The Computer Utility: Market Entry in Search of Public Policy

Abstract

RECENT developments in computer hardware and programming now enable several users to share the stored information and logic capability of data processing machines. The subscriber, no longer adjacent to the computer, may access the computer's logic and memory via telephone lines tied to the data center. Indeed, the combination of data centers, communication lines, and terminal equipment form the elements of what some forecast as a new industry, time-shared services or what others call the computer or information utility. Services arising out of this industry include bibliographic retrieval, stock quotation, hotel reservations, legal indexing, market reports, banking by phone, hospital information systems, common data files, program libraries, to mention a few. Such services soon promise to be international as well as domestic in operation and scope. Last year, the Federal Communications Commission initiated an investigation into the policy implications of computer time-shared operations.' The Commission seeks to determine its statutory obligations given what it terms the 'growing interdependence' of computers and communications. This paper proposes to examine one of the issues posed by the Commission's investigation. Specifically, we will (i) state the regulatory issues as the Commission views them; (2) discuss the background events that prompted the inquiry; and (3) evaluate some of the competitive issues associated with timeshared computer services. We will conclude that the ground rules for market entry are at stake in the FCC's investigation.