1. The Revolution Will Be Commercialized

New Democrats on the Information Superhighway

“It’s the economy, stupid.” This was the unofficial slogan of Bill Clinton and Al Gore’s 1992 presidential campaign, waged in the midst of a lingering recession. Although there is nothing remarkable about politicians campaigning on the economy, Clinton’s platform foregrounded the unique role of information technology as an “engine of growth.”13 Prosperity, Clinton argued, hinged on the country’s capacity to develop and commercialize advanced technology, especially in the domains of computing and telecommunications. Clinton’s selection of Al Gore as running mate was strategic in this regard. As a member of the House and Senate, Gore had been a leading proponent of federal investment in information technology and an evangelist about the broad social gains that would flow from a new American communications revolution.

On the campaign trail, Clinton and Gore spoke about their vision for an “information superhighway,” a high-speed communications network that would revitalize the flagging economy by spawning “dozens of new information industries” and providing cutting-edge services to businesses, schools, and hospitals.14 Most people in the United States had little personal experience with computer networking, so the “information superhighway” was a useful metaphor to encapsulate the bundle of futuristic applications envisioned by the campaign. As the New York Times’ John Markoff summarized, “Scientists, engineers, or product developers far from each other could collaborate because their computer screens would become a sort of electronic blackboard for everyone to work on,” while a “couch potato could summon any movie ever made by pushing a button.”15

Like the interstate highway system that Gore’s father championed in the 1950s, the information superhighway promised to distribute a wide range of economic and cultural opportunities by mitigating intractable problems of distance and cost. But unlike the interstate, which President Eisenhower’s secretary of commerce called “the greatest public works program in the history of the world,” the information superhighway would not be implemented as public infrastructure.16 Over the course of Clinton and Gore’s first term in office, their internet policy coalesced around a very different idea: “The private sector must lead.”17 Over and over, internal correspondences, policy documents, and public statements reiterated this point. The revolution would be commercialized, and the private sector would be in control.

The notion of private sector leadership rests on the idea that markets are the best mechanism to distribute the social benefits of a powerful new information technology—a belief certainly espoused by the Clinton policy apparatus. If Ronald Reagan framed supply-side tax cuts as the primary means to “lift all boats,” Clinton and Gore positioned the commercial internet as the best mechanism for generating broad-based prosperity gains. The government’s main job was to help get things moving and then get out of the way. But there is more to it than this.

Clinton’s devotion to market-based public policy did not spring forth spontaneously on the day of his inauguration. Below I sketch a genealogy of Clinton’s laissez-faire internet agenda, which stemmed as much from political expedience and the power of business to shape public policy as it did from ideology. The internet’s commercialization—and the specific policy decisions that enabled surveillance advertising to flourish—reflected a reorientation within the Democratic Party toward the interests of the technology industry and away from working-class politics. There were important structural dynamics at play as well, including the overriding need for U.S. capital to locate new areas of profitable investment in the face of rising global competition. These and other capitalist imperatives motivated the formative internet policy agenda, placing powerful economic “pressures and limits” on political decision making.18

Any given public policy choice must be understood within its historically specific political context.19 For 1990s internet policy, this means paying close attention to the neoliberal consensus presided over by Clinton and Gore, as well as broader shifts within the Democratic Party that transpired over the preceding decades. As Jennifer Holt argues, neoliberalism “placed great faith in market solutions to economic and social problems, and by the end of 1980s, was the predominant philosophy guiding American political and economic policy.”20 Scholars including Wendy Brown and David Harvey have helped to chart the history of the neoliberal political formation, which reached new heights during the formative years of internet policy development.21

Long before he was mocked by late-night comedians for allegedly claiming to have invented the internet, Al Gore was more of an Atari person. As a U.S. House representative from Tennessee in the early 1980s, Gore became part of a group known as the “Atari Democrats.”22 This was an informal coalition of legislators from primarily affluent districts that cultivated a political niche by touting the economic importance of the technology sector and pledging to reform the government’s relationship to tech companies. As Representative Tim Wirth, another prominent voice in the movement, told the Washington Post in 1982, the Atari Dems wanted to shift from a politics of redistribution to a “politics of growth.”23 A few months later, Wirth and a handful of other Democrats split from their party’s mainstream to join conservatives in an effort to relax antitrust enforcement and provide tax incentives for tech companies that wanted to cooperate on research and development efforts.24 The Christian Science Monitor called it a “modern Marshall Plan” for the U.S. tech sector, whereby Congress would “stimulate private funding” instead of providing direct government investment.25

Preaching a gospel of technology development through increased public–private partnerships and relaxed regulatory scrutiny, the Atari Democrats gained influence and institutional support throughout the 1980s. Jerrold Schneider points out that the movement picked up steam in the midst of rising campaign expenses, particularly related to the growing costs of television advertising.26 Atari Dems were among the first in their party to recognize a new source of political patronage in the technology and finance sectors, which had until then been a relatively untapped source of campaign funding.27

The group carved out a political niche among the donor class and won the support of a number of Democratic strategists who wanted the party to break from its New Deal lineage.28 Lily Geismer links the rise of the Atari Democrats to the party’s movement away from its traditional working-class base.29 Technology was positioned as the domain of scrappy entrepreneurs and meritocratic markets, a rhetoric designed to appeal to a fresh voter base of suburban white-collar workers. It is important to emphasize, as Geismer does, that New Deal policies were designed in large part to benefit white male workers and their families while excluding women, people of color, and other marginalized groups. At the same time, New Deal industrial policy generally gave labor a seat at the table to serve as a counterweight to the influence of the ownership class.30 It favored equitable distribution of profits over uninhibited growth. Retreating from this balance, the Atari Democrats represented an insurgent movement that sought to use tech industry boosterism as a tonic to cleanse the Democratic Party of antagonism to business power. The “Atari” moniker fell out of fashion after the eponymous gaming company failed spectacularly in 1983 (the name was originally a gibe anyway). In search of another label for the group, some newspapers began using the term “neo-liberals.”31

The neoliberal platform was institutionalized and amplified by the Democratic Leadership Council (DLC), an organization created in the wake of Reaganism to foment a so-called bloodless revolution within the Democratic Party, moving it toward the political center. The DLC’s founder, Al From, was an experienced party operative who argued that in order to win elections, the Democrats had to jettison populism, excise the influence of labor unions, and fully embrace market-based policies and limited government.32 Many from the Atari Democrat coalition, including Al Gore, joined the cause. With messaging that focused on individual opportunity and responsibility, the DLC and its associated think tank, the Progressive Policy Institute, churned out a raft of what were essentially conservative policy proposals on issues from free trade to welfare reform. As Jacob Hacker and Paul Pierson point out, a crucial element of the DLC’s “reformation project” was to cultivate relationships with generous political donors, particularly those attracted to the organization’s business-friendly outlook.33 One of the DLC’s first policy initiatives argued against the minimum wage.34

Representing the party’s progressive wing, Jesse Jackson began to call the DLC “Democrats for the Leisure Class.”35 Despite this internal pushback, the DLC’s calls for reform were bolstered as the Democrats lost three successive presidential elections in the 1970s and 1980s.36 It was clear to party elites that something needed to change. As Joseph Stiglitz put it: “One couldn’t win an election just standing up for the poor and in modern America, everyone saw themselves as middle class.”37

In 1990, the DLC announced its charismatic new chairman: Arkansas governor Bill Clinton. Known for his affable nature and a willingness to confront what From called “liberal sacred cows,” Clinton was a rising star among the Atari Democrats’ successors, a group that became known as the “New Democrats.”38 As he geared up to run for president, Clinton plotted out a distinctive path to electoral victory, a centrist “third way” between what he framed as big-government liberalism and small-government conservatism. His platform was incongruous in some respects, juxtaposing outwardly progressive stances on health care reform, reproductive rights, and environmental protections with regressive positions on social programs and crime crackdowns. When he accepted the Democratic Party’s presidential nomination in 1992, Clinton underscored his commitment to a market-oriented policy platform and pledged to create a government that would “expand opportunity, not bureaucracy.”39 Cross-cutting this policy mishmash was the promise of a coming communications revolution.

Third Way Internet Policy

Clinton’s defeat of incumbent George H. W. Bush solidified the neoliberal transformation of the Democratic Party’s mainstream. It was clear from the beginning of Clinton’s presidency that internet development would be a flagship test case for the New Democrats’ third way policy program. One month into office, Clinton previewed his internet agenda in a document called Technology for America’s Economic Growth. The commercialization of the information superhighway, now rebranded as the National Information Infrastructure (NII), was highlighted as a “major priority.”40

Here it is useful to distinguish between privatization and commercialization. Privatization—transferring the ownership, management, and control of internet backbone systems from public to private hands—formally began in the late 1980s under the Bush administration and was not completed until 1995, several years into Clinton’s first term.41 As Shane Greenstein points out, privatization only occurred “after the internet had already incubated under government stewardship for a considerable time in the 1970s and 1980s.”42 Whereas privatization is about handing over control of the pipes, commercialization is about building businesses and markets on top of the newly privatized infrastructure. Clinton inherited and carried out the privatization effort, but his administration was the primary policy architect for the internet’s commercialization.

Clinton convened the Information Infrastructure Task Force to set the federal policy agenda for these overlapping initiatives, which included establishing the formative regulatory framework for online advertising, privacy, and consumer surveillance. From 1993 to 1995, the IITF crafted a series of blueprints for internet privatization and commercialization, a complex task that required surveying a wide range of policy domains and mapping out the government’s strategic objectives.43 Although there were many substantive goals on the table, including universal internet service, telemedicine, network security, and educational applications, the IITF’s most basic and important function was to demarcate the roles of the public and private sectors in internet system development.

As New Democrats, Clinton and Gore saw themselves as reformers not only of their own party but of an archaic industrial political economy beleaguered by a bloated and technologically backward federal government.44 They came to view the government’s role not as the builder or provider of public information services but as an accelerator and steward of private sector internet development, which, once overtaken by market forces, would generate broad social gains. The state, Clinton argued, had not kept pace with technology advancements, and as a result, “Government regulations have tended to inhibit competition and delay deployment of new technology.”45 Framing his administration as a new chapter in the federal government’s relationship with the tech sector, Clinton pledged to “play a key role in helping private firms develop and profit from innovations.”46

In September 1993, the IITF released its inaugural policy framework: The National Information Infrastructure: Agenda for Action. First among nine objectives was “to promote private sector investment.”47 Though the government would play a role through “carefully crafted” policy actions, the Agenda for Action made it clear that “the private sector will lead the deployment of the NII.”48 In order to promote “vibrant competition” and “spur economic growth,” the administration pledged to work with Congress to reform the nation’s telecommunications sector to carve a path for the internet’s commercialization.

This initiative became the Telecommunications Act of 1996, a major legislative overhaul that cleared away decades of public-interest regulation to aggressively implement a free market approach. According to David Horowitz, “The broad change was that the public interest [would] be secured not by regulation but by competition.”49 Letting the private sector lead meant not only deregulation but also an abdication by the government of nearly all operational responsibility to see to it that communications systems served a public good. “The point of government regulation, pure and simple, became to help firms maximize their profits,” writes Robert McChesney. “That was the new public interest.”50 As such, critical media scholars have argued that so-called deregulation is better understood as reregulation.51 The rules are not so much eliminated as revised to prioritize commercial interests.

This approach was applied fervently to internet development, as spelled out in the subsequent Framework for Global Electronic Commerce, the most comprehensive statement of the Clinton administration’s internet policy program. Released in 1997, the Framework’s opening section reads: “Commerce on the internet could total tens of billions of dollars by the turn of the century. For this potential to be realized fully, governments must adopt a non-regulatory, market-oriented approach to electronic commerce, one that facilitates the emergence of a transparent and predictable legal environment to support global business and commerce.” Elaborating on this theme, the Framework laid out guidelines for internet policy development across a range of domestic and international issues. I discuss the creation of this document in detail in chapter 2. For now, it is enough to note that the Framework’s first principle doubled down on the approach laid out in the 1993 Agenda for Action: “For electronic commerce to flourish, the private sector must continue to lead. Innovation, expanded services, broader participation, and lower prices will arise in a market-driven arena, not in an environment that operates as a regulated industry.”52

Joseph Stiglitz, among the most distinguished of elite economists, chaired President Clinton’s Council of Economic Advisors, and in that role, he participated in policy discussions around telecommunications reform and internet development. After leaving the White House for the World Bank, Stiglitz wrote a book reflecting on his “ringside seat in government decision making” during the “roaring nineties.”53 Part of the book tells the story of telecommunications deregulation, which Stiglitz attributes to an ascendant “free market ideology” within the Democratic Party.54 “While the demand for deregulation had long been there,” he writes, “the politics of the nineties provided the supply.”55

It is an oversimplification to characterize the New Democrat movement as a sudden and sharp right turn. As Rick Perlstein points out, neoliberalism’s rise within the Democratic Party’s mainstream reaches back to Jimmy Carter.56 A close reading of Clinton’s early policy proposals shows that his administration tried to thread the “third way” needle to a greater extent than critics often admit. Clinton’s standard 1992 stump speech included progressive proposals on issues such as universal health care and student loan forgiveness.57 One of his administration’s first successful legislative initiatives was a tax hike on the wealthy.58

Nevertheless, once in office, Clinton governed like a conservative in significant respects. Across a spectrum of issues, including social welfare, criminal justice, and the federal budget, the New Democrats yielded the terms of political debate to conservative framings, which led to policies that negatively affected workers and marginalized groups. The Violent Crime Control and Law Enforcement Act of 1994 stands out as a particularly egregious example. The bipartisan legislation, part of what Michelle Alexander calls “the new Jim Crow,” put the United States on a fast track to mass incarceration, with disproportionate effects on people of color.59 Two decades later, Clinton apologized. “I signed a bill that made the problem worse,” he said. “And I want to admit it.”60 Today, 20 percent of the world’s prisoners are locked up in the United States, a country that makes up less than 5 percent of the global population.61

These social policies reflect the same neoliberal consensus that was readily applied to technology issues. With few exceptions, America’s political elites governed from what appeared to be a shared understanding that technological change was rapidly outmoding the structures of government regulation and that the only credible response was to tear up the old rules. This is what Jean-Christophe Plantin et al. call the “retreat from the modern infrastructural ideal,” where governments turned away from public utility-style regulation to embrace privatization and so-called free market approaches to networked computing.62

Of course, this policy record reflects not only the trajectory of the New Democrats but also the impact of the 1994 Republican revolution. Clinton began his presidency in a strong political position, with Democratic majorities in both houses of Congress. Then in the 1994 midterm elections, the GOP won both the Senate and the House of Representatives, the latter of which had been reliably Democratic for four decades. The speaker of the House, Newt Gingrich, dug in immediately, leading the GOP in a series of budget battles that resulted in two government shutdowns during Clinton’s first term. The Republicans maintained complete control of Congress for the remainder of Clinton’s presidency.

Despite roiling partisanship, the two parties found common ground on a number of economic issues, particularly regarding telecommunications and media deregulation and the commercialization of the internet. These were areas in which the “New Democrats could join forces with the Old Republicans,” writes Stiglitz.63 The difference between the parties’ approaches was that, as Paul Starr put it: “the Republicans wanted to jump off a cliff, while the Democrats wanted to scramble down . . . preserving a bit of protection for those population groups which might otherwise be mistreated.”64

Hungry for campaign contributions, both political parties saw an opportunity to forge ties with the rising technology sector, particularly among the software and computing companies that had not been as historically dependent on regulation as, say, the telecommunications industry. “Whereas AT&T, for example, had given millions over the years in political contributions,” writes Leslie David Simon, “IBM did not even have a political action committee.”65 Generally speaking, the Republicans held a home-court advantage in terms of business support, but Clinton and Gore, with their New Democrat bona fides, became reliable champions of commercial technology. There was a sense that the New Democrats wanted to “earn their pro-business stripes by pushing deregulation still farther than it had gone before.”66

Internet policy grounded in free market orthodoxy proved politically expedient for the New Democrats. As organizations like the DLC understood well, the success of the party’s class reorientation depended on its ability to secure a strong donor base among ascendant industries such as technology and finance. As Jill Lepore writes, the Democrats’ abandonment of the “working class for the microchip” turned out to be a lucrative fundraising strategy.67 In 1990, the communications and electronics sector donated more money to House Democrats than Republicans by a near 2:1 margin.68

A transcript of a 1996 conference call between Clinton, Gore, and a handful of Silicon Valley leaders is illustrative of the success of the Democrats’ neoliberal turn. The call was led by notable venture capitalist John Doerr, who explained: “This is a pretty unusual event. We’re announcing today that seventy-five executives from the technology community are endorsing Bill Clinton and Al Gore to be president and vice president in 1997. . . . Seventy-five high-tech executives are saying whether it’s the economy, reducing the deficit, shrinking the size of government, creating jobs, or in opening world markets, this administration gets it.”69 Near the end of the call, Clinton remarked: “I thank those of you who crossed party lines for making a leap not only for your companies and your employees, but for our country.”

Shortly after Clinton’s reelection, Doerr and crew were invited to the White House to discuss economic policy issues. According to the official program notes for the event, Doerr and the other tech leaders who “provided political support during the campaign” sought to “establish a working relationship with the administration in order to help shape the administration’s technology agenda and provide input on economic and regulatory issues that impact high technology industries.”70 Over two terms in office, Clinton and Gore deepened their ties to Silicon Valley, meeting with many tech executives including Marc Andreessen, Jeff Bezos, and Steve Jobs.

The budding courtship between the New Dems and the technology sector was something of a coup for the Democratic Party in terms of political patronage, but it paid mighty dividends to the private sector as well. As I describe in chapter 2, Clinton and Gore extended the idea of public–private partnership to the policy-making process itself by inviting business interests to extensively participate in internet policy formation. In a remarkable book that blends policy analysis with historical tell-all, former AT&T and IBM lobbyist Leslie David Simon provides a glimpse into the extent of corporate access in this formative period of internet policy making. Simon, who is generally approving of Clinton’s stance on private sector leadership, notes that the Clinton policy team “had not come to this understanding accidentally.”71 In fact, business interests had “mounted an aggressive campaign to shape the administration’s policy from the beginning.”

From the very start of Clinton’s first term, the computing, telecommunications, and media industries were invited to give policy guidance in official capacities such as the advisory council for the NII, which served as a private sector counterpart to the IITF. Traditional lobbying was prevalent as well, often though trade groups like the Information Technology Industry Council, which put out over thirty-five policy documents in 1995–96 alone and by 1999 was publishing a “high tech voting guide” that rated members of Congress according to their friendliness to tech business issues.72 Another industry group, the Computer Systems Policy Project (CSPP), reportedly arranged for a wish list of policy proposals to greet Clinton on his desk as he entered office in January 1993. According to Simon, CSPP materials were widely read within the administration, to considerable effect. Among the group’s principle recommendations was that the “development and deployment of the [NII] must be led by the private sector, guided by the forces of a free and open market.”73

As for the Republicans, Gingrich struggled somewhat to prove his technology chops (once suggesting an inane program of means-tested tax breaks to help poor families buy computers), but his free market credentials were strong indeed.74 Gingrich maintained close ties with the Progress and Freedom Foundation think tank, an early proponent of telecommunications deregulation, and he was happy to make deals with the president on such matters.75 In addition to defunding the government’s Office of Technology Assessment, Gingrich stewarded the House’s overwhelming bipartisan passage of the Telecommunications Act of 1996, unanimously approved by the Republican majority.

Despite its policy successes, the neoliberal consensus was not all pervasive, impermeable, or unchallenged. It involved what David Hesmondhalgh calls “struggle and negotiation.”76 Throughout the early 1990s, there was a fair amount of contestation among government and private sector interests on various fronts, including pitched battles over internet content deemed indecent (e.g., pornography) and encryption controls. However, such disputes were overshadowed by the broad agreement over privatization and commercialization. There was little room for alternative ideas regarding the fundamental order of things. For example, before Vice President Gore was a proponent of internet commercialization, he had been a strong advocate for public investment in computing infrastructure development. During the 1992 campaign, and even into the first few months of governing, Gore argued that state-funded internet provision would be necessary to ensure that the information superhighway would be available to all, rather than a “private toll road open only to a business and scientific elite.”77

In mid-December 1992, the president-elect and the vice president–elect held a televised roundtable on the state of the U.S. economy. Panels of executives, academics, and civil servants dialogued with Clinton and Gore on live television. One notable exchange subtly illustrated the powerful voice of business in setting the technology policy agenda. Robert Allen, the chairman of AT&T, remarked that outside of providing incentives to the private sector, the government should steer clear of the task of building the new information networks.

Gore responded: “It does seem to me that government ought to play a role in putting in place that backbone. Just as no private investor was willing to build the interstate highway system but once it was built, then a lot of other roads connected to it. . . . Most people think [the internet] ought to be built by the Federal Government and then transitioned into private industry. You didn’t mean to disagree with that view when you said government shouldn’t play a role, did you?”

“Yes, I may disagree,” was Allen’s soft-spoken reply, prompting more than a few chuckles from the room. Clinton quipped, “I was hoping we’d have one disagreement,” then quickly changed the subject.78 The deadpan delivery of Allen’s opposition to public infrastructure was understated, but his message may have well been shouted into a bullhorn. He was speaking not only for AT&T but for the whole of the U.S. business sector. At a foundational level, the notion that the government would fund the new information infrastructure or steward the development of public interest applications was anathema to a broad swath of private sector interests. A 1994 investment forecast from Deloitte & Touche illustrates this impulse in remarkable fashion, warning, “Network owners counting on advertising and transactional revenues to offset heavy capital investments could be reluctant to go along with steps designed to encourage users to browse through the county council’s agenda or exchange videos of the latest high school soccer games instead of ordering things from information and merchandise vendors.”79 In other words, if it don’t make a buck, it ain’t worth doing. Visions for the information superhighway that lay outside of profit making were a threat and needed to be reined in. The real task at hand was to stimulate economic growth and global competitiveness. Everything else was a distraction.

This sentiment was widespread among the industry groups working closely with the federal government to develop both the broad strokes of internet policy, and, as I show in chapter 2, the specific regulatory environment for advertising and commercial surveillance. Vice President Gore’s rapid evolution on the issue of public infrastructure is indicative of the efficacy of business lobbying efforts. In an “extraordinary turnabout,” Gore quietly abandoned his position on publicly funded infrastructure, instead taking up a star-crossed effort to stash universal service and common carrier provisions into the coming avalanche of deregulation.80

Interactive Media as Threat and Opportunity

Much of the meat and potatoes of Clinton’s first-term internet policy agenda dealt with infrastructural topics such as the privatization and interoperability of internet backbone systems. Issues more directly related to commercialization, such as advertising and privacy, were part of early policy discussions but were not taken up fully until Clinton’s second term. For the marketing complex, however, advertising and privacy were not back-burner issues at all. By 1994, marketers had embarked on a concerted lobbying effort to ensure that lawmakers stuck to the principle of “private sector leadership” as they moved from privatization to commercialization. This political project began in earnest as marketers began to understand the internet simultaneously as a promising new business opportunity and a threat to their long-standing position at the top of the commercial media food chain.

By the time Clinton and Gore introduced the concept of the information superhighway on the presidential campaign trail, the marketing complex was already buzzing about “interactive media.” In the same way that the term “print” evoked an array of media channels from local newspapers to national magazines, the term “interactive” had become a catchall for marketing at the intersection of personal computing, telecommunications, and cable television. Reading the advertising trade press during this period reveals that the new interactive media generated a great deal of hype, but also skepticism within marketing circles.81 Would the new media be a game-changing opportunity for growth or another passing fad?

Early on, there was incredulity about interactive media that, according to Advertising Age, had sprung up “almost overnight.”82 Of course, things like computer-based online services had not actually appeared out of nowhere. In fact, a portion of the ad industry’s early skepticism stemmed from the fact that some practitioners felt like they had been down this road before with less than stellar results. They recalled failed attempts to commercially develop early networked information services such as videotex and teletext, which transmitted text-based data over telecommunications lines and broadcast signals.83 These were followed by a more successful crop of computer-based online services such as CompuServe, Prodigy, and America Online (AOL). Although some of these systems had experimented with advertising, they remained largely funded by subscriptions.84 Content publishers had also begun to test floppy disk and CD-ROM formats, though these too had relatively little advertiser buy-in.85

Things changed after the 1992 election. Clinton and Gore were now promoting the National Information Infrastructure from the White House rather than campaign stops. Led by AOL, commercial online services began to attract new subscribers at a significant rate. Cable and telecommunications companies touted plans to develop “interactive television,” or “iTV,” services to bring electronic shopping, content on demand, and household-level target marketing into the mainstream.86 Most importantly, the trade press began covering a new technology called the World Wide Web. Though it was a fringe medium compared to AOL or CompuServe, the release of graphical web browsers signaled the web’s potential to attract a larger user base.

It was around this point that some leaders within the marketing complex began to take the new interactive media more seriously as both an exciting business opportunity and credible threat to business as usual. The trade press began to argue more forcefully that the web was worth paying attention to, even if it had yet to take popular hold. Advertising Age ran more stories on the web in the first two months of 1995 than it did in all of 1994.87 Whatever this was, it was no teletext.

A key element of the emerging narrative was that interactive media was finally going to put consumers in charge. “If the remote control was the great equalizer in the battle between advertiser and television viewer,” wrote Chris Anderson, then interactive media “may shift power completely to the hands of the consumer.”88 This was a vision of the advertiser–audience relationship that was markedly different from the status quo. Advertising has always been a game of cat and mouse among advertisers and consumers. “Ever since the start of their industry in the nineteenth century,” writes Joseph Turow, “advertising organizations have been deeply worried about finding efficient ways to persuade people to buy their products.”89 Although industry rhetoric tends to downplay this framing, the heart of the enterprise is adversarial: capture people’s attention and try to persuade them to action, whether they ask for it or not. Commercial media environments are structured to facilitate this game through conventions like the commercial break, the full-page ad, the half-time show sponsorship, and so on.

At one level, advertisers understood that interactivity would add new dimensions to the game of capturing consumer attention. The industry has historically adapted to keep up with social trends, especially those produced by new communications technologies. Many marketers hoped that interactive platforms would present fresh opportunities to “go beyond the one-way flow of traditional media” in order to engage consumers in more meaningful ways.90 But advertisers also worried about more fundamental changes. If interactive media was really going to prioritize individual agency, then this suggested the possibility of a media environment where advertisers no longer held structural advantages in the game of cat and mouse. Worse yet, perhaps they would no longer get to play at all.

Practitioners and analysts began to express concern that the ad industry could be “left behind by technology,” as one headline put it.91 Martin Nisenholtz of the Ogilvy & Mather Direct agency was among the earliest to call his colleagues to action, warning, “If you have no role in the development of the [internet] business, you probably won’t have a role in its future. It’s not a foregone conclusion that advertisers will be involved with this.”92 Although some observers in the trade press were skeptical that any media platform could develop in the United States without advertising support, others were not so sure.

By the end of 1993, Gerald Levin, CEO of Time Warner Cable, had pledged to invest $5 billion to build a next-generation interactive television service.93 Dubbed the Full Service Network, the goal was to bundle video programming, home shopping, electronic games, and other applications into a new kind of subscription platform. Other cable and telecommunications companies announced similar initiatives, kicking off a frenzy of speculation about the future of interactive advertising. As John Malone, head of cable giant TCI and perhaps iTV’s greatest evangelist, put it: “Rather than a structure designed to satisfy advertisers . . . everything will be organized to satisfy the needs of the individual consumer.”94 Time Warner executives drove the point home by suggesting that advertising might not be a necessary component of interactive TV. If consumers were willing to pay the full costs of program delivery, Time Warner signaled it might be able to provide “network TV shows without commercials.”95

There is a long history of advertising industry pushback against innovations that give people more control over their media engagement. The television remote control, VCR home recorder, and pay-per-view distribution technologies were all seen as highly disruptive to compulsory advertising. But none of those threatened to upend the basic structural arrangement of the advertising funding model to the same degree. “The revolution is now,” warned an Advertising Age editorial. “Who controls this media—advertisers or the John Malones of this world—is now being determined.”96

The advertising industry’s reaction was dictated most strongly not by advertising agencies or the trade press but by major national marketers, otherwise known as the people who write the checks. Already concerned with the fragmenting of mass audiences and consumer aversion to increasingly ad-cluttered media environments, big marketers grew anxious about their status on the information superhighway. Perhaps the most important call to arms came from Edwin Artzt, chairman of Procter & Gamble, then (and now) among the world’s largest advertisers.97 In 1994, Artzt gave a high-profile address to the American Association of Advertising Agencies that called on the industry to seize control of interactive media development in order to create the “greatest selling tool ever conceived.”98 Inaction, warned Artzt, meant that advertising might not have a future in the new media world. It was a moment of awakening for marketers and the advertising industry that depended on their patronage. As the Washington Post reported: “Now the head of Procter & Gamble, a man as important to U.S. advertising as turnips are to a pig, has said out loud what many only agonized over in private: Someday there may be no commercials on the tube.”99

Even though he never mentioned the internet by name, the structural and political implications of Artzt’s remarks are significant. The man was not simply musing that it might be a good idea to see what this whole interactive thing is all about. This was a rallying cry to maintain the fundamental political economic order of the U.S. media system. It was a call to reaffirm the notion that media exist to serve the interests of advertisers and that the new media, whatever form they may take, must be brought into this alignment. When commercial radio shook up the world of print advertising in the 1930s, Artzt recalled, advertisers took control of broadcast programming and “molded the environment to fit our needs. . . . Now, we’re going to have to grab technology in our teeth again and make it work for us.”100

Matthew McAllister frames this moment as expressing a love–hate relationship that centered around the issue of control.101 Marketers loved the prospect of more control over consumer information in order to target messages to specific consumers, but they were deeply concerned about failing to extend the economic control they have historically wielded over media systems to the emerging internet. Writing in 1995, McAllister argued: “If advertisers sense that computers [and the internet] offer them more control than they had before, then they will exploit these digitized opportunities to the hilt. If advertisers sense that computers offer less control than they had before, then they will do everything they can to turn that around.”102

Political mobilization became a central part of marketers’ efforts. Artzt called on industry leaders to craft a “legislative and regulatory game plan” to ensure that advertising would continue to have pride of place in the media hierarchy. The first order of business was to build a cross-industry coalition to advocate on behalf of the advertising funding model itself. “We’re limited only by our creativity,” said Artzt, “and our ability to prove that it’s in everyone’s interest to involve advertising in these new media.”103 The information superhighway was still a nebulous concept in 1994. Without a clear understanding of how interactive media would pan out, and lacking any guarantee that whatever platforms emerged would be ad supported, the marketing complex adopted an anticipatory strategy to shape the entire regulatory environment in their favor. Lobbying the federal government to support the advertising funding model rather than any specific iteration, the strategy was like arranging the pieces on a chess board to their own advantage before committing to any individual moves.

There were differences of opinion about what exactly interactive advertising would look like, but consensus quickly formed around the notion that marketers, ad agencies, and publishers needed to work together to ensure that advertising would be the economic engine of the new media. A few months after Artzt’s speech, the marketing complex launched a multifaceted lobbying effort to advocate for just that. Leading the charge was a brand new trade organization called the Coalition for Advertising-Supported Information and Entertainment (CASIE), which represented marketers and advertising agencies. Artzt took a leadership role, and throughout the second half of the 1990s, CASIE ran a number of campaigns to support its primary mission of creating “an environment where advertising revenue is the key funding source for the large majority of information and entertainment sources in the evolving world of media.”104

To make this case, CASIE and others leaned heavily on an argument about the benevolence and necessity of advertising’s subsidization of media. The core idea is that funding from advertising is the one and only means to support a media system that is both accessible to all people and free from government control. By offsetting the costs of content creation and distribution, the argument goes, advertising makes media affordable (even free!). And by attracting funding from a diverse range of businesses, advertising ensures media’s independence from the heavy hand of state censorship. In what the trade press described as a “politically winning argument,” the industry shrewdly linked the notion of the advertising subsidy to the concept of universal internet service, a policy objective particularly near and dear to Vice President Al Gore.105

In the summer of 1994, Procter & Gamble dispatched another executive, Robert Herbold, to testify at an NTIA hearing on universal service held as part of that agency’s work with the IITF. Herbold argued that without advertising support, the Clinton administration would be unable to achieve its goal of universal internet access. On an ad-free information superhighway, warned Herbold, “the less moneyed will be stranded at the side of the road.”106 Connecting universal service to the ad subsidy became a staple of the marketing complex’s lobbying playbook, and evidence suggests that the argument was well received among policy makers. After hearing from Herbold, the NTIA issued a formal request for further comment on “the efficacy of advertising as a vehicle for funding universal service in the 21st century.”107 In the words of John Kamp, vice president of the Four As advertising trade group and former FCC staffer, “Clearly we made progress because there seemed to be agreement that advertising will pay for a lot of this.”108

In the next chapter, I take a closer look at how the advertising business model was normalized in the politics of internet commercialization and explore how business interests worked hand in hand with government officials to craft the foundational policies of surveillance advertising.