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What People Are Saying About SMARTHINKING

Lawyers in Love

By: Carol Twigg
The Learning MarketSpace

June 1, 2000 -- One of the things that the Internet seems to be changing is who's in control. The Napster phenomenon is a perfect illustration of this shift.

Last Friday night, MSNBC's Brian Williams devoted a segment of his news program to Napster, most of it consisting of an interview with Metallica's drummer Lars Ulrich. As you now know (thanks to Bob if you didn't know before), Metallica is suing Napster for copyright infringement. As you can imagine, Mr. Ulrich isn't thrilled with what he views as Napster's appropriation of his intellectual property.

Metallica is apparently concerned with protecting their artistic integrity. An essential part of that protection, in Ulrich's view, is controlling when and where their music is played. Ken Krasner, co-founder of Electric Artists, reiterates this point: "People don't really give a s**t what format their music is delivered in, but what's really important is allowing the artist the decision as to whether or not they want to give away a song. That's their decision, not the consumer's."

The consumer's side of the debate was represented by a young Napster user who said, "We're tired of paying $16 for two songs that we want. Other Napster users pointed out that they are merely sharing already purchased music. Ah-the 21st century struggle- producers versus consumers. Who will win?

Information technology and the Internet are undermining-that's probably too tame a word- obliterating our established notions about control, and not just in regard to intellectual property. Let's consider a couple of examples, the first in the area of outsourcing and the second concerning distance learning.

Outsourcing is moving into the mainstream of higher education. The common wisdom offered by experienced campus administrators is that the most important consideration in thinking about outsourcing is the ability of the campus to maintain control of the activity. The issue is presented as one of institutional choice: to outsource or not to outsource, to choose one company versus another, to determine the conditions under which the activity occurs, and so on. But what happens when your institution's functions begin to be outsourced and you've had no part of that decision?

Consider the bookstore. Many institutions outsource their bookstores, making contractual arrangements with companies that guarantee the campus a revenue stream. I was recently visiting one of my favorite universities to see and hear about their new campus wide virtual learning environment. One of the faculty members proudly showed me his course Web site. Among the many resources included was a link to his textbook on Amazon.com so that students could order the book from the course Web page. Presto! He'd outsourced the university bookstore, and the institution had nothing to say about it.

SMARTHINKING is an exciting new company that provides high-quality, real-time, on-line academic support for core courses in higher education through chat technology, virtual whiteboards and personalized feedback. Institutions can, of course, contract with SMARTHINKING to provide tutorial services for their students, either supplementing existing campus services or outsourcing them entirely.

But SMARTHINKING is also entering into a relationship with a major publisher who plans to offer three hours of free tutorial help (through SMARTHINKING) to students who buy their textbooks. There is little doubt that, in the highly competitive world of collegiate publishing, other companies will soon follow suit. Faculty members will be inclined to adopt those textbooks that supply value-added services. Chango! The institution's tutoring function has been outsourced, without a campus decision.

How should institutions react to these developments? Should they, like Metallica, start suing everyone is sight? Should they try to control the behavior of hundreds of faculty members and thousands of students? Or should they recognize that the world is being changed by the Internet and figure out how to take advantage of it?

The phenomenon of distance learning has obliterated the ability of institutions and states to control competition. It has undermined the traditional regulatory framework that provided institutional franchises for designated geographic or programmatic areas. These developments have occurred regardless of the wishes of either individual institutions or higher education systems. When these changes first began to be noticeable, one heard a lot about controlling the competition; today, those voices are silent. Instead, progressive institutions are grappling with this new environment and figuring out how to position themselves effectively within it. They are finding ways to differentiate themselves from their competitors by strengthening service to students. They are, in effect, changing their business models to take account of a new set of circumstances and becoming players in a different kind of game.

State policy makers also have the opportunity to turn what first appears to be a threat into an opportunity as Dewayne Matthews astutely advises. (Note how often the word 'control' appears in his comments.) "The opening of higher education markets to true competition means that state policy can shift away from controlling the behavior of higher education institutions to insuring the effective functioning of the higher education market. It will be less necessary for states to regulate institutions in areas like defining missions, reviewing programs, and approving operating budgets and specific expenditures. It will be more important for states to contribute to the development of effective markets through such mechanisms as informing potential consumers of higher education of opportunities available in the system, disseminating information on student outcomes and other performance measures, and targeting resources to identified state needs. States will need to accept that they no longer control the higher education market and that public institutions are but one player, albeit a very important one, in the higher education system." (See Matthews' full discussion of these issues at http://www.educause.edu/nlii/keydocs/finance.html.)

Perhaps Metallica should consider that they will be unable to control the Napster phenomenon-they can sue Napster, they can sue various universities, they can sue Gnutella and all the other companies who replicate the software, they can even try to sue the 335,435 individuals who have allegedly exchanged Metallica songs-but they still may not be able to control it. Why not turn this threat into an opportunity? Why not think about their hit songs as loss leaders that generate new fans or draw people to their concerts? Why not use their considerable clout to put pressure on the record companies to sell music in a form that consumers want? Why not form the Heavy Metal E-Collaborative, break away from the record companies and sell directly to the consumer via the Net?

It's a new world!

Written monthly by Bob Heterick and Carol Twigg, The Learning MarketSpace, provides leading-edge assessment of and future-oriented thinking about issues and developments concerning the nexus of higher education and information technology.

(Copyright 2000 The Learning MarketSpace)