Cooperation Is Key to the Digital 'Wonderland'

Thirty-five years ago, Newton Minow, then-chairman of the Federal Communication Commission, delivered what came to be known as "television's first enduring sound bite." Before an eager group of executives at the annual convention of the National Association of Broadcasters in Washington, Minow dropped a bombshell - he told them that they had made television into a "vast wasteland."

Whether or not television programming has improved since 1961 is a matter for critics and scholars to decide. What is certain, however, is that three-and-a-half decades later, television programming is being complemented by a cornucopia of rich, interactive digital information and entertainment - an emerging "vast wonderland."

TV itself is changing, too. The television environment of 1951 was like a sepia-tone photograph compared with today's prismatic home-entertainment landscape. Thirty-five years ago, ABC, CBS, and NBC commanded more than 90 percent of viewing time. Today, the three networks' combined share of audience hovers around 50 percent. When Minow delivered his speech, cable television served about 1 million homes. Today, there are more than 63 million cable households watching 137 national networks supported by advertising and viewer subscriptions.

However impressive this breadth of channels may be, even the most dedicated couch potatoes are starting to grow restless for a richer, more-customized experience.

A recent study by Inteco Corporation, a strategic consulting firm, reflects what many consumers are experiencing - namely, that the personal computer is beginning to challenge, and in some cases surpass, the television set as the home information appliance of choice. According to Inteco's findings, more than 18 million Americans are watching television less and spending that time using their personal computers.

Why? I suspect it's because today's digital-age consumers - especially the "wired" generation reared on e-mail, MTV, game machines, CD-ROMs, virtual reality, and, of course, the Internet - crave interaction and connection. They want to connect to one another, to the Net, to on-line services, to businesses, to government archives, to the ocean of information in cyberspace. And they've latched onto the connection machine par excellence - the PC - to travel electronically to whatever part of the world or whatever subject matter, person, or virtual community interests them.

PC ownership still trails TV-set ownership, but the gap is closing so rapidly that by the end of next year, the majority of American homes will have both products under one roof. And households with more than one computer are destined to become as common as households with more than one phone, TV, or VCR.

Why this rush to PCs? Because the PC's versatility is at an all-time high. The PC is a magnet for more and more functionality - fax, phone, modem, scanner, television, Net surfer, and more. It's become a teaching and personal- productivity tool, entertainment source, and communications device rolled into one. It is the one digital tool that can integrate and make sense of all the diverse information streams that consumers will be pulling into their intelligent, networked homes of the near future. In short, the era of personal computing is becoming an era of personal communications.

This should make it clear that delivering the vast wonderland will not be the province of any single industry acting alone. The coming era of digital personal communications is an era of converging industries. These industries must learn to compete in broad markets driven by consumer needs, rather than be protected from competition in their traditional market segments.

For the vast wonderland to fully emerge, among other things the Federal Communications Commission needs to establish some new rules of the game. Fortunately, the Telecommunications Act of 1996, signed into law in February after many years of deliberation, gives the FCC the opportunity to do just that.

IN implementing this law, the FCC should promote the convergence of digital computing and communications technologies and foster growth of competitive markets. Within this context, it is essential that the computer, broadcast, cable, telephone, and other industries attempt to cooperate and find broad solutions the commission can implement. When cooperation cannot be achieved, however, the FCC will need to choose the regulatory path that is most likely to generate broad, competitive markets, and turn the promises of our networked age into benefits for the greatest number of people.

Here are three examples of where meaningful cross-industry cooperation and thoughtful FCC advocacy are sorely needed:

*First, we need to focus on the context for the implementation of advanced-digital (or high-definition) television, and make sure we understand that it is about much more than a higher-resolution display option or over-the-air transmission for today's analog broadcast television. Digital television makes possible new forms of information-rich programming, such as the ability to bore into a televised news story to a depth of your choosing. Advanced television holds the promise of access to a world of customized digital information. But if that promise is to be realized, then the proposal before the FCC needs to be broadened. It should take into account not only the needs of broadcasters and TV manufacturers but also those of the cable and satellite industries, which are considering transmission systems for digital content that differ from broadcasting. Moreover, this proposal should ensure that the computer industry is not at a disadvantage in its ability to display television signals on its products.

*Second, let's recognize that a vast wonderland requires open interfaces that enable individuals to hook up their cable modems of choice (which connect PCs to fiber/coaxial-cable networks) much as they now connect their telephone modems to PCs. The FCC wisely opened the telephone industry to robust equipment competition in the 1970s, to the benefit of consumers nationwide. Extending this principle to cable - a logical next step - should provide even greater access to the Internet and other online services.

*Third, let's make sure that broadband digital telecom services, which enable higher-capacity digital phone service, are deployed as quickly as possible at the most affordable rates. Doing so will bring much faster and more-reliable online services and Internet access to a broader range of consumers. What's needed is a regulatory climate that will encourage communications-bandwidth providers to create more and varied broadband connections to homes and businesses, so that consumers can experience the power of the World Wide Web's rich graphics, high-quality audio and video, and smooth, real-time interactivity.

If the computer, cable, television, and broadcast industries act separately and at cross purposes, we could all miss the market as well as the mark. But if we articulate customer-oriented goals and redouble our efforts to achieve them collaboratively, we can watch the vast wasteland recede as we begin to take giant strides into the vast wonderland - a promised land that, in time, might even measure up to the high standards of Newton Minow.

*Eckhard Pfeiffer is president and chief executive officer of Compaq Computer Company in Houston.

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