If the landmark 1967 film "The Graduate" were remade today, the word of advice young Benjamin Braddock, played by Dustin Hoffman, would receive would be "bandwidth," not "plastics."
Bandwidth is the technical term for the capacity of communications channels. Fiber-optic lines have far more capacity than old-fashioned copper telephone wires; cable can deliver more channels of television than old-fashioned broadcast networks--although all that is about to change.
The news is that communications capacity is about to become, in effect, infinite. With the coming of digital television, the broadcast networks are gaining the ability to deliver five to 10 times the channel capacity they now have, which means they will be able to handle Internet traffic. Cable systems everywhere are being upgraded to carry two-way voice, data and video on the Internet. And new electronic processors are enabling traditional telephone lines to offer broad-band capability for the Internet.
The race to own such bandwidth is behind the deals you've seen recently. Last week Paul Allen, the billionaire co-founder of Microsoft, invested $4.6 billion to acquire cable company Charter Communications, just three months after he entered the cable field by purchasing Marcus Cable of Dallas.
Allen's deal mirrors AT&T's agreement last month to acquire Tele-Communications, a leading cable firm.
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Television networks--ABC, CBS, NBC, Fox, Warner Bros. and Paramount--are wondering how best to exploit the bandwidth they have gained along with frequencies for digital channels. Analysts suggest the networks should seek partnerships with telecommunications companies that know how to bill customers for data services.
What it all adds up to is an explosion of bandwidth in the coming years, with profound implications for business in the decades ahead. Henry Nicholas, chairman of Broadcom, an Irvine-based developer of microchips that enable telephone and cable lines to connect to the Internet, says this technological shift is "comparable to mainframe computers giving way to the Intel- and Microsoft-powered desktop personal computers in the early '80s."
The ultimate potential of increased bandwidth is that "it will bring Internet access to 100% of U.S. households, as today they have access to television," says Geoffrey Yang, a partner in the venture capital firm Institutional Venture Partners of Menlo Park, Calif. Currently, about 18% of U.S. households have Internet access, although 45% have computers.
