High Hopes and Hype Blaze Path For Information Superhighway

AMERICA'S Information Superhighway is a lot like the Yellow Brick Road.

Everyone sees the bricks already in place. They know the direction the road-builders are taking. But Oz is still distant. And nobody has seen the Wizard.

``Trying to separate the facts from the hype is really difficult right now,'' says Michael Wirth, who chairs the University of Denver's communications department. ``The jury is certainly out as to what and how much of these blue-sky applications, services, etc., consumers are willing to pay for.''

At a conference Tuesday in Los Angeles, industry executives, technologists, and Vice President Al Gore Jr. laid out their hopes for the information superhighway.

It may, for example, transform the way we shop. ``The biggest change will be in retail,'' says Lawrence Ellison, chief executive officer of Oracle Corporation. ``It's going to be easier to go shopping for shirts in Hong Kong than to go down to the mall.''

The digital highway may reinvent television. ``Once you digitize the material, then the consumer can summon the material at will,'' says Gerald Levin, chief executive officer of Time Warner. ``It's profound: not the technology but the psychology.''

The superhighway may also revitalize education. This week, cable giant Tele-Communications Inc. and Bell Atlantic Corporation unveiled a plan to give 26,000 elementary and secondary schools - about 25 percent of the schools in the nation - free access to an interactive network that the companies plan to build over the next five years.

Such technological promises, however, have to be taken on faith right now. Television, telecommunications, and computer executives are still groping to understand what the future will look like. At the Los Angeles conference, they could only make two predictions with certainty: A huge change is coming faster than expected, and the implications of this change, though hazy, are enormous - not only for consumers, but for industry and society.

The Clinton administration is moving quickly to draft a telecommunications bill aimed at trimming the red tape that is holding industry back.

In a speech, Mr. Gore said the administration supports key provisions of congressional bills that would let regional telephone companies - the Baby Bells - enter the television business while cable-television concerns could offer telephone service. To avoid double regulation, the new cable-TV/telephone entities could opt to be regulated by a new Title VII of the Communications Act.

Some restrictions would apply. The Baby Bells would not be allowed to own cable TV companies in their service areas. They (and cable companies soon) would have to allow independent companies to offer video and telephone services over their advanced networks at reasonable cost.

The administration also wants government agencies to take over from the courts in determining when the Baby Bells could move into long-distance services and manufacturing. One of the federal government's key mandates would be to ensure that everyone has access to the digital superhighway.

``We cannot tolerate - nor in the long run can this nation afford - a society in which some children become fully educated and others do not,'' Gore said. He challenged the television, computer, and telecommunications industry to provide free ``superhighway'' links to every classroom, library, hospital, and clinic in the United States.

Executives at the conference generally agreed the challenge could be met, as long as the market grows as they expect. This demand is largely untested. ``We will not build these gigantic networks if there are no customers out there,'' says Ray Smith, Bell Atlantic's chief executive.

But Mr. Smith and other executives are bullish. They are having to upgrade their networks anyway to stay competitive in their current businesses. If they invest a little more money, they will be able to enter new and potentially lucrative markets.

``There's no question that what everybody is going to try and do is to get to video-on-demand,'' Professor Wirth says. Interactive TV would allow viewers to order a movie with their remote control, possibly making the $12- to $15-billion video-rental industry obsolete.

Another target: the $50-billion mail-order business. With a TV remote, shoppers could try on dresses electronically at a Paris store or test drive the latest four-wheel drive truck from the comfort of their living rooms.

Does this mean the neighborhood car dealership and suburban shopping mall will become extinct? Probably not. Experts note that home shopping will bring a wider array of products to consumers' attention and may stimulate demand for goods and out-of-home browsing. People will always want to take their family out to the local mall as a social event, says Ruth Otte, president of Discovery Communications Inc.

Schools could experience some of the most profound changes. The marriage of television, telephone, and computer technologies could provide powerful educational tools, allowing students to take an electronic educational safari in Africa or study everything from Rousseau to Roseanne. A concern, though, is whether schools in the inner city and in rural areas will have all the technology of their suburban counterparts.

While schools may be able to plug into the network for free, the educational programming they will be able to call up probably won't be free. Most schools are just struggling to catch up with the technology that exists today. Take California, for example. Though it's the home of the computer chip, the state ranks 44th in the ratio of computers to students in its public-school system.

Not everyone agrees the superhighway will achieve all these things. ``When you talk about the information highway, I feel the way I feel at a bad movie: I get nervous,'' says Michael Eisner, chairman of the Walt Disney Company. ``I'm pretty sure you're going to want to interact in yellow pages, electronic banking.... [But] entertainment? Right now, I just don't get it.''