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Battle Lines: Cable and phone companies want you online - all day and at high speed
Sunday, April 04, 1999 By Ken Zapinski Post-Gazette Staff Writer
Connecting to the Future
First in an occasional series
AT&T Corp. and Bell Atlantic Corp. don't just want your telephone. They want to grab your home computer, too. They want to hook it up to a high-speed data pipe and pump it so full of lively Web pages and e-mail, news and entertainment, that you can't ever live without it. They want to you to leave behind forever the squeals of dial-up modems and the hassles of tying up phone lines just to cruise the Internet at the speed of molasses.
"It's going to be important in the lives of people," said Zia Daniell Wigder, an analyst with Jupiter Communications, a technology research and consulting firm, "because it's going to bring to the home what the people are seeing at work." That is, a constant, high-speed connection to the Internet that doesn't interfere with telephone calls or anything else.
Pittsburgh is lucky. As cable television and telephone companies across the country tweak their systems to provide these services, they have chosen Pittsburgh as a front line for the technological battle. AT&T, for instance, has selected the region as one of 10 nationwide to get its cutting-edge telephone-Internet-cable TV service over the Tele-Communications Inc. cables it acquired when it purchased TCI last month for more than $50 billion.
Adelphia Communications broke the ice two years ago, offering cable modem Internet service in Mt. Lebanon. TCI, now known as AT&T Broadband & Internet Services, offers its own Internet access in dozens of suburban communities. And Bell Atlantic and North Pittsburgh Telephone Co. are now offering DSL, or digital subscriber line, data service over their phone lines.
"My objective is to make this technology as popular as touch-tone," Jeff Waldhuter, Bell Atlantic's director of technology and engineering. "There's no doubt there is a tremendous hunger for speed out there."
People are used to speedy connections at their jobs, their schools or their libraries, said Bruce Leichtman of the Yankee Group consulting firm. "A lot of people are used to flying the Concorde, just not at home," he said.
Just as important as speed, the new services are always connected, which can make the Web a part of the flow of everyday life, as convenient to use as the TV or telephone or - dare we say it - the newspaper.
"And I think that's something that has not even begun to be marketed yet," said Leichtman, Yankee Group's director of media and entertainment strategies.
How can a constant connection - or "Web-tone," in Internet-speak - change the dynamic at home? "Instead of turning on the TV set [for the news], you just reach over and click on cnn.com. Or if you're checking the weather, you go to weather.com," she said. "I do think you're going to see more and more of that."
Or maybe it will be more substantive than that.
Carnegie Mellon University just reached agreement for its students and staff to use the Bell Atlantic service to tie into the university's campus computing network and the Internet. About 100 CMU folks got to try out the service in a year-long trial recently. Participants were impressed with how much work they were able to get done without setting foot on campus.
Bell Atlantic will cost more than $40 a month, or more than twice what most are paying for their current Internet service at home. But when they start to look at what they get for the money, said Charles R. Bartel, operations director for the university's computing services, "it starts looking more advantageous to them."
Who knows where this will lead? Perhaps it sounds absurd to think of paying as much as $100 a month to Bell Atlantic for a home data link that in some ways is comparable to a commercial-grade Internet connection. Do you really need that much power just to swap e-mail with your Aunt Barbara in Detroit?
But who, a decade ago, would have predicted that half the homes in America would own computers by now? And who had even heard of the Internet except for the hard-core techno-geeks?
What these high-speed services, collectively known as "broadband," need is a killer application, some use so totally overwhelming that it all but forces people to jump aboard. For the Internet, the killer app was e-mail and chat. But as the Yankee Group points out, those uses work fine with the tiny data pipes people already have at home.
"It's going to take some time before [broadband] becomes such a compelling technology that everybody has to have it," said Shawn M. McGorry, chief operating officer for Stargate Industries, a Pittsburgh Internet-access company. Telecommuting and e-commerce don't fit the bill, he said. But perhaps data-rich entertainment uses, such as downloading full-length movies to replay later, will.
"That to me has some potential," McGorry said.
In a recent report, Yankee Group suggested interactive game-playing, interactive advertising with purchase mechanisms, delivery of music and movies online, and real-time medical and educational video-conferencing may be some of the uses that drive demand. @@Home, the Internet access service controlled by AT&T and offered over the TCI cables, is already pitching some of these uses to its subscribers.
Waldhuter of Bell Atlantic said there is a chicken-and-egg aspect to the discussion. Once broadband is widely available, he said, the Viacoms, the Paramounts and the Walt Disneys of the world can change their Web sites to include much more intense interactive content. But there is no point in making such changes until people can access them, he said.
And that access doesn't come cheap. Cable modem service runs about $40 a month, almost twice what America Online charges. But the higher price buys faster speeds and the convenience of not tying up a home telephone line.
Bell Atlantic's DSL service is even more expensive. But competition and improving technology is forcing those prices down. When Bell announced the service in June, the price for the slowest speed (640,000 bits per second to the computer) was $69.95 a month. Before the company signed up its first customer, it dropped the price to $59.95. Just last week, Bell cut the price of the Internet access package down to $49.95, and a joint deal with America Online is expected to drop the price even further.
"We're very comfortable with where [our price] is at this point," said Pete Castleton, Bell Atlantic's executive director of high-speed access products. "Everybody agrees that the direction is going to be down, not up."
It's not clear how soon these new broadband services will be available to most Pittsburgh-area residents. Most of the areas where Bell Atlantic's service is available, there is no competition yet from cable. People in Squirrel Hill and Oakland, for instance, can get Bell Atlantic's service, but the city's antiquated TCI cables can't handle the Internet. The phone company intends to move into Mt. Lebanon shortly, taking on Adelphia.
Wigder of Jupiter Communications said both technologies have their strengths and weaknesses. "I would certainly take the first that was available," she said.
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