Information Highway Overview:
The term “information highway” has become a cliché to describe advancing technology. The core question: how will the union of computing and communication change our world, technology, competition, and society?

Foundational Technologies:
Two cornerstones: VLSI (chip technology powering computing) and software (leveraging raw power for users).

Computing Growth:
In the past 20 years, there’s been a million-fold increase in the price/performance ratio of computers. This trend is expected to continue for at least another 40 years. Future computers could achieve in 30 seconds what current ones do in a year or even a million years.

Information Storage Trends:
RAM density increases by about 4X every 18 months.

RAM prices drop by around 30% annually.

Hard disk costs decrease by about 60% per year.

A user’s current hard disk size predicts their RAM size in 3-5 years.

Significance of Exponential Growth:
Exponential growth overpowers fixed growth rates, as evidenced by microprocessors overtaking mainframe computers. Exponential growth will bypass certain thresholds, but some problems, like NP hard problems, remain insurmountable even with immense computing power.

Microsoft Stock Analysis:
Microsoft’s stock growth can be correlated with the increase in semiconductor performance. Software expands according to the hardware capabilities available, which are increasing exponentially.

Business Strategy:
Success in the tech world should be measured by the percentage of CPU cycles consumed and RAM occupied. Microsoft’s strategy: follow the microprocessor, evolving from programming languages to OS, graphical applications, multimedia titles, and diverse new platforms.

Final Note:
Wherever there are microprocessors and memory, there’s an opportunity for software. To stay relevant, software must adapt and expand with the evolving hardware landscape.

Human I/O Limitations:
Human input and output (I/O) capabilities are limited and not expanding at an exponential rate, unlike computing. Computing will surpass the data throughput thresholds of the human nervous system.

Challenge of Perfect Human-Computer Interface:
The ideal interface would saturate human I/O, delivering the maximum amount of information both ways. There are uncertainties regarding how peripherals to achieve this might be developed, particularly those that integrate touch, taste, and smell.

Taste and Smell Interfaces:
Using taste and smell as I/O for computing will be specialized and it’s unclear how they’ll be connected. Humans have a restricted range of unique tastes and smells, roughly estimated at 50,000 distinct elements. The frequency at which we detect new tastes and smells is low; only a few per second. Synthesizing and computing taste and smell data require less bandwidth than audio, making it computationally manageable with current tech.

Touch Interface Considerations:
Video is a prevalent form of I/O, but tactile interfaces (touch) need to be explored further. Physiological tests suggest human touch resolution is generally low except for areas like the hands and lips. High-resolution touch areas have roughly 100 “touchels” (touch pixels) per inch. The total bandwidth required for a touch interface is roughly equivalent to video, making it feasible for near-future tech to handle.

Conclusion: Shift in Computing Challenges:
Achieving the ultimate user interface that fully utilizes human I/O capabilities will be a temporary milestone. Once achieved, computing will need to pivot to other challenges as this interface won’t remain the final frontier.

Communication vs. Computing:
Communication systems have not followed the exponential growth seen in computing. Central office telephone switches and mainframes share similarities in terms of size, culture, and costs.

Analogies with Computing:
PBXs within companies are likened to minicomputers, mirroring similar industry aspects. Microprocessor-based systems, like PCs, have disrupted the dominance of mainframes and minicomputers.

Transformative Technologies:
ATM (Asynchronous Transfer Mode) switching and fiber optics will revolutionize communication. Fiber optics enable long-distance, high-speed data transfer, but ATM switches are essential for efficient networking.

ATM Switching Impact:
ATM switching resembles the effect microprocessors had on computing. This technology will foster the emergence of start-ups and challenge existing switch manufacturers. ATM advancements will render current high-tech wide-area networking obsolete.

Service and Economic Implications:
Traditional phone bills have remained static without significant price reductions or data enhancements. The combination of ATM technology, fiber optics, and increased competition will disrupt the communication sector. Voice communication, due to dropping costs, could become virtually free.

Comparative Cost Analysis:
Video on demand services may charge around $3-$4, with the communication cost being as low as 50 cents per hour. In comparison, traditional voice services can cost 30-60 cents per minute—a vast difference in price.

Shifting Economic Dynamics:
The value placed on current equipment by network companies and public utility commissions will be challenged. Newer equipment will frequently offer improved performance at similar or reduced costs. Companies must regularly upgrade or risk being overtaken by competitors offering better service at a lower investment.

Future of Networking:
The envisioned network is a switched digital system with high bandwidth digital communication. Drawing parallels to the electrical system evolution, communication will move from dedicated networks (like TV or telephone) to a generalized information utility. Devices ranging from personal computers to smart TVs and even water heaters will connect to this utility, providing various services, from entertainment to demand-side power management.

Overarching Theme: General Information Utility:
Future communication systems won’t be dominated by a single device like a TV or PC. Instead, multiple devices will plug into a unified information utility, making information as fundamental a utility as electricity is today.

Division of Information Characteristics:
Nathan Myhrvold discusses the evolution of information by dividing it into different categories based on two aspects: addressing (one to one or one to many) and temporal aspects (synchronous or asynchronous). Examples are provided to represent different combinations of these aspects, such as television for online one to many (synchronous) or postal mail for point to point offline (asynchronous).

Convergence of Information Utilities:
With the advancement of digital technologies, the speaker foresees the boundaries between different information utilities blurring. The difference between forms of media like record albums and books becomes irrelevant in the digital context, leading to a world collapsing into two broad kinds of services: digital data that’s online and digital data that’s offline.

Shift from Online to Offline:
The speaker predicts a significant shift from online to offline consumption of media. The rigidity of time schedules, such as television show timings, is viewed as a limitation that can be overcome with digital means. By moving content to offline storage, viewers have more flexibility to consume media at their convenience, without being tied to specific broadcast times.

Emphasis on Generic Factors:
In this evolving landscape of information consumption, the aspects that stand out as the most enduring are the generic factors, including the way information is addressed and the timing of its delivery. The transition towards digital storage and transmission emphasizes the value of these basic, underlying characteristics, regardless of the specific form or content of the information.

Analogy with Gutenberg’s Revolution:
Myhrvold draws an analogy between the explosion of the information highway and Gutenberg’s invention of the printing press. He refers to an analysis termed “document demographics,” examining the number of documents published each year versus readers, to understand the evolution of information distribution.

Classification of Information Distribution:
Myhrvold classifies information into various scales:

Zero: Notes to oneself.

1 to 100: Personal letters, business letters, photocopies.

100 to 10,000: Ads, brochures, newsletters (desktop publishing realm).

Above 10,000: Books, magazines, newspapers (commercial printing).

This classification is based on technology used for reproduction and distribution, revealing a pattern in how information is produced and consumed.

Impact of Technology on Printing:
Myhrvold explains how technology has transformed the field of print media:

Zero case: Pen or pencil.

1 to 100 copies: Photocopier and Xerox machines.

100 to 10,000 copies: Laser printers and small offset presses.

Above 10,000 copies: Commercial printing.

He discusses the economics of each technology, and how innovations like Xerox, desktop publishing, and Gutenberg’s press transformed information distribution.

Effects of Changing Economics:
Changes in the economics of information distribution have significant impacts, like the decrease in price per copy or the increase in convenience. Myhrvold emphasizes that when you change the economics, you “change the world.” He cites how each technological advancement exploded in usage as soon as it became economically feasible.

Video Information vs. Print:
He compares the distribution of consumer information in videotape with print, noting a disparity due to production and distribution costs. Myhrvold points out that electronic distribution has the potential to bridge this gap and revolutionize the way we consume video information.

Scalable Systems and Universal Authorship:
He highlights the need for a scalable system to support a wide range of authors, from personal notes to Hollywood productions. Contrary to the traditional view that information flow is from a few to many, Myhrvold argues that people want information at all scales and emphasizes the importance of peer-to-peer communication. He concludes with a belief in a universal thirst for information and predicts that history, as seen in print, will prove his vision correct.

False Starts in Tech Evolution:
Rapid evolution involves many experiments, with more failures than successes. Just like in the early days of PCs, many machines came and went. The differences in approaches between companies can often be subtle but crucial.

Data Processing Evolution:
Large mainframe systems like SABRE, which once required enormous infrastructures, could be recreated using a handful of PCs today. Exponential growth in computing will surpass the growth of data in certain sectors, making once-complex tasks achievable on basic PCs.

Impact on Businesses:
Businesses slow to adapt to exponentially increasing computing and communications risk becoming obsolete. Conversely, recognizing and leveraging these advancements offers enormous opportunities. While some will face difficulties in this transition, many will benefit, including authors, programmers, and network builders.

Tech’s Mass Extinction Event:
Advancements in technology are causing many traditional tools and systems to become obsolete. Examples: stock market ticker, typewriters, analog record turntable, etc. This extinction will continue as new technology renders older methods and tools redundant.

Financial Motivations and Uncertainties:
There is significant greed and speculation about where profits will emerge in the tech space. The future model of monetization is unclear: bit-based charging, value-based charging, advertising-driven, or something else. The key to success is having an open, flexible business model and being adaptable.

Entertainment’s Evolution as an Analogy:
Each new form of entertainment (theatre, movies, television, cable, home video) was predicted to kill the previous form. Instead of causing extinction, each advancement expanded the market. Older forms of media might have a reduced presence, but they still satisfy unique needs and hence will continue to exist.

Conclusion:
The speed of this technological evolution raises questions about its timeline and eventual winners and losers. Older forms of media or tech tools, while they might reduce in dominance, won’t necessarily disappear entirely. The market will continue to expand with the introduction of new technologies, offering unique experiences for users.

Evolution of Killer Apps:
Killer applications drive technological adoption, like word processors and spreadsheets for PCs. Over time, new killer apps emerge, like multimedia and gaming for PCs, reflecting changing user needs.

Shift in Cable TV Paradigm:
Initial attraction to cable was better TV reception; today’s draw is diverse programming, showcasing a shift in consumer priorities.

Evolution of Interactive TV:
Early applications might seem basic (video on demand, online TV guides), but the system’s real potential lies in novel, unpredictable interactive programming.

Video on Demand (VoD):
Technically simple: storing files.

Societal impact: breaks the constraint of limited prime time slots, allowing a broader range of content to reach audiences. VoD contrasts the limited offering model, where decision-makers pick content they think will appeal to the broadest audience, often overlooking unexpected hits.

Opportunities Beyond VoD:
Future of entertainment lies in blending computing, communication, and data storage. Not just about distributing content, but also creating it. Microsoft’s R&D investment underscores the potential in distributed programming environments.

Future of Video Production:
Transition from specialized equipment to general-purpose computers and software. Comparison to the shift in publishing: old typesetting machines replaced by digital software.

Synthetic Actors and Creativity:
Advances in tech allow for creating synthetic characters for special effects, suggesting broader applications in the future. Potential for the public, not just professionals, to create using these tools.

Democratization of Authoring:
Computing advances will let even children create complex digital productions. Everyone can potentially become creators, changing the landscape of multimedia content.

The Nature of Information Businesses:
The term “information highway” is reflective of businesses rooted in information, including communication, entertainment, and even retail and finance. Many sectors, like banking and retail, operate as information businesses, with extensive distribution chains.

Shifts in Retailing and Future Projections:
Traditional retail chains are transitioning to warehouse-style retailers like Costco or Walmart.The information highway could evolve retail even further, allowing for on-demand manufacturing, thus reducing the need for physical inventories.

Direct Communication & Reducing Middlemen:
With the information highway, middlemen may become obsolete as direct communication between producers and consumers becomes prevalent. While it will not be an instant shift, the change could lead to more efficient and tailored production.

Overcoming the Tyranny of Geography:
Historically, human communication and interaction have been limited by geography. Technological advances like transportation and telecommunication have gradually reduced this limitation. The information highway will not only enhance existing communication but will also allow for novel communication forms like virtual communities.

Politics and Representation in the Digital Age:
The geographical basis of representative democracy might be challenged by the information highway. Direct polling and digital communities may redefine how we view representation, offering more tailored and immediate responses to constituent concerns.

Information, Privacy, and Security:
The information highway poses a dual threat: the potential for increased privacy or its complete eradication. Challenges arise in intercepting communication on advanced networks, like fiber optics. The debate between enabling strong encryption for user security and potential misuse for malicious activities will be pivotal.

Anticipating the Future:
While the exact trajectory of the information highway is uncertain, the potential for positive transformation is immense, similar to the impact of the Gutenberg printing press. Embracing this revolution requires adaptability and awareness to harness its benefits and mitigate its challenges.