Video Conferencing Is Finally Making Contact With Business World

Washington Post

After decades of false starts and unfulfilled promises, video conferencing is beginning to make a dent in the American workplace.

Growing numbers of companies and government agencies are setting up video rooms that allow people separated by a few blocks or thousands of miles to hold “meetings” via private TV, with their images and voices relayed by satellites or ground transmission systems.

The number of video rooms has about tripled in 3 years to about 700 nationwide, American Telephone & Telegraph Co. estimates. And U.S. shipments of a key piece of video conferencing hardware--a means of measuring the industry’s success--climbed to about 955 last year, contrasted with 490 the year before, according to Dataquest Inc.

“It is emerging as a critically valuable tool for corporations,” says Jack Caldwell, director of internal communications for Ford Motor Co., which recently installed one of the country’s largest in-house conferencing networks and has made a point of keeping its size and capabilities secret. Ford, like other companies questioned, declined to talk about the costs of the system.


Applications extend well beyond bread-and-butter business meetings. Parole boards have used them to interview prisoners, employers for look-sees at potential hires. Judges have conducted arraignments remotely, engineers have monitored test gauges on experiments conducted at other locations. At least one international corporate takeover has been negotiated in large part by video conferencing.

Fall in Prices

A dramatic fall in prices is perhaps the prime reason for the technology’s increased popularity.

Video conferencing today costs about 20% of what it did in 1981, according to Elliot M. Gold, publisher of TeleSpan, an Alta Dena, Calif., newsletter. Transmission costs have come down from about $2,000 an hour then for a high-quality picture to about $375 today, he said.


A lower-quality picture, harnessing technology that was simply not available at the start of the decade, can be had for about $110 an hour. Similar decreases have occurred in equipment costs.

For today, video conferencing remains very much the exception, and how far it will go remains highly speculative. But in certain sectors of the economy--big aerospace companies, for instance--virtually everyone already is using it to some degree. Most feel they gain a competitive edge through it.

Aircraft producer Boeing Co. was a pioneer in the field, building a short-range system almost a decade ago to link various Puget Sound facilities that were developing the 757 jetliner.

9,000 Meetings

“We . . . had to manage an engineering force that was spread out over a geographical area of about 40 miles,” recalled W. R. Savery, a senior engineer at Boeing who helped put the system together. “It became obvious to us that we had to do something better than running up and down the highway.”

More than 9,000 meetings have been held on the resulting network. More recently, the company has installed eight more rooms around the country linked by satellite. Some meetings conducted there are over long distance, others are short-haul. Every Wednesday morning, for instance, people at Savery’s facility in Renton, Wash., confer by satellite with flight test crews in Seattle, just 8 miles away.

Martin Marietta Corp. of Bethesda, Md., today has 10 conferencing rooms; Contel ASC, a Rockville, Md.-based satellite services company, is operating a network that links facilities of Boeing and two other aerospace companies that are jointly developing a new generation of jet fighter.

Government agencies are also getting more interested. Under a 1986 contract with the Defense Communications Agency, AT&T; is operating about 70 rooms at various military installations. The technology will come soon to many civilian agencies through FTS-2000, a mammoth long-distance network that AT&T; and US Sprint Communications Co. will build and operate for the federal government.


The basic technical challenge facing the industry is to “compress” the data contained in a video image to lessen the cost of transporting it, in the same way that it is cheaper to mail a half-ounce letter than a 10-pound package. Technicians have squeezed the signal down to less than 1% the amount of data contained in an ordinary TV image.

Lower Quality

But the greater the compression, the lower the quality. The picture gets fuzzy, motion--a wave of the hand, for instance--leaves ghostly trails across the screen, and voice quality is like that of a telephone line. Still, each year quality gets better and prices get cheaper.

The goal is to refine the technology and lower costs to the point that someday, each desk at a workplace could have a video unit, allowing people to dial up others on demand. The precedent for such wide use is there with the personal computer, but this goal is by no means just around the corner. “I don’t see it becoming a general business product in the next five years,” said David Keeler, a Dataquest analyst.

Ordinary consumers will have to wait even longer. “This technology is a long way off from being in everybody’s homes,” said Steve Reynolds, an analyst at the New York City research firm Link Resources Inc.

The closest thing available so far is the “picturephone,” introduced by Japan’s Mitsubishi Group last year. It can send a still image over an ordinary telephone line. Speech is not possible during the approximately 10 seconds that the picture transmission takes.

The economic fact driving the industry is that the costs of business travel are high and climbing--air tickets, meals, hotel rooms, not to mention the wasted time of executives while they’re en route. In foreign travel, there is the danger of terrorism and kidnapping. So if people can be put together electronically for less money, why not do it?

Quick Decisions


In addition, decisions can be made more quickly. There is no travel time involved, and people taking part tend to come to the point more quickly.

Video conferencing provides a level of communication not possible over the telephone, adding facial expressions, hand signs and other body English to the participants’ words. In addition, people can share graphic material--a sketch for a new advertisement, for instance, or a table of the last quarter’s sales.

But there is resistance. Lack of technical standards means many rooms cannot link up with others. People may find themselves “stepping on each other,” as they talk out of turn because each image takes a fraction of a second to reach its destination.

There are human factors working against it, too: Many people feel uncomfortable with the cameras (even though in most rooms they are hidden).

And, however much better the technology gets, some people feel it still does not match the quality of communication of a face-to-face encounter.