Chapter eight 
Doing Business on the Net
If the narrow electronic footpath called the Internet is ever going to become an Amazing Information Superhighway, if the existing network of university and corporate computers is ever going to become more than just a dust and dirt road, then it will be due to people such as Peter Berger, hot behind the wheel of his big green cement truck.
Though, as I’ve said, there is no real Superhighway at the moment, portions of the roadbed are being cleared and graded, and Berger’s truck, with a massive whirling bucket and Telerama, Inc., printed on the side, is rushing in with a load of wet concrete.
And if the truck doesn’t break down, as this metaphor surely will any second now, Telerama will soon have paved its own small section of the larger road.
Despite my metaphorical fabrication, Peter Berger doesn’t look at all like a truck driver: no dangling cigarette, no Peterbilt cap, not much in the way of whiskers. He doesn’t look that much like an attorney, either, though he is one, general counsel to Luce McQuillen Corp. He is also system administrator for Telerama, Inc., Pittsburgh’s first local access provider.
While Tony Shepps’s Cellar, a bulletin board system, exists mainly to offer its own discussion groups, Telerama’s primary purpose is to hook people into the Internet. There are hundreds of local access providers like Telerama, with more starting up every day; for people who want to be on the Internet but don’t have a free account at work or school, these local providers tend to offer a better Internet price than major national services such as Prodigy and CompuServe, though the latter offer more in the way of features.
On the day we are to meet, I fully expect to find Berger in one of those glass and steel towers that forest Pittsburgh’s golden triangle—there is something so decidedly corporate about the name Luce McQuillen Corp. But instead, Berger’s office is housed in a nondescript brick building, up a steep stairwell, behind a door that doesn’t even have a sign.
The angled building, otherwise empty, fits tightly into the irregular hills of Mount Washington, a few short blocks from the Monongahela Incline. It is a modest neighborhood, to be generous. The morning I visit, the street is empty except for a few elderly men in shorts and dark socks shouting their impressions of the two-run Orlando Merced double that helped the Pirates squeak past the Florida Marlins the evening before.
General counsel? I expect Berger to be pin-striped, buttoned-down, and graying at the temples. My own preconception of lawyers, I suppose. The fact is, Berger looks like my nephew. Though he is twenty-five, the Brooklyn native appears younger, barely out of college—much less law school. He has short, dark hair, a friendly round face, glasses, and enough energy for six Berger has forgone the expected Brooks Brothers suit for blue jeans, a black T-shirt, and purple Converse high-top sneakers.
He is an Internet zealot, it turns out, spending almost every minute of the workday logged on. His own introduction to the Internet world went like this:
After graduating from Pitt Law School, Berger worked for Legal Aid in Washington, Pennsylvania, specializing in divorce and child custody, but his friends Doug and Todd (aka Luce and McQuillen) wanted to open Telerama, and they needed Berger’s advice.
“So I went to my boss and said, ‘Hey I’d like to do some work on the side,’ and he said, ‘No, you can’t do that.’ So I told Doug that if he wanted me, he would have to offer me a real job, so they offered me a real job and I jumped.”
Berger keeps Telerama running, clearing clogged files, answering phones, answering electronic mail. What this means is that he gets to play on the computer all day long, and he fairly loves it.
“When I worked for Legal Aid, I couldn’t wait to get out of there. Now I don’t even notice when five o’clock rolls around.” He says it isn’t work, but fun. “Anytime you want, you can blow off and read news, or E-mail your friends.”
Berger cradles a keyboard on his lap almost the whole time we talk. Our morning is interrupted again and again by a ringing phone—Telerama customers with frozen screens or garbled messages—but Berger handles the calls quickly and sends the callers on their merry ways. He laughs a lot and looks at the ceiling whenever someone phones him with a senseless or rudimentary question.
But Berger’s demeanor changes the moment I ask about legal issues. He invisibly switches hats, and now I see the attorney-at-law. “The big issue, for an access provider, is liability,” he explains, sitting up in his leather recliner. “There is no quick fix to that. There’s no way to just make people sign a document and all of a sudden we aren’t liable. People can use our system for any number of things. If they wanted to—it’s against our rules—but if they wanted, they could conceivably log on and use it for drug transactions or conspiring to murder someone or any number of bad things. Now, are we liable for that?”
His is not the only company worrying about such liability, by the way. Prodigy, which is owned by Sears, runs software that automatically searches out obscene words and then removes the offending messages from its bulletin boards. America Online has had to take action to remove alleged child pornographers from its service.
A bank of modems whines and whistles in the back room, a signal that more people are calling in and getting connected. My eyes come to rest on a bottle of Turns near Berger’s terminal. I ask if the antacid tablets belong to him.
“Yes,” he laughs. “But I think it’s a really good sign that the bottle has been here for two months.”
Telerama and other access providers inhabit a gray area in the communications industry. Phone companies, Berger explains, are designated by the government as “common carriers” and, as such, are not liable for a customer’s misuse. “But the phone company gives up a whole lot of rights in terms of their pricing in order to get that immunity. Some businesses in our position are sort of claiming, ‘Oh, we’re a common carrier.’ Now, I feel like we’re a common carrier, we act like a common carrier, but there is a question of whether legally we really are. If someone ever did something, could we be legally sued? That’s the problem that’s giving me gray hairs.”
I still don’t see the gray, but I can see the concern. “What else?” I ask.
Berger sets aside the keyboard, pulls his plush executive chair to the rim of his semicirclar desk. “There are some ethical questions,” he says. “We value our customers’ privacy. We assure them that we don’t go poking around in their stuff, but what happens if someone tells us, ‘So and so is doing this’? This happens all the time. People say, ‘So and so is doing something bad, go stop them.’ At what point do we have the right, or the obligation, to go in and actually take an action? We try to be as laissez-faire as possible.”
I ask Berger to be specific, to give an example of a misbehaving customer, but the lawyer is cautious. So I ask for a composite, a hypothetical.
“Well, suppose one of our woman customers comes to us and says, ‘Okay, this man customer over here is stalking me. He sends me E-mail messages every day that are lewd and lascivious and I’m beginning to think a little threatening. He’s sending me talk requests all the time. Whenever I get on IRC [an Internet feature that allows people to “chat” in real time, much as they might on a CB radio,] he follows me around and sends me messages. He called me at home the other night.’ What do we do in a situation like this? One, we can do nothing. Two, we suggest to the woman some ways to alleviate the situation, such as setting things up so that E-mail he sends her will bounce.”
(Bouncing is the computer version of “return to sender,” and it can be set up to work automatically so that any mail from one particular address is not accepted at another particular address. The mail just bounces back to the sender. These bounce arrangements involve some computer programming, but can be executed by a reasonably adept professional or advanced hobbyist.)
Berger continues:
“Moving up a rung, we can send him a message saying, ‘You know what you are doing is really uncool and we think you should stop.’ Or we can send him a message saying, ‘You are being really uncool and if you continue this behavior we’re going to kick you off the system.’ A fifth option would be to go and turn him into the cops. There is a whole spectrum of responses we can take. But which one should we take? What’s a principled way of responding?”
Berger and Telerama, Inc., are in the electronic culture business itself, but much more hotly contested, and just as legally unclear, is the question of how this culture might help, or harm, businesses of other sorts. Everyone seems to have a different idea about what this new electronic turnpike should become; yet one thing seems certain: the Information Superhighway has tremendous business potential, and getting in on the ground floor now might be as lucrative as was securing Atlanta’s first cable franchise or owning exclusive rights to manufacture microwave popcorn.
This potential to make money has become its own Internet controversy, right alongside censorship and pornography, generating massive arguments and more flames than the entire lifetime output of the Zippo plant. In fact, using the Net to post advertising is considered by many to be a shameless breach of net etiquette, and those who follow, fret over, and frequently flame net abusers even have their own newsgroup, alt.current-events.net-abuse.
The best-known example of alleged Net abuse is a series of postings by two Phoenix lawyers, Laurence A. Canter and Martha S. Siegel. The lawyers, a married couple, posted an advertisement in April 1994 to thousands of Usenet newsgroups, everything from misc.fitness to rec.arts.disney. Sending a posting to more than one group in this way is known as crossposting. Sending to a multitude of groups is known as a spam, after a famously repetitious Monty Python comedy sketch. Canter and Siegel, as their notoriety increases on the Internet, are often simply referred to as Crosspost & Spam by their detractors.
The lawyers’ simple ad raised hackles for a number of reasons. One seems to have been that people on the Internet don’t like lawyers any more than people elsewhere. The second reason is that the ad, an offer to help immigrants participate in the federal government’s green card lottery, was seen by their critics as a scam, and perhaps a ruthless one, since the lawyers were charging a fee to help aliens fill out forms for what was meant to be a free lottery. The final reason is that the crossposting to literally thousands of unrelated Usenet groups was seen as a new form of electronic junk mail: it was not related to any topic normally discussed on the newsgroups, nobody had apparently asked for the information, yet it filled countless electronic mailboxes.
What really bothered people was not that Canter and Siegel did this once (or even that they went on to repeat it again), but the thought of what would happen if other people started to do it, too, if the firm’s innovative electronic advertising strategy worked out and innumerable companies, large and small, jumped on the bandwagon.
You see, this ability to spam, to reach millions of readers sitting in front of millions of machines, is, unlike conventional junk mail, basically free, aside from the cost of an access account. Name another way to reach millions of potential customers at such a price. Short of jumping off a tall building with advertising on your T-shirt, there aren’t many. With a little technical knowledge, I could spam, you could spam, every charity and mail-order shoe company on the planet could spam, and what would that do to the Internet itself? Would it change the basic character of the Net—the hopeful, forward-looking, freespeech frontier mentality? Would it drive people away? Would the whole thing just explode?
People went to a lot of trouble to make sure that Canter and Siegel’s crossposting strategy did not work, everything from filling the firm’s return electronic mailbox with flames and junk so that no legitimate replies could get through, to notifying various state bar associations of the firm’s conduct and alleging that it was improper, to writing complicated programs called cancel bots that automatically erased subsequent Canter and Siegel postings moments after they appeared.
Others took thousands of those little subscription cards that fall out of magazines and filled them out with Martha Siegel’s name and address. Following the green card lottery post, Ms. Siegel told The Wall Street Journal that she received “carloads” of magazines to which she had never subscribed.
And others simply took to the Net: denouncing the pair, calling for retaliation or legislation, protecting their home turf. The argument has been going on for over a year now, and shows no signs of stopping.
Canter and Siegel themselves continue to practice law. They have published their own book (How to Make a Fortune on the Information Superhighway), claim to have generated about $100,000 in business from the ad (though others dispute this), and have set up their own Internet marketing agency to help other companies distribute commercial messages.
Was what Canter and Siegel did illegal? Not at all. Basically, nothing is illegal on the Internet unless it is illegal off the Internet: for example, threatening the president, transmitting child pornography, or engaging in securities fraud.
Was what Canter and Siegel did unethical? Well, that depends on whose ethics you want to consider. The American Bar Association for instance, fully permits its members to advertise.
I posted a request to the aforementioned newsgroup, alt.current-events.net-abuse, asking what was so onerous about the Canter and Siegel green card incident, and received numerous replies within hours, many of them pages long.
Adam Elman, a graduate student in computer science at Stanford University, pointed out that many magazine and newspaper articles on the Crosspost & Spam affair had missed the point:
The issue with the Green Card post and other spams has NOT been advertising. There are those who feel any advertising on the Net is wrong; however, they’re really living in the past. Advertising on the Net is inevitable. The problem with C&S, pure & simple, is that they misused Usenet. Not by posting an advertisement, but by posting an advertisement to a wide variety of newsgroups to which the post was irrelevant. Usenet is based on the idea of the newsgroup; if I want to read articles about Mac communications, I read comp.sys.mac.comm; if I want to read articles about current episodes of Star Trek, I read rec.arts.startrek.current. I don’t expect to see advertisements about the Green Card lottery in the Star Trek group.
Mitchell Golden, an assistant professor of physics at Harvard, echoed Elman:
What Canter and Siegel did was to flood every Usenet newsgroup with copies of their “Green Card ad”. For example, here at Harvard it showed up in private university newsgroups, such as harvard.course.physl5c—which is supposed to be used to distribute course materials to students. This is, as even Mr. Canter and Ms. Siegel surely know, an abuse of the system. The objection to the immigration lawyers’ posts isn’t their commercial content. Usenet readers just want them in the right newsgroup: alt.visa.us.
Another reply, from Tom Ritchford of New York City, summed it up quite colorfully:
Imagine that you are sitting in a cafe, talking to a few friends. Then, someone comes in with a megaphone and proceeds to deliver an advertisement, in fact an advertisement that is trying to sell for $75 something that you can get for free. You later discover that this individual has done this in every cafe in the city … and that this individual intends to do this repeatedly.
Only two people weighed in on the other side. One of them was Charles Packer, a programmer working at NASA’s Goddard Space Flight Center, who wrote, “I maintain that Usenet should continue to be an adventure in absolute freedom of speech and be open to whatever anyone wants to post. Net etiquette may be that advertisements are not to be posted, and this should be sufficient to dissuade potential advertisers because of inevitable ill-will.”
The other was from Sue D. Nym, a clever pseudonym. Sue wrote this: “Frankly, I don’t think what C&S did was worth the uproar it generated. The response was like ‘mob justice’ and ‘vigilantism.’ The Internet is far less civilized than the world understands.”
There are other “spam” advertisers, of course, though less notorious. For instance, you can buy Tupperware on the Net. You can even host an electronic gathering, and “earn hostess gifts just like you would at a regular Tupperware party? Others have spam-advertised Miracle Thigh Creme, incense, herbal diet plans, and various get-rich-quick schemes. Authors have even plugged their own books.
And, of course, businesses are finding new (and less upsetting) ways to use the Internet as fast as you can read this page. A few of the larger mail-order personal computer retailers have their own Usenet groups—a handy way to answer technical support questions, and not a bad way to keep your name in front of the customer in a low-key way. On-line shopping catalogs for everything from clothing to fruit are appearing on the Internet almost as fast as those old-fashioned paper catalogs appear in the mailbox at your curb. A California nightclub uses the Net to post a listing of upcoming bands, and more than a few restaurants have begun posting menus, with updated daily specials. A new part of the Net called the World Wide Web—which I’ll examine at length later—is bursting with business and advertising.
The lesson for the Net’s architects, I suppose, is this:
When it comes to advertisers and the Net—If you build it, they will come.
Should you by chance be thinking of opening your own local access provider, you will be pleased to know that it doesn’t take all that much in the way of equipment. Peter Berger’s outfit occupies just two small rooms. There is a third room, to be honest, with a conference table and refrigerator, but it doesn’t look as if it has seen much use. Berger holds court in the front room with his desk, his computer, and a small sofa for clients. The back room houses a few personal computers, a bank of twenty-eight standard modems, a laser printer, shelves of what seem like spare parts, and one exotic piece of hardware: an SMSDU (Switched Multimegabit Data Service Unit). People phone Telerama from home or business and connect in with one of the standard modems, the modem connects with the SMSDU, and the SMSDU connects to the rest of the Internet, transmitting data at a very fast 1.17 megabytes per second.
Of course, you need to know how to set all these devices up and work the software that lets them talk. That’s where Doug and Todd come in.
Telerama started as Chat Thing, a bulletin board system not unlike the Cellar. “Todd [McQuillen] had used one of these in Chicago and when he came to Pittsburgh he really missed it,” Berger told me. “So his wife, as a wedding present, bought him six phone lines.”
Doug Luce, the other partner, owned a bit of sophisticated equipment for UNIX (the hardware and software system that provides the Internet’s basic technical vocabulary) and “it just sort of mutated over time. We had the advantage of doing this at a time that really no one else was doing it. So we’ve been able to grow as the hype grows.”
Pittsburgh now has a handful of local access providers and a FreeNet (yet another wrinkle—a no-cost provider), with others in the works, but Berger isn’t worried. “We think the FreeNet is going to be a good thing, because it will get more people interested in the Internet in general.”
In the summer of 1994, Telerama had five hundred customers, and was growing, in Berger’s own words, “rapidly.”
How rapidly?
“I used to think that the main market was expatriate college students, people who have lost their college accounts. But the people we are getting on-line now are very unsophisticated as far as computers are concerned. They are just people who said, ‘You know what, this sounds really neat and I would like to do it.’ A lot of retirees, a lot of married couples. So obviously the market is a lot bigger than we originally thought.”
Just how big is it?
Berger laughs, asks me when my book will come out. He doesn’t want to encourage competition.
So we leave it at this:
The greater Pittsburgh area, the locals who might want local access, is home to roughly 2 million people, and multiplying that by twenty dollars a month would buy a lot of processed pork shoulder.
The Net, like it or not, is fast becoming big business, and many business people are only just starting to catch on. Get your cement trucks ready. Once the Internet marketers figure out how to make this all work, the term “cash flow” is going to take on a whole new meaning.