What did Time Warner have that AOL wanted? According to many industry observers, the driving force behind the proposed megamerger was AOL's strategic need to acquire access to the media giant's broadband hardware.

HBS professor Stephen P. Bradley and P. William Bane (MBA '75), vice president of Mercer Management Consulting, shed some light on the allure and promise of broadband technology in an October 1999 article in Scientific American.

In "The Light at the End of the Pipe," Bane and Bradley talk about broadband's potential to become much more than just "a faster, cheaper telephone-television-Internet system." Given the success of the Internet, which the authors liken to "a kind of broadband on training wheels," they predict that as broadband technology evolves during the coming years, its power to revolutionize consumer behavior could rival the impact of the invention of electricity, the development of plastics, or the advent of inexpensive air travel.

To realize its full potential, however, Bradley and Bane argue that broadband will have to offer consumers something more than just "low price, high speed, and constant availability." "That something," they write, "is greater social utility -- the enjoyment of fulfillment people derive from consuming a good or utilizing a service." Beyond movies-on-demand and videoconferencing, the authors say "the most savvy service providers, such as telephone and cable companies, will support the development of broadband as an open-standards, fertile software platform from which thousands of novel applications will bloom."

While many of those new applications will benefit consumers, the authors raise concerns that the technology might exacerbate the "Big Brother dilemma" -- giving service providers an even greater ability to track users. Furthermore, they suggest that users may become so enamored of the technology that their contact with friends and family is diminished. On a societal level, note Bradley and Bane, "broadband may prove to be a leveler, providing equal access to data and opportunity regardless of wealth. But it could just as likely widen the divide between rich and poor, because information technology to date has generally increased the demand for skilled, higher-paid workers while reducing the need for unskilled workers."

"Let us hope," the authors conclude, "that a generation from now we will view the Internet as a blessing that provides every person with a trusted cyber-lieutenant and not as an Orwellian company store to which everyone is bound."

Post a Comment