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Internet: Technology Student Papers: Fuller - California Western
Internet: Technology Student Papers: Fuller

Digital Technology

by Diantha Fuller

Two of the most fundamental concepts in the delivery of telecommunications services are analog and digital, and understanding these concepts provides a basis for the high-speed digital services that are the focus of this paper. First, this paper will address core concepts of digital technology. Secondly, this paper will discuss digital technology’s application in broadcasting, telephone, and Internet, with the resulting impact on increasing competition with the cable industry. An overview of how deregulating the telecommunications industry has allowed for digital technologies to impact the broadcasting, telephone, and cable industries will be included, along with a forecast for future applications.

Digital Technology

When the telephone was invented in 1876, it was used to transmit speech, and speech is transmitted as analog sound waves. With the introduction of digital signals that are transmitted in the form of binary bits, however, the signals can be transmitted at higher speeds, have higher clarity, fewer errors, and less complex equipment is required. An example of digital transmission to enhance clarity is digital television that has improved picture quality over analog television. High-definition digital television allows broadcasters to transmit information on an ancillary channel used in conjunction with interactive, remote control devices because digital televisions process information in a stream of bits, like computers, thereby allowing the TV receiver to act as a computer.

Telephone companies (Bell was the first) began in 1989 to sell digital subscriber line (DSL) services as a high-speed way to access the Internet to compete with service to Cable TV companies’ cable modems, and now is being deployed for television, telephone, and Internet access. It is also a good vehicle for access by telecommuters to corporate databases, downloading graphics, and larger video files can be sent with greater speed on DSL than on the Internet because less bandwidth – capacity for transmissions – is needed. DSL is a competitive service because it can use the existing copper cable and does not require fiber to households and businesses. The Telecommunications Act of 1996 ("1996 Act") helped deploy DSL by mandating the sale of separate network elements by Bell to competitive local exchange carriers (LECs).

Digital Application

Although the deregulation has increased LEC market share in Internet access, telephone, and television, and digital technology has increased telephone companies’ access into television and Internet markets, the cable industry has remained healthy with an 82% video market share, due in part to the deployment of digital transmissions that provide better picture quality than can be offered through analog service. While the "1996 Act" removed barriers to LEC entry into the video marketplace, the technological convergence that would permit use of telephone facilities for video service has not yet occurred. However, as both cable operators and other multi-channel video program distributors (MVPD) continue to develop and deploy advanced technologies, especially digital compression, additional competition by the LECs and other MVPDs should be possible. Further, cable television’s market share has dropped from 85% in 1998 to 82% in 1999, perhaps indicating that the deregulation and advanced digital technology are having a positive affect for other MVPDs in the video marketplace.

In the broadcast and cable industry, video is the most important asset, and companies are moving to digital technology to "repurpose their content for the Web." Shifting to an interactive model of digital asset management has started to save huge costs, increased customer satisfaction, and expanded productivity. Proactive media management systems take in the video, digitize it, and create a search and retrieval engine. Networks, like CNN, need to log incoming news feeds from affiliates immediately so producers can deliver late-breaking news. CNN has ordered a system from IBM and Sony that will allow it to "repurpose" its content – archived and new – so it can deliver news to its stations more efficiently.

One company, Calif.-based Virage, has tapped into the growing market for video digital storage systems. The digital video file allows users to access video assets with a standard Web browser. Thus, allowing the user to take broadcast assets and convert them into interactive assets on the Web while requiring less bandwidth. Turner Entertainment Group is dedicated to inputting video into digital systems, so it can work out a business strategy for "preferentially storing and managing new video according to how frequently that particular asset goes to air."


Digital technology has allowed for higher speed and clarity, fewer errors, with less complex equipment than analog technology. Along with the "1996 Act," advancements in digital technology have allowed telephone companies to compete for service with the cable industry in television, telephone, and Internet access. The same advancements, however, have allowed the cable industry to maintain the bulk of market share in video due to digital asset management and digital compression. As soon as LECS and major telephone companies converge the same digital technologies with their systems, perhaps the video market share that cable companies now enjoy will start to shrink. Finally, advancements in digital technology that have moved the broadcast model to the broadband economy, cutting edge companies, like Virage, are now tapping into a new market for video asset management that both broadcast and cable industries need.





Commission Adopts Sixth Annual Report on Competition in Video Markets, 2000 FCC LEXIS 197, available in LEXIX, Nexis Library.

Trade Publications

Karen Anderson, Covering your assets: Media management applications are critical in the transition to digital, BROADCASTING & CABLE, Nov. 1, 1999.