tional information infrastructure (NII); (2) has different implications for incumbent and new-entrant enterprises; and (3) motivates some investment decisions based on anticipation that the framework will change. Shifts in industrial organization draw on both technology and policy trends and are fed by the declining costs of bandwidth, increasing consumer investment for infrastructure (cable, end nodes, information services), and surging commercial interest and activity in the Internet.

Among market participants and analysts, there is agreement that markets for information and communications goods and services will grow continuously and that there is a variety of markets, with many kinds of investments, costs, revenue generation models, and buying patterns. There is also recognition that market growth is a function of cumulating purchases and uses that, in turn, build on technical foundations (e.g., expanding price-performance of microprocessor-based devices) and behavioral ones (e.g., growing comfort and sophistication in the use of personal computers (PCs)).2 Nevertheless, the lack of agreement on how much of what kind of services will likely be purchased (at a given price and time) leads alternately to hedging, experimentation, or stalling.

The clearest trend is toward considerable experimentation by network, service, and content providers now and extending perhaps for another 5 years. The foundation for various experiments is a solid business case in telephony, television delivery, and (more variable) on-line services. At this time, though, corporate commitment to a complete strategy relating to network-based services appears unrealistic, and even companies that had made public strategic commitments have been backing off. For example, among the regional Bell holding companies (RBHCs), enthusiasm has diminished for video dial-tone systems, extending to cancellation, deferral, or alteration of plans for deploying video delivery systems.3 The market reaction to the Netscape initial public offering may be emblematic of the current ambivalence: despite considerable uncertainty, there is also considerable investor interest, some of it reflected in almost incredibly high initial stock prices.4

Technical, business, and regulatory uncertainty is yielding a degree of business paralysis as well as experimentation. The difficulty of expanding the market is seen in the fact that many proposed and attempted information services are alternative methods of delivering known products (e.g., (near) video on demand vs. video cassette rental). Robert Crandall of the Brookings Institution cautioned that where capital investment requirements are high, competing wireless investments may retard progress inasmuch as they drain potential revenues from new wireline facilities by targeting similar applications. By analogy, he noted that "cable evolved not in the novel ways that some of the pie-in-the-sky optimists envisioned in the 1960s and 1970s, but rather by providing us

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