A Cambridge perspective
on the digital world
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June 2004
The history of broadband has seen more false starts than a champion horse race, but the runners are now finally out of the starting gate and heading for the first bend, at a fair approximation to a gallop.
Cynics might be forgiven for thinking that up to now, this has been a race run without a great deal of enthusiasm, by players many of whom would rather have stayed at home. But the game has changed. With revenues from fixed line phone calls in long term decline, BT, for one, has staked a large part of its future on broadband. It is investing several billions in completely renewing its network to enable high speed access. And it is promising 'near-universal' broadband access by mid-2005 - effectively, broadband for all. Meanwhile there is heavyweight international competition from companies such as Wanadoo and Tiscali, while AOL, the cable companies and the new generation of WiFi operators are all wading into the fray.
The battle is, ultimately, to decide who will dominate the telecommunications world for the next several decades - as national telcos such as BT, France Telecom and Deutsche Telekom have dominated the past century. This time, the field is surprisingly open. In Britain, newly converged regulator Ofcom is determined to ensure a competitive industry, even if it means the breakup of BT. Yet more price cuts have recently been announced. And the battle is serious. No-one now doubts that any of the companies on the field, even the largest and longest established, could be the victim of a takeover, or if they do the wrong things could simply be squeezed out of the market. And few now doubt that universal, low cost broadband will dramatically change the whole industry - not just the telecommunications industry, but media, entertainment, music, films, IT and consumer electronics as well.
What does this mean for the consumer? It should be good news, though it may also mean a period of uncertainty. Broadband is not just about faster, cheaper email or Web access. It is the way that all the services we have been used to - TV, radio, telephone, films and music as well as email and Web - will be delivered to individual houses, and increasingly to individual people. Broadband will be the 'access pipe' to the rest of the world that most of us will use daily, if not hourly, for one purpose or another. In many cases it will be 'open' and used 24 hours a day - doing things automatically on our behalf even if we are not there to do them ourselves.
Broadband will be the means through which huge numbers of us work, whether at the office, factory, warehouse, at home, on the road, or with customers and clients. Over the next ten years - certainly over the next twenty - it is likely to become the primary medium for home entertainment, gradually sucking up what we now think of as the separate media of TV, games, home video and DVD.
It is also set fair to become the primary means of viewing sport - not just national events but local sports, right down to the level of the smallest teams, perhaps even the school sports day. Broadband will become the cheapest, and the most lucrative way of distributing all these different kinds of material - what the telcommunications industry calls 'content'. It will be the lowest cost way of reaching a mass audience, and the easiest way of getting viewers and supporters to pay something for the privilege (in various ways, form subscriptions and pay-per-view to voluntary donations). It will be the means through which many of us learn, obtain information and news, and communicate with friends, family and colleagues.
Broadband will not compete with TV: it will merge with TV, to create something that is a combination of both. Already, radio programmes can be listened to on demand over the Internet. The Internet removes the tyranny of the broadcast schedule; it also gives access to more radio stations worldwide than could ever fit on a broadcast dial (or on a conventional cable or satellite). A local South African station, or even a hospital radio station in Birmingham, can be listened to anywhere in the world, by anyone who has an Internet connection. Meanwhile Web sites are becoming an integral part of more and more radio programmes, adding on-demand images and text to spoken words and music. Today's Internet - which can deliver sound in real time when the listener, not the scheduler, wants it - has changed the medium of radio (see View from the Fen, September 2003). Tomorrow's broadband, which will deliver not just sound but video, will do the same for TV.
The BBC has done as much as any organisation in developing the new possibilities of digital broadcasting and the Internet, putting them into practice and - equally important - communicating them to its audience. Organisations such as this will play a key role in shaping the future of entertainment, information and education services, as the 'pipe' available between content producers and their audience grows fatter, more interactive, and more complex.
Ideas for broadband services - focused on interactive TV and video-on-demand - were developed in the mid-90s. Extensive trials took place in Cambridge, Colchester, Florida and Hong Kong. But, with some local exceptions, no organisation was then willing to invest the billions needed to create a broadband network.
What did follow in the late 90s was the huge experimental laboratory of the Internet. With big companies uncertain how to go forward, not to mention what the impact would be on their existing business, individuals and small enterprises took the initiative and explored what was possible, whether it made commercial sense or not. Not surprisingly, most of these experiments were not sustainable past the initial burst of enthusiasm. But some, such as Google and eBay, have created billion dollar enterprises.
Now, things have come full circle. Major companies are investing not just millions but billions in developing broadband networks, and delivering broadband services. The Internet was an amateur exercise, and the spirit of co-operation was vital to its development. Broadband will be a professional exercise, designed by companies for consumers and business users.
So far, almost all of the broadband access that has taken place has been through PCs. Will this continue? We don't think so. While the PC is an excellent general purpose device, it doesn't fit naturally into a living room, nor is it ideal for many of the broadband services listed above, such as watching films or sport. For many purposes, PCs are too complex, too slow, too difficult to use, too unreliable - and too expensive.
The PC-based Internet can be seen as the Model T Ford of the broadband era. You can have any device you want as long as it has a keyboard, screen and mouse and runs Windows (or for the discerning, Macintosh or Linux).
The economies of mass production have made the PC-based Internet available to all, but it is is not particularly convenient or easy to use. Over the next decade a wide range of devices will become available, from the broadband phone to the home cinema unit, that will allow different ways to 'plug in' and use the universal access pipe of broadband communications. Many of these devices will be wireless. The Internet radio developed by Reciva is one indication of the shape of things to come.
Another indication is Apple's iPod: a personal device which uses the Internet to distribute (and charge for) recorded music. The success of iPod is turning the music industry upside down. Universal broadband will make possible many more devices like iPod, and services like Apple's iTunes.
Broadband will be in a fifth of all Western European homes by the end of 2004, according to Strategy Analytics. In some countries, the penetration has reached 30%. It has been a long time coming, but it is now on course to become a routine part of daily life.
'Broadband for all' will change more things than we currently realise, or can reasonably predict. 2004 was the year when it became inevitable, and acquired its own momentum. It is pointless now either to promote it, or resist it. Broadband will affect everyone in the telecommunications, IT, media, entertainment, information and related industries; the task now is to deal with the consequences.
©2004 Mediation Technology
