Paving the Electronic Highway

March 07, 1994

The much-heralded information superhighway is still just a road paved with good intentions. Recent events demonstrate that no one is yet quite sure exactly how quickly that electronic roadway will be built, where it will go, who will finance it or what it will be made of.

The massive merger between Bell Atlantic and Tele-Communications Inc. that was supposed to set the pattern for the next great leap forward abruptly collapsed. A closely watched experiment in interactive television by another industry giant, Time Warner Cable, has been put off for six months. Regional telephone companies have paused in the rush to merge with cable TV business. Bell Atlantic now sees virtue in deals with smaller cable systems it scorned a few weeks ago.

The time will come when consumers can order movies without going to the video store, shop without leaving home, choose between local phone services, call up vast stores of information without buying or borrowing a book, select from hundreds of TV programs at any moment, use TV sets as telephones, telephones as sources of entertainment or personal computers to provide any of the above. Hundreds of billions of dollars, the viability of giant corporations and vast changes in our way of life ride on how these feats are accomplished.

Just when the Bell Atlantic-TCI merger seemed to be setting the pattern -- mega-mergers between giant potential competitors, rather than a titanic struggle for technological dominance -- its quick failure again left the field wide open. Viewed solely from a technical viewpoint, each had a lot to offer the other. But economic and financial obstacles made the huge deal indigestible. Which does not mean that similar marriages of convenience will not prove workable on a smaller scale, regional rather than national in scope.

A remark by a businessman involved in Time Warner's delayed experiment in Orlando, Fla., illustrates the problem: "We want to have something the consumer really wants." Not for the first time, technology is searching for a market. The search is far more complicated than before, because now there are competitive technologies as well as rival suppliers. Ordinary highways can be paved with concrete or asphalt. For the electronic highway the choices, and the stakes, are vastly greater.

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