Lost On The Information Highway

I admit to being baffled by the "information superhighway." We are all (it seems) about to be swept into a new world of interactive, multimedia services that will arrive over the superhighway and, somehow, revolutionize our lives. Folks, I'm not holding my breath. The information superhighway may or may not become a truly transforming technology--the likes of the railroad, car or phone. But if it does, the event is many years, and perhaps decades, away.

What inspires the hoopla is the fascination with the new and the spectacle of massive companies (Bell Atlantic, Time Warner, Viacom) frantically maneuvering, through mergers and joint ventures, to prepare for a future they only dimly perceive. We in the press contribute to the illusion, because our technology writers (bless them) are wild enthusiasts whose excursions into "cyberspace" exaggerate its importance. To take one example: computer on-line services are booming; but the total subscribers of the top four services (about 3 million) roughly equal NEWSWEEK'S circulation (3.3 million).

It takes time for breakthrough technologies to make their mark. Consider the car. In 1908 Henry Ford began selling the Model T. One early effect of low-cost cars was to rid cities of horses. A picture of a New York street in 1900 shows 36 horse carriages and one car; a picture of the same street in 1924 shows 40 cars and one carriage. This was a big deal. In 1900, horses dumped 2.5 million pounds of manure onto New York streets every day. Still, the triumph was slow.

"Up to the mid-1950s Americans were far less auto dependent than has generally been recognized," writes James Flink in his comprehensive "The Automobile Age." In 1950, 41 percent of households didn't have a car.

What now passes for the information superhighway is a slogan in search of a mission. The basic technology, fiber-optic cable, is admittedly dazzling. A specimen, supplied me by MCI, contains 40 fiber-optic strands, each the size of a human hair. Together they can carry nearly 1.3 million phone conversations or 1,920 TV channels. MCI says the cable replaced microwave technology (radio waves transmitted between towers) that carried 15,000 phone conversations or 22 TV channels.

The promise of this phenomenal stuff--invented in 1970 by three scientists at Coming Inc.--is that, through its huge capacity, it can deliver to homes or businesses almost any imaginable audio, video (i.e., TV) or computer service. But the superhighway analogy is, as economist Leland Johnson says, misleading. Between 1985 and 1992, long-distance companies laid 95,000 miles of fiber-optic cable. The superhighway, so to speak, mostly exists.

What's missing are local roads: fiber optics into homes. The reason it makes sense to use fiber optics for long distance is that these lines already carry huge volumes of traffic. But what is to be carried into homes to justify the new investment? (At $1,000 per household--some estimates are higher, some lower--wiring the nation's 96 million households would cost almost $100 billion.) Families typically now pay about $55 a month for phone service and about $31 a month for cable, including extra services like HBO. Will they pay an extra $20, $30 or $50 for something else?

The prime candidate is "video on demand": if you want to see "E.T.," you can punch it up and be billed later. This would hardly be a social revolution. It's merely a replacement for Blockbuster, presumably cheaper or more convenient. More revolutionary would be energy-saving services, as proposed by communications lawyer Steven Rivkin. Utilities could deploy monitoring devices that enable consumers to have appliances turned on when generators are idle and prices are low. This, he says, would reduce the need for new power plants and cut household electric bills 20 to 30 percent.

But no one knows whether these and other tantalizing ideas (interactive videogames, multimedia electronic encyclopedias, etc.) are more than commercial pipe dreams. An Arkansas utility is testing new energy-saving technology. One market test of video on demand in Cerritos, Calif., found that hardly anyone used it, reports the Los Angeles Times. In every age there are millions of people like me--who are vying to be last to have whatever is new and allegedly better. Who has time for all the multimedia, interactive mumbo-jumbo? We will join the wave of the future only after it laps gently onto shore. Let others enjoy the pleasures of digging their Model T out of the mud.

What may also slow the onrush of new technology is, paradoxically, the onrush of new technology. GM Hughes Electronics plans to launch this week a satellite that, by early spring, would beam 150 channels of movies, cable networks (CNN, etc.) and sports events to subscribers with small, 18-inch receiving dishes. Will this direct broadcast satellite technology (DBS) subvert video on demand? New wireless technologies, cousins of cellular phones, are being tested. The local phone and cable monopolies are collapsing, just as the long-distance monopoly collapsed.

It sounds chaotic, because it is. All new technologies trigger turmoil. True, they foster change. But they also retard it, because they spawn new technical, economic and legal problems. When these are few, the technology may catch on quickly. In 1945 almost no one had a TV; by 1960 about 86 percent of households did. But typically, the problems are greater, and the spread is slower. This is why new technologies usually make themselves felt only gradually. Alexander Graham Bell invented the telephone in 1876. By 1940 only 40 percent of households had one.

Today's new communications technologies gush uncertainty. Cable and phone companies are forming alliances to compete with each other. Everyone aims to steal everyone else's business. AU strive to rewrite communications laws to their advantage. No one really knows what customers want. Some new technologies will predictably have unpredictable uses. We won't know what they are until the systems are built; but the systems may not get built until we have a better idea of their uses. We are on the threshold of something; we just don't know what or when.