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Data Communications

Data communications services tend to be highly profitable. The growth and growth potential for bandwidth-intensive data services is well documented. Data communications services will include DDS, T-carrier, Frame Relay and ATM. In addition to the LECs and IXCs, a number of the AAVs currently are offering a subset of these services to their large business and government clients.

Internet Access

Internet access is a natural for a convergence scenario. A large number of large end-user organizations have dedicated Internet access, often provided over T-carrier facilities. Additionally, millions of small businesses and individuals have dialup access to the Internet, generally over dialup, analog lines. The explosive growth of the WWW will make Internet access highly desirable and profitable. As noted in Chapter 13, AT&T has made a strong move in this regard, having become the second largest Internet Service Provider in a matter of only a few weeks during early 1996.

In fact, Internet access likely will be the first big contributor to I-Way profitability. Business Research Group estimates that the six primary Internet business categories (equipment, access software, access service, expertise, commerce and content) accounted for $854 million in 1994; that figure is expected to reach $4 billion by 1997 [15-3].

Television

Television is currently provided by CATV providers on a highly profitable basis, especially since CATV rate regulations were lifted during the past few years. In addition to basic offerings, premium channel subscription, and pay-per-view are growing in popularity and profitability. While CATV is likely to continue as the primary means of TV delivery, Direct Broadcast Satellite has grown in popularity, offering greater choice of channels, and at reasonable cost. Employing digital satellites and MPEG 2 compression, transmission quality is excellent. The end user must either purchase or lease a VSAT dish, although the costs have come down to less than $500.

Videoconferencing

Videoconferencing expands to Video Dial Tone, or Visual Dial Tone, on the Information Superhighway. This application is most appealing, although affordable bandwidth and terminal equipment remain major issues.

Distance-Delivered Learning

Distance-Delivered Learning currently has long been accomplished through the media of broadcast television or CATV. More recently, there have been numerous applications of special educational programs over satellite TV, the Jason project being such an example. Additionally, a number of technical seminars are routinely delivered on a commercial basis over business TV (BTV) channels.

Video-on-Demand

Video-on-Demand (VOD) offers great potential, although its future is very uncertain. A number of field trials have shown technological problems and limitations, mostly related to server capacity and performance. Additionally, it is not at all clear that there will exist a market for VOD that is strong enough to justify the cost of deployment of high-capacity local loops and VOD servers. Near-VOD (NVOD) is a variation on the VOD theme, providing access to a predetermined set of video offerings. These videos will be run at frequent intervals, perhaps beginning every fifteen minutes. The user will reserve access to the video channel at the desired viewing time [15-4] and [15-5].

Despite the enormity of the investments required, the technical problems remaining, the uncertainty of the demand, and the low probability of short-term profits, a number of VOD trials are underway. Perhaps the best known is the Time Warner Full Service Network (FSN) trial in Orlando. The FSN trial reached its limit of 4,000 homes (at a cost of about $5,000 per home) in January 1996 and now is in a market research phase in Florida [15-6], [15-7], [15-8] and [15-9]. Bell Atlantic’s Stargazer trial, which includes 750 VOD titles, is expanding and is planned for commercial deployment by yearend 1996. Continental Cablevision is conducting a trial of near-VOD, including 1,000 homes in Natick, Massachusetts [15-6]. Numerous other trials are either in progress or planned for the near future. For a variety of reasons, other have been canceled; those include the AT&T/GTE trial in Manassas, Virginia and the Pacific Telesis trial in Milpitas, California [15-10].

Music-on-Demand

Music-on-Demand (MOD) provides access to a wide variety of music over high-quality local loops. MOD involves access to an audio server, much like a CD-ROM jukebox.

Interactive Games

Interactive games are networked video games, allowing multiple players to engage in a competitive game experience. Again, the CD-ROM game is housed in a server residing in the network.

Home Shopping

Home shopping is already experiencing modest success over the Internet. This application is likely to grow significantly, not only on the Internet, but also on the basis of catalog servers residing at regional locations in the network. Localized Home Shopping catalogs will likely be developed on servers in a convergence scenario; thereby local shopping malls and department stores could effectively provide the same type of service, but on a regional or localized basis. Significant issues of credit card security are being resolved through encryption.

Publishing

Publishing is already experiencing limited success on the Internet. A wide variety of scientific and technical papers have long been distributed in this fashion. Additionally, Web Home Pages provide substantial vehicles for the publishing and distribution of certain types of documents. A critical remaining issue is that of copyright laws that would effectively govern the subsequent use of documents published electronically.

Integrated Messaging

Integrated messaging offers great potential. Extending well beyond the boundaries of voice mail and email, integrated messaging will include videomail and image mail. The compound mail, in effect, will be Multimedia Mail.

Technology

The technology to support the Information Superhighway largely is in place, or in various stages of development. Certainly, a wide variety of voice and data communications technologies are well-developed. The real technology issues relate to the development of appropriate video and image technologies in the form of high-capacity servers, user interfaces, and effective multimedia terminals.


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