What fax tells us about the future

What popular tool of electronic commerce requires a dedicated phone line and then wastes over 80% of its bandwidth, lacks even minimal user authentication and encodes document information in a way that makes it un-indexible or even illegible? If you answered "fax" you're spot on! Readers who remember my personal KM crisis last year and its attendant quest to eliminate paper from my own office will recall that fax remained the last immovable barrier to victory. In spite of my most urgent pleas to send me E-mail instead, a few diehard fax users still cling relentlessly to this creaky anachronism and refuse to give it up.

Fortunately, however, I recently stumbled upon a fantastic service that eliminates fax's most irritating aspects and could even hasten the day when that relic of the pre-digital age is dead and properly buried. Efax.com--there may be other offerings like it--provides any registered user a free personal fax number. Faxes received at that number are delivered via E-mail, which means I can receive them while away from the office and it frees up a phone line. For inbound fax, the service costs absolutely nothing. There are no ads so I'm not sure how they stay in business, but I'm going to enjoy it while it lasts.

This felicitous discovery has now caused me to reflect further on why people still use fax at all, and what that might suggest for our emerging digital economy. Browsing my log of received faxes, I see that they contain a few common elements--dollar amounts, terms and conditions, and a signature, or a space for me to add my signature. These are typically proposals, contracts, purchase orders or invoices. The fax diehards apparently see the medium as providing a record that has some legal standing in the event of a dispute, where E-mailing an electronic document would not. However, fax provides virtually no effective protection against forging the signature, altering the content or impersonating the sender. Any image editor can do the first two with ease and fax does not even try to prevent the third.

In the lingo of electronic commerce, fax fails to provide either secure user authentication--guaranteeing the sender and signer are really who they claim to be--or non-repudiation--guaranteeing the content has not been modified from what was originally sent. That's interesting, because it's those same diehards in corporate finance and legal departments who are the most vocal in saying Internet commerce is "not as safe" as paper and the most insistent on waiting for a mature infrastructure for digital signatures and certificates before they would even consider replacing paper forms with Web forms.

Today the fax and paper diehards are still holding back the tide, but the technology to build such a Web-based infrastructure using public key encryption is available now, supporting authentication and non-repudiation in a way fax never could. So what's the problem? It's not yet integrated. It's not yet dirt cheap. It's not yet ubiquitous. It was once the same with fax, which languished for a couple decades before it exploded in the 1980s. For companies in the business of processing paper transactions looking to jump onto the Internet wave, the challenge--and the opportunity--should be clear.