Thin air?

Thin air?Satellite TV uses valuable airwaves which in the future could become overloaded. What happens when the spectrum fills up? Entertainment will have to go underground, says David Manners
Has Rupe boobed? Murdoch has built his entertainment and communications empire on the belief that the mainstream medium for the digital world will be satellite broadcast TV. Has he built it on a fallacy?
While the air is limited, the ground is infinite. Whereas airwaves are restricted by the amount of spectrum available, the ground can take as much cable as you want to bury in it.
Anyone with a camcorder can take pictures anywhere on earth. When bandwidth improves they’ll be able to send those pictures to anywhere on earth.
When every citizen is a personal tele-reporter/transmitting station, when videophone/videoconferencing calls take off, when digital TV delivers infinite numbers of broadcast channels, the volume of graphics being whizzed around the world is going to grow like a weed.
When graphics are added to the rapidly increasing conventional telecoms and datacoms activities, the amount of electronic material broadcast, telephoned, modem-ed, radio-ed, faxed and cabled around the world will, one day, overload the means of delivery.
What happens then? Well, according to Nicholas Negroponte, director of the Massachusetts Institute of Technology’s Media Labs, the answer is that everything which can go through the ground will go through the ground, and that only those things which have to go through the air will go through the air.  
  Come in earth… When the airwaves fill up the means of delivering TV will have to go underground, because the only application which demands their use is mobile communications.
In other words, the spectrum is far too valuable a resource to be used for entertainment. The means of delivering TV will have to go underground, while the airwaves are used for the only application which demands their use – mobile communications.
This, of course, is a bone-crunchingly horrible scenario for anyone who has founded their media empire on the premise that TV will be delivered from satellites.
Enter Bill Gates. Recently Gates has gone haywire on the UK cable front. If he succeeds in last week’s $4bn-plus bid to buy 30 per cent of Cable & Wireless, to add to the $3bn-plus 29.9 per cent stake in Telewest he bought two weeks ago, and to his $550m 5 per cent stake in NTL, he will have stakes in all three of the UK’s biggest cable suppliers.
Why does he want them? There are several possible explanations: because the UK has an unusually modern cable network – much of it fibre; because the UK is the traditional gateway for US companies wanting to get into Europe; because the TV is thought more likely than the PCs to become the preferred route into the Internet for UK consumers, and because cable is likely to be the ultimate winner of all the rival media seeking to deliver TV programmes.
It could also be that Gates’ cable investments are supporting the ‘Wired World’ vision of his co-founder at Microsoft, Paul Allen, who has a multi-billion dollar string of investments in companies developing products which will deliver cheap high bandwidth communications links to everyone.
Anyone involved in the computer industry, which adopts new technology at breathtaking speed, looks askance at the telecommunications industry which implements technological advance only at a snail’s pace.
Gates shares the frustration of his Wintel compatriot Andy Grove, Intel’s chairman, at the reluctance of the traditional telephone operators to supply consumers with affordable high bandwidth links into the public telephone networks.
So Gates’ incursion into UK cable could be good for all of us with access to cable. We could all get megabits per second access to the Internet while BT still pushes its kilobits per second ‘Home Highway’.
But though it’s good news for us, it could be bad news for Murdoch. Not only because satellite TV looks a time-limited technology, but because Gates has investments in the mobile phone business (Nextel) and in the satellite phone business (Teledesic).
This could parley into the one-stop shopping service of TV, Internet and both a wired and wireless phone service with consumers getting one bill for the lot subsidised by substantial economies of scale.
Murdoch, just peddling satellite TV, would be hard pushed to compete with that lot. Moreover, Gates is richer than him.

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