I had a dream, and it was a wonderful dream. In that dream, a single communication channel came into my home. I wasn’t sure if it was copper, fibre, wireless or something else, and it didn’t matter—it allowed me to do magnificent things.
I could do everything I currently do with my telephone. Long distance was part of my flat-rate access charge. In addition, videoconferencing was available, which allowed me to see the person I was talking to if I wanted to. And there was no shakiness or distortion.
I could surf the Internet at broadband speeds, somewhere in the three to eight megabit per second range. Streaming media was clearer than an untouched lake in Northern Ontario. I could download songs in fewer than five seconds and DVD-quality movies in 10 minutes.
I had true video on demand. I picked what I wanted to watch, when I wanted to watch it. I could subscribe to specific shows, like Will & Grace, or entire channels, like TSN, and watch movies whenever I wanted. Of course, my computer was seamlessly networked with my television to translate Internet Protocol, or IP, packets from the Net into TV signals. I could even interact, sending responses back through the Net (such as to stores selling clothing worn by my favourite characters).
I had complete control of my home communication, entertainment and information needs. And then I woke up.
But I soon realized that my utopia could be created in a laboratory environment. Technologies exist to do each aspect of what I dreamed of. There are two significant impediments, however, to widespread consumer deployment: Internet access speed and industry economics.
The speed block will be overcome in fairly short order. The problem involves what the industry calls “the last mile.” That is the copper wiring that runs into the home from the fibreoptic telephone or cable line in the neighbourhood box. Todd Dixon, a senior consultant in the New World Networks group at PricewaterhouseCoopers in Toronto, sums up the situation this way: “To increase the access speed, you have two choices —add a fibre-optic cable into the home or use new technology to make existing pipes faster. The second option is more feasible.”
Unless you live in a new subdivision that is being wired with fibre, you are probably faced with two choices for broadband access: a Digital Subscriber Line or cable. DSL is a specially upgraded phone link that allows you to use high-speed Internet
and talk on the phone at the same time. Cable claims faster speed, especially when sending. The measurement, however, is very suspect, since performance degrades as additional users are added within the same neighbourhood. Assume that average cable speed is similar to DSL.
To receive streaming video over the Internet with quality similar to digital TV, you need a steady 1.5 megabits per second of bandwidth. Bell Canada is testing newer DSL technology that will increase its rates to between three and seven megabits per second from about one megabit. Cable companies could provide these speeds right now by reducing the number of users that cannibalize each other’s bandwidth. In the next two years, these faster options should become widely available.
One day soon, everything we watch, click and talk on will come from one simple connection
Then there is industry economics. Before the Internet came along, there were clear boundaries around services offered by telecommunication and cable companies: phones versus TVs. With the Net, two things changed. First, telecom and cable firms began offering competing Internet access services. Second, Internet technology evolved (and is still evolving) to allow socalled Voice over Internet Protocol, or the ability to talk to someone over the Net, and streaming media. This is changing the economics of the telecom and cable businesses to the benefit of consumers.
Some experts predict that long-distance phone fees will fall to zero over the next decade. As VoIP matures, and personal computers and Internet appliances are equipped with microphones and speakers for calling, this prediction could become reality. You may also see local phone charges wrapped into a single monthly Internet access fee. If such access is provided by your cable company or third-party Internet provider, this could eliminate the need ever to deal with a phone company.
Meanwhile, the tight relationship between cable companies and content providers such as networks and specialty channels will soon be disrupted by new technologies. While consumers have long been subjected to television packages preset by cable firms, the technology will soon exist to deliver streaming video over the Internet with clarity similar to digital cable. The technology will truly be demand-driven, allowing consumers to choose what they watch when they watch it. Over time, this will force cable companies to offer infinitely configurable video on demand in a digital environment. It will also force content providers to evaluate their distribution channels as consumers demand Internet delivery. If Internet access is provided by your phone company or third-party Internet provider, this could eliminate the need ever to deal with a cable company.
Well, we can dream.
Brice Scheschuk is a chartered accountant and a Toronto-based executive at an Internet financial-services company.
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