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OCR for page 39
Satellite Communications in the
Global Information Infrastructure
STEVEN D. DORFMAN
This paper presents my views on satellite communications and
the global information infrastructure (GII). I believe the GII is more
important to the future of this country in terms of world leadership,
job creation, and export revenues than the national information infra-
structure (NII), which is often called the information superhighway.
The GII is also of paramount importance to the world's newly emerg-
ing global economy. Today's global marketplace requires a reliable,
timely, and unrestricted flow of people, information, capital, and
products. By creating a seamless, ubiquitous, and cost-efficient glo-
bal information infrastructure, we provide the communications archi-
tecture for the global marketplace. Satellites, in particular, will play
a critical role in executing this mission.
THE NATIONAL INFORMATION INFRASTRUCTURE
Ever since Vice President Albert Gore first lit the fuse with his
focus on the NII, the media have responded with a barrage of stories.
Media megamergers, alliances, and acquisitions are frequent news.
Stock prices soar at the mention of the magic phrase "interactive
multimedia." Conferences are being held, and committees are being
formed. Hundreds of billions of dollars have been pledged to build
the NII.
39
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40
STEVEN D. DORFMAN
Much of this interest is justified, because we are indeed on the
brink of turning some fascinating concepts into reality. These in-
clude viewing whatever we want, whenever we want video on de-
mand; strolling through video shopping malls from our living room
and ordering with a push of a button on the remote control; having
two-way fiber optic video transmission into and out of the home;
playing video games with someone in another state; telemedicine;
and telecommuting.
But so far, most of what we hear and read about the NII suggests
that fiber will be the delivery system. Satellites are seldom men-
tioned. Even the term "information superhighway" connotes some-
thing that is land-based, which is why I believe this term is a misno-
mer. It is true we already have 15 million miles of fiber optic cable
crisscrossing the country. This is more than 300 times the mileage of
our federal interstate highway system. However, I believe that satel-
lites will play a major role in the NII, because they fulfill both of Vice
President Gore's clearly stated NII policy objectives of competition
and universal access.
COMPETITION AND UNIVERSAL
ACCESS IN THE NII
The real story behind the hype about the NII is competition-
how we are breaking away from the monopoly concept of telephone
and cable service. The original thought that government would in-
vest huge sums to help create the information superhighway is gone.
Instead, telecommunication bills are being promoted to encourage
competition for local phone, cable, and long-distance service. Now,
the cable company will be able to compete with the local phone
company and vice versa, while long-distance and local phone compa-
nies will also be able to compete with one another. In this competi-
tive environment nrices will droll. services will improve, and new
7 rip -a 7
applications will flourish.
Regarding universal access, the second NII policy goal, the real
issue here is the last-mile link to the home or office. This final mile,
bridged either by wire or by satellite dish, is where the majority of
costs are.
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SATELLITE COMMUNICATIONS
THE ECONOMICS OF SATELLITE TRANSMISSION
41
Satellite communications will flourish in this new competitive
environment and will help make universal access a reality. Hughes'
newly launched DIRECTV service is a good example. We offer 150
channels of TV service to homes that have no cable. That is universal
access. We also provide a competitive alternative to consumers who
do have access to cable. While bridging the last mile to the home by
cable costs $2000, providing this link by satellite costs $700. The
economics favor satellites, if the playing field is kept level by pre-
venting cross subsidies.
Similarly, satellite communication will provide two-way, high
data-rate services using very small aperture terminals (VSATs) where
Integrated Services Digital Network (ISDN) is not readily available,
and it will be a competitive alternative where ISDN is available.
Moreover, satellites can provide mobile communication when terres-
trial cellular communication is unavailable.
Thus, with 20 gigahertz (GHz) of satellite transmission capacity
available from geostationary orbit, a new realism is now replacing
the hype. Many are now questioning whether the cost of a fiber to
each home is justified if phone users or taxpayers do not pay for it.
After all, how much are people willing to pay to save a trip to the
local video store, especially when a service like DIRECTV can pro-
vide video on near demand?
As a result, alliances and mergers, such as the one between Bell
Atlantic and TCI, are being reconsidered. Pilot interactive multime-
dia systems are being carefully reviewed, and investments are being
rethought. One Bell Atlantic executive recently described the firm's
planned advanced video networks as "a little more difficult to de-
velop than people thought." The company intends to invest $11
billion to develop these networks.
Like other companies, Hughes is working vigorously to inject
the already sophisticated NII with new capabilities and services that
focus on satellite communications. I am particularly proud of our
Galaxy Classroom project, where we have demonstrated the power of
satellite-based distance learning by accelerating the learning rate of
K-4 students by one grade in 40 schools around the country. We will
expand this program to 20,000 schools. We support the efforts of
Congress, the Justice Department, and the Federal Communications
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42
STEVEN D. DORFMAN
Commission (FCC) as they strive to implement the architecture that
will serve this country best in the 21st century.
Increasingly, however, Hughes is also focusing its attention out-
side the United States. As both industrialized and developing nations
increase their demand for access to information, entertainment, and
mobile communications, the GII is where the action will be. In a
March 21, 1994 speech in Buenos Aires, Vice President Gore talked
about the importance of the GII and did an excellent job of position-
ing America for a leadership role. The ubiquitous reach of satel-
lites their ability to provide that crucial last-mile link—means that
satellite technology will play a major role in the GII.
THE GII: MEETING THE WORLD'S
NEED FOR TELECOMMUNICATIONS
In recent years, the world has exchanged a bipolar, Cold War
mentality for an environment that recognizes the benefits of multilat-
eral trade and cultural exchange. A global economy has emerged.
But developing nations are finding that in order to participate in this
global economy, they must build significant infrastructure—every-
thing from modern roads and air transportation systems to reliable
electronic banking and telecommunications networks.
A global information infrastructure will require massive devel-
opment around the world. Many countries have only minimal access
to communications technologies and very primitive or poorly devel-
oped internal and external connectivity. China, for example, will
spend $600 billion on infrastructure in the next 6 years. Without
huge spending on such infrastructure, developing nations will experi-
ence bottlenecks that will impede their economic growth and social
progress. Ironically, because they have made limited investments in
communications infrastructure in the past, developing countries will
be heavy users of wireless, digital, and satellite technologies.
PRIVATIZATION, COMPETITION, AND
ADVANCES IN SATELLITE TECHNOLOGY
As we move toward a seamless, ubiquitous, and cost-efficient
global information network, three significant trends are shaping the
future of satellite communications.
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SATELLITE COMMUNICATIONS
43
The first is privatization. Many governments cannot readily
afford the major investments required to develop communications
infrastructure and so are increasingly turning to sources of private
capital. In Latin America, privatization is revolutionizing telecom-
munications in places like Mexico, Argentina, Chile, Colombia, and
Venezuela. In 1994, India ended its state monopoly on telecommuni-
cations after determining it would have had to spend over $7 billion
to modernize its phone system.
As privatization takes hold, Hughes' international satellite con-
struction business is becoming increasingly commercial. For in-
stance, most of the satellites we now build for other countries are
contracted by private firms. Hughes-built satellites serving Japan,
Malaysia, China, Indonesia, Luxembourg, and Thailand were all con-
tracted by private, nongovernment entities.
Competition is the second key trend shaping the future of satel-
lite communications. Competition from both domestic and foreign
satellite service providers is driving down costs, spurring technologi-
cal innovation, improving service, and expanding offerings to users.
In August 1994, for example, Singapore announced it would let
privately owned companies compete to provide satellite communica-
tions links that previously could be supplied only by two govern-
ment-controlled enterprises. By 1998, the European Union will de-
regulate all basic telecommunication services, opening a $100
billion-a-year market to competition.
Privatization and competition are also creating new regional sat-
ellite operators, like Panamsat and SES. With the launch of PAS-3 in
December 1994 and PAS-4 in 1995 both high-power Hughes 601
satellites Panamsat will operate the world's first privately owned
global satellite system. SES, based in Luxembourg, covers Europe
with high-power TV signals using HS601 satellites. Private compa-
nies like SES and Panamsat are building and expanding their systems
to compete against the old-line public satellite consortia. Along with
added capacity, these new operators are infusing the international
satellite transmission market with greater flexibility, improved per-
~ . . . .
tormance, and competitive pricing.
The third factor shaping the future of satellite communication
and, along the way, helping to create a more universal and lower-cost
global information infrastructure, is the quantum leap that has been
achieved in satellite technology. Improvements in efficiency in space,
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44
STEVEN D. DORFMAN
on the ground, and within the radio spectrum are lowering the cost of
satellites and satellite services for everyone. For example, 30 years
ago one needed a 100-foot antenna to receive one TV channel from a
satellite, but today's DIRECTV can transmit 150 TV channels into
an 18-inch dish.
ADVANCES IN SATELLITES, EARTH TERMINALS,
AND DIGITAL TECHNOLOGY
Let us take a closer look at some of these technological ad-
vances. Today's satellites are more powerful and efficient. Re-
configurable spot-beam antennas shape the beams more accurately
and weigh less. Miniaturization and component improvements have
made receivers more sensitive and lighter. Traveling-wave tubes and
solid-state power amplifiers have increased efficiency and, hence,
require less prime power. Batteries and solar panels are more effi-
cient and lighter. Microprocessors simplify tracking, telemetry, and
control of the satellite. Modern composite techniques contribute to
lighter-weight satellite structures, and on-board propulsion has be-
come more cost-effective. In 1995, Hughes will launch the first
commercial ion-propulsion system, for the Galaxy III-R spacecraft.
This will save 800 pounds of satellite mass and more than $10 mil-
lion per launch. As a result of these technological improvements and
improved production efficiency, the Hughes 601 satellite is up to five
times more cost-effective than its predecessor of the 1980s.
Advances in technology are also yielding more efficient, lower-
cost ground-based satellite terminals. At the 1977 World Adminis-
trative Radio Conference, scientists predicted that 60 decibel watts
(dBW) of power would be required to transmit TV signals to a one-
meter dish. Since then, there has been great improvement in receiver
sensitivity, antenna efficiency, and signal processing. Today, only
50 dBW are required to transmit TV to a half-meter dish, and receiv-
ers can be purchased for less than $700.
Finally, digital communication combined with digital data com-
pression is enabling new satellite applications. For example, com-
pression of digital audio signals has made satellite mobile communi-
cations economically feasible by increasing the capacity of satellites
tenfold. Compression of digital video signals will result in at least a
fivefold increase in the capacity of a transponder to transmit televi-
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SATELLITE COMMUNICATIONS
45
sion channels. This, combined with the decreased cost of decompres-
sion chip sets in ground receivers, permits new applications of satel-
lite digital TV, such as Hughes' DIRECTV. In general, compression
of digital signals will significantly reduce the cost of transmitting
through satellites. I believe that the satellite communication market
is elastic and that the reduced cost will increase demand.
AN EXPLOSION OF
SATELLITE COMMUNICATIONS
We already see evidence that the increased cost-efficiency of
satellite communications is stimulating demand. There is an abun-
dance of new satellite capacity. Already, 145 commercial communi-
cations satellites orbit the globe. Another two dozen were scheduled
for launch during the last three months of 1994, and more than 100
new commercial communications satellites are on order. Nine hun-
dred filings have been submitted to the International Telecommuni-
cation Union (ITU) for future satellite systems, and that number
excludes hundreds more low Earth-orbiting (LEO) satellites that
companies such as Iridium and Teledesic plan to launch. At Hughes,
we have our largest-ever backlog; in 1994 and 1995, we will be
launching an average of one satellite per month for customers in
Thailand, Mexico, Brazil, and other countries.
The technological advances I described more powerful satel-
lites, more sensitive lower-cost receivers, and digital communica-
tions are bringing more than just cost efficiencies. They are also
stimulating new satellite applications. I would like to discuss three of
these: high-speed interactive voice, data, and video transmission;
satellite mobile services, which will eventually evolve into hand-
held terminals; and direct-to-home television broadcasting through
satellites.
Before discussing high-speed interactive communications, how-
ever, we must consider that much of the world is still in need of basic
telephony. In China, which has fewer than two phone lines for every
100 citizens, a private residential phone line from the Beijing Tele-
phone Company requires a 6 month wait and costs $575, the average
government worker's salary for an entire year. In Mexico, the phone
system is so unreliable that when a call finally does go through, the
common greeting is not "Hello" but "Who have I reached?"
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48
STEVEN D. DORFMAN
tile Corporation and the Canadian Telesat Mobile Incorporated, will
for the first time give cellular car phone users ubiquitous roaming
service across North America. Dual-mode handsets will route calls
over cellular networks when they are available and by satellite when
they are not.
AMSC-1 and TMI-1 will interconnect with all existing cellular
systems and with the entire public switched telephone network, creat-
ing the first seamless network for nationwide mobile voice, data, and
fax communications in the United States and Canada. The satellites
will be capable of serving hundreds of thousands of customers.
A follow-on AMSC-2 satellite with eight times the capacity of
AMSC-1 will lower costs; more important, its tightly focused spot
beams and on-board digital processing will reduce the needed uplink
power to less than one-half watt. This will permit hand-held service,
using lightweight pocket phones, for the first time.
Hughes is one of several companies examining hand-held mo-
bile telephone service in other regions of the world Pacific Asia, for
example, where demand is great. While Hughes and others are cur-
rently working on geostationary systems, several different entities
have proposed projects that would provide worldwide hand-held ser-
vice via a constellation of either low or medium Earth-orbiting (MEO)
satellites.
Two LEO systems are being built: Motorola's 66-satellite Iri-
dium project and the 48-satellite Globalstar system from Loral/
Qualcomm. A MEO system based on 12 satellites is planned by
Inmarsat. Construction of this system is scheduled to start in 1995.
Each type of system proposed~EO, LEO, and MEO has cer-
tain advantages. A GEO system is most suitable as a regional system
and has the lowest cost. Ultimately, a series of regional GEO sys-
tems could form a global system. A LEO system will be the most
expensive service because of the large number of satellites required,
but it will not have the transmission-time delay of GEO satellites. A
MEO system will be more expensive than a GEO but less than a LEO
and will have minimal time delay.
I believe worldwide demand will be such that all three types of
systems could coexist. Ubiquitous hand-held telephony, using a com-
bination of satellite and terrestrial communications infrastructure, is
a virtual certainty for the 21st century.
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SATELLITE COMMUNICATIONS
47
video. Spaceway will consist of four interconnected regional satellite
systems operating in the Ka band and providing worldwide coverage.
By transmitting in this high frequency band and by using tightly
focused spot beams, we can transmit to or from ultra-small antennas
measuring 26 inches in diameter. The price of these dishes will be
less than $1,000.
The Spaceway system will play two key roles. First, it will
provide basic telephony to underserved areas of the world and offer
these regions access to global telecommunication. Second, Spaceway
will provide critical advanced communications support to the global
marketplace, where huge quantities of information must be accessed
and shared electronically.
Spaceway will offer business users a wide variety of applica-
tions, including desktop video telephony and conferencing, computer
networking, technical tale-imaging, CAD/CAM transmission, and
high-speed, low-cost access to the next generation of online multime-
dia databases, at rates from 16 kilobits per second to 1.5 megabits per
second, and higher if necessary.
Spaceway will enable the entire world to have access to the kind
of souped-up capacity that we are planning for the United States.
And, it will deliver capacity on demand using asynchronous transfer
mode (ATM) technology at a relatively low cost. Spaceway will
offer two-way video for less than the current price of an international
phone call and international phone calls for less than the current price
of a local phone call.
THE NEXT GENERATION:
MOBILE SATELLITE SERVICES
Meanwhile, our second new application satellite mobile com-
munications- is about to take off. The pioneering work has been
done by Inmarsat, which provides service to tens of thousands of
maritime and aeronautical customers. The first land mobile services
will be available soon via piggybacked payloads on the already-
launched Optus and Solidaridad satellites of Australia and Mexico,
respectively.
In spring 1995, the first high-powerland mobile satellite, AMSC-1,
will be launched, followed shortly by its twin, TMI-1. These satel-
lites, which Hughes is building for the U.S. American Mobile Satel-
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STEVEN D. DORFMAN
Satellites, in the form of VSAT networks, already play a tremen-
dous role in providing basic telephony in such areas. While voice is
not a common VSAT application in the developed world, it is per-
haps the most critical application in both public and private networks
in places such as China, India, southern Asia, and Eastern Europe.
VSATs also transmit two-way data and video for business applica-
tions and offer the unique ability to overcome the challenges posed
by distance and terrain.
In Africa, for example, 70 percent of the people live in rural
areas, and major business centers, like Cairo and Nairobi, are thou-
sands of miles apart. The continent's vast mountain and desert areas
would make it prohibitively expensive to provide telephony via fixed
terrestrial links. VSATs offer an immediate, low-cost solution and
the only real opportunity to rapidly advance the continent's economic
development. It will be a very long time before the developing
countries of the world have fiber optic networks approaching the
sophisticated networks that exist in the United States.
VSAT networks are providing far more than basic public tele-
phone and government communications services. They're also being
used for more sophisticated applications in banking, retail merchan-
dising, oil exploration, and newspaper production and distribution.
In Europe, VSATs handle Holiday Inn's international reservations
system and Visa's global transaction network. The China People's
Daily is published via a VSAT network.
SPACEWAY: HIGH DATA RATES AND
BANDWIDTH ON DEMAND
With these VSAT applications as a starting point, we now find
ourselves on the threshold of a new era of interactive high data-rate
transmission. Microsoft's Bill Gates and cellular phone pioneer Craig
McCaw made headlines when they announced an ambitious plan to
launch a high data-rate global satellite business, Teledesic. The
project would rely on a global network of 840 low Earth-orbiting
satellites.
Alternatively, Hughes has announced its intention to establish a
global network of geostationary (GEO) satellites, called Spaceway,
that will provide an interactive bandwidth-on-demand service for
telephony, high-speed data exchange, and high-resolution interactive
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SATELLITE COMMUNICATIONS
DIRECT-TO-HOME DIGITAL TV
49
High-power direct-to-home TV is already a reality. With the
launch of Hughes' DBS-1 and DBS-2 satellites, every U.S. house-
hold with a TV can now access a cornucopia of digitally pure video
programming, accompanied by CD-quality audio, via an 18-inch
dish. Using digital compression, Hughes' DIRECTV company and
Hubbard's USSB are able to beam more than 150 channels of pre-
mium programming directly into every American home. Competi-
tors such as Echostar and Primestar have announced similar services.
Demand for TV entertainment and information is also exploding
internationally. Currently, more than 25 million privately owned
satellite dishes in backyards and on rooftops across the world are
delivering vast menus of programming directly into the home. SES,
for example, is broadcasting programs in five languages to over 17
million privately owned receivers. After Germany and the United
Kingdom, Poland is the European country that has the largest number
of privately owned dishes, even though no Polish language channels
are broadcasting and satellite dishes were banned there until 1990.
Satellites with names like AsiaSat, APStar, Palapa, JCSat, Superbird,
and Astra are sources of such familiar channels as CNN, HBO, ESPN,
and MTV.
Because most of the world has access to only a handful of local
channels, there is enormous pent-up demand for more variety and for
foreign programs. This demand can be filled most cost-effectively
by satellite TV, especially when there is little or no cable. As already
indicated, it costs less to provide access by satellite than to build a
new cable or fiber link to the home.
Because of these fundamental economics and built-in demand,
Hughes is exporting its high-power direct broadcast satellite (DBS)
technology to the rest of the world. We are building high-power
satellites capable of direct-to-home broadcasts for China, Malaysia,
Mexico, Australia, and Japan, among others. Australia, which has no
cable and only a handful of broadcast stations in the major cities, got
its first direct-to-home TV service in 1992 via an Optus satellite. A
second Optus satellite went into service in 1994.
Also, Hughes recently teamed up with three of Latin America's
leading media companies in a joint venture called Galaxy Latin
America (GLA). Beginning in early 1996, GLA will bring multi-
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so
STEVEN D. DORFMAN
channel satellite-to-home digital TV to millions of households in
Central and South America and the Caribbean. Panamsat has an-
nounced a similar system.
The spectacular success of Star-TV in the Asian-Pacific region is
a good window into the future of satellite-to-home TV worldwide.
Star-TV uses 10 channels on AsiaSat, which Hughes built in 1990, to
beam entertainment programming to 60 million homes in 53 coun-
tries. Apparently, The Bold and the Beautiful and Santa Barbara are
especially popular in India.
Because of all these satellites, global viewership is rising expo-
nentially. CNN International currently has 80 million subscribers, up
from just 11.6 million in October, 1991. Soon, satellites will serve
the entire world with direct-to-home digital TV, providing multiple
programming choices from every corner of the globe.
A VISION FOR THE FUTURE
In 1962, President John F. Kennedy envisioned the United States
using its technology to connect the world through satellite communi-
cations. From this vision came the Communications Satellite Act
and two of the most successful international organizations in history,
Intelsat and Inmarsat.
Now, more than 30 years later, we have the opportunity to trans-
port President Kennedy's vision into the next millennium. By ex-
panding on that vision, we can create a global telecommunications
infrastructure that will make this a better world. This satellite-based
network will allow schoolchildren in a remote African village to
receive a superior academic or technical education from instructors
in Nairobi, Cairo, or virtually anywhere in the world. It will enable a
doctor in Afghanistan to transmit a patient's X-rays and medical
records instantly to a consulting specialist in the United States. Local
contractors in Sarajevo or Beirut will be able to rebuild their cities
with the benefit of online engineering and architectural expertise
from other countries. And, using workgroup computing, employees
in the budding economic zones of Eastern Europe can contribute their
talents to leading multinational corporations.
An integral part of this global telecommunications infrastructure
will be the satellite global phone, which we will automatically slip
into our purse or pocket each morning. It will be a smart phone,
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SATELLITE COMMUNICATIONS
51
always in communication with our personal computer, even as we
travel to the most remote corners of the world. It will know where we
are through a global positioning system (GPS) chip set, automatically
switching to satellite mode when we move out of range of terrestrial
cells.
Satellite-to-home television will keep us well informed and en-
tertained and will help us learn and understand the values and cul-
tures of other societies. Hundreds of millions of us will own personal
satellite dishes, and we will be able to receive programs from every
continent. Everybody will be watching news events as they happen,
wherever they happen. There will no longer be any remote corners of
the world.
There will be challenges. We must modify the Comsat, Intelsat,
and Inmarsat organizations so they can keep pace with today's tech-
nology and the worldwide drive toward competition and privatization.
We must formulate an international approach to the orderly alloca-
tion of frequency spectrum for geostationary and low Earth-orbiting
satellites in a highly competitive marketplace. Sufficient spectrum
exists for all of the satellite applications discussed here, but it must be
allocated efficiently. Another challenge we face is to create a global
environment that permits the free flow of information across borders
and, at the same time, protects copyrights.
As in 1962, we have an enormous opportunity to shape the future
of satellite communications around the world. By exporting our
nation's rich store of satellite technology and know-how, we not only
create new jobs in the United States and boost our own economy, we
also further the economic and social progress of developing nations
through improved access to education and health care. By exporting
America's defining values of democracy and human rights, we will
make this a better world.
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JOHN E. MAJOR
signaling; the availability of computing brought on by the develop-
ment of the microprocessor and advances in semiconductor technol-
ogy; and the emergence of competition and choice spawned by new
telecommunications policies worldwide.
What is missing from this picture is wireless communications,
the next generation of telecommunication technology represented by
paging, cellular, and PCS services. Until recently, everything you
could receive on a wall-attached television in your home, you could
receive on a portable television, whether you chose to use it in an-
other room, on a campout, or at a sporting event. That started to
change with cable, when the delivered wired bandwidth for television
services was effectively increased by two orders of magnitude. To-
day, one buys a portable TV but ends up tying it permanently to the
wall with a coaxial line. That has got to change.
A similar shift has occurred in computing. Early on, what could
be done with a portable computer, or what we then called a portable
computer, was pretty much what could be done with an office or
home computer. That changed when LANs and computer networks
came into being. With that transition, the unnetworked portable com-
puter became less useful than its LAN-based equivalent. These
changes initially went unnoticed; after all, at least the new portable
computer was portable when you carried it home. This too will
change. In the near future, for a portable computer to be truly por-
table, the network will need to be portable as well.
Let us keep this perspective and move forward to the time when
the NII/GII begins to deliver on its promises. People far from one
another will be able to talk face to face, so groups can interact and
decisions made more quickly; families will be united although they
live miles apart; and high-speed computing and information access
will be available in the home and office. Because of these develop-
ments, people will be more productive and better informed. Today,
the communications services that are available to a worker in his or
her office are available when that person is on the move. In the
future, that will no longer be true unless broadband wireless services
are brought in line with broadband wired services.
Some people say this cannot be done. Can you imagine what
would have happened to television if, when it was first conceptual-
ized, people had said that it would not work because it could not be
made to fit into the bandwidth of the existing AM and FM radio
Representative terms from entire chapter:
information infrastructure
