George Gilder - ASAP Telecosm Archive
The following article
Angst and Awe on the Internet
was first published in Forbes ASAP, February 1996.

The Telecosm Series

The Coming of the Fibersphere

By George Gilder

In 1995, Internet stories trumped even O.J. The Net will have a far happier ending.

Well, it had to happen. As the Internet emerges as the central nervous system of global capitalism, the Luddite left is bursting into "flames" against the microcosm and telecosm, against interlinked computers and the global radiance of electromagnetic communications.

This rising resistance resonates with the press coverage that has long lavished attention on the excesses of the Net. Richard Shaffer of the Computer Letter counts 39,158 Internet stories during the first three quarters of 1995, beating O.J. by some 15,000 citations. Much of the coverage has been lurid. For psychedelic visions of virtual reality, the media have exalted Jaron Lanier in dreadlocks and bankruptcy above Bob Metcalfe, creator of Ethernet, or Gordon Moore, inventor of IC processing, or Charles Kao, father of fiber optics, all of whom reshaped the boundaries of human possibility. Computer viruses and Net porn win headlines and magazine covers that elude the creators of vast new computer powers, such as RSA encryption or the World Wide Web or new tools of chip fabrication at the quarter-micron level. Last August, Windows 95, a modest advance in operating systems, exploded across the press and the airwaves as if the entire media had been preempted for a Microsoft infomercial. No wonder befuddled academics, politicians and book publishers gain a grotesquely distorted view of the industry.

In Tom Peters's first Forbes ASAP interview (March 29, 1993), he predicted that the '90s would see a fabulous unfolding of new technology, accompanied with increasing outbreaks of technophobia, Ludditism and Marxism. Alvin Toffler greeted the initial readers of Wired with a similar dual prophecy of networked marvels, foiled by a multifront war against the Third Wave. Once again, Peters and Toffler may well be right, as from Hollywood to Harvard, America's brainlords rebel against computer technology.

In his pungent new book War of the Worlds, Mark Slouka joins the rising chorus of resistance. Slouka finds it all a "kind of lie." Like a "speech of Ronald Reagan" or a spiritual vision from the "religious right," the virtual world is increasingly usurping reality and identity itself. "Rather than doing away with the couch potato, the telecomputer has actually created a new, more tenacious variety of tuber: the individual who swivels from the television screen to computer monitor without missing a beat . . . ."

Today, Sandra Bullock writhes in anguish in the sinister clutches of The Net, with a blond, predatory, arachnoid Bill Gates (using "Gateway" software) masterminding the Web. Similar chimeras recur in antitech crusades. Bathed in the ultraviolet frequencies of sunlight, humans throughout the history of the species have raced through a planetary magnetic field of half a gauss in power on a terrestrial sphere charged by worldwide lightning strikes a hundred times a second to a capacitive level of 100 volts per meter of height. Yet Paul Brodeur and other electrophobes panic at power lines, power plants, cathode-ray tubes, microprocessors, cellular antennas and other high-tech oscillators with an impact on humans measurable only in millionths of a gauss. They defy the fact that around the world use of electricity correlates almost perfectly with greater longevity.

Meanwhile, despite the higher longevity and the globally spreading jobs and riches springing from high technology, pseudoeconomists prattle endlessly about the growing gap between the "information rich" and the "information poor." Publishers sign up other disgruntled nerds to write hymns to noble savagery and gardening. And from the fever swamps, a Marxist enrage posts bombs through the mail and addled editors detonate them in the pages of the Washington Post.

Such fears and fantasies have always afflicted the course of human innovation and progress. With life expectancies rising eight years in the developed countries and 22 years in the Third World since 1950, people have more time to lash out at industrial benefactors who gain wealth and create it from sources hard to comprehend.

Misconceptions about the Internet, however, also abound in more savvy circles. From Stewart Alsop's Agenda conference to the Internet Society, serious critics are emerging to predict that the network itself will bog down and degrade, jammed by traffic and trivia. Often unconsciously, these critics feed upon a spurious vision of capitalist ecology. Constantly recycling Garrett Hardin's "The Tragedy of the Commons" as a theory of the Internet, writers such as Clifford Stoll in Silicon Snake Oil, and others from publications such as the New York Times to the National Review and the Atlantic, predict that the Web, as a public good, will be overgrazed, like the commonly owned fields of feudal Britain. Each herdsman or entrepreneur gains from adding to his herd or bandwidth, beating rivals to the remaining grass or spectrum, until congestion ruins the common space.

As the epitome of a capitalist commons, the Internet, according to the critics' predictions, will collapse under the impact of this law, clogged with traffic and polluted with porn and violence. As a precursor, the same writers cite citizens band radio, an earlier fad that rose meteorically and collapsed ignominiously when, as they see it, millions of middle- and lower-class hoi polloi rushed in and polluted the bandwidth without renewing it.

Overall, the resistance converges many streams of reaction. In general, the "humanist" opponents mistake the Internet for a continuation of television technology. Thus they ascribe to the Internet the very flaws that they find in TV -- crudeness, violence, porn, entertainment for "diverting ourselves to death" -- and extend to the computer the old and mostly valid arguments of Neil Postman and Jerry Mander against the idiot box. Some of the other critics of the Internet benefit from TV and fear the Web will replace their familiar tube. The executives of media companies are mostly baffled by the new technology. Paralyzed by market research, as Jim Barksdale, CEO of Netscape puts it, "They are trying to build bridges by counting the swimmers." A Washington lobbyist for a long-distance carrier wonders poignantly if "America is ready for all this bandwidth." Baby Bells spurn the Internet to fund Hollywood films and TV.

Blinded by the robber-baron image assigned in U.S. history courses to the heroic builders of American capitalism, many critics see Bill Gates as a menacing monopolist. They mistake for greed the gargantuan tenacity of Microsoft as it struggles to assure the compatibility of its standard with tens of thousands of applications and peripherals over generations of dynamically changing technology (avoiding the dialectical babel of the more open Unix, for example). They see the Internet as another arena likely to be dominated by Microsoft and a few giant media companies, increasing the wealth of Wall Street at the expense of the stultified masses of consumers and opening an ever-greater gap between the "information rich" and the "information poor." Focused on the summits of the industry -- CEO sˇances among media conglomerates and software kings -- all the critics can foster the impression that the Internet is a questionable, unpromising venue, vulnerable to monopoly and trash, thereby vindicating the Luddites and the Cassandras. From the beginning of its civilian eruption, however (see Forbes ASAP, "The Issaquah Miracle," June 7, 1993), the Net has risen from the bottom up rather than from the top down; by nature, it is a heterarchy rather than a hierarchy.

To get a view of the future of the Net, let us turn aside from Herb Allen's golfing groves and Bill Gates's mansion and Louis Gerstner's "net-centric" revelation, and visit some of the fertile bottomlands where the Web is growing fastest. Here no robber barons or monopolists come into view and there are no signs at all of an impending slide toward tragedy and decline. Here the negative externalities of the degraded commons fall before the huge positive externalities of Moore's Law and Metcalfe's Law, the microcosm and the telecosm, where smaller transistors yield exponentially more efficient machines and the value of networks rises by the square of the power of all the computers attached to them. Governing the positive externalities of the Internet is the convergence of these forces, compounded by the creativity of entrepreneurs.

Perhaps such a combinatorial explosion explains the mind of Avi Freedman of Net Access. Among the vanguard of the armies of the Internet, Freedman is a classic American entrepreneur, entirely alien to the megalithic visions of the critics. As an Internet service provider (ISP), Freedman supplies the Philadelphia area with access to the goods and services of this global ganglion of networks at a flat rate of between $12.50 and $20 per month, depending on the services chosen.

Net Access still operates chiefly out of his cellar in a marginally middle-class suburb of Wyndmoor. The street bristles with wires, transformer nodes, terminal boxes and power lines, many of them converging on the duplex red-brick bungalow where Freedman lives with his wife in an apartment above a basement crammed floor-to-ceiling with multiplying racks of electromagnetic conversion and processing gear for computers and telecom. These technologies are all oscillating and radiating like crazy in the spirit of their hyperkinetic owner, who is multiplexing Internet insights between his cellular phone and an attentive audience of aspiring ISPs from western Pennsylvania and geek students visiting from the University of Pennsylvania, gathered at his door next to the power-line link.

Is this an entrepreneurial dream, or a carcinogenic nightmare out of the muddled pages of Paul Brodeur? Avi is too busy to give the issue much thought. Extending business service to New York City, Washington, D.C., and Chicago, overflowing his basement, he is now moving his operations to a collocation cage at the Philadelphia central office of MFS (Metropolitan Fiber Systems) where he has just turned up a T-3 fiber circuit (45 megabits per second) direct to MAE East, the major East Coast Internet exchange point. From Seattle to San Jose, top companies are besieging him with multimillion-dollar buyout offers, but looking to the future and its promise, Freedman calculates that he can't afford to sell.

With only 4,000 customers, however, Net Access hardly seems to pose a threat to such local colossi as Bell Atlantic and Comcast, now searching the world for "content" opportunities and looming ever larger on Rodeo Drive. Yet Ray Smith and Brian Roberts should pay attention to what is going on in Freedman's teeming mind and basement. Millions of PC owners may well become part-time Internet service providers in the future -- as their home and small-business PCs supply content for others, perhaps beginning with teleconferencing and telecommuting activities that will soon dwarf Hollywood in volume.

One of the students hanging on Freedman's words, for example, is Meng-Weng Wong, whose personal Web page at Penn attracts some 35,000 hits a week with its restaurant reviews, film criticisms, Philadelphia maps, technology insights and other delectations. Drawing wide media attention, from Forbes ASAP to Scandinavian TV (a crew is visiting this very day from the Netherlands), Wong has now established a server at Net Access,, which supplies his clients with a permanent Internet address wherever they may go, and he is developing a Web-page design business.

Responding to the onrush of innovative customers like Wong, the configuration of Freedman's bottom-up operations offers clues to the future shape of the industry. A portly, perspiring, blond, balding geek-genius bursting with monologic humor and street smarts -- hardly full-duplex (scant signs of upstream flow) -- Freedman has just hustled past his 26th birthday. He has been deep in computers since age eight, when a prescient uncle gave him a book on the Basic programming language at a Seder. Within months he was entrenched among the information rich, opening an unbridgeable gap in computer savvy between himself and nearly all of the other five billion inhabitants of the planet. If you think you are going to catch up, forget it. By the age of 12, in 1982, he was an active user of e-mail and Usenet news and familiar with the abstruse command codes of the Unix operating system that ran on his father's DEC PDP-11. Freedman senior, a pulmonary physician, inherited the machine indirectly from Bell Labs, where it had been employed as a Usenet news hub until displaced by a VAX.

In 1986, still a teenager, Freedman began exploring the uses of Unix machines for commercial databases and discovered to his surprise that serious businessmen would give him gouts of money to get help with their computers. Eventually, he was earning "lawyers' rates" (his mother is a Philadelphia tax attorney) for work he found "amazingly routine" and "even fun." Nonetheless, after high school, his parents sent him off to college in Massachusetts, where his computer skills were underappreciated. He returned after a few weeks to get a job at the National Software Testing Labs in the Philadelphia suburb of Conshohocken before enlisting at nearby Temple University, which he chose because it offered more freedom for computer experiments and consulting work than the more prestigious Penn a few miles away.

After arriving, he discovered that Temple's computer lab also commanded a superb resource: bandwidth, in the form of a nearly empty T-1 line linking to the Internet at 1.544 megabits per second. Already computer rich, he was becoming communications rich as well. In Avi Freedman, Temple's department of computer science got rather more than it bargained for. Realizing that the available PCs were network hostile and the lab's MicroVAXes ran VMS rather than Unix, Freedman used his savings to buy five secondhand Sun 3 workstations for $600 apiece.

In short order, Freedman began his career as an Internet service provider and "professional geek," albeit unpaid. Soon he had some 100 students as users, mostly cavorting through games of Multiuser Dungeons (MUD). Temple's address, supplied by Freedman -- -- became known far and wide as a hive of MUD activity. Temple's computer science professors began to rebel at this untoward distinction, particularly when they found that lost in the crypts and catacombs of the Net, their charges were virtually unreachable for assignments in higher-level languages. Freedman was forced to close down local access to the game portions of the server during daytime hours.

Freedman has given some thought to the problem of "how to civilize young, intelligent teenage males." He concludes, "You have got to get them interested." He says the students playing MUD at least were learning Unix commands, "a better way to get a job than mastering the Pascal programming language," which was then being taught in the regular classes.

As a student, working with Prof. Yuan Shi and other Temple professors, Freedman developed a toolkit for distributed processing on Suns and presented a paper in London in 1989 at a conference on computer-aided software engineering. As his time at Temple drew to a close, he began contemplating graduate school. "Everyone was very surprised that anyone who could do anything on the outside was going to graduate school," he says, "but Stony Brook on Long Island offered me a nice job as a research assistant in the lab and I went up there."

After graduating from Temple, Freedman also encountered the harsh facts of life in the world beyond college computer laboratories. With their local-area networks and T-1 links to the Internet, universities offered a revel for budding cybernauts. Marc Andreessen of Netscape discovered a similar disjunction between college lab and residential communications. At LAN's end was a communications cliff and a bandwidth scandal. Most homes and offices connected to the world only through twisted-pair, four-kilohertz, copper telephone wires.

In October of 1992, Freedman became an ISP chiefly to continue his college revels by chasing bandwidth. Twenty-three at the time and engaged, he could still recall his days in high school and remembered how much he had learned from the Internet through his father's PDP-11. He began to fill up his basement with second-hand Sun machines, mostly at prices well below new Pentium levels, all using Berkeley Unix, equipped by Bill Joy with fast TCP/IP (Transmission Control Protocol/Internet Protocol) for Internet access.

Beginning with 40 customers from local bulletin board systems, Freedman provided access through the serial ports of a single SPARCstation IPC with a 200-megabyte hard drive and 12 megabytes of memory that he purchased secondhand for $1,500. The serial ports ran up to 38.4 kilobits per second, linked to 14.4-kilobit-per-second Zoom and Supra modems connected to POTS (plain old telephone service) outside lines running from the phone company's central office. Costing a total of some $4,000, the system worked well enough until his clientele began to multiply and the modems balked at continual resetting. In April 1992, he bought a 16-port Iolan terminal server that answered the phones and connected subscribers to the Sun servers, which supplied e-mail, Usenet news, Gopher searches, Telnet and file-transfer services in a Unix environment.

In June of 1992 emerged the menace of competition. A local entrepreneur launched Voicenet by simply linking a 386 PC with a modem to each phone line through a terminal server. Charging fees several times higher than Net Access's, Voicenet thrived through the device of hiring two full-time people to scan in pictures from porno magazines for what Freedman describes as the "sticky keyboard set." Eventually the "adult" bulletin board service enlisted some 5,000 members paying $4 per hour to peruse images. Nonetheless, Voicenet protested what it called Net Access's predatory low pricing, a $12.50 to $20 flat rate per month with no full-time employees to pay.