November 8, 1999
Volume 52, No. 11
AT&T CEO Armstrong speaks on emerging technologies
The future of communications lies in broadband technology, according to AT&T chief C. Michael Armstrong, who delivered the Nov. 1 Future Makers lecture, "21st Century Communications: The Speed of Technology, the Power of Markets," in WHSCAB Auditorium.
Sponsored by Health Sciences, the lecture offered business, medical and technology professionals a preview of AT&T's latest technologies and forecast the changes such advances will bring to commercial and personal life.
"When I joined AT&T [in 1997], we had a choice to make," Armstrong said. "Sell or build. We decided to build." The CEO made a wise decision: Today AT&T is the world's largest communications company, with 80 million customers and the country's most widely owned stock, producing some $53 billion in annual revenues.
Armstrong's success started when he initiated the decommodification of long-distance or "long-line" service. The long-distance business was by itself neither durable nor sustainable, he said, but it began to thrive when integrated into a larger "bundle of communications services," including broadband, Internet protocol (IP) devices, wireless phones, cable Internet connections and digital technology.
Broadband is one of the emerging technologies contributing to AT&T's success, Armstrong said. It is a fiber which, among other benefits, allows for potentially seamless integration of wireless, cable and Internet services. Nearly 2,800 miles of fiber are currently installed every hour worldwide-enough to circle the globe twice a day. Broadband has thus become one of the most important investments a communications company can make. "Internet traffic doubles every 100 days," Armstrong said.
Also dominant among new technologies are advances in the world of wireless. Cell phones were once limited to local transactions, Armstrong said, but today they have expanded onto the global scene thanks to increasingly affordable rates and advances in the digital industry. AT&T's wireless business has grown at 40-50 percent since the company began offering a flat rate for all wireless calls, Armstrong reported.
And, increasingly, wireless phones are not just for making calls; they're also for accessing data. Emerging digital wireless devices will soon allow customers to check the stock market, make bank transactions, surf the Internet, send email and even view videos on phone-sized screens.
Wireless will become "the most ubiquitous Internet device we have," Armstrong said, "and all those smokestacks [of traditional communications] we used to know...will crumble."
But many new technologies remain too expensive, he admitted. As a result, accessibility is often limited to the upper and middle classes. This "digital divide" must be bridged in order for new and developing communities to obtain their "piece of the economic pie," he said.
To this end, AT&T has taken an innovative approach to the communities it serves. In all cities with broadband access, AT&T offers to wire any schools or libraries that lack the funds to pay for installation. Packaged with this free wiring are free Internet services and training for teachers and parents.
"There cannot be redlining," he said. "[Technology] is a great level-the-playing-field mechanism but has to be accessible to all."
What is the biggest threat to AT&T in the 21st century? Time and scale, Armstrong said. Like other communications companies, AT&T struggles to offer its rapidly growing customer base-currently some 150 million people-quality services within a climate of fast-paced technological advancement. "Doing things to scale in a consolidated time frame is our greatest challenge."
But if Scandinavia can do it, so can AT&T. Home of Nokia and other high-tech services, Scandinavia stands as an exemplar for North American communications companies, Armstrong said. Scandinavian schoolchildren use wireless phones as frequently as North Americans use the Internet. They send written phone messages to one another in class. They access large quantities of data with the push of one button.
"We're living in a world where a phone call is no longer 'an event,'" Armstrong said. High-tech communications are becoming commonplace and part of our individual and collective identities. As the communications revolution continues, Armstrong concluded, it will increasingly bring political and economic tyrannies in distant lands to broader public attention. "And the borders [between nations] will come down faster."