Experts: Telecommunications battles could result in monopoly by 2010

By Linda Myers

High-tech communications battles today are likely to result in one or two major players 10 years from now whose influence will be as widespread as Bell Telephone's before the Bell System breakup, according to a leading group of experts on the telecommunications revolution. The array of services these companies may offer consumersis likely to be mindboggling.

The group -- about 30 experts in academic, government and corporate circles -- gathered Oct. 21-23 at Cornell to envision the future, call for standards and debate what, if anything, might need regulating in the millennial world that promises consumers virtually unlimited connectivity and bandwidth. The three-day workshop, titled "The Evolution of the Telecommunications Infrastructure over the Next Decade," was co-sponsored by Cornell's Johnson Graduate School of Management and the Institute of Electrical and Electronics Engineers-USA (IEEE-USA).

"We are at the verge of a major metamorphosis bigger than anything we saw when the personal computer or the Internet first arrived," said Johnson School Professor Alan K. McAdams, the chief organizer of the conference.

That claim is, if anything, "an underestimation," said keynote speaker Shastri Divarkaruni of Cisco Systems in San Jose, Calif., chair of IEEE's Committee on Communications and Information Policy. As computers offer ever greater processing power and telecommunications companies supply ever wider bandwidth, "Communities are being redefined by technology," he said. They are no longer just the people who live in your neighborhood or town but now include "the people around the world who share your interests."

In addition, Divarkaruni envisioned owning a hand-held Internet device that would allow him to tune in clearly to any radio station or other wireless transmission anywhere in the world. That would include transmissions from a super-high-tech computer server in his home that would also keep perfect track of all his documents and allow him to download the movies and books of his choice anytime.

The experts predicted that companies that move the fastest to give customers what they want will dominate the telecommunications industry by 2010. The top player in 2010, the one that delivers these services and more, is likely to be the company that figures out how to wire the most homes and businesses with a network whose key component is fiber, linking them to the Internet and each other. Fiber will become virtually ubiquitous 10 years from now, the participants agreed, because it has the advantage of being able to carry vast amounts of information, undistorted, over great distances at low cost. "Fiber is the infrastructure of the infrastructure," McAdams said.

Currently most cable television is transmitted over a hybrid of fiber and coaxial cable (HFC), while most telephones are linked locally through pairs of twisted copper wire -- although fiber has already become the backbone of the phone companies' local and long-distance networks.

The experts predicted that wireless providers also would be a potential major player following the shakeout because they offer a unique product: telecommunications mobility. But even these providers need to rely on fiber for their backbone infrastructure, McAdams said.

Those in attendance heard reports by task groups on four technologies: All fiber, HFC, wireless and "DSL"--high bandwidth over twisted pair. They also heard four potential scenarios for the future. They spent a day behind closed doors deliberating and working through the reports. The eventual goal is to issue them as IEEE-USA policy position papers to inform the president's office, lawmakers and regulators about the technology-related issues at hand.

At the end of the conference, two groups integrated the findings and presented recommendations. In addition to the findings noted above, they agreed on the following:

Team two, led by McAdams, thought a wire-line (i.e., fiber) monopoly would emerge by the year 2010; team one thought it would take longer. Both groups called for some government regulation or other action to ensure that all constituents, including the nation's poorest and most needy, would be served by the telecommunications infrastructure. The teams agreed to disagree for now on aspects of their final recommendations to the federal government and other agencies.

Rhonda Velazquez, manager of events and projects at the Johnson School, assisted McAdams in organizing the conference. For more information, see the web site http://www.johnson.cornell.edu/faculty/mcadams/workshop.

October 28, 1999

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