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  • Ian Ritchie : Scottish Business Insider

A call to BT - the internet stage is set

BACK IN THE LATE 1990s I was invited to a BT evening event and over dinner I was seated next to the group managing director for BT UK.

He had been hired by BT from the Post Office and was finding some of the new communication technologies a bit overwhelming.

“This internet thing,” he asked me, “is it really such a big deal?”

He was facing the prospect that BT needed to expensively re-engineer its entire network away from voice traffic and towards data transmission and he wanted some reassurance that this risk was one worth taking.

He wasn’t really convinced, and he didn’t last much longer at BT, because the internet indeed was a ‘big deal’ and even BT was eventually forced to accept it.

Although first created in the late 1960s, the internet was restricted to government and public sector use for 25 years and was only opened up to the general public in the early 1990s.

Mosaic, the first browser for the world wide web, was launched in 1993, and it was this that started the transformation of the internet into the universal global communication system that we have today.

It has completely revolutionised the worlds of publishing, commerce, broadcasting, banking, retailing and so on.

However, the haphazard nature of its development, and its public sector origins, has left gaps in its architecture which might have been addressed if it had actually been designed for the purposes to which it is now deployed.

In particular two key aspects of any normal modern economy are missing: proof of identity, and an effective currency.

Every modern society needs individuals to prove their identity, particularly to safely undertake commercial activities, and every modern economy needs an effective currency, particularly one that allows casual transactions of low value.

However everybody on the internet is inherently anonymous.

This is a fundamental principle and allows open and unrestricted communication channels which in theory cannot be monitored and controlled – although most repressive regimes seem to manage to control challenging views.

But it does mean that criminals can easily use the internet to pretend to be legitimate and steal from unsuspecting users.

As the internet has now become the major channel for commercial activity this is no longer acceptable.

These days it would be relatively easy to introduce an online ‘identity card’ technology which could prove that the sender is actually who they say they are, eliminating at a stroke most online crime. Users could choose to block unidentified individuals, and most would.

The other missing bit is an online currency.

In particular, publishers of newspapers and magazines have struggled to transfer their business model to the internet.

The traditional model of advertising support doesn’t work well, and has also fallen foul of users installing ‘ad blockers’.

If there was a built-in currency, it would be possible to introduce a system where you could be automatically charged a small amount of money to read a particular article.

Individual news items might be set at a very small fraction of a penny, whereas features and other more valuable articles might be priced at a slightly higher level.

A typical user might get a monthly bill equivalent to a daily cup of coffee or newspaper, creating a business model that would benefit both professional publishers and enthusiastic bloggers.

It’s the sort of mechanism that could be introduced by a major telecommunications giant with huge expertise in billing systems, maybe a company like BT.

Could they be innovative enough?

Don’t hold your breath.

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