Global Information Summit 2000

Net Conference

Session 2 - "Electronic Commerce in the Digital Divide Era "

Start-Up 2
From: Lee A. Daniels (11) Self-Introduction
My name is Lee Daniels. I am the CEO of Titus Communications, one of the leading Broadband companies in Japan. As we continue to hype the merits of broadband in facilitating higher speed data applications, I am always interested in the progress of alternative technologies - specifically ADSL and Wireless. I have heard that DSL technology has some unique challenges in Japan relative to the spectrum allocation of NTT for ISDN service and the quality of the phsyical plant. I do believe that these emerging technologies will play a key role in Japan's ecommerce development and would appreciate any insight on the viability of these type of infrastructures in Japan.
From: Takashi Tanemura (12) presumptions
It was very interesting to hear Mr. Schrader's aggressive presumptions. If I was living in the U.S., I would probably agree with the presumptions. But living in Japan, I just can't imagine 80% of all commerce will be dependent on the Internet in some meaningful way. Although we have a computer connected to the Internet via cable at home and that is pretty good regarding other homes without cable access, my parents don't use it as a shopping tool. While advanced-age problem is being discussed in Japan, if they are reluctant to use the Internet for shopping, I think 80% will be too high in Japan.
From: Anthony M. Rutkowski (13) personal experience
(11) Lee A. Daniels and Wireless. I have heard that DSL technology has some unique challenges in Japan relative to the spectrum allocation of NTT for ISDN service and the quality of the physical plant. I do believe that these emerging technologies The same pseudo problems are raised by the old established telcos worldwide. A personal experience: I was told directly by the ADSL product manager of the local legacy telco that there was no way to provide DSL service to my neighborhood in the Northern Virginia area near Washington. Then my longstanding ISP - PSI - called and asked if I wanted the service. When I told them about what the old telco said, they just laughed. PSI implements the service by using a local specialized DSL provider - Covad - who obtains the copper pair from the legacy carrier. The legacy carrier gives them a hard time, but they get the job done effectively nonetheless. The admonition here is to do everything possible to force the availability of local loop copper pair and spectrum, and let the new competitive carriers accomplish what the dinosaurs are incapable of doing.
From: William L. Schrader (14) presumptions
Takashi-san, in four years, 48 months, there will be almost no B2B commerce in JP, HK or elsewhere in the Asia Pacific which is not presold over the Internet via web pages, ordered over the Internet via web pages and credit of some kind, delivered in the standard way, paid over the Internet, and post sales supported over the Internet. We much respect for your parents, I think Mitsui and Mitsubishi spend more than many many households combined. And, besides, the stores that your parents and their friends shop in four years from now (perhaps exactly the way they do today) will be stocked with goods which THEY ordered from their distributors over the Internet and those distributors were supplied by similar Ecommerce orders and payments from the manufacturers. You may not believe now, but wait 48 months. 47 actually. I'll bet you a Diet Coke that I am right, :-) (12) Takashi Tanemura It was very interesting to hear Mr. Schrader's aggressive presumptions. If I was living in the U.S., I would probably agree with the presumptions. But living in Japan, I just can't imagine 80% of all commerce will be dependent on the Internet in some meaningful way. Although we have a computer connected to the Internet via cable at home and that is pretty good regarding other homes without cable access, my parents don't use it as a shopping tool. While advanced-age problem is being discussed in Japan, if they are reluctant to use the Internet for shopping, I think 80% will be too high in Japan.
From: Takashi Tanemura (15) B2B
I think you are correct in regard that almost 100% of B2B commerce will have some relation with the Internet. In that case, even the traditional shopping is going to be e-commerce related and your presumption of 80% might not be a high number at all. I wonder how it will affect our traditional shopping since e-commerce would be hidden behind the scenes in some cases. Will the prices go down? I guess I will definitely lose a can of Diet Coke in 4 years. Hope there is a delivery system by Coke where I can order one can of Diet Coke through Coke's website and delivered to you. :)
From: Nobuo Ikeda (16) video
This is Ikeda of GLOCOM. We are promoting "TV over IP" on the broadband Internet, http://www.wwvi.org. (9) William L. Schrader To answer your question, I suspect that all the short movie clips will go first, and then full length movies, on demand, for fees and for advertising. Tens of thousands of movies, hundreds of thousands of TV shows, any time, any where. Same time frame, EOY2003. I hope your prediction will come true, but how? I am a user of cable Internet, and it is frustrating to watch video on it. I found that the "last mile" is irrelevant, because there is another great bottleneck, i.e., the Internet. Even if the bandwidth of backbone and local loop expands infinitely, the inefficient and unreliable routing on the public Internet makes it difficult to guarantee the bandwidth to carry video. The caching technology such as Akamai and Inktomi would be more important than the "broadband" technologies of telephone companies. I bet broadcasters, who failed in the "digital broadcasting", will turn to broadband ISP. It is stupid to use the huge bandwidth of UHF for the HDTV nobody wants to watch. But is it fair to use the broadcasting spectrum, given free for broadcasting, for the Internet?
From: Takashi Tanemura (17) temporary theme
I have to thank all of you that we are having pretty good traffic compared to last year. Although it is still about a quarter of the Japanese counterpart, it seems that there is a lot of interest. I also heard that Mr. Johnson is ready to start as a coordinator with one of the main subjects, digital divide, shortly. Meanwhile, I would like to propose that we talk about one of the topics Mr. Hennes pointed out. Can we start with the following topics? (2) Wolfgang Hennes - how are publishing and media houses dealing with free content in the net (mp3 etc.)? - is the payment/billing/accounting problem in the Internet really solved? The reason I picked these subjects to start off is that I believe the AOL/Time Warner merger has a lot to do with these problems. I think that AOL wants to become one of the major platform players when pay-contents becomes a norm. As a media company ourselves, we are having trouble with cannibalization and the free content everywhere on the web. We have to find our own content which is suited for the web and can make the difference between other sites, especially the portals. We also haven't solved the payment problem yet either. Our gutsy feeling is that we are not ready for a subscription based model yet. We have seen Dow Jones start a non-subscription site, DJ.com, even though the WSJ Interactive Edition was regarded as a success.
From: Yuki Yamamura (18) Self-Introduction
This is Yuki Yamamura,General Manager of Excite Japan. I was a board of director, Trans cosmos Inc. and established DoubleClick Japan as a first president and CEO. I am very interested in EC strategy from portal site and how will making relationship between portal site and marchant.
From: Dr. Marja Erola (19) About content, infra ownership, pricing and business models
First, a practical example of this complex entity is free Internet Service Providers (ISP). The US and European business models for free ISP are different. The differences are quite obviously based on different pricing and also on cultural differences. In the US pricing is based on flat rate and business models rely on content and advertisement revenues. Customers are paying for content and the role of advertising is quite strong. Some ISP's even pay to their customers as customers have to accept advertisements. In the EU the free ISP business model is more based on interconnection pricing, revenues are collected from it. Finland is - once again - a special case. Here in Finland prices, both telephony and Internet access, are among the cheapest in the OECD countries. And no pricing regulation as in the other OECD countries, here markets determine the prices. And markets are fully liberalized: free competition, no de facto monopoles. I would say the result is actually quite excellent for both customers, teleoperators, ISPs. - OECD Internet Access Price Comparison can be found from http://www.oecd.org/dsti/sti/it/index.htm When interconnection pricing affects so strongly that even free ISP business is possible it's of course worth of thinking is that system good for customers. The model actually hides the pricing system and this non-transparency can even lead to some kind of stagnation, no pressure for lowering prices. - The situation can be compared with the close bundling of getting a mobile phone and selecting the operator. Customer is then more or less married with the teleoperator for a longer time and will surely pay the whole price of the gsm and even more during this time. In Finland this kind of bundling is not at all common. A link worth of looking on the free ISP issue is by Jupiter Communications: "Free ISPs Expected to Secure 13 Million Households by 2003, Free ISPs Will Fail to Displace Traditional Dial-up Service, but Will Help Diversify Revenue Models and Service Options" http://www.jup.com/company/pressrelease.jsp?doc=pr991206 Second, another practical example of business models: a couple of weeks ago I heard a short presentation on Nikkei's e-mail services which is quite impressive and interesting, different subjects, some of them are free, some of them you have to pay. I was wondering what kind of different business models can be found in general when providing those services and are there differences when compared to the US and the EU. Now, this is not my guess for the Nikkei case but in general: it's possible to use advertising, open advertising text in e-mails and at the homepage. Then some other companies might be sponsoring these activities, to reach their own goals. - Then we can of course ask if sponsoring - if it exists and customers are not properly informed - is against the principles of the independence of journalism? - Or media and ISP have a business relation, ownership or other deal. Also the registers of the customers who use these services can be extremely valuable. Customers might fill registration forms full of interesting information which cannot be found so easily from other sources, the coverage all over the country is quite good etc. This customer information, collection of it and making business out of it brings us to one of the very core questions of the e-business: privacy. How this information is collected and used? At the IST99 conference http://www.ist99.fi in Helsinki I mentioned previously one speaker was Dr Marc Rotenberg　from Electronic Privacy Information Centre http://www.epic.org The title of his speech was "No e-trust without e-privacy". His presentation started with a quotation from Wall street Journal, Sept 1999: The "loss of personal privacy is the number one concern for the 21st century". He himself continued: "The protection of privacy in the information age may be as great a challenge as the protection of the environment has been in the industrial age". Using existing technologies it's quite possible to collect quite amazing amount of detailed information of persons' behavior and personality, even so that people don't quite understand this happens. Here we really need clear rules of the game and also fair business practices. Privacy - as well as security - are issues which should indeed be included in core business strategies and the leading principles of a company should be shown to their customers, consumers and partners. Privacy and security are the very core generic elements for the whole e-business.
From: Anthony M. Rutkowski (20) temporary theme
(19) Dr. Marja Erola speech was "No e-trust without e-privacy". His presentation started with a quotation from Wall street Journal, Sept 1999: The "loss of personal privacy is the number one concern for the 21st century". He himself continued: "The protection of privacy in the information age may be as great a challenge as the protection of the environment has been in the industrial age". Using existing This issue strikes me as one which plays to general fears and paranoia of people without a lot of substance, and varies greatly among different individuals. Like a great many things, privacy always comes with a cost - not only monetary and convenience, but the ability to meaningfully function - and is all weighed off against the risks. With good, simple, encryption systems and authentication methods the barriers to using privacy tools will be reduced. However, even today, with readily available PGP, how many of us are actually using the tools? The bottom line is that privacy isn't really that important because the risks and adverse effects are remote, and a really determined adversary could probably get the information anyway. return to Start-Up 1　to Start-Up 3