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Media industry lays groundwork for new high-speed networks

The media industry is quietly building a new set of broadband networks aimed at letting people watch videos, listen to music or play games online.

Everyone wants a piece of the high-speed Internet.

While telephone and cable companies fight for Web surfers' high-speed Internet dollars, the media industry--intent on delivering its content using its own means--is quietly building a new set of broadband networks.

For the most part, these projects aren't direct competitors to the high-speed Net access services now clambering into the mainstream. They're niche players, aimed at letting people watch videos, listen to music or play games online.

At this week's annual National Association of Broadcasters convention, the likes of Sony and big TV broadcasters are announcing new investments and affirming their commitment to creating high-speed Net services that could lead to a future in which Web surfers are no longer tethered to their personal computers.

Millions of dollars are being poured into developing these new networks as high-speed Net services ripple into the mainstream. Nevertheless, analysts say these networks will likely have little effect on the consumer market in the foreseeable future.

"This is a very expensive process," said Dylan Brooks, an industry analyst with Jupiter Communications. "You really have to assume that within the next few years we'll have to leverage what's there today, rather than building from scratch."

The race to bring high-speed Net connections and content to consumers has already created fortunes, political bullfights and once-unthinkable mergers. Only about 2 million customers had signed up for high-speed services by the end of 1999, but this number will swell to more than 15 million by 2003, according to industry research firm Jupiter Communications.

The speedy network connections are just one side of the coin. Movie studios, music and software companies, and Net entertainment companies are salivating at the idea of being able to present consumers with video, downloadable songs and software, or Web programming that rivals broadcast television. The recent combination of America Online with cable network giant Time-Warner is only the most obvious example of this trend.

But this Net media nirvana is still a long way off. Today consumers still wait in long lines to have high-speed services turned on; they fight through slowdowns and shutdowns, or they're told they live too far from high-speed wires to get service. Two-way Internet satellite connections and fast mobile phone networks are for the most part still a thing of the future.

That's where the newcomers see their opportunity.

Most of the Wireless takes center stageplanned new networks are wireless, allowing them to reach beyond the physical limits of cable-TV and telephone networks. But most of them also are looking at a world beyond the personal computer.

Yesterday, Sony Corporation of America said it was investing $8 million in wireless infrastructure ArrayComm, an ambitious company that wants to create a nationwide high-speed network that offers consumer devices like portable games or music players.

Sony won't admit to any specific plans for devices using the ArrayComm technology, and the small firm must sign up big-name wireless carriers and win access to actual spectrum before it can carry through on its plans.

But hints dropped by the media company's executives yesterday raised the prospect of a range of Sony devices, similar to a Walkman or a Game Boy, that could plug into the company's extensive database of music, videos or games over a fast wireless Net connection.

On the TV side, executives are scrambling to find a use for the valuable digital TV spectrum federal regulators have given them, but which they aren't yet using for TV broadcasts.

Several coalitions of TV stations have sprung up with plans to use this resource for data and Net transmissions instead of traditional programming, creating national services with plans to beam broadcast-quality video or music to consumers' computers or other devices.

Executives at Geocast Network Systems and iBlast, both groups supported by deep-pocketed TV conglomerates and big-name venture capitalists, see their models as a kind of high-speed digital delivery truck.

Rather than offering traditional Web surfing, which requires two-way connections, they would use their fast one-way connections to beam videos, music, games or other software to a mass audience.

"Downloads of almost any size would become almost instantaneous," said Geocast chief executive Jim Ramo. "We see this as the real definition of broadband--real full-motion video, not just streaming."

Leadership at the Broadband Digital Cooperative, made up of TV stations that cover about 85 percent of the country, is less clear about its future. The group knows that it has a valuable chunk of digital spectrum that can be used to deliver data somehow. But just what does that mean?

"We don't know that," said Steward Park, senior vice president of digital business development at Granite Broadcasting, one of the co-op's members. "We're open to suggestions from the business community on the best way to satisfy their needs."

Both iBlast and Geocast say they will go live next year. The co-op hasn't yet gone far enough in its plans to have release dates set.

Though still a long way from realization, these nascent networks hold potential for new convergence of the telephone and TV networks, similar to what is happening on the cable-TV side through the actions of AT&T and others.

"In concept, there is a convergence between digital television and digital mobile networks, because of the idea of transmitting complex digital content over the air," says Herschel Shosteck, chief executive of research firm Herschel Shosteck Associates. "How that actually works out, I don't know."