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Electronic Mail: A Revolutionary Courier Aims to Become Routine

Times Staff Writer

From offices in San Francisco, the Bechtel Group Inc. coordinated its Tedi River gold mining operations around the globe in Papua New Guinea by exchanging information over a computer message network.

In Mexico, agricultural scientists are using computer links to remote experimental crop stations to monitor data on new strains of wheat being grown there.

And in Deerborn, Mich., the Society of Manufacturing Engineers coordinates plans for its annual convention and distributes abstracts of technical papers to engineers across the United States over a computer communications system.

Today, information that might otherwise require costly long-distance calls or delays for postal delivery can be exchanged across town or around the world virtually in an instant via “electronic mail"--a computer-to-computer communications system regarded as the most revolutionary since the telegraph and telephone replaced horseback couriers more than a century ago.

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“Electronic mail will be the 21st Century version of the telex--which it clearly makes obsolete,” said communications consultant Richard Miller, president of International Telematics in Palo Alto. He predicted dramatic changes in international communications. “It allows me, for example, to send you a message regardless of where in the world either one of us is at the time.”

Although still a fledgling industry, with revenues last year estimated at $200 million, electronic mail use is growing at an annual rate of nearly 60%--faster than any other segment of the computer industry, according to analysts.

Last year, for example, Columbus, Ohio-based CompuServe--the nation’s largest electronic mail service-- doubled its subscribers to 185,000. And Echo, a Marina del Rey-based newcomer, has established 14,000 subscribers in less than a year, adding 3,000 electronic mail subscribers in the last month alone. Today there are an estimated 1 million electronic “mailboxes” in use.

International Resource Development Inc., a Norwalk, Conn. marketing research firm, estimates that about 250 million electronic mail messages were transmitted last year but that by 1994 the usage numbers will mushroom to at least 25 billion annual messages.

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“It saves money; it saves time; there’s absolutely no doubt that in 10 years electronic messages will be a routine part of the way we do business,” said Michael J. Cavanagh, executive director of the Electronic Mail Assn., a Washington-based industry group.

However, there are substantial obstacles to universal use of electronic mail. Access to computers is required, for example.

And because of technical compatibility problems it is not yet possible for a subscriber to one electronic mail service to send

messages to someone subscribing to a competing service. It is as if a Bell telephone customer were unable to call a General telephone customer.

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“It’s a tower-of-babble problem,” conceded Andrew Rev, vice president of marketing for Echo.

Largely because of foreign efforts to enter the market, that problem may be resolved soon. Last October--after nearly four years of negotiations--a committee of the International Telecommunications Commission agreed on a set of international technical standards that would permit interconnection between all electronic communication systems regardless of company or country of origin.

“We’ve moved toward getting an international system put together,” said Miller, a member of the U.S. negotiating team.

“In the next decade electronic communication is going to become as routine as making phone calls,” said Jan Lewis, an analyst for InfoCorp, a Cupertino, Calif.-based marketing research firm.

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She predicted that the average home in the mid-1990s will be equipped with a telephone with a built-in computer that will permit easy access not only to electronic mail, but to various databases, the latest stock quotes, weather reports and computerized directory assistance. “We won’t even have to memorize telephone numbers anymore,” Lewis said.

To use most publicly available electronic mail services, a subscriber simply pays an initial fee (such as CompuServe’s $40 sign-up charge) or a monthly service charge (such as Echo’s $10 rate). The subscriber is assigned an electronic mailbox and a “password” that allows him to check the contents of that mailbox anytime from anywhere in the country.

As Near as a Phone

Although the huge central computers that process the messages may be located in Ohio, Nebraska or Connecticut, for example, they can usually be reached by calling a local phone number in most major cities. Price ranges vary widely from one service to another. Some charges are based on the length of a message or the distance it is sent. Some charge only a flat fee. Consequently, cost of a typical one-page electronic mail letter can range from less than 20 cents to well over $1, depending on the service.

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Among the major electronic mail companies, in addition to CompuServe and Echo, are Western Union of Upper Saddle River, N.J.; General Electric Information Services of Rockville, Md.; ITT Dialcom Inc. of Silver Spring, Md.; MCI-Mail of Washington; Tymshare Inc. of Cupertino, Calif.; Source Telecomputing of McLean, Va., and GTE Telenet Communications Corp. of Vienna, Va.

The electronic mail concept is not new. Back in the days when mail was delivered by horseback, telegraph--the original electronic communications system--revolutionized the way the world conducted business. News of a gold discovery in the West, for example, could be relayed in a matter of hours to financial centers in the East.

Today, however, the computer has squeezed the hours down to milliseconds. It is technically possible today to move the contents of an entire set of encyclopedias from a computer in Chicago to another terminal in Los Angeles in the time it takes to read this sentence.

Similar Pattern

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The largest users of electronic mail are businesses. A similar pattern was followed more than a century ago when the early telephone systems were almost exclusively purchased by commercial interests. The telephone didn’t become a consumer product until it was in fairly wide use among businesses.

“Business knows the value of speed and information,” said Echo’s Rev. “When a hamburger chain has to get instructions to 8,000 outlets about how to handle a report of worms in its hamburger, they can’t wait for the mails or take the time to dial 8,000 stores.”

Business has found other less urgent--but profitable--applications. In Parkersburg, W. Va., the chemical division of Borg-Warner Corp. uses electronic mail to help market its plastic products. The company even gave Apple computers and telephone modems to customers without that essential communication equipment.

“It gives our customers access to engineers at our design and engineering center and they can check on the physical properties and costs of materials,” said Bob Hess, a spokesman for Borg-Warner.

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A study by International Resource Development found that business-related use accounts for more than 90% of electronic mail volume--a figure that the research firm believes will not change substantially over the next 10 years. The report concluded that growth of consumer use will be slow until the end of the century.

Will Affect Consumer

But Cavanagh of the Electronic Mail Assn. said that increasing business use of electronic mail will affect consumer use as well.

“People who use it at the office are going to want to use it at home, too,” he predicted, citing the example of an early electronic mail network set up a few years ago through the Defense Department--a system designed for the exchange of important scientific information. “After a time they found that there were also personal messages being exchanged, like plans for Friday night poker games,” Cavanagh said.

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He conceded, however, that consumer growth will lag behind business use of electronic mail.

“More people need to buy personal computers and telephone modems for their homes,” he said. “Until they do, we’ll have the same problem that the telephone had for the first few decades--that is, even if some of those earliest users had a telephone, the chances were that very few of their friends did. So, who could they call?

“That’s the case now with electronic mail,” Cavanagh said. “Its consumer value will increase as the numbers of subscribers increase.”

Echo’s Rev noted: “Credit cards weren’t all that valuable until they got to be universally accepted at stores and restaurants. Now most consumers are using them.”

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Solution to Problems

Business users regard electronic mail as a solution to the problems of slow mail delivery, “telephone tag"--the frustrating experience of trying unsuccessfully to get two busy people together on the phone at the same moment--and time zone differences.

For example, Bechtel’s electronic mail network allows project managers at a synthetic fuel construction site in New Zealand to exchange information with the California headquarters staff despite a 19-hour time difference that would otherwise require phone calls at awkward hours.

Electronic mail poses its greatest and most immediate competitive threat to traditional telegraph services and to the overnight courier services which specialize in hauling paper from one part of the country to another. Western Union, the dominant telegram provider since the Civil War years, has invested heavily in electronic mail. And Federal Express, the leading overnight courier service, has introduced a form of electronic transfer of documents.

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The International Resource Development study forecasts that over the next 10 years, while anticipated electronic mail volume increases 10-fold, telegraph and facsimile transmissions will fall by half. And while the study projects continued growth of the courier services, it predicts a slower rate of growth.

Ultimately, electronic mail is expected to displace, at least to some extent, both telephone and first-class mail service.

“The postal service is not the best delivery system--that’s why there was such a strong market for the courier services,” said InfoCorp’s Lewis.

In fact, the U.S. Postal Service tried to develop a hybrid electronic mail system called E-Com. The system, essentially a substitute for traditional bulk mailing, involved distributing letters or documents by facsimile machines located at postal locations around the country.

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E-Com not only was slower than computers but it was also slower than overnight couriers. It was a commercial failure, and today the postal service is trying to sell it to a private vendor.


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