Local competition: Internet, cable, and telephone companies may be equally positioned to deliver content and services to consumers - Industry Trend or Event

EDGE, On & About AT&T, Nov 2, 1998

Industry executives were evenly divided on whether consumers will want their local phone company, long distance phone company, or cable company to deliver their Internet, cable, and telephone services. The executives were polled at the 1998 Global Convergence Summit, presented by Business Week and PricewaterhouseCoopers.

Thirty-three percent of those polled thought consumers would choose a local phone company, 32% thought they would choose a long-distance company, and 31% thought they would choose a cable company to deliver theses services. Only 7% thought consumers would opt for service delivery from an electric utility. More than 500 executives attended the Summit. They represented a cross-section of converging industries, with 13% from the entertainment sector, 17% from media, 16% from communications companies, 14% from technology companies, and 19% describing their company as a hybrid or combination of these sectors. Panelists highlighted the advantages their respective industries had to offer, but noted that in the end, consumers would decide based on the quality, convenience, and pricing of the service. Leo Hindery, President of Tele-Communications Inc., quoted Wall Street analysts in stating that the cable industry is "the lead-horse in the race for the digital era." Hindery cited cable's broad-band capability that is already wired into the TV - "the nerve center of the American household" - but added that it is still "a race that virtually anyone can win." In praising the advantages of today's Internet, Todd Wagner, vice-chairman, CEO, and secretary of broadcast.com described it "as coming out of the silent-movie and into the talkies." He reminded executives of all the "PCs sitting on people's desks, in their office, at home. Those are devices we can broadcast to, and we can broadcast to them today. . . We broadcast things that we never thought of as broadcast capable before. For example, this conference." As for the technology to deliver high-quality audio and video over the Internet, Wagner said, "It (technology) doesn't go backwards." Solomon Trujillo, president and CEO of US West, pointed to DSL technology that will enable phone companies to "turbo-charge their copper lines," and thus deliver high bandwidth into the home or office over the wireline. Late this year, the company plans offer cable TV over those lines in Phoenix. To quote Hindery, "The race is on." Supporting the findings of the 1998 Global Convergence Summit poll is the recent survey for PricewaterhouseCoopers on "Views of Consumers Towards Technological Advancements in the U.S. and U.K." While the survey results for service delivery preference in the U.S. were similar to the Summit's poll findings, the PricewaterhouseCoopers survey also broke down the results by gender. In the U.S., females are more likely to choose a phone company for their phone and Internet services (53 percent a local phone company and 28 percent a long distance phone company), while men were more likely to choose a cable company. The Global Convergence Summit, presented by Business Week and PricewaterhouseCoopers, addressed convergence, consolidation, and competition among the entertainment, media, technology and telecommunications industries. Award-winning journalist Sir David Frost and Kevin Carton, global entertainment and media practice leader at PricewaterhouseCoopers, hosted the day-long event on October 28, 1998. Business Week and PricewaterhouseCoopers are pleased to have presented the event with the sponsorship of France Telecom and Siemens. PricewaterhouseCoopers (www.pwcglobal.com), one of the world's largest professional services organizations, helps its clients build value, manage risk, and improve their performance by providing industry depth, delivering global reach and enhancing revenues and profits. The PricewaterhouseCoopers Technology, Info/Comm, and Entertainment Group addresses business challenges for its clients including: developing business strategies to leverage digital technology; marketplace positioning in industries characterized by consolidation and convergence; and identifying new sources of financing. Drawing on the talents of more than 144,000 people in 152 countries, PricewaterhouseCoopers provides a full range of business advisory services to leading global, national and local companies, and to public institutions. These services include management, information technology, strategic and human resource consulting; audit, accounting, and tax advice; financial advisory services including mergers & acquisitions, business recovery, project finance, and litigation support; business process outsourcing services; and legal services through a global network of affiliated law firms.