Across Nation, Fiber Optics Race Is On

The great race to wire America for the next generation of entertainment and information services is finally on.

The Clinton Administration’s plan for a national electronic superhighway is spurring cable and telephone companies to install their own fiber-optic highways to protect their turf. After years of foot-dragging, the nation’s phone companies are spending billions to install the fiber-optic networks capable of offering dial-up movies, at-home shopping and video teleconferencing.

Not to be outdone, the nation’s cable companies, operators of the rival pipeline into America’s homes, are meeting the challenge with projects of their own.

In less than two weeks, Tele-Communications Inc., the nation’s largest and most influential cable TV operator, will announce details of a plan to launch the most ambitious installation of fiber-optic cable yet in the nation. TCI will spend more than $2 billion over the next four years to lay 2,800 miles of fiber-optic cable to serve nearly all of its 10 million customers throughout the country.

The goal of all these initiatives is to make it possible for torrents of new information to reach every nook and cranny of America. For consumers, this would mean access to a huge new range of entertainment, shopping and learning, plus new ways of working and visiting. For businesses it would mean enormous opportunities as televisions and computers converge.

Fueling the cable and phone company investments is the strong fear that the Clinton Administration’s proposal to build a $17-billion national electronic superhighway will usurp private industry’s control over what is expected to be the largest new business opportunity of the decade.

“The message we want to send to Washington is that the private sector is already installing the electronic superhighway,” a TCI spokesman said of the company’s upcoming announcement. “We don’t need the government to get involved.”

Just last week, top executives from the nation’s 14 largest telephone companies sent a similar message to Washington. They urged the Clinton Administration to limit its electronic superhighway involvement to experimental government and university research projects. Moneymaking networks, they said, should be “built, managed and operated” privately.

Besides fending off the government, the telephone and cable industries have another principal foe: one another. Each wants to become the premier carrier for the new entertainment and information services permitted by exploding advances in computer and telecommunications technologies. Each wants to capture the lion’s share of what is widely expected to be a multibillion-dollar industry before the end of the century.

It will not be easy. Fiber-optic networks are expensive--according to some estimates, it would cost up to $500 billion to install fiber throughout the country--and time-consuming to deploy. Furthermore, the rewards are still several years away.

Nevertheless, in recent months no fewer than six telephone and cable companies have announced plans for huge increases in their fiber-optic networks.

“These announcements are repellent, designed to keep other businesses off their turf and drum up support for their position,” said Bruce Egan, a research fellow at the Columbia Institute for Tele-Information in New York.

The announcement expected April 12 from Tele-Communications is the most elaborate yet. TCI Chief Executive John Malone is expected to reveal that the company’s fiber rollout will begin in San Francisco; Chicago; Pittsburgh, Pa.; Hartford, Conn.; St. Louis; Salt Lake City; Miami, and Denver, and fan out from there across the country during the next four years.

TCI is not alone. In January, Time Warner announced plans for a fiber-optic network to serve about 4,000 cable subscribers in Orlando, Fla. In February, Cablevision Systems Corp. completed the first phase of a $300-million upgrade plan to bring fiber optics to 1.1 million cable subscribers on Long Island, N.Y.

The phone companies are also stepping up fiber installations. In February, Denver-based U.S. West became the first Baby Bell to commit to fiber throughout its 14-state, 13-million-customer territory, a project it expects to take 25 years and $12 billion.