AT&T-TCI deal may add speed to Net

June 29, 1998|By MIKE HIMOWITZ

There's only one real problem with the Internet -- getting connected to it.

For most computer users, that means using a modem to dial up another computer a few miles away that's directly attached to the Net via a high-speed communication line.

Those few miles might as well be a thousand, because the phone lines that connect you to that big, fast Internet computer are too slow to bring you all the information waiting out there for you. Until somebody does something about this, you'll grow old watching graphics-laden Web pages trickle onto your screen. You'll settle for scratchy audio and jerky, Claymation video. Or you'll just get bored with the whole thing and give up.

That's what makes AT&T's proposed $48 billion takeover of cable TV giant Tele-Communications Inc. so tantalizing. AT&T owns lots of high-speed, long-distance computer lines and it has money that's measured by the cubic acre. But to get to your house, it has to go through your local phone company, over lines that were basically designed to make sure you can recognize Aunt Rhoda's voice when you call every Sunday.

TCI, on the other hand, owns a lot of really fast communications lines that deliver TV signals directly to more than 10 million homes (including Baltimore City's). It has owns part of or has deals with other cable outfits that serve 33 million homes. Theoretically, those lines can deliver high-speed Internet service, but unfortunately, cable systems were originally designed for one-way communication. Upgrading them to handle two-way Internet traffic and other high-speed data will cost billions.

AT&T has enough billions to make the upgrade happen sooner rather than later for TCI's customers. In return, it gets a direct pipeline into millions of homes, where it plans to offer to offer not only Internet service and "Gilligan's Island" re-runs, but also local phone service. This is something AT&T has been lusting after since 1984, when a federal judge broke up the old telephone monopoly, made AT&T a long-distance carrier, and gave control over local calls to the new regional Bells.

If your home is served by TCI or an affiliate, this could make AT&T your new one-stop shopping center for all kinds of communications. The competition could also put downward pressure on local phone rates, which have remained relatively stable or even increased over the last decade while the cost of long-distance calls has plummeted.

And while AT&T is setting up your house to talk to the rest of the world, would you like to pay a few hundred dollars more to have it wired for high-speed internal communications? There's nothing like having your own local area network to connect your PC, phones, TV, stereo, refrigerator and garage door opener. Don't laugh. More than a few new homes are already being wired this way.

How much of this will actually come to pass is anybody's guess. It certainly won't be tomorrow. Both companies agree that it will take almost two years before any of TCI's cable outfits can offer phone service. It will take just as long to beef up the system for Internet traffic, although TCI is already offering Internet service in some of its markets. In Baltimore, for example, TCI says the cable system is now equipped for high-speed data traffic but it hasn't set a date for offering the service to subscribers.

There's also no guarantee the deal will go through. A proposed merger between Bell Atlantic and TCI fell apart in 1993, and it wasn't long ago that TCI chairman John Malone was telling stockholders that the company should concentrate on delivering entertainment, not necessarily Internet service.

But there's no doubt that cable companies can deliver high-speed Internet connections well when they set their minds to it. In Baltimore and Howard counties, Comcast Cablevision has done a superb job with itsome service, using technology developed by a consortium that includes Comcast, TCI and other cable giants. I use it every day, and I don't know if I could ever go back to plain old dial-up.

If nothing else, the deal will prod local phone companies, who have so far approached consumer access to the Internet with all the speed of a Yugo towing a trailer up a mountain. Not long ago, the regional Bells and a group of computer industry powerhouses announced that they would support a technology called Asynchronous Digital Subscriber Line (ADSL), which takes advantage of unused capacity in regular phone lines.

Theoretically, an ADSL connection can move data as fast as cable lines handle regular phone calls, too. Computers that have built-in support for ADSL could be on the market late this year or early in 1999.

But the phone companies will also have to invest big money to make it work -- and they'll have to offer the service at a rate consumers are willing to pay. This is something they've been unwilling to do because they might lose business customers who are currently paying a lot more for dedicated, high-speed data lines.

The bottom line: Cheap, high-speed Internet access isn't around the corner. But a deal between AT&T and TCI could bring it a little closer.

Send e-mail to mike.himowitaltsun.com.

Pub Date: 6/29/98

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