Money talks, but how fast can it speak?

Thu, 02/29/1996 - 7:00pm
Roger Brown

CEOs of every major communications and hardware company were seemingly elated at the news.

It is perhaps ironic now to realize that although the new law allows cable TV companies to get into the telephony business and telcos to offer video, neither scenario is immediately likely, except perhaps in some select markets. Instead, local exchange companies are busy working to cannibalize their brethren by jumping into the long distance market, while the interexchange carriers eye the local market the way a thirsty vampire views a pulsing jugular.

Cable MSOs, meanwhile, are clearly focused in the near-term on launching a pre-emptive strike against the telcos by deploying high-speed data modems. Seeking to capitalize on the burgeoning popularity of on-line services and Internet users, the MSOs hope to deploy such units nationwide. This, they hope, will allow them to lock up marketshare before the telcos can respond with ISDN and similar services.

While consumers may not yet be aware of the cable industry's plans, the operators are making sure the message isn't missed by the information technology crowd. In fact, the MSOs and CableLabs made a bit of a splash during last month's ComNet show in Washington in what could be described as something akin to a "coming out" party.

Clearly, there is no shortage of suitors for this debutante, judging from the hundreds of people who crowded into the CableLabs IT/Convergence forum, or gathered to hear a representative of Prodigy talk about how the cable companies can eliminate the telephony bottleneck that chokes information flow. And if that wasn't enough, officials from Digital Equipment Corp., Cisco and LANcity were on hand to talk about how they have already taken the plunge.

David Fellows of Continental Cablevision and Mario Vecchi of Time Warner provided overviews of their plans, which can be described as nothing short of aggressive. Fellows told the gathered audience about Continental's Project Agora that connects more than 5,000 Boston College students and faculty members to information at 10 megabits per second. He also talked of how equipment is already in place that allows doctors in Exeter, N.H. to review documents and patient information from the local hospital. Vecchi, on the other hand, explained how his company is structuring its planned "LineRunner" service around industry standards and a common set of protocols in order to ensure universal connectivity.

Unlike some recent industry announcements that were long on hype and short on reality, it's clear that data services won't die on the vine. There's already too much investment being made by the MSOs to turn back now. According to Fellows, Continental alone has budgeted $50 million in capital spending to prepare its network and roll out modems. Money talks. The cable industry hopes it speaks at 10 Mbps or faster.

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