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Forecast

a. Short Run: There is considerable doubt just how the communications systems will evolve. The telephone system planned two major expansions in communications. The first is a communication protocol called ISDN, integrated services digital network. This system will be an all digital system using the existing copper wire installed phone system. An ISDN line into a home will have two 64K digital channels and one 16K packet data channel. ISDN integrates voice, data, fixed image such as FAX, and limited dynamic image such as poor quality teleconferencing. By creating better algorithms for compression, better image communication can be transmitted through ISDN. ISDN is available now and may become common early in the next century. The long run plan for the phone system is UIS, universal information services. This system, which will require an expansion of the ISDN protocol to include high capacity communication, will be based on laser light as the media and fiber optics as the carrier.

The problem with ISDN is that the Bell system procrastinated in its implementation. Currently it is an obsolete protocol. A desirable system would facilitate the integration of continuous type communication, voice and video teleconferencing, and packet, data, text, and still image. A compromise which has been proposed is ATM (Asynchronous Transfer Mode). This protocol breaks all types of communications into standard 53-byte packet. It can accommodate voice, audio, ASCII text, a series of Ethernet of FDDI frames, or a combination of the above. ATM supplies bandwidth on demand. ATM packets can be switched in hardware much more quickly than the proposed ISDN protocol messages. The first generation ATM switches(telephone exchanges) can accommodate 2.4 billion bits a second. Under such a system video phone calls would be as cheap as current voice calls. ATM may win out over time.

Currently Congress is revising the 1934 Communication Act. Since the 1930s the philosophy of regulating communications has changed. Then the problem was how to regulate monopolies, now the problem is how to promote competition. For example, today there is competition in the long distance phone business. Because of wireless communication there could also be competition in the local business. Phone companies could compete with cable companies in the delivery of cable television. Most economists agree that the public interest would be served by promoting competition in all aspects of communications.

b. Long Run: In your lifetime, computers at all levels may become 10,000 times as fast as they are now and also increase that much in memory. At a super computer conference I went to a few years ago, they were conjecturing about when today's supercomputers would be desktop computers for engineers. The big advance in software, artificial intelligence application, will make computers much easier to use. New devices such as neural networks will increase pattern recognition so that languages can be based on voice recognition of structured English.

Paper as a media of communication is on its way out. All office equipment is currently being linked into a network so that documents and data can be transmitted over the telephone system. Paper will gradually become the secondary media. Existing one time write optical disks could fulfill the legal requirement for a media which can not be easily tampered with. ISDN will make it possible to transmit a book into your local memory in about a minute for the price of a current phone conversation. With fiber optics the capacity of residential phone system will initially increase from 144 thousand bits per second to 140 million bits per second and then over time increase into the billions of bits per second as the potential capacity of optical fiber is utilized either by a broadband ISDN protocol or ATM protocol. This system should be in place in thirty years. With UIS, the phone system becomes a multiple dynamic interactive video voice communications system called the social nervous system. By the social nervous system we mean:

a. A broadband digital communication system capable of carrying any media-voice, data, symbols, or video which links every home and office. This is the UIS system which AT&Tis committed to produce.

b. Every home and office would have at least one smart terminal capable of handling all the various media.

c. All man's knowledge or recorded experience whether in the form of documents, books, video, or sound cassettes would potentially be available from any terminal (provided the individual has access).

d. Electronics will replace paper as the primary media for text. One time write optical disks will become the legal media for recording important documents.

The speed at which such a system is installed depends on economic incentives. For example, currently optical fiber is about as cheap as copper wire. Hence, new subdivisions will be increasingly wired with optical fiber as opposed to copper to anticipate the future system. With the lifting of the restrictions on the phone companies, they should move quickly to replace the existing copper wire system with a fiber optics system into every residence in order to sell video services. My forecast is 20 years for fiber optics to become commonplace in residences.



Next: Forecast: Surf the Up: Competition and Forecast Previous: Competition


norman@eco.utexas.edu
Thu Jun 8 16:37:44 CDT 1995