Sale on words… 50 cents a pound

In the summer of 1996 I presented a series on CBC Radio’s Island Morning program, produced by Ann Thurlow, called Consumed by Technology. I’ve managed to recover the audio of the episodes, along with the “show notes” and transcripts, from The Internet Archive and I’m posting each episode here for posterity.

This second episode of Consumed by Technology focused on the economics of moving around information on the Internet; it aired on July 16, 1996. Karen Mair was the host.

In 1837, a retired school teacher named Rowland Hill wrote an essay which shook the world of “moving information from place to place,” an essay which is perhaps even more relevant today than it was when he wrote it.

Show Notes

These are the original links that I released with the episode; each is a link to the Internet Archive’s cache of the site at the time.


INTRO: In 1837, a retired school teacher named Rowland Hill wrote an essay which shook the world of “moving information from place to place,” an essay which is perhaps even more relevant today than it was when he wrote it.

To talk about this retired school teacher and about “moving information around from place to place,” Peter Rukavina joins me now in another in the series “Consumed by Technology.”

QUESTION: What exactly was in this essay that shook up the world?

ANSWER: Well, in 1837, Rowland Hill was living in England after retiring from a career as a teacher and administrator. He was quite an eclectic man; he was know for his somewhat innovative teaching methods and his interests in printing, astronomy, mathematics, and transportation.

And in that year, 1837, he produced a pamphlet called “Post Office Reform: Its Importance and Practicability”. And, quite simply, the theories he forwarded in this pamphlet revolutionised the postal system, not only in England, but around the world. And not only in 1837, but in ways which live on today.

You see up until that time, the cost of sending a letter was based on a rather complex set of factors like the distance the letter was to travel and the number sheets of paper you sent and so on. And in fact the cost was usually charged to the person receiving a letter, not the person sending it.

This all resulted in the need for something of an overwhelming postal bureaucracy: not only did the people delivering the mail have to charge for every letter they delivered, but they had to charge a different amount for each one. And that amount had to be figured out.

The system required large number of people, cost so much that is was hard for the common person to use it, and was just generally inefficient.

And then Rowland Hill can along with three relatively simple suggestions:

  1. Postal rates should be lower.
  2. The cost of sending a letter should be the same, regardless of distance.
  3. Costs should be paid by the sender, not the recipient

Although Hill faced some political challenges getting his ideas across, in the end, nothing could stop common sense and by 1840 uniform postal rates, and postage stamps purchased by the sender, were in place across England. Within 25 years his ideas had spread around the world.

What we end up with, 159 years later, is a system here in Canada where you can send a standard letter to any of 12 million addresses in the country, for just 45 cents.

QUESTION: So Rowland Hill gave us a world with cheap, universal postal rates?

ANSWER: Exactly. And not only that, but his ideas changed the model for the way that information was moved from to place to place.

Now that we live in an “information economy” where we’re moving around more and more information and less and less tractors and sheet metal and rolls of carpet, how we pay to send and receive information becomes only more important.

Imagine, for example, a world where it cost $73 to send a letter to Toronto. Or what if international telephone calls were free? Or we had to pay for Island Morning by the minute? What if it cost five dollars to run a TV commercial during Compass?

In a world where money is so important to us, how we pay to move information dramatically affects how we deal with that information. Generally, the cheaper it is, the more we use it.

Now, in addition to the sort of “all you can eat” way we pay for postal service — one fee, as much information as you can stuff in an envelope — there are generally three factors used to charge for moving information from place to place: how much, how far, and how long. Which of these is in place for a particular “information moving device” tends to determine how we use that device in our daily lives.

QUESTION: Well what about telephone service as an example?

Telephone service is an interesting case because the way we pay for it changes depending on where we’re calling. Local calls are “all you can eat” and long distance calls are charged using a combination of time and distance — not unlike postal service before 1837.

Now think of the difference in the way we make local phone calls versus the way we make long distance calls. In any given day, I might make 20 or 30 local phone calls. Because I don’t have to pay for each one, I don’t even think about picking up the phone at the drop of a hat to make a local call.

Long distance calls, however, are a different matter. Because I have to pay for each one, even thinking about making a long distance call is a different kind of thing altogether from making a local call, to say nothing of the experience of actually making a long distance call with the clock silently ticking all the time in the background.

Not it sort of seems a little silly to be describing all of this is such intimate detail; it seems like such a natural part of our lives that we just take it for granted that to call across the street is free and to call Halifax costs. But sometimes it’s useful to step back for a minute and realize that all of these distinctions are ones we’ve allowed to be put in place; take these arbitrary distinctions as to where is “near” and where is “far” and multiply their effect over millions of phone calls over the years, and you’re talking about a pretty major issue. And an issue which not only affects the size of our phone bills at the end of the month but which can determine how communities relate to each other.

Take North and South Granville, for example, close to Hunter River in the middle of the Island.

South Granville is in the Hunter River “964” telephone exchange and North Granville, just over the hill, really, is in the New London “886” exchange. Now I’ve been told that the natural inclination of people in South Granville is towards Hunter River and Charlottetown, both local calls, whereas the natural inclination of people in North Granville is towards Kensington and Summerside, again, both local calls. As a result, the natural inclination of North and South Granville is not towards each other. It seems like such a simple and insignificant thing on one level, but when you start to think about all of the friendships and marriages and business arrangements that have been subtly affected by this over the years, it looms pretty large in the grander scheme of things.

And again, it’s really all about how we charge for moving information from place to place.

QUESTION: You mentioned the “information economy”… how do things like the Internet fit into all of this?

ANSWER: Well, although the Internet has been around, in one form or another, for over 20 years, it’s only in the last couple that people like you and me have started to use it. And so how we pay for using it — what “information moving” model will apply is only in the process of being figured out.

By far the dominant model right now is something which shares something in common with long distance phone service and something in common with the revolutionary postal system of Rowland Hill. In most cases when you sign up for an Internet account you pay a certain fixed monthly fee which allows you to spend a certain number of hours connected to the Internet… $30 for 30 hours, for example. Any time that you spend online over that fixed monthly amount is billed by the hour.

QUESTION: So the clock is always ticking?

ANSWER: Yes indeed, and, as you might imagine, that affects the way that people use their time online.

The Internet is often compared to the public library; they’re both places where lots of information is stored and organized.

Think of the feeling you get from wandering around a public library: you might wander over to the magazine section and read the latest issue of the New Yorker, browse though the Irish travel book section for a while, maybe try and find the latest John Grisham novel. Because using public libraries is free, and because you can take as much time as you want to find what you need, there’s a certain kind of freedom that libraries bring to gathering information.

On the “billed by the hour” Internet, however, that freedom is gone. Although you can wander around the Internet in much the same way you can wander around a library, and although you’re not paying for the actual information you’re browsing, there’s always that feeling that the clock is ticking. It’s not unlike the feeling that you get making a long distance telephone call.

One of the reasons I know this is true is because I’ve experienced another way of using the Internet, a model which is gradually becoming more common, and that is paying a fixed monthly fee for unlimited Internet use. This is a model very similar to the way we pay for cable television; in essence, “all you can eat.” Without that invisible clock ticking in the background, “surfing the net” is an entirely different experience.

QUESTION: Do you expect that this “all you can eat” approach is going to be the way of the future?

Well, it’s certainly preferable from a consumer’s point of view, but it also makes it hard for someone in the Internet business to make any money.

The third possible model for paying for the Internet, and the one which perhaps makes the most amount of sense for someone in the Internet business and the least amount of sense for consumers, is the “pay by the byte” model. This is similar to the way we pay for telegrams: by the word.

In essence, we would pay for the actual amount of information we browsed on the Internet, no matter how long it took. If we look up two books in the Library of Congress online catalogue, it might cost us 5 cents. I we look up ten books, it might cost us 25 cents.

Just to give you some idea of the relative size of pieces of information: the book Anne of Green Gables weighs in at just under half a million bytes — one byte equals one letter or space in the book. The entire Canadian Constitution is about 100,000 bytes long while the American Declaration of Independence is about 7,000 bytes long. The Encyclopaedia Britannica article on dandelions is 508 bytes long.

Now remember, in this “pay by the byte” model, the clock isn’t ticking, but the “information meter” is. It’s more the bookstore way of doing things than the public library way of doing things.

The “pay by the byte” way of charging for Internet use isn’t really common for consumers yet, but it’s becoming an increasingly common model for charging businesses for Internet access.

QUESTION: So the Internet will be “pay by the minute,” “all you can eat,” or “pay by the byte?”

ANSWER: In the end it will probably be some combination of the three. No matter what the final model is, however, its going to have a dramatic affect on the role that the Internet plays in our life.

Just to introduce one final wrench in the works: there’s a lot of talk now about “convergence” — about telephone and television and radio and the Internet all merging into one sort of “digital appliance.” When you hear people talking about a “set top box” this is what they’re talking about.

Things start to get really weird when you start thinking about telephone service — the new “digital appliance” telephone service — being billed not by the minute or by distance like we’re used to, but by the amount of information that is communicated.

Hello mother, I’m doing well” might cost you a tenth of a cent, “Hi Mom, all okay!” might cost you half as much. We could end up with a whole generation of people talking in a weird abbreviated code.

QUESTION: We’d have old Rowland Hill rolling over in his grave…

ANSWER: Indeed. Just remember, the next time that you pick up the phone or send a letter or pick up the newspaper, or watch TV, you’re helping to move information from place to place. And how you’re paying for it probably has a lot more to do with how you’re doing it than you realize.

EXTRO: Peter Rukavina operates Digital Island in Kingston. He’ll be back next week for another in the series “Consumed by Technology.”

Four inches of metal strapping for 37 cents

In the summer of 1996 I presented a series on CBC Radio’s Island Morning program, produced by Ann Thurlow, called Consumed by Technology. I’ve managed to recover the audio of the episodes, along with the “show notes” and transcripts, from The Wayback Machine and I’m posting each episode here for posterity.

This first episode of Consumed by Technology focused on the coming of the commercial realm to the Internet; it aired on July 9, 1996. Wayne Collins was the host.

It’s hard to believe that only two years ago we were talking about the Internet as a lofty academic sort of place where you could do things like search the Library of Congress catalogue and read research papers on fruit fly migration patterns. The business world has now discovered the Internet and it’s as if a giant shopping mall has suddenly moved in next door to the old “Internet public library.”

Show Notes

These are the original links that I released with the episode; each is a link to the Internet Archive’s cache of the site at the time.


INTRO: It’s hard to believe that only two years ago we were talking about the Internet as a lofty academic sort of place where you could do things like search the Library of Congress catalogue and read research papers on fruit fly migration patterns.

The business world has now discovered the Internet and it’s as if a giant shopping mall has suddenly moved in next door to the old “Internet public library.”

In the first of a new series we call “Consumed by Technology,” Peter Rukavina joins me now to talk about “going shopping in cyberspace.”

QUESTION: So business has jumped online…?

ANSWER: Yes, in a very, very big way. As you suggested, it’s hard to believe that just a couple of years ago there was still raging debate about whether even mentioning something vaguely commercial-sounding on the Internet was acceptable. Many long-time Internet users — people in universities and colleges and governments — were convinced that if the Internet “sold out” to business, it would loose the sort of fuzzy, anarchic “information sharing” feeling that had developed over 20 years of being something of a “secret nerds-only club.”

Now, all that’s changed and you’d be hard pressed to find a business, small or large, that isn’t on the Internet right now or in the processing of getting there.

QUESTION: Now when you say that a business is “on the Internet,” what does that mean?

ANSWER: That can mean many things. What it usually boils down to is something called a “home page” which is really just a starting place, a “page one” for a business’ electronic presence.

Some businesses just have a very simple home page: they list their address and telephone number, have a paragraph about what it is they do, maybe a picture or two of their building or their products and that’s it.

Other businesses dive in with both feet and have thousands of pages of product information, online order forms, lifestyle magazines, contests and whatever else they can dream up to get people to come to their Internet site and hang around for a while.

No matter how extensive their Internet presence is, most businesses are trying to do two things online: first, to generally build their “brand identity” and second to “sell stuff.”

QUESTION: By “selling stuff” do you mean something along the lines of “electronic catalogue shopping?”

ANSWER: I can answer that best with a couple of examples. I must admit to being something of an “home shopping” cynic. I’ve never been one to order things from the “Home Shopping Channel” and I’m not really a catalogue shopper. But recently I’ve become something of an bona fide “online shopper” so I can tell you some real life “stories from the field” to give you some idea what it’s actually like.

For me, online shopping really works for three things: buying CDs and tapes, buying books, and buying computer software. Lately I’ve found myself doing each of these at least a couple of times a month.

QUESTION: When you talk, for example, about buying a book online, explain to me how the process actually works.

ANSWER: Well, typically I’ll have a specific book in mind. I’ve not really found the Internet a very good place to browse around for books — it lacks the “feel” of a genuine good bookstore.

So with my specific book in mind, I’ll dial up the Internet, go to a online bookstore’s “home page” and select the option to search their catalogue of books. I can enter a title, or an author, or a subject and get a list on my screen of all the books in their store that fit the bill.

One example: a couple of months ago I rented the movie “Speechless”, which is about a man and woman set inside the centre of a U.S. federal election. She manages the Republican campaign, he manages the Democrat campaign… somehow they meet and fall in love and get married.

Now I knew this was all based on a true story and I’d read somewhere that the two “real people” had written a book about it. But I had no idea who they were. To find the answer to that question, I relied on a low-tech solution and phoned my brother Steve. When he heard what I was looking for, he immediately said “oh, you mean the book by James Carville and Mary Matalin…”.

So I had my answer.

Now, being the home shopping cynic that I am, the first thing I did was phone my local bookstore. No sense in buying something online if I can just go down the block. I told them I was looking for a book by James Carville and Mary Matalin that has something to do with the U.S. election.

They searched in their computer and nothing came up.

They looked on their microfiche and there was nothing there.

They suggested, perhaps, that no such book existed.

They sort of sounded like maybe I was bothering them and I should leave.

So I did. And I went home and sat down at my computer and decided it was time to give online shopping a whirl.

I ended up at a bookstore called “” (which, I later found out, is somewhere in Seattle).

From their “home page”, I clicked on “search our catalogue, ” entered “Carville, James” in the blank, clicked on “Search Now,” and, a couple of seconds later, the titles of seven books were listed on my screen, including three different versions of why I came to know was called “All’s Fair: Love, War and Running for President” — paperback, hardcover, and audio cassette.

I clicked on “Audio Cassette” and then “Buy Items Now”, entered my name, mailing address, and credit card number, told them how I wanted the book shipped and that was it. A week later the book was waiting for me at the post office.

Sub’ in CDs and tapes for books, and the process works much the same way.

QUESTION: When I hear you talk about giving your credit card number out over the Internet, alarm bells go off in my head… is that something that’s safe and secure?

ANSWER: It depends on who you talk to. And it all depends on who you give it out to. Nothing that passes through the Internet is ever 100% secure. There will always be someone, somewhere, trying to get at that information and use it for evil purposes. Just as there will always be people breaking into houses and people stealing cars.

But just as you can put a deadbolt on your front door, you can be careful about how you give out “secret” information — like your credit card number — online. Most Internet stores operate something called a “secure server.” This means, in essence, that when any information you send form your computer to their computer over the Internet, it’s encrypted so that, even it is intercepted somewhere along the line, it will be useless gibberish.

Now encryption has been around for a long, long time. But encrypting credit card numbers and the like on the Internet has only been around for a little more than a year, so it’s not exactly what you would call a “mature” technology. That said, there are thousands of people now buying thousands of things every day online and it’s rare if ever that you hear of a major security problem. Pretty soon places like Mastercard and Visa and the major banks will be getting into the game themselves and, presumably, things will only get more secure.

But there will always be a risk. I feel about as comfortable in typing my credit card number over the Internet as I do in giving it to some anonymous order clerk at a toll-free catalogue order desk; I know there’s some risk, but I’m willing to take the small risk for the convenience it offers.

QUESTION: You mentioned buying computer software over the Internet — is that any different that buying books or CDs?

ANSWER: The real difference is not in the actual ordering — that works pretty much the same — the real difference comes in the delivery. Whereas a book or a CD is sitting in some large warehouse somewhere in Seattle and has to be physically shipped from there to here, computer software is, quite literally, invisible. Software is digital information, and the Internet moves digital information, so the neat thing about buying software online is that you can get it delivered right over the Internet.

Enter your name and credit card number and the software you order gets automatically transferred to your computer where you can set it up and use it right away. This is true whether it’s a word processor or a spreadsheet or the latest video game.

QUESTION: Instant delivery, in other words…?

ANSWER: Not exactly instant. If you’ve ever bought a piece of software from a store, you know that often it comes on upwards of 10 or 20 floppy disks, each which holds quite a lot of information. To squeeze that amount of information over the Internet takes a bit of time. I recently ordered a scheduling program over the Internet, for example, and it took about 45 minutes to transfer from the store’s computer to mine. So it’s not quite instant, but it’s a lot easier than getting in my car and driving to Seattle.

QUESTION: Should Island retailers fear this losing business to these new “cyberstores?”

Yes and no. I think retailers in general, no matter where they are located, are going to have to start looking at their competition not as the guy down the street but the guy — or the thousands of guys — all around the world.

As much as I’d like to be able to buy locally, why should I order a book or a CD or a piece of software from someone down the street with a poor selection, grumpy staff and high prices when I can get great selection, responsive staff and decent prices online?

There are obviously some businesses that have to worry more than others. I don’t think buying furniture or tractors or heads of lettuce online is going to take off anytime soon — there are certain things that people are, I think, always going to want to pick up or kick the tires of. But if you’re selling something which is pretty generic — books and CDs and software yes, but also everything from jeans to modems to tea towels — being quick and lean and very customer friendly is going to become more and more important or you’re going to find your customers “going to Seattle.”

Or to a new upstart just around the corner with a low-rent warehouse, a big computer and zero overhead.

What the Internet cannot offer, and what I don’t think it will ever be able to offer, is the feeling that comes from truly amazing customer service be real friendly local people.

Perhaps the best example of the this for me came up last summer. It was Saturday night at 7:30 and we were in the middle of renovating our bathroom and we needed 4 inches of metal strapping before we could continue. I got in my car a drove up to Bobby Clow’s store in Hampshire before he closed at 8 o’clock and, sure enough, he had metal strapping. Now a whole roll was about 100 feet or 1000 feet and cost about 12 or 15 dollars. I only needed 4 inches. No matter. Bobby snipped off 4 inches and charged me 37 cents and I was on my way.

I don’t think I’m in any hurry to look for 4 inches of metal strapping for 37 cents on the Internet.

EXTRO: Peter Rukavina operates Digital Island in Kingston. He’ll be back next week for another in the series “Consumed by Technology.”