To preview the cutting-edge themes of our ninth Highlands Conference, Ubiquitous Microsensors and Networks (Carmel Valley, CA, November 3-4, 1997), our resident interviewer Michèle Ledgerwood had a chat with one of our very forward-thinking Highlanders, Mr. Jock Gill, President of Penfield-Gill, Inc. She was joined by Mr. Larry Seaquist, whose "do-tank," The Strategy Group, shares many interests with Jock.

In 1981, after several years of working in communications, Jock started a computer company that created educational and business software. In August, 1991, Bill Clinton announced that he was running for President and Jock, who knew him personally, began working on the campaign in July, 1992, doing electronic media work. He continued on as a "technology wonk" in the communications department at the White House (January 1993-March 1995), during which time he created an "American Dream" e-mail list that he still uses to get feedback on his "interests du jour." Since leaving Washington, he has been a consultant to many large companies including IBM, John Hancock and General Motors, consulted to a number of startups and has done pro bono work for political groups in Washington. Our interview, conducted in the Fall of 1997, focused primarily on Jock's recent project on Intelligent Houses [http://www.penfield-gill.com/presentations/aug97/intellihouse.html]. Jock recommends that when you read his paper, you also look at the reader responses that he has posted. Another paper of interest is Critical Technologies in a Global Context: A Review of National Reports, by Caroline Wagner at RAND (White Paper, WP-117, May 1997). [http://www.rand.org/centers/cti/].

Henry Kelly in the Office of Science and Technology Policy (OSTP) initially sparked Jock's interest in fuel cells. Jock made a presentation to group called the Uninterruptible Uptime Users Group (UUUG), which examines the consequences of electricity blackouts during important procedures such as surgery or financial transactions, and devises ways to create an uninterruptible power supplies. George Kamburoff came to one of their meetings to discuss fuel cells. After talking to some folks at Pacific Gas & Electric (PG&E), Jock decided that "we really need to work towards distributed point source generation—gas turbines, fuel cells, wind, local hydro—because the idea of a massive central generating plant distributing electricity to end users over an inefficient and expensive grid is not going to be a viable solution much longer." His work on information warfare—looking at how information might be used in a conflict situation to the disadvantage of an opponent—also made clear the dangers of massively centralized, highly computerized infrastructures. There were obvious environmental, national security and balance of payment advantages to taking a new approach.

JOCK GILL: One of my Japanese clients, Mr. K. Nishi, asked me to think about a very interesting problem: what could we begin to say about the year 3000? Can we say anything at this point? We can say with confidence that the Seven Deadly Sins will be as prevalent as they are today and that there will be tensions and conflicts and problems. Given the state of biotechnology, there probably will be biological backwards compatibility with the people in the year 2000. Everything that today is dumb probably will be smart; things that are disconnected will be connected. The balance between what is heavily centralized and what is decentralized will shift towards more decentralized, because a bottom-up evolutionary approach isn't always ideal: if you've just experienced a surprise attack, you want a rigid command-and-control mechanism that specifies who does what now why, not a leisurely bottom-up approach. Also in the year 3000, it is probably true that we won't be burning oil or natural gas or coal, either because we've run out of it, or because it's too toxic.

Starting from the year 2000, when do these future scenarios become probable and when do they become realistic? You don't have to get very far from the year 2000 to think that burning carbon is a bad idea and that disconnected dumb devices are a bad idea. In a few years, we probably will have the technology to wean ourselves off of coal and oil and natural gas if we want to. So we should look at what's going on, and housing is a wonderful place to start because it touches so many fields and is so basic to society. The choices and assumptions people make about their housing shape the society they build. If we look at distributed power, we realize that automobile designers are working to build cars that have electric motors as the key component, with a motor on each wheel; fuel cells are major candidates in this area, although automobiles aren't the best application for fuel cells (fuel cells have a steady, mid-range power density output which automobiles match when they are cruising but not when they are accelerating). Your typical automobile will be equipped with 25-50,000 watts of fuel cell generated power. A typical home uses 2-3,000 watts when on 'idle.' A house with a 100 amp service can only draw 24 kW. Therefore a single automobile would be able to power 4 to 7 homes. The Rocky Mountain Institute has a project called "Hypercar," [http://www.rmi.org/a_report/trans.html] which has electrical generation of some kind in the automobile; when you're not driving it, you plug it into your destination, not to charge the car but to power the destination! Many groups are studying this, but as always, timing is key. If the politics or the technology or the media story or the myth aren't quite there, nothing happens.

Adding computer networks to the above equation, we have to wonder why the homes aren't plugged together. In this scenario, the community becomes a sufficient network. Combining the laws of increasing returns and network effects, we conclude that increasing the number homes that are plugged together increases the stability of the power flow and makes it easier to ensure that there is enough for peak periods, and so on. What really got me going on this personally, is when my furnace died in the Spring of 1996. I did some research and found that it would cost me roughly $3,000 to get a new furnace. I saw ads in the paper for a co-generation system that offered free electricity; unfortunately, this involved a diesel engine that ran in your basement and generated heat that heated the hot water that then heated your house. But these ads introduced the idea of co-generation to me at a very personal level. Wouldn't it be nice to have something in my basement that would be environmentally friendly, make my hot water, heat my house and allow me to sell surplus electricity back to the grid? I started to look for such a device, but there weren't any on the market. This realization brought back my conversations about fuel cells. I asked myself what it would take to make this realistic. One requirement is a market for surplus electricity, so that you have a way of selling it back to the system. About 20 states now have "net metering laws." What we need is for houses to be connected together. Houses today are built as stand-alone fortresses that, by design, deny the existence of any other house. What if we could build a house that respected privacy and the need for individuality—strong traditions we have about housing—but recognized that our independence is rooted in co-dependence and that if our houses were connected together as intelligent devices, they could negotiate power swaps with neighbors? What would the consequences be?

JOCK: Not all of them—but they're all conceivable within a 2-to-5 year span. There is a huge amount of work going on with fuel cells. Imagine a house where everything that consumed electricity had some intelligence about itself and the ability to communicate bi-directionally with its environment—to both receive and send messages. A hot water heater would consume electricity when the price on the street was at a low and would not be on when the price of electricity was high. The devices could constantly monitor the price of electricity on the street and the local generating system (fuel cell, wind, hydro, turbine, etc.) would decide whether to consume the power internally or sell back to the neighborhood. Consider the problem: how is electricity different from information, physically? Clearly, some devices sip electricity, and some gulp. When you start an air-conditioner, there is a great big gulp, then it pretty much sips. Might there be a way of staggering gulps according to price, demand, time of day, weather, my health, my absence from home, etc.?

I was introduced to an interesting essay by David Isenberg, a researcher at AT&T, called "Rise of the Stupid Network." [http://people.qualcomm.com/mfischer/essays/att.html] David's point, which echoed George Gilder, is that if you build smarts into the center of the network, then you build limits and liabilities into that network. You can only build what you know at the time into the network, which then becomes a sunk cost barrier to innovation, because you have to upgrade the entire network to realize any change in technology. An example: the telephone network has 64 Kbit sampling built into it, so the voice quality on a telephone network cannot get better than 64 Kbit sampling. The telephone network is frozen in time. On the Internet, you can sample voice calls at 256 Kbits per second, or 512 Kbits, or more, depending on the bandwidth and the time and money you are willing to spend; the transmission mechanism of the Internet does not put a limit on voice quality. The advantage of not having any smarts in the middle and putting all the smarts on the edges is that consumers can upgrade their "infrastructure" at their own rate. It also makes it harder to bring down a system, whereas if there are few centers, it is more straightforward to take them out. The same is true with a power grid; from a national security perspective, look at the President's Committee on Critical Infrastructure Protection. [http://www.pccip.gov/] What they are trying to protect is a highly centralized network. A distributed network offers significant advantages with respect to national security, the environment and the national economy.

One of the things that we need to develop are networks and homes that require no new wiring. You would use the power wire, or the telephone wire, or the TV Cable wire or, better yet, go completely wireless. A wireless network would have many advantages. Imagine home theater systems with speakers that received their inputs wirelessly and that learned and adapted to the acoustics of the room—maybe even to the number of people in the room—so that the actual location of the speakers would not be particularly critical. Additionally, we need to layer on the idea of Internet protocol everywhere. Combined with everything being adjustable and talking bi-directionally, this would provide the necessary infrastructure to support our scenarios. These would be the consumer advantages of working with addressable, smart and wireless devices. It would be quite a sandbox to play in. Someone suggested that you might have south-facing windows with Internet (IP) addresses, so that they might communicate with the power system and the cooling system and control their density accordingly, adjusting it to who was home and who liked what.

LARRY SEAQUIST: …and perhaps generate power at the same time.

JOCK: Yes. Plastic for roof tiling could be photovoltaic, generating electricity while keeping the rain out. We're not merely talking about housing, but about quality of life in the next millennium —making sure that we have more time for each other in a better environment with cleaner air and water and with easy-maintenance, lower-cost and safer dwellings.

JOCK: There are about 1.4 million new homes built in this country every year. You would like to see more and more of those incorporate some of this thinking. In the beginning, you would probably need to have specially constructed communities, but you might also have a large retrofit business that would put control systems into existing homes to monitor the price of electricity on the street and wait until a certain point before turning on the dishwasher. This model might require reforming some of the utility environment; the utility might give you a break if you paced your demand to low points in its demand cycle. A utility knows when it's being saturated—the mechanism for notifying home appliances would be fairly low-tech. Today's refrigerator knows nothing about itself. In the future, you would like to have a refrigerator know when it can turn itself off—when the refrigerator and the freezer are at the appropriate temperatures—and sell that electricity back to the neighborhood. If the devices are aware of their environment, time of day, etc.: the hot water heater would know to be full at 6:00 AM for the morning shower rush, but that a tank of cold water was fine at 3:00 PM.

JOCK: Right. Here, you would want the water heater to come with enough smarts that it would at least have some default values that are easy to override or reset. These types of devices exist out there, but we would like to see them built into more of a systems approach. This brings up the whole issue of utility reform. Utilities are currently rewarded for being inefficient. The regulatory environment for construction is a state-by-state issue and is not necessarily supportive of innovative building practices. We need to suspend our current thinking and focus on the types of building codes that would be ideal for the next millennium, that would create incentives and possibilities for building the core structures of a society in ways that are beneficial to that society.

LARRY: Regarding your question about individuality, there are a couple of things to think about. One is the question of encryption and privacy. If you are going to have a wired residence where everything is interactive with everything else in an intelligent way, one of your critical technologies is going to be personal encryption, the ability of an individual family to feel that their home really is theirs. Technically, those are not complicated issues. The other is that this is not going towards an Orwellian Big Brother climate where everything is watched by central facilities. What you are doing here is empowering the individual and empowering local communities at a time when this is a frontier political issue.

JOCK: The real thrust of the Internet, from my point of view, is to enable communications between partners. For society to work well, we have to be respectful, participate in conversations and not treat each other as ciphers or objects or targets of messages. To go back to one of Larry's points, why couldn't a house generate most of its own electricity and clean water and process most of its own waste? Let's take that house off the 19^th-century grid where it is dependent upon the grid for water or power or electricity, and let's make people more responsible. The price of freedom and independence is responsibility.

Another significant consideration is the fact that 2 billion people, one out of every three of the world's population, have no electricity. This is a destabilizing fact. This means that one third, 33%, of the people either want to be just like the other guys or want to make the other guys just like them. This is a real engine for tension and conflict. From a national security point of view, is it more appropriate to wait for a conflict to erupt, then send in the marines, or is it more appropriate to send in housing and technology that would provide people with electricity and water and shelter? In the Middle East, a huge amount of the conflict is actually around water…

HIGHLANDS: ...and will be increasingly so.

JOCK: Exactly. Look at the number of people who do not have potable water as a regular daily assumption; one of the nice things about fuel cells is that they can crank out nice, clean water. It is in our best interest to enable local industries to build these sorts of houses on the ground where they are required, rather than building a mega power plant someplace and running miles of high-voltage grid and miles of copper in each house. What is the probability of that happening for the 33% of the world that has no electricity? Is it more probable that incrementally, from the bottom up, they could build communities that were self-sufficient in their needs for electricity and water?

JOCK: I'm an optimist. What is realistic depends on the quality of the questions you can ask. And policy is a reflection of the questions being asked. Let me suggest an argument: that the first economy that gets this will realize a phenomenal increase in returns compared to all the other economies in the world economy; the first economy that is able to take the money it is currently investing in buying offshore oil, and invest it in the economy itself, is going to have a huge leg up on economies that have to allocate significant chunks of their foreign exchange to buy oil, because that is money they cannot invest in their home economy. Furthermore, the first economy that really understands this "green vision" will be in a position to manufacture a "green system" and then offer that to the world market. Other economies will catch on, but by then the first economy will be in the second or third generation. That seems obvious. One of the ideas that Vice President Gore and others have been very good at getting across to people is the idea that the environment has an impact on us and we have an impact on the environment. Prior to the 1960s, extremely few people thought this way—so there has been a significant change for a significant number of people in this idea that we are tightly linked.

LARRY: This matter is urgent because of timelines. The total world population, currently at about 5 ½ billion, will be, in real numbers, double in the next half century. There are four times as many of us now at the end of the 20^th century as there were at the beginning. The interesting thing is that if we make it through the next 50 years, the various predictions about how many of us there will be waver between 9 and 11 billion. They all agree that we will probably begin to level off 50 years from now, so that in 1,000 years, the world population will be about double what it is now, unless we colonize elsewhere. This means that the current leaders, and those in their 20s and 30s who are going to be the next generation of leaders, will make the most important set of decisions in history. Never before has a set of leaders been confronted with the problem of how to manage that many people arriving that fast when we are already near the edge of the envelope. The only debate is how close to the edge we are. Fifty years from now we will either have created the most awful civilization in history, or we will actually have begun to put ourselves on the path towards an intelligent civilization. All those decisions are going to be made in the next 25 years—so this is a pressing political set of issues which face today's leaders now.

LARRY: Clearly one of those countries is the United States; there is an enormous opportunity for American leadership. But it's not the only place with a sense of local empoweredness. Many of these are local decisions.

JOCK: There is also an enormous opportunity for bottom-up demand. I cannot have been the only person whose furnace broke down in the Spring of 1996. What if most of the people whose furnaces broke down thought there was an intelligent alternative to buying another oil furnace? There is a huge story-telling opportunity for the press, for school systems, etc., for trying to ask new questions and stimulate discussion, for a bottom-up demand that gives the elected official the courage of his or her convictions.

LARRY: 95% of the future population growth will occur in the developing world—not in the West, not in the US, not in Japan. The traditional leading policy makers, the G-7 kinds of people swinging big sticks, are not the people confronting the most important set of issues in the world. I think that while American and G-7 leadership is important, it would be a mistake to underestimate the capacities of local leaders and local citizens to intelligently think their way through these things. There are enormous numbers of savvy, intelligent, well-educated people who are the ones facing their own communities collapsing under the weight of over-population. There is enormous capacity locally to make intelligent decisions. Again, the concept of central thinking, that the problem will be solved in Washington, is a dangerous idea. Leadership, facilitation and enabling should take place; we are not trying to wire Washington with the capacity to manage America's power sources.

JOCK: The inherent nature of stupid networks is not to believe in a political network that's central. The political process needs to be involved in the arbitrage of bottom-up and top-down. It should not act as the smart center that determines the actions and activities of the end points. One of the roles of the government is to promote the discussions that allow the end points to make rational decisions towards agreed-upon goals and outcomes and then to use their own individual wits to determine how best they can get to those goals.

LARRY: Each of those local solutions will be different, literally unique. A week ago I spoke with a group of European members of Parliament; there was a woman MP from the North of England and one from East-South Wales, who each had done some remarkable things in local economic development with telecommunications, wired communities. Each of them had taken the same basic technological climate and found completely different local solutions. Both were very effective. Each local community solution will have its own character and its own flavor. It's like the Internet: what you do with it, what kind of equipment you hang on it, what it means to you is unique to you. We are empowering individuality.

JOCK: It is important not to succumb to a dystopian vision. There are people who are so firmly wed to smart networks, central controlling and to carbon-based energy that they can envision no positive alternative. Therefore, they view any attempts to respond constructively to environmental issues as requiring Draconian penalties such as exorbitantly priced gasoline, no backyard barbecues, no lawn-mowing, etc. I think those are false arguments because they are based on the false premise that we must have the same organization of our infrastructure in the future as we have had in the past. If we liberate the American spirit of innovation through imaginative questioning, reengineered regulatory environments at the state and local level as well as at the national level, and a national leadership challenge to organize wireless networks, Internet protocol everywhere, stupid networks, cogeneration, etc., then "intelligent homes" will appear much faster than we would have thought possible. But there are people who are getting ready to spend millions of dollars in TV advertising to attack the premise that we need to respond to the environmental feedback we're getting, to say that we should ignore it because the American lifestyle would be dictated by other people. My argument is that the American lifestyle can go on quite nicely, while creating whole new markets for American ingenuity that can be sold worldwide.

LARRY: That leadership also means that we get to do it and demonstrate it here—it's not just something that we export. But if you take the case of India's development, they are one of the fastest-growing countries in the world, they are not going to be able to sustain that kind of growth with traditional power grids and traditional housing and water distribution. If this world is going to be secure and civilized, you are going to have to offer a different ramp.

JOCK: When we grew up, we didn't have the opportunity to create a house that would generate its own energy and its own water and help process its own waste, or to create houses plugged together that, cooperatively, could perform these functions. In the Boston area, the local power company is going to run a photovoltaic experiment quite close to where I live; there will be a number of rooftops with quite a lot of power generation capacity on them. But these are still stupid houses that aren't wired together, but are all wired back to the local substation; if that substation goes down, it brings all those houses down with it. These houses aren't wired together because we have not asked the new questions: how hard would it be to treat houses as networks? How hard would it be to create computer software over time that would allow us to run real-time markets? Why is it that we settle for a remote regulatory entity studying the price of electricity more or less arbitrarily, from time to time, when the actual conditions and costs of generation and demand are varying minute by minute? The electrical market is governed by such grossly imperfect knowledge that they can only set the price every year or two. This is ridiculous.

One of the issues of conflict becomes: if one electrical car could power three or four houses, and I have a huge sunk cost in mega power plants, what's my role? There is a whole role in distribution, linking houses together, maintenance and support of infrastructure, load balancing between the supply peaks and valleys—but there may not be a role for a power plant operator. What business are they in? There will be some painful readjustments for them, as we realize that an automobile is not only a means of transportation but a key power source. They will not be irrelevant, but their power-generation functions will be dramatically reduced. The power companies will not be able to tell the car companies that they can't use electricity in their cars or if they do, they can't plug the 25kW fuel cell in the car into the house. In fact, another good question is simply what business will the car companies be in 2010?

LARRY: For the Highlands audience, it might be interesting to draw a comparison to the "IT" (information technology) industry, which is a cluster of technologies. This "IH" (intelligent housing) industry is much larger in size. The total volume of economic transitions here will dwarf information technology, because it will include IT as well as housing, construction, retrofit, automobiles—a much more pervasive "galaxy" of technologies.

JOCK: The American culture, as it is currently configured, doesn't exist without electricity. Therefore anyone who wants to aspire to some form of our culture has to have electricity. At some point, electricity becomes that without which you cannot achieve your goals. If we want a world with equitable opportunity, allowing for non-identical outcomes, we need to provide everyone with an opportunity to have electricity. The notion of using coal or oil or nuclear technologies is extremely unappetizing.

LARRY: We don't yet have the silicon to glue all this together. That being said, no community is so poor that it cannot use information technologies immediately. Information technology is not a luxury for the rich, it's a necessity for the poor. In Kyrgyzstan, the 18^th-poorest country in the world, the president's wife has 51 elementary schools wired on the Internet through three regional centers and a national center that she runs. Those kids are learning Windows; their national strategy is deliberately plugging their country into the world and reinforcing their localness in the process. The Strategy Group's interest in the self-reliant communities (self-reliant families, houses, etc.) is the capacity of the local community to lead itself forward in economic and social prosperity, where it flourishes not because the World Bank loans the national government money, and not because some NGO goes over and donates a kid's vaccination program that dies out in six months when they run out of energy and leave. Tip O'Neill said, "all politics is local" and the arena where things really count in the world is where a local community with real leaders, people, streets and water supplies all interact. The challenge we have right now in the world is how to enable those local communities to take off. The Strategy Group's pilot project is in Jordan. We would like to demonstrate this with a community, but we're also looking at a university and would like to explore some of the indigent Bedouin communities. We look for ways in which the local communities can begin to generate economic self-reliance; it always starts with money in the pocket. Birth rates will come down rapidly as soon as there is some money in the family. We are looking fo r critical techniques and businesses that people can be in. One of those is credit unions so that they can save money; even very poor communities are capable of saving remarkable amounts of money quickly, enough to have leverage over generating new busin esses. Getting the computer into these communities through telemedicine is an example… poor people need medical care and health advice more than most; you can deliver very high-quality locally-tailored medicinal and health care through telemedicine and h appen to have the computer sitting in the village at the same time. So the telemedicine facility and the Internet café for the kids can be in the same room. One of the sites that is demonstrating this is the Charles County Community College in southern Maryland [http://www.charles.cc.md.us]. The kinds of communities that Jock has envisioned are the ones that are just ahead of these communities in the Middle East or India or Africa, that could grow up among them. These local communities—which might seem quite primitive to us, and are culturally quite different—are plug-compatible right now with the information revolution. They see this stuff on television, they understand the lingo, they understand the concept of being wired. What is interesting is that it accentuates localness; it's not a global village where we all speak the same language, all use Windows '95, write in English and think the same thoughts in the wired world; what actually happens is that people are reinforced in their localness and particularities, while new kinds of particularities emerge, new virtual communities and such.

We need to recognize that these are business opportunities, not charity and welfare cases. These communities need to buy, sell and utilize things just like we do; the NGOs that simply dump old equipment on poorer communities are actually doing them a disservice. Rather than going out to "do good" by giving something away, we're trying to encourage companies in self-reliant communities to go out, hook in and make money for themselves at the same time as they are enabling the local people to create their own careers.

Talking about infrastructure, local communities need a community center. They need a school, a post office, a space for a public meeting—so that not everything happens in your local house. There is virtually no such infrastructure in many rural communities. The world is now a little over 50% urban. But we also have infrastructureless megacities cropping up like mushrooms in the developing world where 95% of the population growth is coming from. There is virtually nothing there: no wiring, no electricity, no schools, no culture, no roots, just angry young people who often have weapons. There is a compelling opportunity now to avoid this with future communities. I worry that the IT industry is only partly lined up to take us in the direction of these simple, local networked devices hanging on the end of dumb networks. Right now, in order to be on the end of a dumb network, you can only be a jet pilot, not a bicycle rider. The software is more and more complicated, the bloatware is bigger and bigger, you need a driver's license to plug in. We would like to eliminate that and be able to use this in a completely casual, thoughtless and instinctive way. One of the implications is that the IT industry in Silicon Valley and elsewhere is missing an enormous market and a trend by not building these elegantly simple things. Only a few companies are thinking about this.

JOCK: A lot of work has been done on "agents" and "robots," but people think of these as going out into the Internet. Suppose we decided to attach them to hot water heaters and dishwashers and stoves. It's not that the technology isn't there, but the creative thinking about these technologies is lacking. An interesting task would be to identify who has done interesting demonstration projects along these lines, what has worked, what hasn't. The challenge is to create a demonstration project that is then replicable and marketable, and upgradable tomorrow: evolution, replacement and modularity need to be built into the structure and concept, and these should be locally tailored. In terms of energy, the use of wind, or hydro, or fuel cells combined with photovoltaics would be driven by local conditions. I would like to see some communities living in houses that embodied these concepts and were wired together, for example, to see what the impacts were. This is not something where n years out, all the houses are built embodying these ideas; rather, over time, the good ideas will survive, the bad ideas will fail, and the housing will adopt more and more of it. But unless we talk about it and create some working, marketable, sellable units, it still remains an irrelevant theory or speculation.

LARRY: In Jordan, for example, they have no oil supply; they have to buy most of their energy. The energy is cheap but, comparatively, it's a large chunk of the national economy. The educational levels are generally high; they would immediately recognize why they would want models like this, why they should lead themselves forward. Most African countries would do the same if they could.

JOCK: Somehow we need to get the General Motors and Mercedes-Benz and Fords and Chryslers of this world to envision how their research into automotive fuel cells could be applied to housing, for example. The people working on wireless networks and cell phones could become engaged in designing a wireless network for an intelligent house. A lot of this problem is simply re-purposing. Larry is right that the population explosion does change the dynamics. If we have trouble carrying this population load now, it will be much worse in 50 years when the carrying capacity is worse and the load has doubled.

Jock Gill [jgill@penfield-gill.com]

Larry Seaquist [larry@strategygroup.org]

Highlands Interview Staff [michele.m.ledgerwood@cpmx.saic.com]