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Living With "THAT"

By Frank Greenhalgh

When Bill Gates was asked about the future of the long distance telephone carriers, he replied: "I wouldn't want to be in their shoes with "THAT" out there." The "THAT" he was referring to is the Internet. What he was inferring was that the Internet would soon be making it possible to make telephone calls to anywhere in the world for free, eliminating the need for having anything but a local carrier. Software today is available that allows two computers to become telephones when they are connected to the net. Quality is poor and only one side at a time can speak, but hey, this is the frontier with larger bandwidth and improved software, you might be able to hear a pin drop on your computer. Maybe ATT took notice of Bill's comment and that is why they are covering their bets by moving into the position of a local high bandwidth Internet provider. Buying TCI and making deals with Time Warner will put ATT right at your doorstep through your local cable company. The idea of using your computer for long distance calls is still a long way off. In time however, the long distance phone companies may become obsolete unless they, like ATT, find a way to replace the business lost to the Internet.

This is not a single example of how the Internet is changing things. Since the advent of online trading, the personal broker is becoming a threatened species. As more people learn to trade on line and more information is available regarding stocks, the need for someone to advise you and place your stock order becomes unnecessary. Today, more than 25% of stock orders occur on line. Pressure is mounting on brokerage houses to allow online trading. Merrill Lynch is permitting their premium customers to sample on line trading. Schwab allows access to both on line and personal brokers. Will it stop at the brokerage level? I don't think so. Instead of having specialists on the stock floor that deal in certain stocks, why not have web pages for stocks or groups of stocks? When you want to make a trade you go to the web page of the stock you want to buy or sell and buy or sell it directly on line. Don't think this won't happen in years to come. Talk is already underway. It could provide a 24-hour stock exchange. You would subscribe to the service that ran the web site and establish your credit. When you want to trade you could go to the home page and look up the stock you wanted, see its asked price and make a bid yourself. Now we have not only eliminated the stock broker, the brokerage firm but also the stock exchange!

The music industry is about to become obsolete in its present form. Through MP3 compression technology, it is possible to download CD quality sound directly from the Internet. Web sites all over the world allow visitors to download top forty (and much more) hits for free. The kids today are beginning to stop buying CDs, by downloading their favorite songs and making up a composite MP3 track that is transferred from their computer to a Walkman like player. They end up with a portable high quality hour of their favorite songs for free.

Musicians are also starting to use the Internet as a means of bypassing the music companies. A favorite rock or hip hop group can simply pay for their own studio time and engineer and record their own CD. Then they can sell it over their web site either as a CD to be mailed to you or an MP3 file you can download.

The music industry sees this threat and working as fast as it can to insert some sort of digital protection into the system, but it may be too late. Once a critical mass of teen-agers gets used to free and personalized music, it will be hard to stop. The ability to put an Internet server in a country without copyright laws makes it easy to avoid US laws.

Radio stations are now just starting to stream their audio onto the net. It is possible to listen to local stations all over the world now. This ability will threaten stations that carry network programs. When the bandwidth gets higher legal and bootleg TV stations will join the net and threaten local TV stations. Maybe movies will be compressed and downloaded with a streaming rate that would allow real time viewing. Maybe Hollywood will also be in trouble as people start to get movies for free.

The threat of the high bandwidth Internet is not a hollow one. It will change the way information is accessed and threaten the usual providers forcing them to either rethink their businesses or lose them. Gonna be fun with "THAT" out there.

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About the Author

Frank Greenhalgh has been working in power supplies and systems for 38 years. He has many impressive accomplishments and patents. Over the years he has made significant contributions to Trio Laboratories where he held the position of Chief Design Engineer and was then promoted to Vice President.

He co-founded CEAG Electric Corporation (now ABB CEAG) and developed the first mainframe power system using the droop paralleling concept. He has written numerous articles and columns, presented papers at the milestone PowerCon convention and consulted for ABB CEAG and other companies. Recently his accomplishments include the development of two Web sites, www.fgl.com with the Power Corner and www.amityville.com. Frank is presently functioning as "Director of Technical Sales" for Toritsu Tsushin Kogoyo Corp.