I took the early morning Schnellzug to Cologne. With over an hour
to kill, I put my bags into a locker and checked out the bar and cafe.
It was 8:00 A.M., but the bar was standing room onlythere
were no chairs but lots of men standing around drinking their pretrain beers. In the cafe, there were eight of us and five had cigarettes going, all crammed into a space smaller than a Manhattan
studio apartment. I went back to the bar.
Two minutes before departure, I went up to the track just as the
train to Brussels pulled in. I boarded and spent a dreamy two hours
staring at sleepy villages and isolated farm houses, built of stone
and sitting precariously on hills in the middle of black fields.
We entered Brussels, the center of the densest train network in
Europe. Our track joined others and soon we were picking our way
through a yard dozens of tracks wide. Then, suddenly, we were
inside the cavernous central train station.
I spent the weekend catching up on my reading and looking for
open restaurants in a city where it seemed like even the red light
district closed on weekends. Brussels prides itself on being at the
geographic center of Europe, and thinks of itself as the logical capital of the
European Community,
home to the
Commission. I think
of it more as the Indianapolis of Europe.
After the sleepy calm of the weekend, I figured my two days
trying to find out about the infamous
Directorate Generale 13 (DG
XIII) would be relatively simple and might even yield useful information.
This optimistic mood was soon to change. The weather got even
colder, the food got toxic, the taxi drivers started getting into accidents, and, worst of all, I entered the bureaucratic swamp of the
European Commission.
Monday morning, I walked over to the European parliament building and up the Rue du Loi, past huge monoliths filled with functionaries, to the Rue de Trèvres, home to a portion of DG XIII. The
European Commission security system requires visitors to leave
their passports as identification, but since I had a fax from a DG XIII
PR officer I was allowed through. Security didn't even look at the
fax to make sure that the letter wasn't a request to have me permanently barred from Europe.
On the second floor, I was ushered into the office of Peter
Johnston, an official of the F Directorate of the 13th Directorate-General of the Commission of the European Communities. We were
soon joined by another official, also named Peter. There was one
seat free on my side of the little conference table, but Peter 2 took
great pains to clear off a chair and align himself with Peter 1 on the
other side.
With both Peters in place, they began an interchangeable litany
of platitudes, trying to explain everything the Commission was doing from promoting networking to ensuring the future of international trade. I had heard about things like COSINE, RACE, PACE,
RISE, and the European Nervous System and naively asked if perhaps one of the Peters could explain these pieces, perhaps starting
with the RACE project.
There was my first mistake. You see, RACE is a program, not a
project.
"No, no, no," Peter 1 chided me, explaining how, in the context
of the third framework there were a series of programs such as
RACE, each of which was made up of dozens and dozens of projects. RACE was no mere project, thank you.
I learned little of substance in my briefings, but later, digging
through over 20 pounds of documents I had amassed, I was able to
put together a cursory picture of the programs and projects and
themes and frameworks that the Peters were so unable to articulate.
DG XIII is the portion of the bureaucracy of the Commission
charged with looking after the areas of telecommunications, information technology, and innovation. DG XIII has taken an active role
in industrial policy, funding a great deal of research and development, and also handling some regulation.
The reason for DG XIII is that Europe has traditionally been a
stronghold of the PTTs, monopoly service providers of postal services, telecommunications, telegraph, and even, in many cases, banking and other sundry services. Although the size of the European
economy is about the same as the U.S., fragmentation of telecommunications has led to conflicting standards, closed markets, and inefficient service providers.
The Commission was taking a variety of steps as a regulatory
body to try and open up telecommunications, including requiring
PTTs to relax their procurement policies so all European suppliers
could compete. Other regulatory steps included requiring a single
112 emergency phone number for all of Europe and a single standard for mobile radiotelephony, replacing the 6 different standards
that had sprung up in the 12 EC member states.
In all this regulation, DG XIII worked with the existing PTTs,
trying to get them to change their practices. The Commission was
less than enthusiastic about taking steps that might lead to the PTTs
demise. In fact, the second prong of the Commission's strategy was
to couple regulation with a very strong industrial policy, trying to
keep the industry competitive.
This was no minor research program, either. In the fields of information technology and communications, the Commission was
funding R&D to the tune of ECU 2.221 billion from the period 1990
to 1994. (The ECU was worth roughly U.S. $1.25 in 1992).
To understand the Commission, it is best to defer the natural
inclination to ask where the money was spent and what resulted
and instead focus on the process.
The quintessential model for an EC program was
Esprit.
Started
in February 1984, DG XIII bills Esprit as "the key to reviving European technology." The premise behind Esprit was matching funds.
The Commission would put up half the money for a research project, the participants would put up the other half.
Rather than have researchers suggest some interesting research,
the Commission would issue a call for proposals. To respond, a
group had to have at least two industrial partners from at least two
EC countries. Typically, a successful group would have up to a half-dozen members, including research institutions, consulting firms,
telecommunications companies, and computer companies.
Esprit shelled out ECU 1.5 billion and involved 3,000 researchers
in the first phase from 1984 to 1988. From 1988 to 1992, Esprit
shelled out another ECU 3.2 billion, involving almost 6,000 researchers.
Probably the best known result of Esprit is the transputer, an
example of which is the T800 chip, a 10-MIP, 32-bit, RISC processor
useful as a building block for parallel computers or signal processing units. Of course, there are several other chips that the
transputer must compete against, such as those from Motorola, Intel, and the Sparc consortium.
Other projects helped train engineers in VLSI design or developed opto-electrical equipment for video reception at medium distances without amplification. Esprit officials categorize these as
"major results" and point to "over 500 major results" in the Esprit
program.
I examined the list of major results through the end of 1989.
There were 343 major results, and it is interesting that 43 of these
were in the category of having made a "substantial contribution to
the preparation of international standards." If prestandardization
activities got their own category and were counted as major results,
it was obvious that all this money was certainly not going to develop new technology or to conduct real research.
Though the bulk of Esprit money went to things like high definition TV standards, a substantial sum was devoted to an area of
research projects known as the "Information Exchange System."
Best known of these projects was COSINE and its IXI backbone.
IXI, connecting 20 different X.25 networks in 17 countries, was listed
as the key infrastructure for Information Exchange.
A COSINE brochure proudly stated that IXI was transferring 25
Gbytes of data per month by the Spring of 1991. The fact that IXI
was several years late in coming was not mentioned, nor was the
fact that 25 Gbytes per month is not a tremendous amount of data.
The German DFN X.25 network, for example, was transferring over
70 Gbytes per month of TCP/IP data over X.25, not to mention substantial traffic from other protocols such as SNA.
There were several other information exchange projects proudly
trumpeted in the COSINE literature, but my favorite was ROSE, Research Open Systems for Europe. The project started in 1983 and
ran for 60 months, involving five European vendors such as Bull,
ICL, and Olivetti. ROSE had the novel goal to promote OSI and
"reinforce standardization work by implementing the standards and
demonstrating them." At a gala demonstration at the Esprit 88 conference, the vendors all demonstrated OSI prototypes that included
FTAM, X.400, and the X.28/X.29 PAD services.
With Esprit such a shining success, DG XIII used it as a model
for other industrial policy programs. The STAR program, for example, was started to try and get the less developed portions of the
telephone infrastructure jumpstarted. From 1986-91, the Commission pumped ECU 780 million into places like Northern Ireland,
Portugal, and Greece, with matching funds coming from the member states.
These types of government intervention can be quite useful if
the money is put into the right places. The program that really
caught my attention was RACE, Research and Development in Advanced Communications Technologies for Europe. RACE was supposed to get a broadband ISDN network into Europe and if there
was any place a massive infusion of help was needed, it was the
European telephone system.
As the two Peters explained to me, RACE was focused on the
area of integrated broadband communications (IBC) and was meant
to avoid the problems that ISDN had encountered on its way to
market.
According to Peter 1, ISDN had run into a few setbacks because
the standards were too vague, leading to incompatible implementations. While the ISDN generation of technology was getting on its
feet, it had taken a bit longer than anyone had planned.
In other words, ISDN was a fiasco, consumed huge amounts of
resources, and produced few results (but did so consistently over a
long period of time). RACE would make sure the next generation
of technology had a smoother roll-out.
If the problem with ISDN had been vague standards, then RACE
would make sure that all the downstream activities from standards, the implementation profiles, conformance specifications, feature subsets, and the like‹were formulated in great detail, thus
avoiding incompatibility.
DG XIII had set itself the highly ambitious goal of a B-ISDN
network by 1995 and was investing heavily. Between mid-87 and
mid-92, RACE would involve 294 organizations in 92 projects for a
total outlay of ECU 1.2 billion (U.S. $1.47 billion), of which the Commission was pitching in ECU 550 million.
The RACE literature explained that by bringing all the European
players together in one project, the risk of failure was reduced. Everybody would work together for a common goal. Putting all your
assets into one investment was a strategy I had not learned in my
class on portfolio analysis, but I was willing to hear the argument
out.
RACE hoped to somehow speed up the standardization process,
a "well-known bottleneck in the exploitation of high technology."
Rather than reduce the bottleneck by reducing the size of the stack
of paper and focusing on implementation experience, RACE was
going to try and increase the volume of paper produced.
The result would be the integrated broadband communications
architecture, a pile of documents that would specify everything necessary for the network. This suite of documents would, of course,
be adopted by the rest of the world, opening up the vast external
market for European suppliers to exploit.
RACE, one of my glossy brochures exultantly proclaimed, was
"the current focus of attention of all the intellectual and industrial
work on advanced telecommunications in Europe."
When you talked to the Peters, though, you got the idea that the
real purpose of RACE was to reinforce the dominant position of the
PTTs. ATM cell switching, the technology that forms the basis for
most of RACE and B-ISDN, was to Peter 1 simply a means to eliminate "rate arbitrage."
Rate arbitrage is one of those code words that summarizes all
that is evil about those who insist on setting up their own networks.
By this philosophy, the only reason that a value added network (i.e.,
anybody but the PTT) can exist is because entrepreneurs take advantage of differential tariffs for different speeds.
If the tariffs did not vary, the philosophy goes, everybody would
buy their services from the underlying network provider, the PTT.
The evil of the Valued-Added Network (VAN) is that these greedy
businessmen skim the cream off the top, diverting funds away from
the PTT that is trying to provide service to everybody. If the profitable business accounts go to the VAN, who takes care of the poor
widow in the village?
This line of argument makes a lot of sense unless you ask a
more fundamental question. Do the PTTs have the capability to do
the work in the first place? If not, the cream-skimming argument
breaks down at that first assumption. Stopping others from doing
important work is not an effective strategy for building an infrastructure.
While I was mulling over the proper way to get highspeed fiber
and ATM switches into place, the two Peters had left the now-boring details of the RACE program for their newest toy, a program so
new it didn't even have an acronym.
This new program was in the area of
telematics, bureau-speak
for applications that use networks. To the tune of ECU 376 million
from 1990 to 94, the Commission was funding half of the projects in
seven telematic areas, including transportation, health care, libraries,
and government.
I had been wondering what the purpose of Peter 2 was, and I
soon learned that he was heavily involved with the transportation
portion of the telematics program. Peter 1 ceded the floor and Peter
2 began his presentation.
He talked for 10 minutes, at which point I started leafing back
through my notes. During those 10 minutes, Peter 2 had not uttered
one sentence that was evenly vaguely comprehensible. I understood the words, but was unable to parse any of the sentences, let
alone extract any semantic content.
Evidently, there had been a separate program of research on intelligent road systems, known as Drive. Drive successfully completed a total of 71 projects in 1991, presumably with many major
results and at a cost of ECU 60 million. Of course, overhead took 10
percent away, but this was still real money.
Peter 2 kept referring to the "road transport informatics in the
context of the Drive 2 programme," but I had a tough time understanding what that actually meant. Luckily, Peter 1 realized the
problem and cut in.
"I must insist," he said, arching his eyebrows, "there is no Drive
2 programme." Rather, it was more appropriate to refer to the
transportation "theme" within the larger context of the telematics
program.
I still didn't know what this theme/program/project cluster was
actually doing, so I asked Peter 2 to give me an example of one of
the pilot projects or some technology that was actually being used.
He couldn't. He mumbled on about harmonization of standards
and finally explained, as if talking to a small child, that it was "hard
to pick out a particular report from Drive and say this was used
here," pointing to the table in front of him.
It was clear to them that I didn't realize that I was in a room
with policy makers, not some mundane road technician or highway
analyst. Peter 1 gave me a lecture about the vast scope of DG XIII.
It was as if I had asked the Chairman of the Board of EXXON to tell
me how many gas stations he had in Lexington, Kentucky. (Of
course, if you asked the Chairman of EXXON to name any one city
in which he had a station, chances are he might be able to answer
that question.)
I decided to try another tack. The Peters and 40 of their colleagues seemed to spend most of their time issuing contracts under
various themes. Was the process computerized?
Peter 1 was insulted. Peter 2 sniffed.
"Of course we're computerized," Peter 1 said, waving vaguely
in the direction of his desk, which bore an Olivetti PC and a
Hewlett-Packard laser printer.
"What kind of network do you use?"
"Uh, Novell," one mumbled uncertainly. The other one looked
down and shuffled some papers.
"And what kind of DBMS do you use to manage your contract
boilerplate library?" I wanted to know.
A look of panic crossed their faces. Peter 1 gave an exasperated
sigh. Peter 2 seemed to think they were using Foxbase. Peter 1 rose
and handed me some brochures. Peter 2 excused himself for an important meeting upstairs.
I took the subway out to the isolated suburb of Beaulieu, where DG
XIII has office space, to meet Jurgen Rosenbaum, an information officer. We paid our mutual respects and lied about how much help
we would be to each other. I collected another 10 pounds of paper,
then left to try and find someplace to grab lunch in the hour before
my next meeting.
Beaulieu has at least four huge office complexes and dozens
more under construction, and is surrounded by modern looking
apartment blocks. Yet, with all these people, there was not a single
place to eat, or even get a newspaper. This was city planning at its
best.
I got back on the subway and went a few stops into town, hurrying to find a lone Spanish restaurant down the street from the
station. After a quick lunch of fish soup (preceded by a 25 minute
wait), I hustled back to the subway to find my next bureaucrat.
Halfway through our audience on Esprit, I felt myself getting
more and more nauseous. I realized with horror that this wasn't
caused by platitudes but that I was feeling the all too familiar onset
of food poisoning from the fish.
As I rode into town, I felt worse and worse, just making it back
to the warmth of my mediocre hotel before collapsing. I spent the
entire next day in bed, trying to gather enough strength for Wednesday's train ride to Paris.
I left Brussels puzzled by the European Commission. There is
certainly a place for a strong industrial policy, as the Japanese demonstrated with their MITI program and as the U.S. Defense Advanced Research Projects Agency repeatedly showed with TCP/IP,
UNLY, and a host of other successes. Yet in the one field I felt qualified to judge, the Commission appeared to have been a total failure.
The European Internet was coming into being, but only after fighting active opposition from DG XIII.