From Internet to Superhighway

Superhighways

A concept, rather than a technology – "an integrated, broadband-network infrastructure delivering a wide range of digital, fully interactive, multimedia services directly to homes, workplaces, institutions, and public places."

The term "Information Superhighway" was first used by Al Gore in 1978 when he was a senator from Tennessee.

Despite a lot of talk about superhighways, no commercial superhighways are currently in operation.

Existing technologies such as the Internet and cable TV meet only a few of the criteria to be considered superhighways.

The Future of the Information Industry

Transformation of the industry towards digital electronics

Three major industries in the era of the new information industry – providers of digital content, multimedia devices, and convergent networks

Three key characteristics of the new information industry – multimedia, global, and personal-market driven

Global Superhighways Market

Cable TV reached 350 million subscribers worldwide by 2008 – currently 100 million cable/satellite households in the US

Top cable and satellite TV markets in Organization for Economic Cooperation and Development (OECD) countries – USA, Germany, Japan, UK, and Netherlands.

Big cable markets in non-OECD countries – China, India, South Korea, Taiwan, Argentina and Poland

Significant satellite market in non-OECD countries – Poland, the countries that once made up Hungary, Czech Republic, Indonesia, and India

Top audiovisual companies worldwide – Viacom, AOL, Time Warner, Sony, NHK (Japan), ARD (Germany)

European and American companies are of roughly equal market importance. Germany dominates in Europe, followed by UK and France

The Ramps to the Superhighway

The ramps consist of telephone, computer, TV infrastructure

The Internet is the most important development in the superhighway market. In the mid-90s – the PC market moved from a niche market to a mass market. In 1996, the home-computer market was larger than business PC market. The global PC market growth rate: 15% per year, but slowing.

Current networks will be upgraded and replaced with superhighway networks such as full service networks (FSN).

Issues that need to be solved before the construction of superhighway infrastructures – high cost of delivery, national and international interconnection fees, vested interests, lack of procompetitive regulatory environment 

The development of superhighways will be evolution, not revolution

Internet: Front Runner in Interactive Services

Interactive TV will be too expensive and limited – hard to use TV for the higher level of interactive services.

The Internet is better at delivering the same service. In 2001, the Internet network reached the same size as the telephone network.

Interactive services will become available on a mass-market scale sometime during the period 2005-2010

Internet-based rather than TV-based developments will be the trendsetters for the superhighway.

The hybrid fiber/coax network seems to be the avenue for delivering broadband to the home. Depending on developments, wireless could be competitive.

Alternative infrastructure – banks, energy companies, water authorities, and other utility organizations

Carriers need to build more networks without worrying demand – great need for bandwidth. Only big players will survive.

Voice communications will be transferred from fixed to mobile and entertainment from wireless to cable-based networks (the 80/20 rule in reverse).

The superhighway networks should be a totally open system to be successful.

Services and Content

Convergence of the telecommunications sector with the computer and the broadcasting world creates new demand for services – the exponential growth of the Internet.

In December 2000, 391 million users were connected to the Internet – was over one billion by the end of 2005. Most of the growth was in non-English speaking regions

The significance of the Internet – not what it is but what it will become. It will be the foundation of the e-commerce of the 21st century.

Content and service providers will play a key role in making the superhighway viable. Niche markets will end the age of mass media.

Main categories of content and service providers:
a.	traditional full motion-video content providers
b.	advertising agencies and other producers of commercial video material
c.	telecommunications and other interactive service providers
d.	multimedia and software developers
e.	digitizing and storage services
f.	packaging and marketing organizations

Killer Applications

Cable/Internet telephony – will completely revolutionize long distance telephony

On-line gambling – growing by leaps and bounds internationally despite regulation in some countries

Adult entertainment – as is usual with new technologies, pornography is a driving force

Pay TV – from both traditional cable providers and Internet providers

News services – customizable, up-to-the-minute news service 24 hours a day – greatest impact on TV news

Demand side energy management – automated meter reading, outage detection, realtime usage and pricing information, control of appliances and thermostats, electronic billing and payment, energy usage detail

Video conferencing – PCs, laptops, and handheld devices