highway as being segmented into
four periods.
(1)
Between 1990 and 1995, national narrowband lines were transformed into a Euro-ISDN- based network.
(2)
The period from 1996 to 2000 will be the years of the implementation of Integrated Broadband Communications (IBC) based on Synchronous Digital Hierarchy (SDH) and asynchronous transfer mode (ATM) switching. IBC will include such services as videoconferencing, inter-LAN data transfer, and multimedia database access for business customers in larger centers.
(3)
During the years 2000 to 2005, IBC will be extended to intelligent networks, and optical access networks will grow. Intelligent networks include seamless interworking between mobile and fixed services and advanced call security.
(4)
The transparent network will be implemented from 2005 to 2010. In this time frame, 50 percent of Europeans should have access to 155-Mbps ATM switched services, and even higher on request. Fixed networks wi
ll be increasingly integrated, and fiber will go to the home. End-to-end optical communication will become possible via photonic switches, which will replace today's electronic exchanges. Real-time language translation servers will be available in the international network, and the trans-European network will be part of the global information infrastructure.
This is the vision of the major telecommunications network operators, as well as leading European broadcasters and cable TV operators, who have joined together in the Advanced Communications Technologies and Services (ACTS) research program of the European Commission. However, in reality, many insiders admit that the current communications infrastructure in Europe is a heterogeneous web of optical fiber, coaxial cables, radio waves, and telephone wires that provides sufficient bandwidth only through private networking facilities that are available primarily to large corporations that can afford to pay for them and thereby derive the considerable com
petitive advantages that accrue. The recent developments in Europe largely ignore the small- and medium-size businesses that also need better access and better ways of communicating with their customers.
Interactive TV (ITV) pilot trials and market studies revealed that users would pay only a few dollars to get video-on-demand, and that they wanted only a few videos each month. Therefore, a financial return on the massive investment in new cable TV infrastructures can be achieved only in the medium and long term.
Ovum, which is a London-based research company, predicts that ITV in Europe will not become cash-positive until the year 2002. This prediction indicates that payback from superhighway applications will not meet the early hype, and the installation of new infrastructures will therefore take longer than what the industry and telecommunications operators estimated two years ago.
However, the de facto infobahn that is here and open to everyone is the Internet. Internet phoneware and vid
eo-compression technology make it a serious environment for collaborative work. If you use two ISDN B-channels to access the Internet, it can even serve as a medium for delivering special-interest TV.
Serious competition for the ISDN service providers will come from European cable TV operators when they start to offer Internet access in early 1997. Cable TV subscribers in Paris were the first in Europe to get full Internet access at 1.5 Mbps (see
"PC Weds TV,"
October 1995 BYTE). Industry experts say that the increasing cable TV competition will likely bring the current monthly ISDN tariffs down to a few dollars.
Access Is the Key
Jonathan Hudson, who is the managing director of Esprit Telecom, which is an international telecommunications company that is establishing a pan-European digital network, says access to any sort of infobahn is the key issue, and, he also adds, it is the one issue that most of Europe's politicians have sought to avoid. "Most entry ramps only ha
ve one lane, which is controlled by a national carrier. In the absence of competition, service is low, prices are high, and there is little incentive for innovation."
In the absence of a tangible European information highway, the global Internet is the way to go for small- and medium-size companies. The number of Internet host computers has doubled every year for the last six years. The World Wide Web has gone from 2 million subscribers in 1994 to more than 10 million at the end of 1995. Sales of Internet applications went up by a massive 70 percent worldwide in 1995 over 1994.
The Internet is also an alternative to groupware applications. Enterprise-wide intranets use the Internet as an access medium to corporate databases, but instead of being global and open to all users, only authorized users have access privileges. A typical intranet scenario includes several servers that connect to the Internet over leased lines. In-house users can connect over a LAN to these resources. Other corporate sites
as well as individual customers access the servers over the Internet -- for the price of a local call. Forrester Research (Cambridge, MA) reports that 22 percent of the U.S.'s top 1000 corporations already have an intranet. In Europe, intranets are still in their infancy, but they will of course proliferate over the next two years.
However, the real growth of Internet and intranet applications in Europe will depend on two key issues: bandwidth and price of local high-speed access. Strong competition in the "local loop" will come from new providers of telephony and data services, but it will also come from cable TV operators.
The agenda for private competition and lower communication tariffs varies widely from country to country and depends very much on the deregulatory status. For example, Finland has never been a regulated telecommunications market. That's why this country leads the field in terms of the quality of the services and reasonability of prices.
The U.K. was deregulated in the e
arly 1990s and, according to market forecasters Frost & Sullivan (London, U.K.), has established a dominant market position with the largest number of telecommunications subscribers. The other countries are now being dragged with various degrees of reluctance toward 1998, when the European telecommunications markets will become deregulated.
After 1998, competition will drive bandwidth up and prices down, and the latter development is already starting to take place. Many public telephone organizations (PTOs) are now de facto Internet service providers (ISPs). Telecom Finland even offers access outside its borders. And the new paradigm for BT, France Telecom, and Deutsche Telekom is ubiquitous access for the price of a local call.
In Germany, the PTO goes one step further with its T-Online service by offering automatic detection of analog/digital access (i.e., one number does it all). This is important because, according to Deutsche Telekom, around 25 percent of all connections in Germany are curre
ntly made over ISDN.
Hybrid fiber/cable local loop is the technology that will have the greatest impact on bandwidth and prices. Cable TV networks will serve as an alternative local loop and provide the bandwidth to run 10 Mbps and more, and access will be around 1.5 Mbps, depending on the number of users on the network at the time.
Telephone companies (telcos) have the edge in terms of regional availability, but they require a dedicated, switched connection to the ISP. This is inefficient because the ISP must dedicate resources to users whose traffic pattern is bursty. With a cable TV architecture that works like a LAN, users will have a 24-hour connection that they can access as and when required because only the cable LAN has a connection to the ISP.
Both architectures seek to provide a duplex, wideband service. For telcos, the best solution they can offer is ISDN enabling a 128-Kbps connection. Asymmetric Digital Subscriber Lines (ADSL), which can now provide 6 Mbps downstream and up to 64
0 Kbps upstream, is a superior solution. However, this service has been around for only four years and is still on trial. It is not likely to be implemented on a broad scale soon.
Cable TV companies have the bandwidth. What they need is a network upgrade that will enable two-way traffic. The cable hardware is proprietary, but this will not be a problem if the prices are low enough.
Cable modems are currently being introduced in the U.S. Motorola, for example, has launched its CyberSurfr modem, which offers 10 Mbps downstream and 768 Kbps upstream. Other features include connectivity to an Ethernet LAN, spectrum management, encryption, system authentication, plus user ID and password protection. European cable operators will start offering data services in early 1997.
Cable TV Coverage
Cable TV in Europe varies from country to country; however, coverage is more than 50 percent in countries like the Netherlands or Germany. But it will take some more years to cover all regi
ons of Europe. So the only practical alternative for these users is to bite the bullet -- pay the price, get an ISDN line, and replace the trusty modem with an ISDN controller.
According to Ovum's report "Applications for the Superhighway," bandwidth will develop in three waves. Today, we have cheap access to basic communications, along with a lot of frustration caused by bottlenecks in the local loop. Ovum sees this analog access method peaking in 1998 and then falling off quite rapidly. Wave two will be digital access over ISDN, which overtakes analog in 1998. Early next year, 1.5-Mbps broadband access over a cable TV LAN will start to take off.
The
graph shows that cable access
will overtake analog slightly earlier than ISDN. From 1998 to the first years of the next century, the revenues generated over ISDN and cable will rise rapidly, with ISDN flattening out around 2002. Ovum says that by 2005, the combined revenues from offering access to the infobahn are predicted to reac
h a total of around $180 billion in Europe and the U.S.
Ovum predicts that in 2005 about 50 percent of all businesses and institutions in Western Europe will have a link to some form of the information superhighway. However, compared to more than 70 percent in the U.S. at the same time, the figures for Europe as a whole (40 percent), and Eastern Europe in particular (20 percent), are disappointing.
More Vision than Reality
The information superhighway is more of a vision than a working reality for most businesses and home users in Europe today. Access rates severely limit the multimedia functionality of the Internet. Thus, the dissatisfaction with low-speed analog lines will drive the market for ISDN and lead to competitive access via cable. This development is also being fueled by the demand for high-speed data services to telecommuting professionals.
The opening of the European telecommunications market will bring a crossing of conceptual barriers, a blurring of produc
ts and services, more media types, and a convergence of industries and markets. Applications will be increasingly offered over different delivery mechanisms for use on different types of end-user devices: digital TV via optical fiber, voice over coaxial cable, TV set-top boxes that manage voice and data, the Internet on the TV, and TV on the PC.
WHERE TO FIND
ACTS Central Office
Luxembourg
Phone: +32 2 296 3415
Fax: +32 2 295 0654
E-Mail:
aco@postman.dg13.cec.be
Internet:
http://www.analysys.co.uk/acts/
Wanted: Europe's Infobahn
