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Information superhighway (I-Way) and market forces influencing I-Way

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I wayMarket forces influencing Information Superhighway (I-Way),
Fundamentals of E-commerce Notes | Sixth Semester,
BSc.CSIT | Tribhuvan University (TU)

Information superhighway (I-Way)
According to Wikipedia, I-way is defined as high-speed communications system that was touted by the Clinton/Gore administration to enhance education in America in the 21st Century. The Internet was originally cited as a model for this superhighway; however, with the explosion of the World Wide Web, the Internet became the information superhighway.

I-way, also known as the electronic, interactive, or multimedia superhighway has become the leading buzzword that has no precise definition. I-way can be portrayed as the high bandwidth, interactive pipeline capable of simultaneously supporting a large number of electronic commerce applications. Multinational companies have started mergers and investments in technology to construct the new infrastructure.

Market Forces influencing I-Way

1. Demands and Requirements of Market Participants
The success or failure of any innovation, product or service is a factor of Market forces. The market participants are those users who become information publishers by setting up on-line servers, and those consumers, end users or business consuming and paying for information, products/services. They are information service providers who are commercial, government or private providers or publishers of information goods and service. It also includes value added information providers, including third party brokers and other intermediaries, as well as originators or services who add value by packaging or building on services provided by others.

We may see that users and firms play multiples roles as consumers and producers of information. These roles are not fixed and can be a major reason for why many companies are merging or realigning themselves. The companies which once focused on one type of user role (communication, entertainment or information) now seek to broaden their markets and serve as many users as possible.

The Telecom companies want to see an I-way that can support a variety of applications: on-demand publishing, real time video conferencing, and tele-everything- telemedicine, telemarketing, and telecommuting – where individuals work from home through the extensive used of telephone hookups.

While the cable industry wants to expand services from TV programming or pay per view services such that the consumer can pay bills, shop, reference encyclopedias, or check stock prices – all staying at home. Most cable companies tend to see the I-way as a 500 channel one way distribution vehicle.

The online services and computer companies want to see an I-way that involves a lot of two-way interaction such as electronic mail, information search and retrieval, and more forums, chat lines and BBS.

The demand and requirements various participants place on the network infrastructure are bound to be very different. To support as many roles as possible, an increasing number of alliances are developing between telecommunication, cable television and entertainment companies. These partnerships provide synergy to spur consumer demand for advanced information, entertainment services and the equipment and devices necessary to provide them.

2. Strategic Alliance and the I-Way Infrastructure
To ensure construction of a broadly useful I-way, strategic planning should take into account the needs of the communication, entertainment and information sectors. The resource requirements of building these three segments of the I-way are driving companies to make maximum use of existing facilities through alliances to control costs and create test markets.

Alliances, particularly among large firms are dominant as they reduce risks, spread costs and allow firms to acquire costly expertise in different areas instantly.

They cut across industry lines a diversity suggesting that member companies will perform different roles within the alliances. E.g studio provide the content, telephone or cable companies deliver the information and computer hardware and software firms provide the access hardware and application to use the data. Many alliances are international, signaling that the I-way will be global from the start.

A majority of the alliances are between Telcos and cable companies just because today the cable companies posses the bandwidth to the home that the Telcos lack but they don’t have the Telcos sophisticated switching equipment and operational support systems to provide interactive point to point communications.

These mergers are expected to result in significant long term opportunities to achieve economies of scale by providing cable and telephony access to more customers. Moreover, it would give the new alliance increased control, from both cost and timeliness perspective in the purchase of content or programming.

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