THE OTHER END OF THE TUBE

A TALK GIVEN TO THE GOVERNMENT COMPUTER CONFERENCE
OTTAWA. SEPTEMBER 11, 1979

There is a story of the old farmer who was being encouraged by his son to go back to school to learn some new agricultural techniques. The farmer replied that it would be a waste of time as he already wasn’t farming half as well as he knew how.

There has been much written about the Wired City and the future of many information services in offices and homes. As a matter of fact I have been one of the proponents of this concept since the days of the Telecommunications Conference in 1971. I am still an enthusiast, but want to balance the picture with a hard-nosed look at reality.

Like the old farmer we are close to being flooded with information. Any use of broadband communications networks to place yet more information before businessmen or homemakers must be preceded by a sound analysis of what is really needed as defined by what people will pay for.

The GAMMA Group at McGill had noted that we have been ignoring the demand side of the information equation. To quote their report of March 31st, 1979 (The Information Society: The Issue and the Choices), “Much weaker than technology push, demand -pull seems to be following rather than leading. There is as much evidence of information overload as information thirst. The OECD countries seem to have an overabundance of certain forms of information.”

They go on to say: “The logic of stages of development is leading the industrial economies to demand more information because, in a sense, they have run out of things to consume.”

The GAMMA Group observes further that “Many of the information-intensive consumer goods on the market are either overt toys (video games, etc.) or disguised toys, stereo-sets, multi-channel TV, home terminals, etc.).”

It is time that we looked at this process from the consumer’s point of view – a view from the other end of the tube.

SOME FUNDAMENTAL CONSIDERATIONS

1. THE BUSINESSMAN’S NEED FOR INFORMATION

There is an assumption that better information leads to better decisions. Obviously, no information can lead to very bad decisions. E.g. those based on pure guesswork. However, it is wrong to assume that even with perfect knowledge of a situation good decisions would always be made. What is needed by the businessman is not necessarily more information, and particularly not more information in real time, but rather better analytical and modelling techniques to enable the business person to assess limited information and make logical projections.

If I were proposing a use for two-way communications for business, my inclination would be to provide courses on statistical analysis, simulation techniques, decision making aids and other such factors. This should precede any new flood of information.

It would surprise most non-business people to realize how few decisions of importance are made in real time. Trivial decisions of course are made by the dozen each day. But major decisions are very unlikely to be made on the basis of the type of information that can be provided on a TV tube.

Of course there are exceptions. Stock purchases for short term speculation may be made on the basis of real time information. But most serious investors make their decisions on the basis of comprehensive financial information and analysis.

As I am in the communications business I have a TV set in my office. Vancouver Cablevision provides a comprehensive service of broadcast news, weather information and other items, and yet even with the convenience of a remote control device on my desk I rarely use the TV set for this type of real time information. It is this reality that concerns me most about the glowing predictions about how much such an information delivery system would really be used.

Certainly few businessmen have time to passively review even such information as is provided by the Dow Jones press service. If one were to be able to selectively retrieve information there might be a greater use of such a system. However, after nearly twenty-five years in the computer business, during most of which time it would have been possible for businessmen to have on-line terminals for a variety of information in their offices, there has been little use of this process. Frankly, most businessmen do not have the time to sit in front of a keyboard/CRT and peck away to retrieve information.

I have experimented with information retrieval techniques ranging from the New York Times data bank through Infomart. All of these are useful and have their place. But certainly it is not in the businessman’s office. It is more likely to be in his research library.

It would of course be shortchanging the technology to write it off on the basis of standard information retrieval on general subjects. Other applications such as electronic mail could in fact provide a real boon to business. Again, however, to be realistic we should bear in mind that forms of electronic mail are already available. Telex or TWX provide very efficient means of distributing information. It is surprising to me that these devices are not more widely used considering the length of time they have been in service.

Most businessmen find it is very frustrating to call someone, find out they are out, leave a message, get a call back at a time when the originator is in a meeting or otherwise unavailable, and then have to repeat the whole process. Any device that would allow a message to be sent, read at the leisure of the recipient and then allow a written reply to be sent would be helpful.

We should be aware, however, that for this type of information substitute devices are available. The increasing use of telephone recording devices is one answer. Such store and forward methods of handling business correspondence will likely be offered by the Telcos in the years to come as a standard telephone feature.

The use of a Telidon-like device for computer assisted meetings is another often-touted use of broadband communications networks. Whatever happened to Picturephone? Again, I have experimented with conference calls which I generally find very effective, and also with televised conferencing. My experience in the latter was limited, but frankly I am not sure it added a great deal to the information exchange. I found the more effective way was to use a telecopier to distribute information in advance of a conference call.

Does this mean that there are virtually no office applications for the Wired City? Not at all. However, we should be realistic about doing adequate market research on what the needs really are. I expect that some of these needs would be:

• accurate and up-to-date transportation scheduling, e.g. delayed plane flights

• useful weather information, particularly for international weather where flights might be delayed.

• better methods of confirmation for travel booking

• in-the-home shopping (more of this when we discuss the consumer need for information)

• access to company files (a real headache for the businessman, although not one easily solved without a great deal of attention to proper indexing and information retrieval techniques)

• paid work at home (with computerized information banks there is no particular reason why some work could not be done at home, e.g. in the cable television business we employee a number of people who answer phones from clients to take work orders, check on billing problems, etc. There is no reason that a switchboard could not relay such calls to a person in their home)

There are therefore a number of imaginative uses of broadband communications networks for offices, but if the concern is the saleability of universal pay-as-you-go data then I would have to conclude that we may be pushing a real time medium for an unreal world – the demand has yet to be clearly established.

2. TERMINAL IN THE HOME

This is the exciting market that everyone predicted would sweep the industrialized nations in the late Seventies. In fact, that is exactly the prediction I gave at a talk to the OECD in Paris in September of 1974. Five year later there is some experimentation, but again we are faced with technology leading the desires of the consumer.

There is a rather deep concern that one could express about how many more hours industry should encourage the consumer to sit in front of the TV set. We are already concerned about lack of healthy exercise of both the mind and the body that comes from too many hours in front of the tube.

However, as a businessman I take the view that the industry should provide the public with what it wants and hence will pay for. In 1973 Paul Baron in an article in “THE FUTURIST” predicted that the major in-the-home use of a television set beyond regular broadcasting would be plays and movies from a video library. With this I am in entire agreement. It may sound crass, but I have yet to see a serious limitation to the amount of entertainment that people seem to be able to absorb via a television set.

Our own experience with pay television in the United States indicates that there is a real market for this type of operation. I have found myself, even without the benefit of pay television in Canada, that I can simulate this experience by video taping movies, sports events or cultural activities presented by the networks at inconvenient times. This time delayed form of

entertainment is a great boon, particularly when one lives on the West Coast and realizes that the world still operates on Eastern Standard Time.

Leaving aside this acknowledged huge market for entertainment, what other in-the-home applications would really be saleable. In the early Seventies I predicted that the most likely candidates were:

• in-the-home education

• in-the-home shopping.

2.1 EDUCATION

Rather than repeat the advantages which are well covered in the literature, I would like to raise the question of why this seemingly useful process has not been more successful. I do not want to imply that there are not success stories. While I was Chairman of the Board of Governors at Carlton University in Ottawa, the University undertook a very imaginative experiment with both cable companies to provide in-the-home credit courses. My understanding is that this has been well received and I sincerely hope that more of this can be done.

However, I noted an interesting piece in the Vancouver Sun on August 2 8th which read: “Faculty members at the College of New Caledonian in Prince George are up in arms because they fear their jobs may be up in the air. That’s because beginning next week televised courses will be bounced from the B.C. Institute of Technology in Burnaby off a satellite called Anik B into six colleges around B.C. and the Yukon.”

There is some reluctance on the part of some educators to expose themselves to the competition that comes from having the best lecturers present pre-taped presentations which can then be broadcast over an entire country.

Even assuming that this can be overcome and good material can be created, (and this requires more than simply taping a lecture), there is a question of economics and marketing. There is no doubt in my mind that the need is there. Whether for vocational or avocational reasons people in all walks of life will want to have continuing updates of their interests and skills. What has held back the development to date in my opinion is that it is not sufficiently attractive for the private entrepreneur to get into this field. Some very interesting experiments have been run and some serious proposals made, but the risk is still high that people will pay enough to make this a financially viable operation without government subsidy.

One interesting proposal in the United States was to find a forced market by concentrating only in the retraining of doctors, accountants, nurses, etc. who are required by the state governments to take refresher courses. I looked at this operation but decided that a better way to handle it would be on a lending library basis of video tapes or video discs. I recall the famous ‘flying’ broadcast experiments of the 1950’s where planes were put in the air to broadcast in-the-home or in-the-school educational programmes. The process in the United States failed because it was too difficult to schedule many people in different locations to look at the same programme at the same time. The lending library operation of video tapes is, in my opinion, in the long run a better solution than the use of satellites.

However, I still feel that there is a market here which could be developed by the right entrepreneurial spirit.

2.2 TELESHOPPING

I remember having some discussions with representatives of the Eaton’s catalogue operation to try to convince them that in-the-home catalogue shopping via TV would be much more effective than the printed catalogue. I assume that by that time they were too far in the red to consider this seriously.

The great advantage to the communication, of course, is that the process is paid for by the stores rather than the consumer, and hence the economics are quite clear. The stores see the advantage of having the ability to buy tied closely to the sales pitch. If the sales pitch can be selected by the consumer, i.e. used by the consumer the way he would use a catalogue or even the Yellow Pages, then the results could be quite dramatic.

In these days of gasoline shortages it would certainly be more efficient to have a well-developed delivery system throughout the city, rather than having every housewife drive to a shopping centre. I predicted a real market for this some years ago and I still believe this is a most exciting area.

2.3 IN-THE-HOME INFORMATION

There will certainly be a market for encyclopedic information in the home for students doing essays or other casual browsing. However, I have always cautioned that most people have an encyclopedia in their homes and yet access it at the most 2-3 times a month.

I have had some opportunity to experiment with Prestel in the United Kingdom. With all due respect to that system and its look-alikes, it is a bore. The information provided has not been well researched and after a short period of working with poor response time and the almost useless information, I concluded this was a good example of people developing the technology while ignoring the marketplace.

Again, I believe there is a market for such things as:

• up-to-date sports scores

• booking of events such as plays, sports, movies, etc.

• restaurant selection and booking

• travel information and booking

It should be noted that many of these applications require some form of in-the-home printer as a confirmation of bookings made. This is an area which should be investigated.

The Hickling-Johnston critique published in February 1979 of the Telidon market noted that for all of the above, and in fact for all the proposed uses of Telidon, there are readily available alternatives. They acknowledged, however, that there is an almost insatiable desire for convenience items and therefore advanced in-the-home devices are likely saleable in the long run.

The Hickling-Johnston report re-emphasizes however that “serviceware is what the customer will pay for.” They point out that there will be increased growth and expenditures on recreation, entertainment, education and culture. This may be at two times the growth rate of the Gross National Product. Certainly the market is there.

WHY HAS THIS MARKET NOT BEEN DEVELOPED?

I have expressed my enthusiasm for this market despite my cautions about realistic market analysis. it is not the lack of a market that has held back development. It is the current incredible jurisdictional scene in Canada.

The Department of Communications has been imaginative in promoting the technology as demonstrated by Telidon. However, it is not the technology that needs the development. What is critically needed is a totally new approach to telecommunications in Canada.

The cable industry, which has the capability of delivering all kinds of services to homes and offices in most of the major populated areas of the country, has been constrained from doing anything imaginative or innovative in all these fields. The Canadian Radio-television and Telecommunications Commission has for many years deliberately discouraged innovation by the cable companies on the grounds that this might hurt the over-the-air broadcasters, might not contribute to Canadian culture or whatever. Not only has the cable industry been constrained from offering clearly desired services such as Pay Television, but has similarly been hamstrung in its efforts to bring to the public such new services as have been outlined above.

As a result the lead that Canada had in cable television has now been eroded by the United States and other countries where essentially the regulations have been lifted and companies are free to innovate and be responsive to the desires of their clients.

Frankly, I believe the CRTC is trying to protect the broadcasters who are, as part of a mature industry, no longer in need of protection. The cable companies will still undertake to carry in preferred channel locations whatever signals the broadcast industry wishes to transmit. Beyond this requirement which is in return for obtaining licenses to wire areas, the cable industry should be totally freed of regulation and should be allowed to test the market with new products in any way it wishes.

I believe that Canadians are sick and tired of regulatory bodies trying to dictate what Canadians want. Canadians know what Canadians want and will demonstrate this by paying for it. The restrictions placed on cable companies in Canada are both unwarranted and totally unnecessary. I hope the elected representatives both federally and provincially will come to realise this and be responsive once more to the electorate.

SUMMARY

I have tried to look at the situation from the other end of the tube. As a supplier in the communications industry this is the most important thing I can do. It is high time that governments do the same.