How Big, How Soon a New Internet After AOL Deal?

Is it really a big deal that mighty forces of industry are mobilizing to give consumers access to higher-speed, greater-capacity Internet services?

Yes, it’s a very big deal. It was the driving force behind the merger proposal last week of America Online and Time Warner. It was the reason that Bill Gates gave for stepping aside as Microsoft chief executive to devote himself to developing the “next-generation Internet.”

Yet most forecasts seem vague and uninteresting: the ability to download movies quickly or connect all home appliances to the Internet. Such puny predictions lack imagination.

A true broadband Internet with two-way communications capacity will have a profound impact on medicine, education, retailing, finance, everyday lives.

For insight into what it will be, who will benefit and who may not, it’s a good idea to look at users of broadband Internet today--major companies in business and industry.

Enovia, a subsidiary of Dassault Systemes of France with links to IBM, is a good example. Enovia sells a “Digital Enterprise” package of Internet-connected computer software programs to manufacturers of cars and airplanes. The package helps manage a project, coordinating the work of a prime manufacturer and five or six subcontractors. It constantly moves parts and subassemblies as it keeps every worker informed of each step, so that the finished product comes together seamlessly.

With Enovia and a computer design program called Catia, a manufacturer can stress-test every part and joint and configuration. Computerized models can be constructed that eliminate the need for expensive prototypes. Vehicle models can be changed quickly because all participants in the manufacturing process are in constant communication and working in concert.

Enovia, based in Charlotte, N.C., is involved in $1 billion worth of projects for Boeing, DaimlerChrysler, British Aerospace, Black & Decker and other firms.

But what does all that portend for consumers, few of whom manufacture cars or airplanes?

Think of the power of the communications system that can coordinate such work and apply that power to a future Internet-connected two-way communications device in the home.

In medicine, it would make possible nearly a full physical examination, complete with blood tests, the equivalent of a CT scan performed with the kind of sensors that today test the properties of aircraft parts, and a two-way consultation with a physician.

In education, learning at home through lectures and communication with teachers on an individual basis will be taken for granted, just as workers in industry today communicate across national and continental boundaries.

In retailing, consumers will have many options and enjoy a different, more personal shopping environment in which they will be able to “test” garments and products. Internet shopping won’t replace “real” physical shopping but rather will be in addition to it--as movies and television have been “in addition to” books for almost a century.

What technology allows such wonders? Computers’ processor speeds, memory and storage, and, more important, the transmission capacity of the network, also called bandwidth. The amount of bandwidth available is growing very rapidly as fiber-optic cables with almost infinite capacity are installed everywhere.

But the equipment in homes will have to improve to take advantage of the new infrastructure, notes Silicon Valley marketing entrepreneur Regis McKenna. A typical modem today can download a 3 1/2-minute video clip in 46 minutes at 28.8 thousand bits per second. A 100-million-bit-per-second network connection, now available to industry, can do the job in seconds. But gigabit networks--with 1 billion bits of data downloaded per second--plus faster processors that are coming within the next five years will allow feature films to be downloaded almost instantly.

The reason the AOL-Time Warner announcement aroused such excitement is that it represents a credible attempt by big media companies to move toward the next generation of the Internet. Time Warner is investing in its cable systems so they can carry two-way Internet traffic to its millions of cable customers.

AOL could bring its 20 million customers, plus Time Warner’s, to the next stage, in which the Internet would always be “on”--you’d be able to receive and send messages and check personal information through portable phones or computer TV devices in the home, without the annoying delay of telephone dial-ups.

AOL and the other big-name Internet players such as Yahoo want to be the portal consumers go through to get their e-mail, phone calls and other information.

But competition will be intense, notes telecommunications consultant Peter Bernstein. Microsoft is going to introduce a Internet system this spring with such services as “voice-enabled chat,” another name for telephone service on the Internet.

The race to build more Internet infrastructure is becoming a free-for-all. Telephone and cable companies are investing heavily to upgrade their systems. Newcomers Qwest Communications and RCN Corp.--in which Microsoft co-founder Paul Allen is a major investor--are constructing fiber-optic-based networks.

Hughes Electronics is investing $6 billion in its Spaceway venture to achieve two-way communication through satellites for its DirecTV service.

Yet advanced Internet services won’t reach consumers as quickly as all that investment and today’s enthusiasm might indicate, laments Rohit Shukla, head of the Los Angeles Regional Technology Alliance. Why not?

“The ‘social infrastructure’ will hold things up,” says Shukla, whose alliance is a nonprofit industrial development group. He’s referring to the many lawsuits and battles among phone and cable and Internet companies, the arguments and delays over municipal permits, and the government hearings at all levels.

That’s why it’s far too early to single out winners and losers in the race to supply consumer Internet, says Geoffrey Yang, partner in Redpoint Ventures, a Silicon Valley venture capital firm.

Yang sees the consumer Internet developing gradually. “Consumers will enjoy improved versions of services they already have,” he says. Stock portfolio and personal finance information will be provided constantly; movies and other attractions will arrive in the home faster.

He points to TiVo, a company with an advanced video recording system, as playing a role in the next-generation Internet.

Meanwhile, away from the fanfare, industry the world over will be working ever more efficiently because of the Internet.

In the factory or in the home, it’s a big deal.

James Flanigan can be reached by at jim.flanigan@latimes.com.