THE WIRED FUTURE
                            PART THREE

                          Sabre Rattling
                                by
                          Robert Parson


     In the Halls of Congress and at various Regulatory Agencies 
the Phone Lobby and the Cable Lobby are trying to keep each other 
from getting into certain areas.  The Phone Lobby wants to keep 
Cable Companies from providing personal communications.  The Cable 
Lobby wants to keep the Phone Companies from providing data 
services.
     So far, Cable Companies have made a little more progress than 
the Phone Companies.  But that is mainly because the hands of the 
Phone Companies are tied more tightly than the Cable Companies.
     While the Phone Companies are trying to beat down the 
regulations that keep them from being more than gateways to 
services, the Cable Companies have been step by step becoming 
gateways to services and in actually brokering those services to 
clients.
     The Phone Companies currently must provide a node to anyone 
who wishes for one and can pay for it.  Currently the major 
players are Tymnet, Telenet, CompuServe and GE.  Those four then 
broker access to clients either through their own services (such 
as the CompuServe to Dialog gateway) or directly to the 
information service (Such as Tymnet to Dow Jones News Service).
     Some of the Phone Companies do have Regional Networks, but 
again they are simply gateways to information providers and cannot 
provide information themselves.
     However, the Cable Companies are in an enviable position, 
compared to the Phone Companies.  They not only provide the 
access, but they can deny access also.  They can also broker 
services to clients.  As far as data is concerned, the major 
player in this field is XPress.  XPress provides News, weather, 
sports and stocks through the cable companies.  A subscriber must 
have a computer to access this but it is the beginning of the 
Cable Industry as the one stop Information Provider.
     The Cable Companies have another jump on the Information on 
Demand business, in a way.  Pay Per View, which permits customers 
to view special events in their homes at a premium, is a start.  
During the Winter Olympics, Cable tried a bold experiment.  They 
provided Wall-to-Wall (24 hour non-stop) coverage on many cable 
systems of most Olympic events.  This was accomplished through 
Multi-Plexing.  Basically, one person could watch continuous 
coverage of Hockey while another person was able to watch 
continuous coverage of Skiing at the same time.  HBO is expected 
to begin experimenting with Multi-Plexing later this year.
     Meanwhile the Phone Companies are making headway in setting 
themselves up as Information Providers.  Their argument is that as 
the nation's largest publishers of print phone directories, they 
should be permitted to publish those electronically as well.  
Already they are selling them to third parties who in turn publish 
them on CD-Rom or as on line services.  But so far, they are 
prohibited from doing this themselves.
     But in the ten years since the breakup of the AT&T system, 
they have constantly petitioned the Courts, Congress, the Federal 
Communications Commission and others to loosen those restrictions.  
In the past two years those petitions have been looked upon with 
less hostility than they had previously.
     As far as Phone Companies are concerned, there are two 
wildcards.
     The first wild card is that only the companies that were part 
of the AT&T system had those tight restrictions.  Regulations 
concerning Phone Companies not previously a part of AT&T, except 
for allowing AT&T to be a vendor for long distance service, are 
not as strict.  One of them, in fact, is already providing online 
directories.  Cincinnati Bell also serves as a primary gateway to 
a University's computer classrooms, and brokers that service to 
clients.
     The Baby Bells may use those unusual circumstances to their 
advantage, claiming the Court Order divesting them from AT&T 
creates a disadvantage.
     The second wild card is AT&T itself.  The Divestiture Order 
that created the Baby Bells prohibited the Baby Bells from getting 
into the Information business because they were in charge of 
providing local customers with access to services.  Permitting 
them to be Information Providers could have stacked the deck to 
far into their favor.
     Many of those restrictions were not placed on AT&T because it 
no longer had near direct access to potential clients.  AT&T has 
emphasized it's line of personal computers.  It has also branched 
into electronic mail with AT&T Mail which could later lead to 
providing Information Services.
     So far, the deck seems stacked in favor of the Phone 
Companies as far as providing that One Wire Access to all 
Information Services.  The image is that after divestiture, the 
phone companies were crippled.  They are now actually in a 
stronger position than they were before.  
     The Cable Industry paints itself as the poor upstart 
underdog.  The truth is that the Cable Industry is almost as large 
as the Phone Industry.  Although it's history dates back to the 
late 1950s, the Cable Industry went through its adolescence in the 
80s.  All told nearly 60% of the nation is wired for cable.  Some 
communities even have an 80% penetration rate.  It's quite 
possible Cable could be as pervasive as the telephone by the end 
of the century.
     What's more, the Cable Industry learned from the mistakes of 
the Phone Industry.  They are very carefully stepping around the 
minefield left by the Phone Industry's growth, decline and 
rebirth.
     After fighting with each other there will likely be some 
convoluted merger between Phone Companies and Cable Companies.  
Each will carve up their slice of the market and we'll have 
MultiMedia in our homes through one wire.  It will provide us with 
personal communication, current events, entertainment, and 
education; all with full motion video and sound.
     But while the Phone Companies and the Cable Companies argue, 
another player could steal the cards from the dealer.

Next:  Pulling the Plug
                                           (c)1992 Robert Parson