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page 6 of 7

Washington's Bogeymen

For that reason the future of the American computer industry largely depends on the future of the cable industry. By linking America’s computers to broadband networks and then to telco fiber systems, cable can be the great enabler of the next phase of development in America’s digital economy.

In laying broadband systems the cable industry has already been forced to solve many of the key problems of an information superhighway. Although often depicted as an intrinsically one- way service, cable technology has, in fact, long provided two-way capabilities.

Every cable coax line, for example, offers potential bandwidth equivalent to six times the 160 megahertz of spectrum assigned by the FCC for personal communications services. Cable can accommodate as much as one gigahertz—a billion cycles per second—of communications power. This is some 250,000 times the capacity of a four-kilohertz telephone line to the home. Just one six-megahertz cable channel commands 1,500 times the bandwidth of a telephone line. In every coax connection the first four channels, between five and 30 megahertz, are reserved not for broadcast but for reverse communications to the headend. Widely used to transfer video programming among headends and satellite dishes and other programming sources, these channels alone already represent a potential information highway for home computers 2,500 times faster than a 9,600-baud modem to a phone line.

Even these possibilities, however, underestimate the potential of cable. The coax laid by the cable firms must carry analog video material without interference or distortion. This means cable equipment must track perfectly all the analog waveforms representing the shape and brightness of the image, and must detect tiny differences in the frequencies of FM signals bearing color and sound information. Because any deviation in an analog wave imparts a defect to the picture, cable TV has had to develop extremely low loss technologies. Although most current cable systems function at much lower signal-to-noise ratios, measured logarithmically, a cable TV plant can potentially function at nearly 50 decibels, or at a signal-to-noise power ratio of almost 100,000-to-one.

Necessary to transmit high-quality analog video, between 10,000- and 100,000-to-1 signal-to-noise ratios are vast overkill for the relatively crude on-off codes of digital communications, which can function at 17 decibels or less. Therefore, the one- gigahertz coax lines can carry many more than one bit per hertz. Craig Tanner, vice-president of advanced TV projects at Cablelabs, the industry’s research arm in Louisville, Colo., estimates that by wiggling every wave in readable patterns using a modulation scheme called 256 QAM (quadrature amplitude modulation), cable systems can transmit as many as seven bits per hertz. This means that the one-gigahertz bandwidth of an existing cable line might potentially carry between six and eight gigabits per second, or more than three gigabits per second each way. These potential links to homes are more capacious than the current telephone fiber lines that accommodate tens of thousands of phone calls among telco central offices.

This bandwidth represents the real potential of cable coax. For the next decade much of the cable plant will still be devoted to analog TV broadcasts or to digital renditions of pay-per-view movies. Time Warner’s Orlando project, however, envisions devoting the top 350 megahertz of its system to two-way digital communications, including 100 megahertz for the personal communications services of wireless telephony and 150 megahertz for digital two-way data flows. At a very conservative estimate of two bits per hertz, Time Warner projects a total of 300 megabits per second from these digital channels. At these levels a computer could download a full movie of two-and-a-half hours in about one minute.

Cable's Real Potential is Not TV
Abandonment of the Malone model by Malone and the rest of the cable industry ultimately requires that cable TV magnates develop a new grasp of the dynamics of the microcosm: the exponential growth of computer power and connections. Accustomed to the role of propagating mass entertainment, cable leaders have long downplayed the potential market in computer communications.

Gradually growing throughout TCI, Time Warner, Continental Cablevision, Jones Intercable and other cable firms, however, is a recognition that the real future of cable is in computers rather than TVs. As David Fellows of Continental declared in launching his pioneering new Internet access system in Boston In late February, “The market for computer communications is huge.”

Indeed, during the next decade the cable companies are going to discover that the computer market for their services is far more important than the television market. The computer industry, hardware and software, is already some 60 percent larger than the television and movie industries put together and is growing six times as fast. On-line networked computer services, such as Prodigy, CompuServe, Delphi and America Online, are collectively growing at a pace of close to 100 percent per year. When on-line services can exchange video and audio files as readily as they transfer text today, these computer networks will be able to outperform any television system. Against all their expectations and plans, cable executives are going to find themselves a central part of the computer networking industry.

As Fellows explains, “Cable and computer network topologies go together perfectly. Both provide shared bandwidth. Ethernet over cable is a natural.” In both networks all the data flow by every terminal. The receiver tunes into the desired channel. For computers, cable offers the dumb bandwidth that is increasingly needed as terminals gain near-supercomputer powers. In the past networks had to be smart in order to provide needed services to the dumb terminals on their periphery, whether phones, computers or TVs. Dumb terminals could tolerate narrowband connections. In the future, however, all terminals will command supercomputer powers.

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