A. Michael Noll

Anatomy of a failure: picturephone revisited

Abstract Picturephone service — a two-way, switched, video telephone system — was developed and marketed by AT&T in the late 1960s and early 1970s. The market did not respond to the service offering, and the service was withdrawn — in other words, picturephone service was a market failure, although the technology was an impressive success. This article reviews the history of the Bell Systems effort to market picturephone service and presents the reasons for its market failure. The results of market research are interweaved with the authors personal experience with visual communications to support the inescapable conclusion that most business customers and residential consumers simply had little need for two-way, face-to-face visual telecommunication. The reasons for the picturephones market failure had little to do with either technology or cost. Picturephone service simply had little incremental value compared to a telephone call — and perhaps even negative value for some users.

Videotex: anatomy of a failure

Abstract Considerable excitement has been generated in Europe and North America in videotex - namely, the concept of electronic access in the home to centrally - located computerized databases containing vast amounts of data. However, the public offering of such services has thus far been unsuccessful in achieving significant penetrations in the residential market. Videotex is examined in this paper to illuminate possible reasons for its failure thus far in the residential marketplace. Comparisons are made with somewhat similar on-line systems for accessing computerized data-bases and for performing transactions and transmitting messages to other people. The final conclusion is that most consumers simply do not have a need nor a desire to access vast computerized data-bases of general information. Videotex or any other similar system that attempts to satisfy consumer needs for information in such a fashion will surely fail.

Bell system R&D activities: The impact of divestiture☆

Divestiture of the US Bell System in 1984 caused concern about the future of research and development activities conducted at Bell Labs. This article 4describes the history of R&D in the Bell System, and in the organizations which have been formed since divestiture, and looks at likely future trends in research. In terms of both staffing and funding levels, no major changes have occurred as a result of divestiture. However, competitive pressures on AT&T may cause AT&T Bell Labs to be more secretive and proprietary about its research. There is also cause for concern about the stability of funding levels. Vigilance is warranted for the future.

Telecommunication privatisation: mixed progress

Questions the effectiveness of regulation and the openness of markets in telecommunications, when government has a vested stake momentarily in a telecoms provider. Looks at various countries’ways of handling such as global alliances, and gives recommendations to safeguard sales of public property, using a Figure to give extra emphasis and explanations.

The future of AT&T Bell Labs and telecommunications research

Bell Labs is a costly development house, and the products designed and developed there do not appear competitive in price and features. Since divestiture it is no longer fair that AT&T foot most of the research bill for the US telecommunications industry as a whole. Everyone concerned would benefit from the creation of a national telecommunications research institute funded by a tax on the gross revenue of all service providers.

Technical opinion: does data traffic exceed voice traffic?

Mergers and acquisitions of enormous financial proportions have been redefining the media and telecommunication industries since the Internet began to emerge as a form of mass communication and commerce. The view that the Internet represents the future on a grand scale appears to motivate many of these megadeals. More and more good money from established telecommunication corporations is chasing Internet dreams, some of them based on claims that Internet traffic exceeds telephone traffic. But claims of data and Internet superiority over voice in terms of network traffic are exaggerated and seem to be based mostly in folklore. I offer some simple estimates to argue that voice traffic (measured in bits) far exceeds data traffic and most likely will continue to do so for the foreseeable future (see the accompanying sidebar). The gap between data and voice traffic should not be surprising. A single-spaced typed sheet of paper contains about 30,000b of ASCII, which is equivalent in bits to only about 0.5 seconds of a telephone speech channel. Thus, a five-minute telephone conversation generates as much traffic—in bits—as 640 typed sheets of paper. Speech, though natural, is an inefficient means of communication in terms of bits. The greatly exaggerated claims by some analysts that data will exceed voice are wishful thinking, stimulated by the media and stock market frenzy surrounding the Internet. When billions of dollars chase a limited number of high-technology investment opportunities, the investment climate stimulates exaggeration and hyperbole—and increasingly risky investment strategies. The notion that data traffic exceeds voice traffic goes back to 1961 when Frederick R. Kappel, then president of AT&T, forecast that “...within 15 years or so, the volume of information communicated between machines may be even greater than the amount of communication between people” [2]. To refute this claim, R. Hough, while at Stanford Research Institute in 1970, showed through careful analysis that telephone traffic would exceed data traffic for the foreseeable future [2]. I confirmed the conclusion that telephone traffic would continue to exceed data for the foreseeable future again two decades later [3]. Claims continue to be made by telecom analysts and executives betting billions on Internet business strategies that Internet data traffic either already exceeds voice traffic or will do so very soon—even this year. Some telecom analysts go so far as to predict the decay—and even the death of—plain old telephone service [1, 6]. Other telecom analysts claim data traffic will predominate under any Internet growth scenario [7]. But, as far Does Data Traffic Exceed Voice Traffic? A. Michael Noll

Internet pricing vs. reality

How should service on the Internet be priced? Should it be “free,” as many computer enthusiasts seem to expect? Is it too cheap to meter? What should the Federal government’s role be in promoting and supporting the Internet? I seek to answer these questions by estimating the price for the packet-switched data network that comprises the backbone of the Internet. Not included in this analysis is the cost of the various computers, servers, and access providers connected to the packet network. In light of the following estimates, the Internet is most certainly not free (see Table 1). While the prices for such low bit-rate services as email might be so small they could be offered free to most users, the transfer of large files, such as full-motion video, would consume vast amounts of capacity on the packet network and thus would incur large costs—and prices. For the entire Internet to be “free,” competitive market forces have to be excluded and subsidies have to be created, severely warping these market forces. Any form of federal financing and support for the Internet and for packetswitched networks is not warranted, in my opinion. However, the minuscule costs and accordingly “free” nature of the packet switching of email might create a millennium of “free” interpersonal communication via the electronic post. So the answer to the question of whether the Internet is too cheap to meter

The Evolution of Television Technology

The historical evolution and progression of television technology is reviewed as a framework for understanding the developments that are occurring today in television technology. New developments in television technology—such as high definition, wide-screen, digital, and interactive—are described. The various technological uncertainties that will help shape the future of television technology are discussed

The beginnings of computer art in the United States: A memoir☆

Three decades ago, such terms as computer art, virtual reality and computer animation had not yet entered our vocabulary. This was a time for the experimentation and innovation that produced today’s industry of computer art and animation, along with new media for creative experiences with computers. The author has used digital computers in a variety of the visual arts, including still images, stereoscopic images, computer holography, three-dimensional animation, four-dimensional animation, interactive stereoscopic displays and input devices and, ultimately, three-dimensional force-feedback—the latter becoming a major component of today’s virtual reality. This research and experimentation in computer art was performed during the 1960s. In this article the author reminisces and describes his early work.

The costs of competition. FCC Telecommunication Orders of 1997

This article summarizes and discusses the FCC orders for reforming universal service (FCC Order 97-157) and access charges (FCC Order 97-158) that were issued in May, 1997. Also included in the article is a summary and discussion of FCC Order 97-159 which makes some changes in price cap regulation. The article starts with a short tutorial on access charges. It then summarizes the FCC Orders and analyzes their financial impact. The article concludes with some personal observations on the course, thus far, of telecommunications reform in the United States.