THE CUTTING EDGE: SPECIAL REPORT / HOT TIPS : What’s Coming, When, and Why It’s a Big Deal : Nation Will Get Wired, but Not All Will Benefit

Though Congress failed to rewrite the nation’s telecommunications laws this year to spur competition, private industry efforts to wire the nation for interactive TV, electronic home shopping and other advanced communications services will likely intensify in 1995.

The improving economy, cheaper communications technology, phenomenal growth in computer on-line information services and aggressive state deregulation of the telephone industry are combining to revive industry interest in modernizing the nation’s communications network for the Information Age.

The progress, however, will still be slower than many of the info-superhighway-is-at-hand advertisements suggest. Only wealthy, relatively urban areas where it is most cost-effective to string high-capacity communications wires will see the deployment of the newest communications technologies, such as digital phone lines and interactive cable systems.

“I think everyone now recognizes that the superhighway is coming, but it’s coming slowly,” said Richard Cotton, general counsel for NBC. “Certainly, all the major networks and video programmers in general recognize that change is coming and that anyone who stands still does not have a bright future.”

One of the flashiest components of the emerging network was launched last week when entertainment giant Time Warner Inc. hooked up a dozen families to the nation’s most ambitious interactive TV system. The company plans to expand the system--which features movies on demand, interactive video games and home shopping--to serve as many as 4,000 Orlando, Fla., homes by the end of next year.

By midyear, an industry consortium will have completed final testing of high-definition television and will be submitting their recommendations to federal officials for final approval of the technology, which offers compact disc-quality sound and movie theater-quality images.

Meanwhile, the Federal Communications Commission recently gave phone companies permission to build networks to compete with cable TV. The Justice Department is considering recommending that a regional Bell telephone company be allowed to enter the long-distance business for the first time since a federal judge ordered the breakup of the Bell telephone monopoly a decade ago.

And an enormous amount of activity will continue to take place on the state level, where authorities are overhauling telecom regulations to spur competition. California, long a laggard in this regard, will launch a broad reform proceeding this month.

The politics on the federal level are uncertain. Congress, in September, pulled the plug on a landmark telecommunications measure that would have allowed long-distance carriers, cable operators and local phone companies into one another’s markets. The move followed bickering between long-distance carriers and the Baby Bells over the timing of full competition.

Though many of the House and Senate leaders who helped spearhead telecommunications reform were ousted in November’s Republican election sweep, many Republican leaders, such as U.S. Sen. Larry Pressler (R-S.D.), the incoming chairman of the Senate Commerce Committee, promise quick action on telecom reform in 1995.

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WIRED

What: Telecom deregulation bill

When: Late fall

Why it’s important:

Rewriting ancient telecom laws will open the way for competition and new services.