The great convergence

As technology advances, the lines between phones, TV and the Internet are blurring

December 27, 2005|By STACEY HIRSH | STACEY HIRSH,SUN REPORTER

Imagine typing into a Google search on your television screen: "Here's looking at you, kid."

Google responds: "Casablanca. Would you like to watch it now?"

Click yes, and the movie plays.

This sort of digital seamlessness might not be imaginary much longer. With the convergence of telephone, cable and Internet, experts say technology is inching us closer to a world where all three services are interchangeable.

Incoming phone calls will pop up on your television screen. You'll watch movies on the Internet. On-demand viewing will be the norm - not just what you want and when you want it, but in what form. Buyers and sellers on eBay will actually talk to each other to cut their deals.

And as telephone, cable and Internet businesses continue to fight their way into the others' markets to form single multimedia networks, some experts believe the big winner will be consumers, because added competition should yield better products and lower prices.

"Over the next few years, we'll see a lot of experimentation with different packages of communication and Internet access services," said Jim Harper, director of information policy studies at the Cato Institute in Washington.

Already, cellular phones have become so universal that many people are using them as their main phones instead of land lines. More than 40 million homes have high-speed Internet access, double the number three years ago, said Brahm Eiley, president of the Convergence Consulting Group, a Canadian consulting and research firm. The group predicts that by the end of 2009, nearly 80 million homes will have broadband.

Because that technology is readily available, Eiley predicts that more television content will become available on the Web, whether it is streaming movies or CNN. Television, the telephone and the Internet "are in essence morphing into each other," Eiley said.

The hardware is adapting, too. Such devices, Eiley said, are becoming like Swiss Army knives - a single tool used for multiple functions. Ultimately, all the devices in our homes will have several purposes, from making a phone call to sending e-mail. Some of these changes are already evident. For instance, consumers can watch video on their wireless phones.

What it boils down to, said Harper, is that "more of everything will be accessible everywhere."

That could mean consumers will be able to buy TV packages where channels are available a la carte, so they pay only for the channels they want to watch. Or it could mean being able to set a digital video recorder from the office.

There may be so many choices that consumers might find themselves baffled, Harper said. Choosing services will be like going to the grocery store and picking from different cuts of meats or a variety of apples, he said. And there will be new reliability issues that customers will have to weigh - cable phone service, for example, goes out if there's a break in the cable line. (Comcast said its phone service has a battery backup that kicks in during a power outage, but phone service would be interrupted if the cable line to a home snaps.)

Even if it seems confusing to some, the next generation will be sure to catch on. Or, as Harper put it: "Us oldsters should just keep in mind that our kids will understand what all these options are."

A picture of what this convergence might look like began to emerge in Maryland this month with the official launch of Comcast's telephone service in several area suburbs. The added service allows consumers to get phone, Internet and cable service from one company - and pay for it on the same bill.

With its new service, Comcast introduced to the market a formidable competitor for Verizon, which has more than 2 million customers in Maryland. Verizon, which has a joint venture with DirecTV satellite service, is countering Comcast's foray into the phone business by rolling out its super-fast FiOS Internet service and preparing its own television service. Verizon's television service is already available in parts of Northern Virginia, and the company plans to offer it in Maryland.

Mark Cooper, director of research at the Consumer Federation of America, argues that with only two major competitors in Maryland, the competition won't be vigorous.

"Small-numbers competition is not very consumer-friendly," he said.

But the Convergence Consulting Group predicts that cable companies will have 12 percent of residential telephone subscribers by the end of 2007 and 21 percent by the end of 2009. And phone companies will have 2 percent of television subscribers by the end of 2007 and 5 percent by the end of 2009, the group says.

Already, the old system is starting to adapt. Major media companies are realizing "that it's important to get their video on other screens besides the TV," said Phil Leigh, senior analyst for Inside Digital Media Inc., a Florida market research firm.

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