CMC
Magazine

June 1996 http://www.december.com/cmc/mag/1996/jun/marca.html

SPECIAL FOCUS: WEB BUSINESS MODELS

The Bandwidth Tidal Wave

Andreessen at Jupiter

by Chris Lapham

The 500 or so new media execs at Jupiter Communication's recent Consumer Online Services Conference wanted to hear about the future: they wanted a guide through the tumultuous and uncharted waters of this fledgling new industry--someone to assure them that their gut feelings were on target. And who better to deliver the conference keynote than Net star Marc Andreessen. Clad in a crisp white cotton shirt and his dress khakis, Andreessen prophesied a coming "bandwidth tidal wave" that would transform the industry.

Using the exponential growth of computer industry during the last two decades to fortify his thesis, Andreessen predicted an explosion of sorts in computing power and predicted that tens of millions of people will gain high bandwidth access and have multiple Internet access in their homes, schools, and workplace within the next five years.

[] Wyman maintains that phone and directory services companies are working hard to build services that will eclipse the weak efforts of newspapers.

The flood of bandwidth is not being unleashed, according to Andreessen, because of the Telecommunications Reform act which promises to reshape the telephone industry. The telephone industry, in turn, will totally reshape consumer online services and the Internet. And the result will be a mad scramble by regional bells, long distance, cable, and wireless satellite companies as well as energy utilities to provide the most services at the highest bandwidth to the most people. Andreessen predicted that the cost of bandwidth would drop like a stone and explained that the ten million miles of fiber optic cable already in the ground is being underutilized.

Looming fast on the horizon with an ominous foreboding for the cable industry is wireless technology, which some cable companies refer to as the "death star" of their industry. Who needs all this wiring and cable when you can buy a satellite dish for about a hundred dollars and get as many channels with the quality you want? In fact, Andreessen claimed that wireless technology is the fastest growing consumer product in the world.

As an example of what is being done now to increase access to consumers, Andreessen pointed to @Home, a joint effort of TCI, the nation's largest cable company and Kleiner Perkins Caufield & Byers, a leading venture capital firm. The project uses a cable system to provide Internet service to PCs in homes, and the first test market is Sunnyvale, California. According to Andreessen, more bandwidth will come from wireless cable companies and other technologies such as ISDN. The phone companies are motivated to compete with the cable companies, he said, and energy utilities are a "dark horse" but they have the right of way and are trying to figure out what to do. Once the bandwidth is available, the challenge will be to make the content it is carrying both interesting and useful.

We will see a blending of content, services, and applications as many companies experience increasing returns from the Internet's open standards software platform. Java and Java Script are dynamically gluing everything together, according to Andreessen, and he believes security will improve for information and transactions, as well as communication. Internet tools are evolving so content can be provided directly on the network and Andreessen specifically mentioned Director, Quark, Power Builder, DigitalStyle, FutureTense, and Net Objects. He said these tools have enabled millions of people to become content, application, and service creators.

In this broadband future, it is clear that the Internet model wins, said Andreessen. He believes that servers will reflect Internet standards-based information, communication, and applications, and that they will provide an easy means for conducting online commerce, such as publishing, advertising, and transactions. We will also see the emergence of new types of services such as personalization, cataloging and distributed searching, and agents. A wave of consumer demand--which Andreessen said will go through the roof-- will result in thousands of new applications and uses. He believes that not only are data services at stake, but voice and video services as well.

[] Bauwens' first law of the cyber-economy states that the price of information will tend towards zero

How will the publishing industry face the coming bandwidth flood Andreessen so solidly predicted? Like a flood of bandwidth, a flood of free content will threaten to drown Internet users. Andreessen's answer to the fact that almost everyone can create content is that the creativity of the individual needs to be paramount. Economies of scale in the content business are very hard to exploit because it's simply hard to get people to pay for content. Are there benefits to having a lot of people create content? Not necessarily, but the cost of distribution, which almost approaches zero, will benefit everyone.

What will the broader implications of this flood of bandwith and spawning of multitudes of applications and content mean ? Andreessen predicted that voice and video will get swallowed. Distance will become irrelevant and the telephony business structure will break down completely. According to Andreessen, with advanced PC-based video creation and production software, everyone can become a television station. And while brands are incredibly easy to build--and he used AOL, Netscape, Yahoo, and the Motley Fools as examples--they are incredibly hard to carry over to the Web.

He believes that within the next fifteen years, an entire generation that has grown up totally comfortable with computers and networks will grow up ready to embrace all technology with all its complexity and this will accelerate the rate of change. Where do we go from here? Andreessen outlined the following call to action:

  • Now is the time to start preparing for the high-bandwidth Internet; it's coming faster than you think;

  • Make sure the government doesn't screw it up;

  • It's a great time to do a start-up!
[TOC]

Chris Lapham (chris@lapham.com) lives in the Capital Region of New York State and works as an online content consultant and technology writer.

Copyright © 1996 by Chris Lapham. All Rights Reserved.

Contents Archive Sponsors Studies Contact