sprint/brodsky

broadcast June 3, 1998

Let's start to look at the future by going back 14 years. The long-distance market was starting to look pretty attractive to would-be competitors. In a week's time in April 1984, two companies made announcements that would set their future business courses. The venerable ITT signed a 10-year contract to lease the lines that would make up its long-distance network. And a small local telephone company, United Telephone, made the audacious announcement that it would spend $4 billion over the next six years on a newfangled fiber optic network for its fledgling long-distance venture, called Sprint.

It's clear who was right. ITT bailed out of the business after a few years and has disappeared entirely. United, which changed its name to Sprint, forced the entire industry to adapt to its pin-dropping fiber culture and technology.

Yesterday, the company started down a course that could again change the direction of the telephone business. Based on the record, it could be a mistake to bet against them.

Sprint wants nothing less than to change the entire makeup of the telephone network -- a network worth billions of dollars. Instead, it wants a network that looks and acts more like a Local Area Network, or LAN, that computers use.

It wants to replace the crowded conditions and relatively limited capacity that's starting to plague telephone companies with the more flexible, adaptable network that computers use. Blame your fax machines and online services.

The predictions are that the network that Sprint wants to build will allow you to call, fax and access the Internet at the same time, with speed and efficiency unheard of now.

There are a couple of factors to consider before declaring victory. The regulatory structure, already starting to strain under data traffic, will have adjust to a new model.

Another is cost. Sprint wants to bill you for the amount of data you put on the network, like paying for electricity. The price of each call is expected to drop, but the overall service won't be cheap. Sprint estimated it could cost about $100 per month, plus another $200 for a special control box.

Lastly, there's connectivity. Right now, the marriage of a computer network, the Internet, and our phone network, doesn't always work smoothly. There are stops and gaps and those annoying waits. That's Sprint's biggest hurdle, because it will still have to hook its super-duper network into the architecture the rest of the world is using. All the pieces of the network have to work together because, as they say, no LAN is an island.

In Washington, this is Art Brodsky for Marketplace.