Promise From Cable Guys: Internet 300 Times Faster

The Internet is poised to go through a change as dramatic as the switch from still photography to moving pictures.

Instead of today's text with a few grainy graphics, the global computer network will go Hollywood. It will carry full-motion, full-screen video and, eventually, telephone conversations where all the parties can see each other. This capability will be available not only to businesses but also to individual consumers.

The catalyst for this revolution? A raft of new devices that will connect users to the Internet at speeds 300 to 400 times faster than today's fleetest modems. And at least one of the technologies will make connecting to the Internet as simple as turning on a television.

"It'll change the applications that we use [on the Internet] dramatically," says Lisa Pelgrim, a telecommunications analyst at Dataquest, a research firm in San Jose, Calif. Today, receiving video over the Internet is not practical for most consumers. But soon, "you will be able to do data, voice, and video at the same time."

Two industries are pushing the revolution: cable television and telephone companies.

Cable companies are racing to upgrade their networks so they can provide consumers with cable modems. The cable modem is so new that no standards have yet been set for the technology. But "that's the wave of the future," says Dick Green, president and chief executive of Cable Labs, the research arm of the cable-TV industry in Louisville, Colo. One day, he says, providing Internet access will be as important to the cable industry as its $25 billion core television business is today.

Telephone companies, meanwhile, are racing to implement their own solution, called ADSL (Asymmetrical Digital Subscriber Line). Earlier this month, AT&T Paradyne announced it had developed its version of the technology, which is capable of receiving more than 7 million bits of information per second. That is almost as fast as the first generation of cable-TV modems, which promise 10 million bits per second, and far speedier than today's modems (running at 28,800 bits per second) or today's enhanced telephone lines called ISDN (short for Integrated Services Digital Network), which run at a top speed of 128,000 bits per second.

The advantage of the new ADSL technology is that it runs on existing telephone lines. The disadvantage, analysts say, is that it may turn out to be more expensive to deploy than cable modems. It all depends on how popular cable modems become.

To make these modems work, cable companies will have to upgrade their entire networks. If many people decide to use the new service, then the costs of the upgrade can be spread over many customers. If cable modems are a flop, then ADSL, which can be upgraded one phone line at a time, will be cheaper.

"It's really a business issue," says Frank Wiener, director of broadband products for AT&T Paradyne, which is pushing the ADSL technology. If 10 percent or fewer cable customers order the new service, ADSL wins, he estimates. If 30 percent or more of cable customers take the new service, then not only will cable companies win, but telephone companies will also begin to upgrade their networks with the cable technology, he adds.

Analysts are split on who will win. By 2000, Dataquest forecasts, the phone companies' ADSL and related technologies will pull ahead with 3.7 million modems to 900,000 for cable.

"My money's still on the cable guys right now," counters Emily Green, an analyst at Forrester Research Inc., a research firm in Cambridge, Mass. By 2000, nearly a quarter of consumers hooking up to the Internet will use cable modems, she predicts.

The dramatic increase in speed will not only make Internet access faster, it will change the Internet itself, industry officials say.

Bruce Linton, vice president of new enterprises at BBN Planet, a national Internet service provider in Cambridge, Mass., sees a big opportunity in teleconferencing. He says firms will use the Internet to include their home-based employees in company meetings.

Another huge potential: entertainment. Three leading cable-TV companies - Tele-Communications Inc., Comcast, and Cox Communications - have invested in the At Home Corp. The new company, which started a market trial of cable modems about a month ago in Sunnyvale, Calif., plans to offer CD-quality audio and real-time video programming to its customers. The commercial launch of the network is scheduled for late summer or early fall.

Mr. Linton of BBN sees the cable providers able to offer consumers two services - a $20 to $30 a month option for Internet service at roughly 20 times the speed of today's modems and a $50 to $60 a month option for service at 400 times the speed.