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Telecom Mega-Merger / Company Town | THE TECHNOLOGY

A Daunting Task

Expensive upgrades will be required to convert all of TCI's existing cable system into a digital format.


The convergence of cable TV and the telephone system has been one of the most persistently chanted mantras of the digital age, promising the ultimate in consumer convenience and, for the company that ultimately accomplishes the task, a powerful lock on the future of consumer communications.

But despite the great promises made by architects of the proposed AT&T-TCI merger, there are significant technical hurdles that, at least for the immediate future, will keep digital convergence in the realm of dream rather than reality.

Sending telephone calls over coaxial cable is no trivial matter. Expensive upgrades to the existing cable network will be required. And the issue of scaling a system to handle millions of calls with near perfect reliability is a daunting task.

What makes the joining of cable television and telephone service possible is the nature of digital communications, in which all information is carried as an electronic stream of ones and zeros. In the digital world there is no distinction between images, sounds or text--only a coded stream of binary digits that can represent a Mozart symphony, a telephone call to mother or a chapter of "War and Peace."

The beauty of the digital stream is that it can be manipulated in infinite ways. Modern communications, from the Internet to many parts of the regular phone system, now rely on a method of transmission known as "packet switching," in which the stream of bits is broken into tiny packets of information, each of which is tagged with information on its place in the stream and ultimate destination.

Since each packet is marked with an address, it can be commingled with other packets and sent down a common wire without fear of getting lost or mixed up. A computer at the receiving end of a transmission decodes each packet and then assembles the full digital stream of information once again.

Cable companies are considered to be in a prime position to take advantage of this digital revolution since their wires, capable of carrying millions of bits per second, were originally designed to carry far more information than the telephone wires.

"Cable is a broad-band medium, and it can provide services much faster than the little copper pipe that telephone companies have," said Peter Krasilovsky, vice president of Arlen Communications, a telecommunications consulting firm in Bethesda, Md.

Competing against the cable movement are systems relying on satellites and high-speed telephone wires. Most of the projects are in a early stage of development or deployment.

In a cable telephone system, the sounds of a conversation would first be converted to a digital stream of ones and zeros. The stream would then be sent to the cable company's set-top box, which would then cut the stream into packets and send them down the web of coaxial cable and optical fiber to the cable company.

The packets from a telephone call would be intermixed with a data packets from a computer, e-mail messages or other phone calls. A computer at the cable company office would then sort out the jumble of packets, send phone calls onto the telephone company trunk lines and computer data out onto the Internet.

From the trunk lines, a call would travel to the local telephone company and then to the recipient of the call, as with any other call.

The digitizing of telephone, cable television and computer information opens a variety of possibilities for telecommunications companies. TCI Chief Executive John C. Malone spoke at a press conference Wednesday about the possibility of consumers being able to instantly add new telephone lines and other services through their television sets. Since a single cable can carry hundreds of simultaneous phone calls, there would be no need for the company to send out a worker to string a new line every time someone wanted another phone number.

Mike Walsh, vice president of, said the prospect integrating high-speed Internet access, cable television and telephone service on a single wire could be attractive to companies that now deal with a veritable jungle of wire and providers.

But while the idea of convergence is entrancing, the task of actually accomplishing it will be an expensive and time-consuming process.

Krasilovsky said most cable companies were built just to send television to the home and not to handle two-way communications. To upgrade a cable system requires laying fiber-optic cable and installing new equipment at the cable company's facilities.

"TCI does not have the best collection of state of the art cable systems with two-way interactivity," Krasilovsky said. "Even though we all see the potential of two-way interactivity, the reality is that only about 15% to 20% of cable systems today are outfitted for that type of capability. AT&T is going to have to spend a small fortune to upgrade TCI's system."

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