price. What it takes from us is our time. Hours, days of our life go floating out our modem not to be returned. The cost of heavy Internet use is, oh, it takes my useful time away from me, time that I could be spending studying, doing research, chatting with friends, interacting with my neighbors, be with my family.

PAUL SOLMAN: I wanted to ask Mr. Beesos, aren't people better off browsing in a bookstore than doing what I did today in buying this book sight unseen as it were?

JEFF BEESOS: Well, it depends on what your objectives are. You know, Amazon.com carries 1.1 million titles, which is between thirty and forty times as many titles as you'd find in a mall bookstore and six times as new titles as you'd find in the world's largest physical superstore. So many of our customers just wouldn't be able to find the books they're looking for, other than Amazon.com. The other thing is that in terms of time, you know, as Clifford is talking about, shopping at Amazon.com saves you a huge amount of time because the book, it's sent straight to your office or desk, to your office desk or home. So it's a big deal in terms of time savings. And like the Federal Express Web site too, that saves a lot of time.

PAUL SOLMAN: I wanted to ask about privacy. Mr. Levy, I found out today that I could for $20 in one day get my--somebody, anybody could get my Social Security number. And there are two different vendors on the Web for that. Doesn't something like that scare you, or--I mean, it certainly made--it gave me pause.

STEVEN LEVY: Yeah. It's terrifying, and I think privacy is really one of the issues that we're going to have to nail down as we become more connected, as the Internet becomes more popular. One aid we can use is the adoption of strong encryption, which is the kind of technology which scrambles things so eavesdroppers can't get hold of it. But the problem with that is government, our government in particular, sees a big problem in allowing this technology to, you know, be widely adopted, because they feel that they want to maintain their ability to conduct surveillance on criminals. So they've managed to hold back the, you know, widespread adoption of this. And it's a very big issue in Washington.

PAUL SOLMAN: Do you have more of a sense of community--this will be my last question--or less using the Internet, Mr. Levy? I'm getting back to Mr. Stoll's last point. More of a sense of community, do you feel more connected to the world, or less?

STEVEN LEVY: I think it's actually way--you know, it can cut both ways, but I think overall, you have to say it strengthens communities, maybe not your geographic community, though I think, as it becomes more widespread and everyone in the community gets online, you'll be able to strengthen your immediate physical community, but I think it starts a different kind of community. If you're isolated and you're not able to get out to a coffee shop and, you know, can meet a lot of different people, you're in an urban area, you have a way to get in touch with people in say a breast cancer support group, or, you know, your friends who support the Cleveland Indians, no matter where you are. You could be at a totally isolated rural area and be in touch with a community of people who think like you. So I think in that sense it actually can strengthen communities.

PAUL SOLMAN: All right. Well, thank you all very much.

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