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  1. Technology
August 19, 1996


By CBR Staff Writer

As the Internet continues to evolve at such a phenomenal pace, a plethora of new industries has sprung up in its wake. New companies emerge, while other more established firms rush to keep up. Microsoft Corp is a prime example of its growing influence and power. Until the end of last year the software giant’s Internet strategy basically comprised creaming off its profitable parts – and there are still not that many of them to be found – putting them on the Microsoft Network and charging a fee for them – the success of which was reflected In November when Goldman Sachs & Co dropped the company from its recommended list due to its perceived lack of an Internet strategy (CI No 2,803). But then came chairman and chief executive Bill Gates’ dramatic about turn. Now Microsoft’s propriety Network is just another piece of the Internet and some of its content will actually be offered for free; and if Gates, the world’s richest man on paper, cannot wield enough power to stand aloof from the Internet world with its own Network, how many others can? Everything is Internet-enabled these days and an increasing number of companies, even those without the slightest connection to the technology industry, have launched corporate Web pages, though few appear to put them to any practical use. There is an undeniable feeling that the Internet is almost there – and here lies the rub: no one is quite sure where there is. The technology is available today to take care of the majority of our needs, whether it is home shopping, banking, information, education or any one of a myriad of other services that are required, and the chances are it will be floating on some server somewhere.

Stumbling blocks

Internet adoption rates remain relatively low throughout the world, but within the next 6 to 12 months its possible the situation will have changed. A secure method for credit card payments over the Internet should be ironed out by early next year , and the widespread availability of inexpensive Internet access devices, such as the so-called Network Computer and the television set-top box, has the potential to push the technology further into our homes and workplaces. Until these fundamental stumbling blocks are removed, the commercial future of the Internet will hang in the balance. One of the most interesting, and potentially one of the first really useful pieces of technology to ripple the waters of the Internet world since electronic mail is Internet telephony. The emerging industry is in the early stages of development, but the idea is simple. Route telephone calls over the Internet and pay just for the local call regardless of distance, destination or time of day. You don’t have to be a rocket scientist to see the idea would have instant mass appeal.

A handful of companies has developed equipment. The first offerings to appear were cumbersome, with headphones and speakers that needed to be connected to a personal computer. IBM Corp’s Internet Phone Connection software needs a computer, microphone and sound board, and although IBM’s Internet technical specialist Andrew Agerbak said the firm had no intention of becoming a phone company, it was very interested in the whole area of and wanted to be part of the development. But even within the last couple of weeks a few companies have announced products that are more than just interesting ways to make low-cost phone calls. Herzliya, Israel-based VocalTec Ltd had stated it would concentrate on the business market with its range of Internet Phone software, but then signed for the software to be bundled with Packard Bell Electronics Inc’s new Platinum series multimedia home computers (CI No 2,961). With VocalTec VTSound technology, users are able to use traditional telephones as well as personal computers to place calls over the Internet to any standard phone or personal computer that runs its Internet Phone software. London-based Firecrest Group Plc has announced it has a working prototype of its Internet Transphone, developed in partnership with secure electronic financial transaction specialist Dione Development Corp (CI No 2,951). All calls are paid for with a Smart Card via an inbuilt port, and Firecrest said it hopes to have its product on the shelves by Christmas. Then there’s the elusive Rockville, Maryland-based Labs of Advanced Technologies International Corp. The company claims it has cracked the code on Internet-based phone-to-phone calling and is to launch a new long-distance service called LatCall. The company said the service will be rolled out in September, and be operational in 10 US Cities within a month of that. Unfortunately, try as we might, no-one from Labs will give us any further information about the technology – or even return our phone calls, so it’s difficult to know exactly what the company has developed. Similarly, US telecommunications company Network Long Distance Inc has announced it is taking part in the development of a commercial end-user market for two-way, real-time voice conversation technology that will run from one standard phone to another via the Internet. Interestingly, the company has suggested, but not confirmed, that the two parties will not need to use the same software.

Talking Net

If this is the case Network Long Distance will have made a major breakthrough. Until any protocol standards are established, it will be difficult for the industry to develop, and if the recipient of your phone call has to use exactly same system, it is likely that most of us would rather use the conventional phone line and pay the greater charge if it means our calls get through. Conversely, even if problems with software are resolved quickly, few people appear to have considered the wider implications of the issue. Could the Internet logistically cope with such an enormous increase in traffic? IBM’s Agerbak argued that voice communications over the Internet could provide the boost needed to increase bandwidth capacity. And what of conventional phone companies? Neither British Telecommunications Plc or Mercury Communications Ltd would comment on their views of Internet telephony – but British Telecom has in the past acknowledged that the days of distance-related telephony tariffs are numbered. And would Internet service providers become phone companies themselves? There is no legislation to cover these variables as yet, and there are no signs that any is imminent. It is possible these arguments will be discussed next next month at New York’s Talking Net Conference, where the likes of Microsoft, Intel Corp and Netscape Communications Corp will put forward their various arguments and strategies, but will undoubtedly take some time for the industry to settle down, and consumers to build up confidence. After all, no-one out there wants to be stuck with another Betamax video recorder.

By Louise Williams

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