April 20, 1998, 10:47 p.m. PT
Microsoft's Gates Sees Blending of Cable, Telecom Companies
Denver, April 21 (Bloomberg) -- Cable-television and
telecommunications companies will become more similar as
their ability to deliver high-speed data communications over the
Internet expands during the next five to 10 years, Microsoft
Corp. Chairman and Chief Executive Bill Gates said.
Gates likened the current race between the Baby Bells and
the cable industry to provide a single source for video,
telephony and high-speed Internet access to the situation of the
semiconductor chip industry on the eve of the introduction of the
personal computer.
''There are great opportunities for cable companies that
invest in the right ways as well as for telephone companies that
also invest in the right ways,'' Gates said at a United Way event
in Denver last night.
Gates, 42, is generally regarded as a technology visionary,
and Microsoft's $1 billion investment in Comcast Corp. last year,
touched off months of speculation that the software giant would
make similar investments in other cable companies, like Tele-
Communications Inc. and U S West Media Group Inc. There's also
been a wave of partnerships as telecom and high-technology
companies find ways to use the pipeline to almost 100 million
U.S. homes provided by a cable-TV industry's fiber optics
network.
''You'll see us doing a lot with the phone companies, as
well as other things with the cable companies,'' Gates said.
Although he didn't mention any companies by name, he said the
telephone companies are making good progress with digital
subscriber line (DSL) technology, which increases the capacity of
conventional copper telephone wiring to carry multiple signals at
the same time.
One such company, U S West Communications, the Colorado-
based Baby Bell, said yesterday it would begin offering 120
channels of digital entertainment and information programming in
Phoenix this summer, using very high-speed digital subscriber
line (VDSL) technology.
What's been greatly underestimated is the demand for high-
speed communications capabilities required to make software
advances widely used in the home and business environment, Gates
said.
Because of that, demand for data connections should generate
revenue streams ''way beyond'' that currently generated by
broadcast video, cable and voice telephone services, he said.
Because the cost of building new infrastructure capable of
carrying sound video and high-speed data transmission is so high,
there's ''no scenario where one (industry) is the victor and the
other is the loser,'' Gates said. Within five to 10 years, ''we
won't be able to tell the difference between them,'' he said.
--Jeanie Stokes in Denver (303) 267-0311 through the New York
Copyright 1998, Bloomberg L.P. All Rights Reserved. The information herein was obtained from sources which Bloomberg L.P. and its suppliers believe reliable, but they do not guarantee its accuracy. Neither the information, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any securities or commodities.
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