I have been thinking about some of the discussions here and realized that we are arguing about the merits of competing technologies without really thinking about the longer term implications. Given the profound affect some of these technologies will have on the future of our society, it is no wonder that such stocks as AMTX and ZE have been causing such a frenzy in the investment community. There is no doubt that we will be spending more and more time performing our jobs, doing our shopping and entertaining ourselves over some form of communications network. This is why all of the corporations are making such a mad grab to control those technologies they expect will afford the greatest degree of clout in affecting a future which is favorable to their business interests. It is in this same spirit that investors are frantically trying to follow along behind all of this jockeying around hoping to catch some of the crumbs.
For many years, the personal computer revolution has been quietly transforming many of the physical aspects of our world into their digital equivalents. In order to communicate and exchange data between these computers, a sophisticated network technology has sprung up which now allows many workers to access common software and data, exchange multimedia mail, conduct video conferences and even play games with each other over the network. Although the technology needed to bring these capabilities to the home has been available for some time now, their migration to the home market has been constrained by the slow speeds of antiquated phone systems originally designed solely for the purpose of transporting analog voices.
Now, with the popularity of the internet and the world wide web, home users are beginning to demand faster methods of transporting data that will allow them to begin taking advantage of quicker multimedia browsers, on demand entertainment systems, interactive shopping, video conferencing, etc. If they were to have the option, the computer and network companies would like to design a whole new global network using the best routers and bridges, following standard communication protocols, and based on fiber cable. Since it would require a massively expensive and time consuming effort to lay new cable to every home, these companies have decided instead to take the path of least resistance and use one of the existing communication conduits to begin their migration into the home market. Here are the choices:
1. As a short term, temporary solution, they can assist the phone companies in beefing up their aging copper phone lines by using a digital enhancement scheme which boosts the speed and bandwidth to levels that will support adaquate transmission rates for at least a few years. One such solution is adsl which provides a high rate of transfer from central content providers to individual users but does not allow sufficient bandwidth for individual users to broadcast their products and establish a network business from their homes or most places of business. Under this scenario, the computer and network companies will be forced to continue to rely on the hodge podge of old switches and controllers and patch work of incompatible software modules controlled through proprietary and often outdated operating systems and programming languages used by the phone companies. In addition, the telcos will undoubtedly exert tight control over how these networks are designed and will likely resist standard based solutions and modern innovations unless forced to by the competition.
2. They can work with existing cable companies in setting up a modern network which can meet the demands of customers today using their choice of modern, off the shelf and fully proven network equipment and software which is easily maintained and upgradable for the future. Since cable companies do not already have a complicated hardware and software system in place for managing communications, they will be much more amiable to embracing all of the modern networking architectures, standard software products and open system protocols such as ethernet which will provide a smooth upgrade path based on market-driven innovations and which is more in line with the ideals of the computer industry and especially the internet community.
As far as owning a controlling piece of technology, which do you think is more likely to have a greater potential for generating profit and affecting the future of society. A company that makes a chip based on a standard digital enhancement scheme that will go in every modem (until something better comes along) and which, in time, may not be seen as any more important than any of the other crucial components that are necessary for the phone system to function. Or would you rather have a stake in a company that is developing the state of the art cable modems, high definition monitors and the set top boxes that are required to move the computer revolution forward into our homes. |
