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Summer 1997
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The Bottomless Well
The Twilight Of Fuel, The Virtue Of Waste, And Why We Will Never Run Out Of Energy

by Peter Huber and Mark P. Mills
Basic Books, 2005

The Bottomless Well.
 
  S oundings

Telecosm NYC
Peter W. Huber
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The big telecom merger in 1993 was going to join Bell Atlantic with Tele-Communications Inc. (TCI)—the cable company that serves 820,000 subscribers in New Jersey, Long Island, and Rockland and Westchester counties. But federal regulation of cable service kicked in right around then, cable stock values crashed, and the merger collapsed.

The Federal Communications Commission left one corner of the cable business—data transport—pretty much unregulated, however. Cable-modem technology has caught up, and cable stocks are suddenly very hot—with important consequences for New York. In early June, TCI announced a swap that, if approved, will hand over its ten New York- area cable systems to Cablevision in return for a 33 percent stake in the company. This will boost Cablevision's metro New York customer base from 1.7 million to over 2.5 million homes. Meanwhile, state regulators and the Department of Justice have cleared the Bell Atlantic/ NYNEX merger. The stage is being set, at last, for a pitched competitive battle.

It won't involve your television or your phone—at least not the way you think—but you won't care. The future of telecom is headed for the Web. Your Web browser already delivers perfectly good live radio from San Francisco, and television too, though in very slow motion. And you can already use that same browser for phone calls, though not yet very conveniently.

Speed up the connection enough, and the browser will do it all: phone calls as easy as ever, the Yankees live and crisper than television, and Web pages flipped as quickly as the pages of a magazine. Voice and pictures will just get folded into high-speed digital data, the new universal medium of electronic communication. That's where every New York telecom company is headed, whether its old network is wired or wireless, phone or cable, copper, coaxial cable, or glass. Wall Street has had high-speed digital links for years, and paid for them dearly. Pretty soon, they're going to be cheap and ubiquitous. 

Bell Atlantic/NYNEX has already signed major contracts for the equipment needed to push broadband digital services out to residential customers. In 1995 Cablevision began providing high-speed Internet access (some 50 times faster than current phone lines) to residential subscribers in Yonkers and Long Island and has since added service to homes in Oyster Bay. The company is committed to upgrading its entire New York network, including the TCI properties, within the next couple of years. Time Warner will offer comparable service in Manhattan and parts of Brooklyn and Queens.

Though Seattle, Palo Alto, and Hollywood have their talent too, New York remains, by a wide margin, the information capital of the world. The new barons of bandwidth—Cablevision, Bell Atlantic/NYNEX, Time Warner, and AT&T— know it. If government regulators of the telecosm only let them loose, the city will get digital bandwidth faster, more cheaply, and more abundantly than anyone else, because there is so much to compete for and the competition will be fierce. That bandwidth will link the wealth-creating talent of Madison Avenue, Broadway, Wall Street, and Silicon Alley to the planet. The city will prosper as never before.

 

 


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