Who Will Supply Our Digital Dialtone?

Bruce Karsh

A long time ago, houses stood alone - without connections to any public utilities.

Before long running water was invented and soon water companies were formed and people's houses were connected to the water companies. Running water made a tremendous improvement in people's lives, and people were willing to pay to have it. Over the years, the water companies continually improved their technology for providing water and they got better and better at it. They learned to build dams, reservoirs, aqueducts, and myriads of other civil engineering constructs which are, to this day, still masterpieces of man's ability to build.

Sometime later, the natural gas stove was invented and people needed to have natural gas lines connected to their homes. The water companies did not bring natural gas to the houses, since they were already too busy with their dams, reservoirs, aqueducts, et. al. Instead, natural gas utilities were formed and they connected natural gas to people's houses. Over the years, they learned better and better ways to prospect for, and mine natural gas. They developed huge natural gas pipeline systems which carried the gas throughout the world. They developed safety systems and sniffer systems which have drastically reduced the number of inadvertent natural gas explosions. Natural gas became an advanced and highly developed technology.

While natural gas was (and still is) very useful, a still more useful invention came to pass. Electricity, especially the electric light, motor, and heater, have completely revolutionized the house. The gas companies were busy with their wells, pipelines, and safety problems, and therefore were not able to bring electricity to the houses. Instead, great electrical utilities were formed and they connected electricity to people's houses. The electrical distribution technology that they invented is one of mankind's great achievements. Giant generators, powered by nuclear reactions, oil, coal, hydro, wind, and other sources feed vast international power grids of high tension DC and AC distribution. Billions of houses, worldwide, are connected to this network.

Next the telephone was invented. You would think that the electric utilities would be the natural companies to bring telephone service to the houses. But the electrical companies had enough problems keeping their power plants and power grids running so it took the formation of giant telephone companies to bring telephone service to people's houses. And the telephone companies did a masterful job. Telephone service is now available worldwide, and you can easily direct-dial phone calls all over the world with proper billing and good signal quality.

After the telephone came cable TV. You would think that the telephone companies would have been the ones to provide cable TV service. But in fact, they were too busy worrying about billing, audio signal quality, and direct-dialing. So large cable TV companies formed, and they connected television cable to peoples' houses. They were so successful that even in areas which were well served by broadcast television, people chose to purchase cable TV service. Whole networks formed which are only available over cable. TV signals were brought into communities thousands of miles away. In the remote island of Cay Caucker, off the cost of the central american country of Belize, the citizens are all Chicago Cubs fans, because the island's cable TV service provides WGN TV from Chicago.

Now we have the invention of the computer network. Many people believe that the cable TV companies or the telephone companies will provide a computer network service into houses. As you can see from the previous examples, this is historically unlikely. Utility companies have enough trouble providing their existing services and cannot afford to neglect their core businesses in order to mess around with new-fangled inventions.

I predict that networking will be a new utility, not a part of an old utility.

FIAT LUX