Across Angelo Bravos` computer screen dances one vision of the future. Colorful graphics originating from a machine many miles away shine next to a moving image of that far-off machine`s human operator, accompanied by his voice.
It`s a technologist`s Nirvana-a tomorrow where the computer, television and telephone are one object, tied neatly together by the spun glass called optical fiber.
But it also may be just the latest effort by telephone people to sell a new version of the old Picturephone to folks who have shown, time and again, that they don`t like being watched by the people they call.
Either way, telephone video, carried by light particles called photons over a fiber network, is a dream shared by local Bell operating companies. They want to move America from the era of electronics to the age of photonics, and they argue that it is essential to hook up the nation with optical fiber to do it.
And though the conversion may cost nearly as much to finance as the savings and loan debacle-and might even jeopardize the reliability of plain old phone service-the telephone people appear determined to tear out most of the copper wire that carries telephone service to American homes and replace it with fiber.
They are driven by the competition that is eating into the telephone company`s most profitable markets, threatening to erode their longtime position as America`s most predictable moneymakers.
With a tradition of relying on new technology to solve problems, the telephone people are turning to fiber as a ”killer” technology, intended to increase operating profits and vanquish their foes.
Those foes include the cable television industry, which is fighting with all its resources to keep phone companies from entering the home entertainment market. Other contenders are alternative phone-service firms, which are using optical-fiber technology to steal business from the Bell companies.
Framing this struggle is a technology that won`t hold still. The revolution in information processing and transmission is progressing so rapidly that nearly any decision made today portends obsolescence tomorrow.
It adds up to a classic case of a problem common to much of America: how a company copes with shifting markets by adopting a new technology, but one that promises uncertain benefits.
Many scientists see the shift to using photons instead of electrons to process and carry information as technology`s most exciting trend. Traveling on glass fiber at the speed of light, photons don`t interact with matter, slowing down and generating heat, as electrons do while moving on copper wire. Photons also can carry vastly more information, enough to easily accommodate video signals as well as audio. And because they don`t generate electro-magnetic fields, there is no ”crosstalk” interference in photon signals.
America cannot afford to wait on the sidelines while foreign competitors exploit photonics` phenomenal information-processing speed and flexibility, say fiber partisans.
But the drive to spend $200 billion to $400 billion nationwide on a residential fiber network is more than just a leap of faith in new technology. It also underscores the anxiety among those who provide America`s local telephone service.
They expect the 1990s to bring the same wrenching challenges to local phone companies that hit long-distance firms in the 1980s with the breakup of the Bell System. And just as technology, including the proliferation of advanced communications satellites and highly sophisticated switching equipment, spurred firms such as MCI Communications Corp. to challenge American Telephone & Telegraph Co. in the 1980s, it is promoting competition for local phone companies such as Illinois Bell.
It has become possible for large business customers to go elsewhere for local phone service. Soon, smaller businesses and maybe even residential phone customers will be shopping around for local service. So Bell executives are looking to the same new technology to provide them with new markets, new services-and new ways to make money.
Angelo Bravos` videoconferencing lab is in the Rolling Meadows complex operated by Ameritech Services to do research for Illinois Bell and the other Midwest phone companies owned by Ameritech. The companies hope to get the new technology out of the lab and into the marketplace as quickly as possible.
Using optical fiber to transport signals, Bravos can shift moving video images from a large television screen to a portion of a computer screen. People sitting at computer terminals at opposite ends of the country could use such a device to collaborate on writing reports, talking and watching each other as they manipulate data.
Telephone planners also expect that once the phone network is mostly converted from today`s copper to tomorrow`s glass fiber, new services such as video on demand-and many more as yet undreamed of-will become available.
Central to this hope is ”bandwidth,” a measure of how much information a medium can carry. Optical fiber, which carries packets of light instead of the electricity that flows on copper wires, has virtually unlimited bandwidth. That is why these strands of glass thinner than a human hair have become workhorses of the telephone network, carrying tens of thousands of
conversations at a time in long-distance connections and between local telephone switching offices. (It was just such an optical fiber cable, connecting stations in Hinsdale and Elmhurst, that was severed by a landscape contractor in Oak Brook last week, disrupting phone service not only in those communities but in all those served by the switching stations.)
But most of the phone network, the part called the ”local loop” that carries signals to and from residences, is still made of copper wires that carry electrical signals. And even the staunchest fiber backers concede that replacing this copper wire with fiber just to carry regular phone
conversations is a bit like building an eight-lane superhighway for a farmer to drive a tractor to and from the fields.
If one expects, however, that building the superhighway will spur development, turning the farmer`s cornfield into a populous metropolis-as has happened, say, in Du Page County-the construction might make sense.
Experiments have indicated that fiber won`t be installed all the way to each residence but to neighborhoods, so that four or more homes will share the expensive devices required by a fiber system, said Joel Engel, Ameritech Service`s assistant vice president for science and technology.
This strategy will make it just as economical to install fiber in a new subdivision as to put in copper wire, he said, and though it isn`t strictly an all-fiber network, it is close enough.
Virtually every major telephone operating company is experimenting with fiber to the local loop and expects to begin using it to hook up new residential subdivisions within a few years. Most also hope to begin replacing copper service with fiber in some residential neighborhoods within at least five years.
Few experts disagree that it makes sense to install fiber phone lines to businesses, universities and others generating a lot of phone traffic. Nor do they argue with using fiber to equip new residential subdivisions for phone service.
It is the vast majority of households wired for phone service delivered over a ”twisted pair” of copper wires where real questions of economics, technology and policy begin to roil.
If fiber is used only for replacement of worn-out copper systems, it will take 20 to 30 years to convert the residential phone system to the new technology, Engel said, and that`s an unacceptable delay for fiber`s expected benefits.
But tearing out the working copper network before its useful life is over means spending billions that must come from telephone ratepayers or phone company shareholders.
Either way, it`s a tough sell.
”Suppose I come to you, the customer, and say, `I want you to pay 50 percent more for telephone service because that`s what it`s going to cost me to put in this fiber, and some day you`re going to want services that`ll need this fiber to operate,` ” said Engel. ”I don`t think you`d take me up on it. ”So then I turn to the shareholder and say, `I want to invest in this thing and it`s going to be terrific for future services, but I`m not sure what those services are, when they`ll appear or who`ll buy them.`
”Shareholders aren`t crazy about that.”
The phone companies see television as the way out of this dilemma. They are lobbying Congress to remove restrictions that effectively restrict Bell phone companies from offering TV programming, and even have launched an advertising campaign to take their case directly to the public.
If the law allowed it, a fiber phone network could carry TV programs and other new services such as video-on-demand that would give customers all the conveniences of renting video tapes without leaving their homes, planners say. By opening these new entertainment markets, the fiber investment could be justified by phone companies to their shareholders and would provide an attractive new service to ratepayers.
But cable television companies, as well as newspaper publishers, moviemakers, network television moguls and an array of others, have lined up to oppose regulatory changes allowing local telephone companies into the entertainment business.
They argue that the Bell companies, flush with cash, would spend lavishly without regard to normal market forces just to get into the game. The phone companies would use subsidies from their protected monopoly services to finance this raid on the cable industry.
”Because they can cross-subsidize, they could enter the cable business even where it made no economic sense,” said John Wolfe, spokesman for the National Cable Television Association. ”There`s a clear history of phone companies doing this in the past. These current restrictions are in place for very good reasons.”
Bell executives respond that cable TV companies are just afraid competition will spoil their position as unregulated monopolies that can raise prices almost at will while providing mediocre service.
As Congress and the Federal Communications Commission listen to this debate, the central question of whether American homes really need to be served by fiber phone service within the next decade is often ignored.
Many familiar with the industry and the technology think the drive by telephone companies to accelerate fiber residential service is based on wishful thinking and a romantic view of technology.
”New things keep popping into view and get overhyped, and these guys start believing their own rhetoric,” said A. Michael Noll, on the faculty of the Annenberg School for Communication at the University of Southern California and a former AT&T employee.
Noll said phone company executives ”are babes in the woods when it comes to new technology and thinking about the future. It`s almost like a contest to see who can be wilder than the other guy.”
No one questions that fiber optics is useful, and it is likely that entire phone system will someday run on fiber, Noll and others acknowledge. But, they say, it makes no sense to rip out a good copper network to replace it with fiber before the copper has worn out.
Putting fiber into residential phone connections also poses potential reliability hazards. Copper telephone lines carry a low-voltage electrical current that carries voice or data information. If an area has a general power outage, telephone lines usually are unaffected because of their independent power source.
But fiber cannot carry electrical current, and phone planners are faced with the question of how to maintain phone service when residential electricity fails, an event all too familiar in some Chicago neighborhoods in recent months.
It may mean that even in a fiber-connection system, some copper connections will be needed as an emergency power source.
Also, neighborhood interconnections between a fiber system and the copper wiring going to each home requires electronic equipment to convert the packets of light carried on the fiber into electrical impulses that can ride copper wires. When such complex equipment is placed in neighborhoods far from the air-conditioned safety of the central telephone office, another possible failure point is created, critics note.
”My guess is that fiber to the home will have a rough go because of this decentralized electronics,” said Leland Johnson, a senior economist for Rand Corp. who co-authored a detailed analysis of telephone company plans to provide cable television service.
”Fiber service is going to be hard to maintain and hard to power in emergencies.
”There`d be nothing worse than for the majority of people who just want the plain old telephone service that almost always works to lose that because the phone companies want to make things fancy and provide a lot of services that only a few people ever use.”
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Monday: Cable TV rolls out new features to head off the phone fiber challenge.
