Choices offered to consumers in the telecommunications marketplace are
expanding rapidly as competition heats up. Just as vacationers enjoy numerous travel
options, telecommunications customers increasingly have more choices for transport on the
Internet at lower prices.
Cable represents just one of many high-speed options. Telephone companies, electric
utilities, fixed wireless companies and satellite providers are competing to offer a new
generation of services. This is a great environment for consumers. Cable companies are not
the only ones making huge investments: AOL recently invested $1.5 billion in a Hughes
satellite venture, while MCI and Sprint invested a combined $1.6 billion in wireless
systems. Bell Atlantic plans to roll out 17 million digital subscriber lines (DSL) by the
end of the year; GTE will offer DSL nationwide, and Bell Atlantic is distributing
DirectTV, whose DirectPC broadband service is widely available. These technologies are in
direct competition with cable’s high-speed service.
The rollout of cable modems offering high-speed access to the Internet has spurred Bell
Atlantic and GTE, for example, to accelerate deployment of their high-speed service, DSL,
and to drop their prices. A comparison of 1998 and 1999 Bell Atlantic and GTE charges for
DSL in Boston, Philadel-phia and Washington, D.C., shows about a $10 per month reduction
in each city. Competition with cable modems is driving down these prices, and competition
should continue to bring consumers more choices and lower prices. All of these services
are in close competition with each other, even though their means of delivery are vastly
different.
Today’s cable industry is at the center of the revolution in telecommunications.
Cable uses a sophisticated network that effectively combines a host of technologies
including point-to-point microwave and satellites, plus coaxial and fiber-optic cable.
Signals from broadcast transmissions, satellites, and local television stations are
received and processed at a cable system’s headend. Then they are transmitted to the
homes of customers through a network of coaxial cable and/or optical fiber, which is
either attached to telephone poles or placed in underground channels.
These technologies allow consumers to choose the type of service that best suits their
needs, whether it is convenience, speed or content. The current benefits of the thriving
entrepreneurial and competitive marketplace are enormous, and the future benefits are
unimaginable.
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