DETROIT -- NOVEMBER 8, 1993 -- Drawing parallels to the nation's system of interstate highways, AT&T Chairman Robert E. Allen told members of the Detroit Economic Club today that the emerging "Information Superhighway" must be accessible and affordable to everyone who wants to use it.

In the 1950s, he said, the federal government undertook policies that resulted in construction of America's first superhighway--the interstate highway system that eventually reached every part of the country. It was accessible to anyone who could drive, and it was affordable.

"Today, there's a new highway under construction," Allen said. "It's often called the 'Information Superhighway.' In its own way, it will take people much further and faster than the Interstate Highway System ever could. But like that system, it is crucial that the 'Information Superhighway' be accessible and affordable to everyone who wants to use it."

The term "Information Superhighway" describes the vastly expanded options for moving and managing information created by the merger of communications and computers, he said. Networking on the "Information Superhighway" means the integration of voice, data, video and still images.

Easy, affordable access to the "Information Superhighway," for such applications as information retrieval, distance learning, extending the reach of medical expertise and personal communications involving voice, video and messaging, depends on a convergence of technology, public policy and competition, he said.

While the promise of interactive games and other consumer opportunities presented by the "Information Superhighway" are widely publicized, "the ability to access and manipulate information will be a survival skill for business, with a direct influence on economic growth and future standards of living," Allen said.

He cited the current wave of proposed mergers among media, telephone and cable companies as a "realization by existing industry leaders that they have to put their faith and their vision and their money into building a substantially new industry" based on the "Information Superhighway." He included AT&T's proposed $12.6-billion merger with McCaw Cellular Communications among those mergers.

"Today, no single company has the capital or the technology base to go it alone and be a leader in the new information industry. Companies are reaching out for partners and resources. And as they do that, we could very well see a period of creative chaos," he said. "But let's keep in mind that America is very good at that kind of chaos. The ability to raise venture capital and launch new enterprises quickly is one of our competitive strengths in this country. So the next 10 years have the potential to be a very good time for America.

"Some of the ventures and partnerships forming today will flourish, and some of them won't. Some people will make a great deal of money, and some people will lose it. But the net result for the country will be a vastly expanded superhighway offering more and better options for using information technology.

"This can be realized with minimum investment and minimum regulation by government. I think the Clinton Administration realizes that. They are vitally interested in seeing that the 'Information Superhighway' keeps expanding. And it appears that they're willing to help by working with business on the vision, and leaving the actual construction and operation to the energy of the marketplace.

"There's just one catch, but it's a big one," Allen said. "To be successful, the 'Information Superhighway' must be built on a foundation of universal access and competition. By access, I mean that everybody who wants to provide content should have access to everybody who wants to buy it, and vice versa. If you have that kind of access, I think the competition will take care of itself."

Public policy must play a role in assuring full competition in the future of information technology, Allen said, arguing that the principle of competition in the U.S. telecommunications industry, under which the old Bell System was broken up nearly 10 years ago, should be extended to all segments of the market.

"The technology available today raises the possibility that local telephone service could be converted into a competitive market, with all the benefits that competition brings," he said. "The time has come for government and the telecommunications industry to see if we can make that happen. . . .

"It's certainly not a reality today. Not when the local phone companies still handle 99 percent of the local traffic in their region. Not when the local exchange is still the tollgate that stands between the long distance companies and their customers.

"In recent years, the local phone companies have been lobbying for removal of the antitrust settlement restriction that keeps them out of the long-distance market," Allen said. "The long-distance carriers and many of our customers are opposed to this, not because we're afraid of competition but because we want to preserve it.

"Letting the local phone companies into the long distance business while they still have monopoly control of the local networks would be a serious setback to competition in long distance," he said. "Speaking for AT&T, we would welcome the local phone companies into the long-distance market as soon as a competitive market exists for local services as well. And it's time we find out whether that's possible."

Mark Trierweiler
313-262-4960 (office)
515-229-0092 (home)

Jim Byrnes
908-221-7876 (office)
908-689-6040 (home)