Relay-Version: ANU News - V6.1B9 05/16/94 VAX/VMS V6.1; site commgw Path: commgw!nott!cunews!daemon Newsgroups: can.infohighway Subject: Report by Elmer H. Hara Ph.D. part 1/4 Message-ID: From: "McGregor, Scott: NM" Date: Thu, 22 Dec 1994 15:23:00 GMT Sender: daemon@cunews.carleton.ca Organization: Carleton University Approved: news@cunews.carleton.ca To: "can.infohighway" Encoding: 650 TEXT Received: by mssmtp.istc.ca with Microsoft Mail id <2EF9B3CF@mssmtp.istc.ca>; Thu, 22 Dec 94 17:13:51 EST X-Mailer: Microsoft Mail V3.0 Content-Length: 17998 Lines: 649 CIBINT Canadian Institute for Broadband and Information Network Technologies, Inc. Faculty of Engineering University of Regina Regina, SK S4S 0A2 THE INFORMATION SUPER-HIGHWAY [A One-Time Opportunity for Canada] A Brief to the Information Highway Advisory Council November 7, 1994 Elmer H. Hara, Ph.D. Director of Research & Development Tel. (306) 585-4438 Fax (306) 586-8202 SUMMARY 1. PURPOSE The purpose of this document is to emphasize the need to choose a single super-highway to the home and offices to maximize benefits for the public and Canada as a whole. 2. SCOPE This document considers primarily the COs (Central Offices: Telephone Exchanges) and subscriber lines of the information highway. The need for a National Telecommunica-tion Policy to allow an orderly development of the information highway is emphasized, and the reasons for choosing a single information super- highway are argued on the basis of national and public interests. The advantages of an information super-highway in the form of a centrally-switched fiber-optic star- network which supports full video-on-demand services, are argued. The importance of full video-on-demand service is stressed as a service that meets current consumer preferences, and its benefits such as a new distribution network for Canadian movie producers, National Arts Centre, Museum of Civilization and National Art Gallery, are pointed out. Major points that need to be estab-lished by a National Telecommunication Policy, such as separation of carrier and content, and guaranteed access to the information super- highway, are discussed. The Appendix discusses the transforma-tion of the cable TV and broadcasting industries under the information super-highway. The fact that the cable TV industry will not be really relinquishing their "plant" ownership under a single information super-highway, is pointed out. 3. CONCLUSIONS The national and public interests are served best by a single information super-highway to the home and offices. The preferred configuration of the information super-highway is a centrally-switched fiber-optic star-network. Access to the information super-highway and video-on-demand systems can be guaranteed because the switching capacity at the COs is expanded readily. The cable TV operator should be licensed to become the video-on-demand service provider to assure their continued prosperity while advertising should become the exclusive domain of the broadcasters to enhance their earnings. TABLE OF CONTENTS Page 1. INTRODUCTION [ 1 ] 2. TELECOMMUNICATION POLICY NEEDED FOR THE 21st CENTURY ................. [ 1 ] 2.1 National Interest is not served by a Duopoly [ 2 ] 2.2 Single Super-Highway to the Home is in the National Interest ......... [ 3 ] 2.3 Consumer Preference [ 4 ] 2.4 Information Super-Highway . [ 4 ] 2.5 Video-On-Demand System . [ 6 ] 2.6 Video-On-Demand Services . [ 7 ] 2.7 Benefits of Video-On-Demand Services [ 8 ] 3. NATIONAL TELECOMMUNICATION POLICY [ 9 ] 4. DISCUSSION [ 12 ] APPENDIX IMPACT OF THE INFORMATION SUPER-HIGHWAY ON CABLE TV AND BROADCAST INDUSTRIES 1. INTRODUCTION [A-1] 2. CABLE TV TRANSFORMATION [A-2] 3. TV BROADCASTER TRANSFORMATION [A-3] 4. RADIO BROADCASTER TRANSFORMATION .. [A-4] BIOGRAPHY 1. INTRODUCTION The impact of a national information highway on Canada might be compared to that of the coast to coast railway lines and branch-lines which contributed significantly to the development of the country. pv Even more important was the construc-tion of the Trans-Canada Highway, freeways and roadway networks that allowed goods to be transported freely between cities, villages and remote sites. The growth of Canadian economy would have been impossible without this free movement of goods. Much is owed to the freeways and roads for the high standard of living enjoyed today. A similar impact on the Canadian economy can be expected from a national information highway where the goods transported are now voice, data, images and information. The structure, capacity and features of the information highway will determine the magnitude of benefits the nation might harvest in the future. The national structure of the information highway can be divided into two parts, the long distance section and the subscriber section. Following the telephone network configuration, the subscriber section can be viewed as the CO (Central Office: Telephone Exchange) and the connections to the subscribers' premises (i.e. local loop). The long distance section can be considered as the network interconnecting the COs. This document addresses primarily the subscriber section of the information highway. In other words, the roadway to the home and offices is the main concern. Of course, with advanced technologies, the road to the home or office is no longer a mere roadway but a highway, and can be a super-highway as well. [1] The following sections first discuss the need for a telecommunication policy that prepares Canada for the 21st Century by establishing rules and regulations towards an orderly development of the information highway. Then, arguments to select a single information super-highway to the home and offices are presented. 2. TELECOMMUNICATION POLICY NEEDED FOR THE 21st CENTURY Today, United States has yet to establish a telecommunication policy that will allow the orderly introduction of the information highway. The telecommunication scene is rather unclear with the telephone, cable TV, movie production and publishing industries all maneuvering to establish a favourable position for the multimedia future. The result may be a duopoly favoured by the cable TV industry of Canada. On the one hand, cable TV operators may install "500 Channel" fiber-optic cable TV networks that have the same structure as the present broadcast-type tree-distribution system. Satellites will add hundreds of pay-per-view channels to this "more-of-the-same" service that the consumer seems to be shunning. On the other hand, the U.S. telephone companies may install FTTC (Fiber-To-The-Curb) which can support cable TV services but not the full video-on-demand services. This would be a mistake because, judging from the popularity of videotape shops, the full video- on-demand service is expected to be a high revenue producer. In order to profit from the full video-on-demand services, U.S. movie and TV program producers may join forces with the telephone companies and install a centrally-switched fiber-optic star-network. Of course, this configuration supports full video-on-demand services. [2] Whether such a development will take place awaits future developments, particularly in the movie industry where a large portion of ownership rests in Japanese hands. In the coming years, business interests favouring the "bottom line" may prevail eventually, and centrally- switched fiber-optic star-networks that support full video-on-demand services, will most likely become the standard installation in the United States. Today, Japan has in hand, all of the advanced technologies to realize the information highway to the home. However, the design of the fiber-optic information highway by NTT (Nippon Telegraph & Telephone Corp.) supports less than 60 standard TV channels and less than 6 HDTV channels on a broadcast basis, in addition to telephone and data services. Full video-on-demand services, termed "Personal TV" by some in Japan, are not being considered. At present, there is little possibility that NTT will upgrade their design to support full video-on-demand services and install it on a nation-wide scale because there is little cooperation between MPT (Ministry of Post and Telecommunications) and MITI (Ministry of International Trade and Industry). Furthermore, the historical hostility of MPT towards NTT does not help matters. As a result, NTT is forbidden by MPT to transport broadcast TV signals to the subscriber while electric power utilities are allowed to establish cable TV services as well as competing telephone and data services to the home. Only after the ideal information highway is adopted by another country will Japan come to realize the mismanagement of their telecommunication policy. Clearly, there is a window of opportunity for Canada to take the lead in information highway technologies and applications. The type of national information highway selected today will set the course of Canada for the 21st Century. On the one hand, a choice representing the compromise of vested commercial interests with little concern for the benefit of the public as a whole, may limit Canada's prosperity. In the long term, the well- being of our descendants might be undermined. The competitive position in international markets may also be placed at a disadvantage. On the other hand, a choice based on the long term benefits of the nation, taking into account public and business interests, could maximize the probability that Canada will continue to maintain a high standard of living, well into the 21st Century. Obviously, a telecommunication policy that establishes clear rules and regulations is required. The telecommunication and other industries can then proceed in an orderly manner towards the construction of a national information highway. 2.1 National Interest is not served by a Duopoly A duopoly where the telephone and cable TV industries construct separate information highways to the home is not in the national interest for the reasons discussed below. Because of the fragmented customer-base, two mediocre information highways cannot match the earning power of a single super-highway. Therefore, all of the multimedia services that might be offered by a single super-highway to the home and offices, as shown by the examples in Table A, cannot be matched by a duopoly. In particular, a full video-on-demand service that meets consumer preferences, cannot be provided. As a result, the public will be deprived of the full benefit of services that could be offered. This means that a duopoly will waste valuable industrial capital in providing a less than a full multimedia telecommunica-tion service to the public. Clearly, a single super-highway to the home and offices will benefit the public more than two mediocre highways. TABLE A INFORMATION SUPER-HIGHWAY MULTIMEDIA SERVICE EXAMPLES ç Telephone, Facsimile & Data ç Switched T1 = 1.544 Mb/s ç Cable TV (Standard TV & HDTV) ç Full Video-On-Demand (Standard TV & HDTV) — Movies, TV Programs — Museum & Art Gallery Tours ç Interactive Computer Aided Education ç Telemedicine ç Electronic News (Text & Images) ç CD Music (Broadcast & On-Demand) ç Broadcast Radio ç Radio News (Broadcast & On-Demand) ç Professional Data Bases ç Encyclopedia & Dictionary Look-Up ç Home Security and Meter Reading ç Electric Power Utility Management ç Water & Gas Utility Management ç Video Games ç Video Telephone ç Print-To-Voice, Voice-To-Print, Conversion for the Visually and Hearing Disadvantaged ç Other New Services [3] 2.2 Single Super-Highway is in the National Interest Obviously, duplicating the water supply system to the home is uneconomical although one system might supply low- quality water for general use while the second system provides spring water for drinking and cooking. It is self-evident that a single system with purifiers in the home to provide water for personal consumption, is more efficient. The same is true for information services to the home and offices. A single super-highway can be constructed at a cost approximately equal to or less than that for two separate highways while providing a wider range of services. The result will be a more efficient use of precious industrial capital. The services listed in Table A are by no means exhaustive. The number of new and imaginative services is limited only by the ingenuity of entrepreneurs who wish to profit from the multimedia business. The large traffic volume based on a full range of telecommunication services and a broad customer-base, guarantees high earnings with low transmission toll- charges. Capital funds to construct the informa-tion super- highway can be raised readily through the promise of high returns from the broad range of multimedia services which includes full video-on-demand. The consumer's share of costs is limited to the redirection of current discretionary spending. The Canadian economy will benefit widely by the availability of a broad range of telecommunication services at low cost. An impact similar to that of freeways and roadway networks might be expected. In fact, the free exchange of information should enrich all participants because the transmitted information is still retained by [4] the provider. As a result, all will share the totality of available information. This will encourage engineering develop-ment, scientific discoveries and inventions which will contribute towards a robust economy. Various areas of the performing arts and fine arts will also be stimulated by their wide exposure. Furthermore, construction expenditures of more than $ 3,000 per subscriber for the super-highway will continue to stimulate the Canadian economy throughout the construction period which may exceed 10 years. Unlike the construction of a super-train between Montreal and Toronto, installation of the information super-highway will benefit all regions of the nation. By making an early start, Canada can become a leader in the technologies and applications associated with the information super-highway. A one-time window of opportunity is present today for the formulation of a Canadian Telecommunication Policy that responds to the needs of the 21st Century. The policy should institute rules and regulations that will permit the orderly establishment of a single information super-highway to the home and offices. Key decisions must be made on the configuration and functional features of the super-highway. The following sections provide reasons for the selection of a specific configuration and discusses its merits. 2.3 Consumer Preference Today's consumer preference is reflected in the healthy earnings of videotape rental shops. Ethnic videotape shops are also showing high profits. The fact that most adults are unable to operate the time-scheduled recording function of VCRs (Video Cassette Recorders), verifies the reality that VCRs are being used primarily to view rented videotapes. When replaying recorded TV programs, the advertisements are skipped by using the fast-forward function. In this manner, the viewing time of a 2 hour TV movie can be shortened by at least 30 minutes. Furthermore, consumer preference for better picture quality can be observed in the steady sales of large screen TV sets in Canada and U.S.A., and in the increasing sales of HDTV (High Definition TV) sets and HDTV laserdisc players in Japan. Also, the sales growth in Japan, of laserdisc players with no recording function, indicates a preference for quality pictures because laserdisc players deliver a much higher quality picture than VCRs. Consumers' preferences are obviously for the freedom to choose content and viewing times, no advertisements and good picture quality. A service that meets these preferences will most likely maintain high earnings for the service provider. In fact, these preferences can be satisfied by the full video-on-demand service offered through an information super-highway in the form of a centrally- switched fiber-optic star-network. The following sections describe a net-work configuration of such an information super-highway and the video-on-demand system as well as the services that can be delivered. 2.4 Information Super-Highway A block diagram of an information super-highway based on a centrally-switched fiber-optic star-network is shown in Fig. 1. It also contains Table 1 which shows a "channel" allocation scheme. The advantages of the centrally-switched star-network configuration are listed in Table B. Compared to systems that have active components located outdoors, the maintenance costs are expected to be low because only the fiber optic cables are placed outdoors. This is particularly true for regions where winter temperatures reach below -30 ›C. Relay-Version: ANU News - V6.1B9 05/16/94 VAX/VMS V6.1; site commgw Path: commgw!nott!cunews!daemon Newsgroups: can.infohighway Subject: Hara Report part 2/4 Message-ID: From: "McGregor, Scott: NM" Date: Thu, 22 Dec 1994 15:27:00 GMT Sender: daemon@cunews.carleton.ca Organization: Carleton University Approved: news@cunews.carleton.ca To: "can.infohighway" Encoding: 672 TEXT Received: by mssmtp.istc.ca with Microsoft Mail id <2EF9B3E2@mssmtp.istc.ca>; Thu, 22 Dec 94 17:14:10 EST X-Mailer: Microsoft Mail V3.0 Content-Length: 21297 Lines: 671 Signal transmission is all digital in form. Therefore, the consumer demand for good picture quality is satisfied readily. A single SM (Single Mode) fiber optic line connects an SPU (Subscriber Premises TABLE B ADVANTAGES OF THE CENTRALLY- SWITCHED FIBER-OPTIC STAR-NETWORK ç No active components outdoors means low maintenance costs ç Compressed Digital Video Transmission — Aggregate bit rate less than 200 Mb/s — Low cost components (CMOS ICs, LEDs) — Room for future expansion & upgrades — Low cost CMOS video matrix switch ç Centrally Switched — Flexible interconnections — Multiple HDTV standards supported — Room for future expansion & upgrades through new switching units — Low cost switched T1 = 1.544 Mb/s service supported ç Network access not a problem — Easy expansion of interconnection capacity by installation of additional switching hardware [5] Unit) to the CO (Central Office: Telephone Exchange). Multi-fiber ribbon-type cables can be used to reduce the installation costs. The technology for such cables is already well established and companies such as JDS-Fitel of Ottawa have ready access to the technology. The electronic circuitry for the SPU and corresponding units in the CO can be designed in modular form to lower the initial installation costs as well as the cost of future upgrades. In other words, for each "channel", a separate plug-in interface card can be used. This way, "channels" not desired by a subscriber can be left blank in the SPU and corresponding unit at the CO. Of course, extra slots for interface cards can be built- in at the start to accommodate future service expansions and technology updates. This approach will maintain the cost of expansions and upgrades to a minimum. All channels are switch connected to appropriate signal sources at the CO according to the type of service. Approximately 50,000 subscribers can be served by a single CO. For services requiring interconnections to other COs, whether in the same city or distant locations, the trunk lines are used. These trunk lines form a network which extends the reach of the super-highway to the far corners of Canada. The present cable TV system has a limited spectrum (i.e. channels) and universal access is impossible to achieve. In contrast, the centrally-switched star-network configuration can easily increase the interconnection capacity by installing additional switching hardware. Since the hardware is very small in size, expansion is not a problem. [6] The transmission capacity has ample reserve to accommodate future expansions such as that for HDTV, as well as other advancements in technology. Yet the overall transmission bit rate per subscriber is below 200 Mb/s. This relatively low bit rate is achieved by employing compressed video transmission technology. Tests have established that the reproduced pictures based on the conservative examples shown in Table 1, cannot be distinguished readily from the original pictures. The low bit rate means that for most circuits, low cost CMOS (Complementary Metal-Oxide Semiconductor) ICs (Integrated Circuits) and fiber optic components such as LEDs (Light Emitting Diodes) and Si (Silicon) photodiodes, can be used. The CO houses all the switching units required for each of the services. Some services may share the same switching unit. Most switching units employ standard TDM (Time Division Multiplex) switching including the ATM (Asynchronous Transfer Mode) which is much in vogue today. The ability to switch connect a channel at the CO provides the flexibility to introduce new services by expanding the switching capacity. New technology can also be incorporated by upgrading the switching units. This switching flexibility also allows different HDTV standards to be supported at the same time. The HDTV switching unit need only connect the subscriber's TV set to a signal source that has an identical standard. If ATM switching proves to be overly complex or too costly for switching a large number of 10 Mb/s and 60 Mb/s TV signals, low cost CMOS circuit (i.e. spatial) matrix switches can be used. Unlike TDM and ATM switches, circuit matrix switches have the advantage of being transparent to transmission protocols and formats. This can serve to lower the cost of switching units. That the circuit matrix switch is nothing but a repackaging of the old telephone cross-bar switch in very compact IC form, is an interesting fact to note here. The switched T1 = 1.544 Mb/s service can also be supported economically because the subscriber line is shared by many other services. The lowest cost switching unit can be used, whether it is a TDM switch or a circuit matrix switch. The latter can be fabricated at very low cost with CMOS technology. 2.5 Video-On-Demand System The CO also houses the video-on-demand system consisting of a cable TV head-end, videodisc jukeboxes, a video matrix switch and a management computer. A videodisc jukebox can have 100 erasable discs, each disc with two recording heads, one for each side of the disc. Field trials for video-on-demand services have shown that the waiting time to the start of a movie should be less than 5 minutes after a request has been made. Therefore, 24 playback heads per disc should be installed to provide a starting time spacing of 5 minutes for a 2 hour movie. Fifty such videodisc jukeboxes will provide a choice of 5,000 titles. The cost per subscriber is very small because the jukebox costs are shared by many sub- scribers (e.g. 50,000). Depending on the service demand, a larger number of juke-boxes may be installed. Titles requested infrequently might be stored in a central depository and requests filled through a trunk line. Some delay is expected for this service. The video matrix switch connects each subscriber TV set to the appropriate playback head of the specified videodisc (i.e. requested title) on a non-blocking basis. In other words, subscribers requesting the same title and starting time, are connected to the same playback head. Subscribers' connection requests are processed by the video-on-demand management computer which also controls the video matrix switch. The customer accounts are administered by the same computer as well. The management computer can also be programmed to compile various statistical data to be used in marketing strategies. Some video-on-demand field trials have indicated that subscribers wish to have rest breaks of 3 to 5 minutes at their option. In order to accommodate this need, with the cooperation of manufacturers, consumer TV sets can have small erasable optical-disc hardware to record and playback up to 5 minutes of video. This way, if the rest break exceeds 5 minutes, the contents of the subsequent start time can be viewed. Of course, such video recording and playback capabilities can also be used to receive still-picture and multimedia services. Such a development in consumer TV sets is not unusual because the current direction of multimedia PCs include TV signal reception, recording and processing. In other words, convergence of consumer TV sets and multimedia PCs will most likely take place in the future. Actually, a similar development was seen in the past when cable TV set-top conver-ters were incorporated into consumer TV sets. In the same manner, consumer TV sets for the information super-highway will contain the circuitry not only to receive, record and process compressed video signals, but also contain much of the hardware associated with a PC (Personal Computer) to receive multimedia services. [7] The video-on-demand system described above supports a wide range of services. The following section discusses different types of services that might be offered. 2.6 Video-On-Demand Services Table 2 lists the major services that can be provided by a full video-on-demand service which means that movies and TV programs are provided within 5 minutes of a request without blocking. The waiting time can be reduced to less than 30 seconds for short (e.g. 10 minutes) items such as on- demand newscasts. Of course, real-time broadcast programs are received without delay. Services can be offered with and without advertisements, the latter at a slightly higher cost. This option fulfills one of the consumer preferences. The current cable TV service can still be offered on a subscription basis in the same fashion as today. The delayed rebroadcasting of sporting events and immediate availability of newscasts should be very popular. All play-off games such as those for the NHL (National Hockey League) might be offered simultaneously and the viewing choice left to the subscriber. Preempting of scheduled programming of major networks, much to the aggravation of numerous viewers, to show the likes of the O. J. Simpson saga will no longer be necessary. Not only movies and TV programs, but performing arts such as ballet, theatre and symphony performances can be provided as well. Collections of the National Film Board can also be offered. Even as a still-picture service, video-on-demand can offer a wide range of [8] choices. In particular, packaged tours of establishments such as the National Art Gallery and the Museum of Civilization will allow the public from coast to coast to appreciate their extensive collections. Still-picture tours of art galleries and museums will be an important factor for these institutions not only from the point of finances, but also from the point of public exposure of their collections because only a fraction is normally on display. Delivery of movies and other material to the CO for the video-on-demand services can be through the trunk lines or by post or courier, depending on the program scheduling. TABLE C BENEFITS OF VIDEO-ON-DEMAND SERVICES ç Consumer receives: — choice of content, — non-blocking service, — 5 minute spacing of starting times, — option to avoid advertisements and — good picture quality ç High earnings for the service provider ç High toll-charge income for the super-highway operator ç Copyright fee collection for Movie & TV program producers ç Residual fee collection for performers ç New distribution network for Canadian movie, TV program and performing arts producers ç New distribution network for National Film Board, museums, art galleries and libraries The listing in Table 2 is by no means complete and the full range of services is limited only by the ingenuity of the entrepreneur. The public benefits of the video-on-demand services are many. Some of the important advantages are discussed in the following section. 2.7 Benefits of Video-On-Demand Services Table C lists the major benefits expected from the video-on-demand services. High earnings are anticipated for the service provider because the consumers' preference for choice of content and viewing time, no advertisements and good picture quality is satisfied. Compared to renting from a videotape shop, the restrictions of weather, time and transportation are absent. Also, there are no late return penalties and no out-of-stock (i.e. blocking) annoyances. Impulse buying will increase sales through the convenience of simple remote control keypad selection, free capsule reviews and free title searches. Promotions such as special sales and film festivals will further improve sales figures. In fact, video-on-demand field trials have shown that consumers approximately double their spending on movie-viewing. Normally, this will be a reallocation of their discretionary spending. Other new services (See Table A and Table 2) such as interactive computer education can attract additional budgetary allocations from the consumer. Overall, the provider of video-on-demand services can expect earnings much larger than that from today's cable TV services and satellite pay-per-view services. The largest flow of traffic on the super-highway will most likely be generated by video-on-demand services. When combined with the full range of services, the traffic toll-charges should finance a major portion of the super-highway. The computer managed collection of copyright fees from each and every viewing provides a profitable and long term financial base for movie, TV program and performing arts producers. Such collection of fees is not possible today. In particular, special event TV programs and popular TV series can be offered over a longer period to increase the earnings many times over. Many old TV programs can be resurrected as well. Performers' residuals can also be collected from each viewing under computer management. This will provide a stronger income base for performers. The video-on-demand services provides a new distribution network for Canadian movie and performing arts producers. Through an access guarantee, competition will now be on a level playing field. Quality and promotional activities will then determine market share. Also, national institutions such as the National Arts Centre and National Film Board, can all become truly national in scope. A wider financial base for these institutions will be guaranteed. The same can be said for regional institutions that have attained a high level of excellence. There is no reason to prevent them from expanding their reach to all regions of Canada. Similarly, the fine arts institutions and museums will gain a new avenue to serve the public. The National Art Gallery and Museum of Civilization can be appreciated coast to coast. At the same time, a new revenue base can be established for these and other institutions. In order to reap the wide range of benefits from the information super- [9] highway, a National Telecommunication Policy must be solidly entrenched with rules and regulations to allow orderly establishment of the information super- highway. The following section discusses some of the key points that should be included among the rules and regulations. 3. NATIONAL TELECOMMUNICATION POLICY Table D lists some of the major points that need to be established by a National Telecommunication Policy. Based on a strong recommendation from the Information Highway Advisory Council, the federal government will need to balance the vested interests of telephone, common carrier and cable TV companies when formulating the National Telecommunication Policy which establishes the principle of a single information super-highway for Canadian homes and offices. Of course, the network configuration should be a centrally-switched fiber-optic star-network in order to deliver the widest range of services possible, and at the same time, allow for future expansion and improvements in technologies. The interests of the publishing, broad-casting, movie, performing arts and fine arts entities as well as those of museums must also be reflected in the Policy. In order to assure equal access to the super-highway, strict rules should be established to separate the super- highway owner/operator (i.e. carrier) from the information and software (i.e. content) provider. A critical decision must also be made to introduce measured services on the super-highway to assess user fees (i.e. toll-charges) in a fair and equitable manner. Unless measured service is introduced, the class of users with a low fixed rate can take unfair advantage of the low rate by [10] TABLE D NATIONAL TELECOMMUNICATION POLICY ç Single information super-highway ç Centrally-switched star-network ç Separation of carrier and content ç Introduction of measured services ç Information super-highway operator licensed by CRTC ç Long term capital depreciation ç Video-on-demand service operator licensed by CRTC with option for multiple licenses ç Free market for long distance services ç Free market for information services with a Consumer Watchdog for consumer oriented services ç Broadcaster to be exclusive advertiser ç Radio & CD music (broadcast and on-demand) licensed by CRTC ç Service provider to pay transmission toll-charges ç Guaranteed access to the super- highway through fees set by CRTC ç Guaranteed access to video-on-demand systems through fees set by CRTC ç Copyright protection for video-on- demand material through a copy- protection virus ç Protection of privacy ç Establish transmission standards ç Broadcast and telecommunication satellites for remote areas ç Surtax on toll-charges to support CBC ç Surtax on toll-charges for long term telecommunication R & D ç Surtax on toll-charges to support performing arts and fine arts ç Subsidies for the disadvantaged using digital technology and divert a significant portion of the regular revenue traffic to this class of service. As a result, the financial base of the super-highway will be placed in jeopardy. Therefore, measured service should be introduced and applied to all traffic. A logarithmic scale providing lower per bit rates to high volume users, is probably the most appropriate method to institute the toll-charges in a fair manner. Because the super-highway is a mono-polistic entity, it should be constructed and operated under licence from CRTC (Canadian Radio-television & Telecommunication Commission). A consortium of telephone companies and common carriers might construct the super-highway and become the operators. The expected high earnings from the super-highway toll-charges should be sufficient to inspire the telephone companies and common carriers to accept this separation of carrier and content. Because the super-highway is of national interest, the capital depreciation period might be set at 30 years or longer. In view of the relatively long life expectancy of nearly all of the fiber optic and electronic components, such a long term depreciation is not unreasonable. As a result, the trans-mission toll-charges can be maintained at a low level. The high returns from the video-on-demand services should also induce the cable TV operators to become video-on-demand system operators licensed by CRTC. This transformation is discussed in the Appendix. Some form of competition for video-on-demand services might be retained by allowing additional licences for specialty services such as the performing arts and still-picture services. Conversion of cable TV operators to video-on- demand service providers might be encouraged by offering a fair return on their investments plus an additional incentive for a limited time. Long distance services which inter-connects the COs should be left to free market competition as it is today. Since access to the super-highway can be guaranteed without creating unsolvable hardware problems, the issue of fair access to the subscriber loop is resolved. All data, information, shopping and related services could be left to free market competition. Newspaper and book publishers will face a new challenge as they expand to provide multimedia versions for consumer consumption. Obviously, copyright ownership will become a powerful instrument when new multimedia services are planned. Multimedia services will provide ample opportunities for unscrupulous operators who prey on unsuspecting consumers. A watchdog should be established to prevent deceptive or fraudulent services from reaching the consumer. The watchdog can be funded through annual operator registration fees. The broadcasting industry will face a major problem of audience fragmentation under the service structure of the information super-highway. Video-on-demand services will have the biggest impact on this audience fragmen-tation which will impair the earning power of advertisements. Furthermore, if the video-on-demand service provider is allowed to insert advertisements, the broadcast industry may be faced with financial disaster. Therefore, in order to assist the broad-cast industry, advertising associated with video-on-demand services should be made the exclusive domain of the broadcaster. The impact of the information super-highway on the broadcast and cable TV industries is discussed further in the Appendix. [11] With the new wireless systems based on 900 MHz technology, distribution of high fidelity stereophonic audio signals within the home is a reality today. Therefore, "wired" radio service to the home over the super-highway can be anticipated. Relay-Version: ANU News - V6.1B9 05/16/94 VAX/VMS V6.1; site commgw Path: commgw!nott!cunews!daemon Newsgroups: can.infohighway Subject: Hara Report 3/4 Message-ID: From: "McGregor, Scott: NM" Date: Thu, 22 Dec 1994 15:27:00 GMT Sender: daemon@cunews.carleton.ca Organization: Carleton University Approved: news@cunews.carleton.ca To: "can.infohighway" Encoding: 703 TEXT Received: by mssmtp.istc.ca with Microsoft Mail id <2EF9B3E8@mssmtp.istc.ca>; Thu, 22 Dec 94 17:14:16 EST X-Mailer: Microsoft Mail V3.0 Content-Length: 20471 Lines: 702 In order to provide an orderly develop-ment of the radio market, radio and CD (Compact Disc) music services, whether they are on a broadcast basis or on- demand basis, should be licensed by CRTC. Since the bulk purchasing power of the service provider can lower transmission costs, service providers should shoulder the transmission toll-charges. This approach lowers the cost to the subscriber. It also has the psychological advantage of reducing the number of toll-charges in the monthly billing to a subscriber. The toll-charges for subscriber to sub-scriber calls should be billed to the call originator except for collect calls, according to the present approach. Unlike the current cable TV system where spectrum (i.e. channel) capacity is limited, the centrally-switched star-network configuration can provide extra interconnection capacity by installing additional switching hardware. Since the physical size of the hardware is very small, this extra capacity can be added without major complications. Increased access to the video-on-demand system can also be provided by installing additional erasable videodisc jukeboxes. Today, there is only one network of roadways and freeways that reaches the home. Access is guaranteed to the limit of road capacity as long as a vehicle, whether it is large or small, meets established safety standards and is licensed properly. Similarly, since there is only one information super- highway to the home and offices, access must be guaranteed. Connection should be allowed on payment of [12] a fee established by CRTC, provided the user satisfies standards established by legislation. For the same reason, access to the video-on-demand system must also be guaranteed upon payment of a connection fee instituted by CRTC, provided the applicant satisfies qualifications set by law. Since signal transmission is all digital on the super- highway, with the cooperation of consumer electronic manufacturers, measures can be introduced to protect the copyright of video-on-demand material. A copy-prevention virus can be included in the video- on-demand signals. The virus will be recognized by the TV receiver and after viewing, the material could be erased. Of course, the TV receiver should also prevent any analogue signals of the copy- righted material from leaving the TV set. Parallel to copyright protection, is the issue of protecting the privacy of sub-scribers. Legislation should be introduced to maintain a subscriber's viewing habits and usage of the super-highway, in strict confidence. In order to facilitate the way for Canadian manufacturers to supply the parts, subsystems and systems for the super-highway construction, the transmission standards and hardware dimensions should be established at an early date. Many of the international standards can be adopted but some mechanical dimensions might reflect particular situations encountered in Canadian homes and offices. Remote areas where installation of the super-highway is uneconomical, DBSs (Direct Broadcast Satellites) can continue to provide broadcast services. Telephone, facsimile and data services can also be supported by satellites. Taxes on the toll-charges can be a new source of revenue because of the ease of computer processing such assessments. Surtaxes to support CBC (Canadian Broadcasting Corporation) should be welcome because of the independence from political pressure gained by CBC. This type of tax is not an alien concept since it is equivalent to the old licence fees charged for radio receivers. It is illuminating to recall that NHK (Japan Broadcasting Corporation) is funded by the licence fees on consumer TV sets and satellite receivers. The HDTV technology was developed by the NHK Broadcast Technology Center and their excellent TV programs are also supported by the same source of funds. If there is sufficient margin in the gross revenue of toll-charges, surtaxes to support long term R & D (Research & Development) for telecommunications and to support the performing arts as well as the fine arts, can be considered. The cost of digitally processing text and sound is very low today. Therefore, voice-to-text and text-to-voice conversion services for the hearing and visually disadvantaged might be offered at low cost. The information super-highway supports a wide range of services, and significant benefits can be expected for the society as a whole. The following section discusses some of the technical issues associated with the super- highway as well as its benefits. 4. DISCUSSION The advances in broadband fiber optic transmission systems promise Tera bits per second (1,000,000 Million bits per second) capacities to the home and offices. A super-highway in the form of the current cable TV tree-structure where all signals are broadcast from the CO to the subscriber might be considered. Bidirec-tionality can be provided by time division multiplexing signals from the subscriber to the CO. This approach has the advantage of minimizing the required fiber optic cable length. Also, the "channel" selection function is located at the subscribers' premises, thereby eliminating the need of installing switching equipment at the CO. However, this approach has major disadvantages compared to the centrally-switched star-network configuration. When all the information super-highway services listed in Table 1 are considered, there will be some services that cannot be accommodated because of the upper limit in the transmission capacity. In other words, the access problem encountered in today's cable TV system will not be resolved. This will be particularly true for video-on-demand services for tens of thousands of subscribers selecting thousands of movies and TV programs at the time of their choice. Establishing starting times at 5 minute intervals for movies, and at the same time providing a list of titles exceeding several thousands will not be possible because of the upper limit in the transmission capacity. Furthermore, expensive LDs (Laser Diodes) and electronic circuit components must be used because of the very high transmission bit rate. Therefore, expansion of communication capacity in the future will require costly upgrades in the subscribers' equipment. In contrast, expansion of communication capacity in the centrally-switched star-network configuration can be achieved by simply installing extra switching units at the CO. No changes are required in the subscribers' equipment. [13] The provision of close to 200 Mb/s capacity in the subscriber line when the centrally-switched star- network is initially installed, should be more than sufficient for the life of the transmission facility. As a precaution against unexpected future demands for extra transmission capacity, spare fibers can be included in the fiber optic cable to the subscriber. The additional cost of this extra fiber is a fraction of the installation cost of the cable. Such an approach is standard in current installation practices of telephone lines to the home. Obviously, the centrally-switched star-network configuration is the preferred choice for the information super-highway to the home and offices. The access problem is resolved, and the flexibility of switch interconnections at the CO supports a wide range of services and also allows full video-on-demand services to be offered. Also, well established fiber optics and electronics technologies can be used. This also means lower component costs. With passage of time, public monopolies often suffer from complacency and lose sight of their mission to serve the public. For the information super-highway, such will not likely be the case because there will be an unending flow of entrepreneurs who develop new services and users who demand sophisticated services. Therefore, super-highway operators will be responding constantly to the introduction of new multimedia technologies, additional access requests, extra video-on-demand facilities and expansion of switching capacity. This activity can be supported and sustained by funding long term R & D for telecommunications. As mentioned earlier, such financing might be established through a surtax on toll-charges. This will allow Canada to [14] remain in the forefront of information super-highway and multimedia technologies. It is instructive to remember that NTT's (Nippon Telegraph & Telephone Corpora-tion's) preeminent position in fiber optics technology today, is founded on a generous R & D budget made possible by the wide scale introduction of measured services many years ago. TABLE E BENEFITS OF THE INFORMATION SUPER-HIGHWAY ç Long term economic stimulation by the construction of the super-highway ç Fair competition in long distance service ç Support of economic activity through low cost telecommunication including T1 = 1.544 Mb/s — Free movement of voice, data, text, images and information ç Release of radio frequency spectrum ç Interactive computer aided education ç Telemedicine — T1 = 1.544 Mb/s and video channels allows efficient utilization of specialist and support of rural health centers ç New distribution network for Canadian movie, TV program and performing arts producers ç New distribution network for publishers, fine arts institutions and museums ç Bilingual and multicultural policies supported The time required to construct the information super- highway will give ample time for the related industries to adapt to the multimedia world of the super-highway. In particular, the cable TV industry will have sufficient lead-time to depreciate their present capital investment. Some of the major benefits of the super-highway are listed in Table E. Canada-wide installation of the informa-tion super- highway will require 10 or more years to complete. Therefore, the economy will receive continuous stimulation over a long period because of the more than $3,000 per subscriber that is expended in the construction. All of the technologies required by the information super-highway discussed here, are well established and very familiar to the Canadian industry. Also, there is a solid engineering and technical infrastructure to quickly assimilate technologies such as those for videodisc jukeboxes with erasable optical discs. This technology can be obtained through a licensing agreement. Additional benefits will also be generated from the demand for software and hardware required to support a wide spectrum of multimedia services. Examples of services that can be provided over the information super-highway are listed in Table A which is reproduced here. Clearly, a large volume of traffic can be expected from the wide range of services. When this volume is combined with the measured service, high earnings are expected from the transmission toll-charges. Economic activity will be facilitated by low-cost telecommunication channels through ready movement of voice, data, text and images. Under measured service, the basic telephone service will most likely cost less than at present for most subscribers. In fact, the free exchange of information enriches both the sender and receiver because the receiver's volume of information is expanded while the sender still retains the block of transmitted information. By repeated exchanges, the information base of the entire nation is enriched. TABLE A (Reproduced from Page 3) INFORMATION SUPER-HIGHWAY MULTIMEDIA SERVICE EXAMPLES ç Telephone, Facsimile & Data ç Switched T1 = 1.544 Mb/s ç Cable TV (Standard TV & HDTV) ç Full Video-On-Demand (Standard TV & HDTV) — Movies, TV Programs — Museum & Art Gallery Tours ç Interactive Computer Aided Education ç Telemedicine ç Electronic News (Text & Images) ç CD Music (Broadcast & On-Demand) ç Broadcast Radio ç Radio News (Broadcast & On-Demand) ç Professional Data Bases ç Encyclopedia & Dictionary Look-Up ç Home Security and Meter Reading ç Electric Power Utility Management ç Water & Gas Utility Management ç Video Games ç Video Telephone ç Print-To-Voice, Voice-To-Print, Conversion for the Visually and Hearing Disadvantaged ç Other New Services [15] As a result, the probability that some of the knowledge will be creatively applied by somebody to financially enrich the society, is greatly enhanced. Guaranteed equal access to the CO of the super- highway will provide a level playing field for competition in the long distance services. For long distance telecommunication companies, the problem of gaining access to the local loop in a fair and equitable manner, will be resolved. Because the transmission facilities are shared with many other services, the cost of the T1 = 1.544 Mb/s service can be low, unlike that of the dedicated leased lines offered today. In addition, the service can be provided on a switched basis, in the same manner as today's telephone service. The low cost switched T1 = 1.544 Mb/s channels will encourage free exchange of information among research institutes and reinforce the foundation of R & D in Canada. The same T1 service will also facilitate interchange of graphic information, support interactive educational instruction and in general, benefit the business and industry. The switched T1 = 1.544 Mb/s service is becoming more important because the operational speeds of PCs on the market today have already exceeded 100 MHz (Million Cycles per Second). Interconnection of such high speed PCs cannot rely on transmission rates such as 19.2 kb/s (Thousand Bits per Second) which is considered very high speed by many users of word processing programs today. When receiving graphic images, waiting for the PC screen to be filled is a waste of valuable expert time. Therefore, trans-mission rates such as T1 = 1.544 Mb/s will be demanded in the multimedia future. The low-cost switched T1 = 1.544 Mb/s service will fill this need for high speed interconnections. In the long term, even the T2 = 6.132 Mb/s rate can expected to be [16] preferred by specialists in various fields. If needed, this rate can also be supported by the super-highway with ease. If nearly 100 % of subscribers in urban areas are served by the information super-highway, the transmission hardware of broadcast TV stations can be eliminated because broadcast services are provided over the super-highway. The radio frequencies used by the TV stations can then be released for other applications such as cellular telephone. Such a development will be very welcome because of the extreme congestion of the radio frequency spectrum. Of course, direct broadcast satellites can continue to provide broadcast services to the rural and remote areas. Interactive computer aided instruction can use the switched T1 = 1.544 Mb/s and TV channels to deliver education directly to the home. Many university level courses will reach a population that is normally excluded from higher education. Telemedicine can be supported through switched T1 = 1.544 Mb/s and TV channels. By making use of different time zones across the country, specialists (e.g. X-ray and Magnetic Resonance Imaging) can be consulted at any time. The best treatment for a given case, particularly in emer-gencies, can be provided to the patient. Rural health centers can also benefit by receiving specialist support through telemedicine. Clearly, telemedicine allows efficient use of limited human resources. Canadian movie, TV program and performing arts producers will benefit from the super-highway by gaining a new national distribution network. Guaranteed access will provide a level playing field where quality of the product and promotion will determine market share. Similarly, museums, fine arts institutions, publishers, educational establishments will gain a national distribution network. A new financial base will be available to these entities. Bilingual and multicultural needs can be met right across the country because the centrally switched super- highway con-figuration allows ready connection of subscribers to the programming source using the language of their choice. This means that movies can be shown in French, English or in the original language with or without subtitles. Those who dislike dubbed sound tracks should be pleased. Similarly, all TV programs can be offered in both official languages at the same time. The window of opportunity to establish a National Telecommunication Policy in order to move towards construction of a single information super-highway, is no more than 2 years. Otherwise, the telephone and cable TV industries will most likely harden their positions before the end of 2 years and be at a point of no-return in terms of financial and emotional investments in their chosen technologies. If the direction of two mediocre information highways is taken, the nation and people as a whole will be the losers because the full range of services and wide ranging benefits will not be enjoyed by the public. In the single information super-highway, there is ample capacity and volume of traffic to promise the super-highway operator as well as the video-on-demand and other service providers a fair return on their investments. To prepare Canada for the 21st Century, concern for the society as a whole should be placed ahead of parochial interests. Hopefully, the telephone and cable TV industries will be astute enough to realize the much larger earnings they might generate on the information super-highway, and at the same time direct their attention to the wide range of benefits that can be realized for the public, the business community and other industries. The future prosperity of Canada depends very much on the recommendations to be formulated by the Information Highway Advisory Council. [17] APPENDIX IMPACT OF THE INFORMATION SUPER-HIGHWAY ON CABLE TV AND BROADCAST INDUSTRIES 1. INTRODUCTION If telecommunication services to the subscriber's home were opened to free competition, the following scenario may become a reality. Realizing that high profits can be gained from full video-on-demand services, movie producers may join forces with telephone companies to install the information super-highway to the home based on the centrally-switched fiber-optic star-network. To the movie producer, the chance to distribute their products directly to the consumer is attractive. Even more attractive is the possibility of collecting a fee from each and every viewing. Copyright protection systems associated with the super-highway will also reduce losses through piracy. Such protection is not available today. To the telephone company, the user fees (i.e. toll- charges) for the video-on-demand service will finance a large portion of the cost of constructing the information super-highway. Furthermore, large profits can be gained through toll- charges on a wide range of multimedia services which can be supported with relatively small incremental costs. The desire for higher profits is the same for movie producers and telephone companies. The assets of the two entities complement each other very well and there are no reasons not to cooperate with each other. The TV broadcaster may also decide to take advantage of the full video-on-demand system. The additional pay-per-view income from same-day rebroadcasts, and offerings of new and old programs will be more than welcome to the consumer. Relay-Version: ANU News - V6.1B9 05/16/94 VAX/VMS V6.1; site commgw Path: commgw!nott!cunews!daemon Newsgroups: can.infohighway Subject: Hara Report 4/4 Message-ID: From: "McGregor, Scott: NM" Date: Thu, 22 Dec 1994 15:27:00 GMT Sender: daemon@cunews.carleton.ca Organization: Carleton University Approved: news@cunews.carleton.ca To: "can.infohighway" Encoding: 488 TEXT Received: by mssmtp.istc.ca with Microsoft Mail id <2EF9B3EE@mssmtp.istc.ca>; Thu, 22 Dec 94 17:14:22 EST X-Mailer: Microsoft Mail V3.0 Content-Length: 14383 Lines: 487 In particular, same-day rebroadcasts of edited versions of sporting events still containing all of the action but excluding the activities unrelated to the game, will be welcomed because of the time that is saved for the viewer. A-1 For viewers with busy schedules, edited versions without advertisements, further shortening the viewing time, should be popular even with a modest surcharge. Of course, the movie and TV broadcasting industries might choose the cable TV industry as a partner. However, when the cable TV and telephone company assets are compared, the telephone company is in a far better position. The extensive ownership of COs (Central Offices: Telephone Exchanges) and transmission-line right-of-ways is a definite advantage. In addition, the telephone industry is very familiar with digital fiber optic transmission technologies. No difficulties are expected when the information super- highway is to be constructed. Obviously, the telephone industry as a partner offers much more security to the movie and TV program producers. This means the demise of the cable TV industry because there is no need to have their services as the middle layer in the distribution of movies and TV programs. For Canada, there is also the danger of U.S. domination of the full video-on-demand services by virtue of the large volume of movies they produce each year. The stock of old movies places the U.S. movie producer in a even stronger position. As is the case today, Canadian movie producers will most likely be shut out from the full video-on-demand services unless equal access is guaranteed by legislation. Clearly, the free market approach to telecommunication services to the home and offices can lead to drastic changes in the structure of the telecommunications industry. [A-2] In fact, because of the wide range of multimedia services that can be offered over the information super- highway, not only will the broadcast and cable TV industries be affected, but the newspaper, publishing, music and video game software industries will also feel the impact. Therefore, a regulated orderly approach is preferred because the public interest may be sacrificed in the confusion of the revolutionary restructuring caused by the information super-highway. 2. CABLE TV TRANSFORMATION As part of the regulated approach, cable TV operators can be licensed by CRTC to provide the video-on- demand services. Some form of competition might be introduced by reserving the option to provide multiple licenses for specialty services such as ethnic movies and interactive computer education. Conventional cable TV and pay-per-view services cannot compete against full video-on-demand services which meet consumer preferences completely. Therefore, trans-formation of the cable TV operator into a video-on-demand service provider is necessary to ensure the survival of the cable TV industry. As the licensed video-on-demand service provider, they can act as the instrument to provide guaranteed access to the information super-highway through the video-on-demand system. Transformation of the cable TV operator to a video- on-demand service provider will not be traumatic because construction of the super-highway will take place over many years. The cable TV industry will have ample time to depreciate their present capital investment and make a gradual transition to the video- on-demand services. In the transformation, the cable TV industry will appear to be abandoning their traditional right to own their transmission facilities. However, this will not be the case as might appear at first glance. At present, the cable TV and telephone industries often share the same underground conduits in new residential developments. In other words, the same physical space inside a concrete or plastic conduit is shared. If sharing the same physical space is acceptable, then sharing the same physical space within the sheath of a fiber optic cable should be acceptable. Of course, the cable TV and telephone services will each have their own indepen-dent fibers. This approach is some times referred to as spatial division multiplexing. The concept of sharing can be taken one step further to sharing time space instead physical space. This means that the same fiber optic line is shared in the time domain through time division multiplexing. In contrast to spatial division multiplexing where multiple fiber optic lines in a single cable are used, time division multiplexing uses multiple time slots to transmit multiple signals through a single fiber optic line. At the transmitting end of a fiber optic line, digital telephone and cable TV signals are time division multiplexed into a single high speed optical bit stream and coupled into the fiber optic line. At the receiving end of the fiber optic line, the time division multiplexed optical signals are demultiplexed and separated into their original signals. As far as the telephone and cable TV engineers are concerned, there is no difference in the received signals whether they are transmitted through a fiber optic cable as spatial division multiplexed signals or time division multiplexed signals. Therefore, in the information super-highway scenario, cable TV operators will still own their transmission facilities. That is, instead of owning a physically separate facility, they will own time slots on a fiber line shared with telephone companies. This ownership of time slots in a high speed digital bit stream is equivalent to owning a frequency allocation for a TV station. As a tangible asset, the time slots are just as valuable as owning a distribu-tion system for cable TV. Actually, in the information super-highway, the telephone company will become the carrier which collects toll-charges and maintains the super-highway. As a carrier, they will become transparent to the user under the guaranteed access rule. The current telephone "company" signals will be replaced by signals from multimedia service providers and subscribers. Clearly, majority of the signal traffic will be video-on-demand signals. The video-on-demand services will have a significant impact on the TV broadcasting industry because of audience fragmentation. Radio broadcasting will also be affected because of the extra "channels" that can be offered over the super-highway. The following section discusses the direction of the broadcast industry in the context of the information super-highway. 3. TV BROADCASTER TRANSFORMATION Already, videotape rentals have caused a decrease in the number of TV viewers. Added to this problem, audience fragmen-tation caused by full video-on- demand services appears to threaten the well being of TV broadcasters. If video-on-demand service providers are allowed to insert advertisements, the earnings of the TV broadcaster will be reduced significantly. Therefore, in the interest of survival, advertising should be legislated to be the exclusive domain of the TV broadcaster. [A-3] The issue of audience fragmentation may be converted to an advantage in the information super- highway. Since TV services are provided on a switched basis in response to subscriber commands, particular advertisements can be "directed" to specific subscribers. In other words, what we know today as broadcasting becomes narrowcasting and advertising to the masses becomes "directed" advertising. For example, advertisements for luxury automobiles can be "directed" to high income residential areas and those for high performance personal computers might be "directed" to sub-scribers who have in the past requested old "Star Trek" programs. Of course, subscriber viewing preferences can be compiled by the video-on-demand management computer for such purposes. In fact, compilation of statistical information on subscriber viewing will allow the broadcaster to charge the advertiser according to the number of actual viewers of an advertisement. Such advertising might be termed "precision" advertising. The ability to narrowcast to specific residential areas will allow even the corner grocery store to advertise. To accommodate a limited budget, the number of viewers of advertisements can be specified in advance. The impact of narrowcast advertisements can be gauged by recording the increase in sales of an advertised item. Alternatively, a simple question and answer survey with token gifts as an inducement can provide the answer. Such a promotional activity might be termed "measured" advertising. "Directed", "precision" and "measured" advertising over the information super-highway will place the present broadcast advertising on a more actuarially sound footing where the cost-effectiveness of advertising is gauged with confidence. With appropriate marketing strategies, the pool of advertisers can be expected to [A-4] increase, and at the same time, the TV broadcasters' earnings should also increase. With exclusive rights to the advertising business, the TV broadcaster should continue to thrive with the information super-highway. Business opportunities can also be expanded beyond traditional broadcast activities to include multimedia program production for the performing arts centers, art galleries and museums. 4. RADIO BROADCASTER TRANSFORMATION Since there is a large number of radios installed in automobiles, radio broadcasting can be expected to operate with little change under the information super- highway. Also, rural and remote areas will still demand radio broadcast services. However, the easy installation of switching equipment at the CO for digital audio signals, and guaranteed access to the information super-highway opens the possibility of too many digital audio broadcasting services to the home. In order to provide an orderly transition to the multimedia world of the information super-highway, digital audio broadcasting might be included as part of the radio license issued by CRTC. As a result, a new source of revenue will be opened to the radio broadcaster. If on-demand service of CDs (Compact Discs) is also included as part of digital audio broadcasting, additional earnings will be gained by the radio broadcaster. Furthermore, "directed", "precision" and "measured" advertising over the information super-highway can also function with digital audio broadcasting. This should lead to a further increase in earnings. With new sources of revenue in digital audio broadcasting, CD on-demand services and advertising, the radio broadcasting industry can look towards a secure future. BIOGRAPHY Elmer H. Hara, Ph.D. Director of Research & Development CIBINT Canadian Institute for Broadband & Information Network Technolgies, Inc. Faculty of Engineering University of Regina Regina, Saskatchewan, Canada S4S 5Z7 Tel. (306) 585-4438 Fax (306) 586-8202 Elmer H. Hara was born in Vancouver, B.C., Canada in 1933. After graduating from Seiryo High School in Kobe, Japan, he attended the University of British Columbia, Vancouver, B.C. and received his Honours B.Sc. and M.Sc. degrees, both in physics, in 1959 and 1960. In 1960, he moved to Ottawa to join the Defence Research Telecommunica-tions Establishment which, in 1969, became the Communications Research Centre of DOC (Department of Communications). There, he participated in basic research of the lower ionosphere. With the support of a Defence Research Board Scholarship, he attended the University of Toronto, Ontario, and in 1970, received his Ph.D. degree in Rayleigh-Brillouin light scattering from hydrogen, hydrogen deutride and deuterium molecules. Since 1969, he has been one of the pioneers in fiber optics R & D in Canada, and has had a strong interest in the development of fiber optic telecommunication systems, particularly in B-ISDN (Broadband Integrated Services Digital Network) subscriber loops, LANs (Local Area Networks) and intelligent buildings. He spent the year of 1980 at the Musashino Electrical Communication Laboratory of NTT (Nippon Telegraph & Telephone Corporation) of Japan, as the Exchange Scientist from DOC. In July 1986, he was seconded from the position of Director of Technology Assessment & Development at DOC Headquarters, to the University of Regina, Saskatchewan, on the Public Service Commission's Executive Interchange Program. At the University of Regina, he occupied the SaskTel-NSERC Industrial Research Chair for six years. After Returning to DOC in 1992, he retired from the federal public service to devote his time to the development of fiber optic networks for intelligent buildings and Video-On-Demand systems. At present, he is Director of Research & Development for CIBINT (Canadian Institute for Broadband and Information Network Technologies, Inc.) at the University of Regina. He also serves as president of Net-Five Telecom Corporation of Regina, Saskatchewan. His work on Video-On-Demand systems in the context of B-ISDN services to the home is known for pointing out the possible high return on the investment for FTTH (Fiber-To-The-Home) systems. Of recent, because of its ability to meet the diverse needs of intelligent buildings, the Net-Five fiber optic network development has attracted the attention of the Japanese industry. Dr. Hara is a member of the Canadian Association of Physicists and IEEE (Institute of Electrical and Electronic Engineers). He is also an official interpreter (Consecutive: Japanese-English, English-Japanese) for the Department of Secretary of State, Canada, and serves as an examiner for CTIC (Canadian Translators and Interpreters Council) translator certification tests (Japanese - English & English - Japanese).