The nation’s telecommunications giants are poised to spend billions of dollars during the next decade to revamp their electronic networks and to lay millions of miles of fiber-optic cable. Investment in the Information Superhighway could generate jobs and swell incomes for years. Indeed, just as economic growth in the 1980s was kicked higher by real estate investment, economic growth in the 1990s may be driven by the telecommunications revolution.
Predictor: Farrell, Christopher
Prediction, in context:In a 1993 article for BusinessWeek, Christopher Farrell and Michael Mandel look at the coming investment in networked communications. They write: ”The nation’s telecommunications giants are poised to spend billions of dollars during the next decade to revamp their electronic networks and to lay millions of miles of fiber-optic cable. Investment in the Information Superhighway could generate jobs and swell incomes for years. Indeed, just as economic growth in the 1980s was kicked higher by real estate investment, economic growth in the 1990s may be driven by the telecommunications revolution. The first wave has already begun, with the biggest push coming from Pacific Bell, the California phone company of Pacific Telesis Group. On Nov. 11, it announced a $16 billion, seven-year plan to build a high-speed fiber-optic transmission system offering voice, data, and video services. That’s an increase of 26 percent from its previous spending plans. Bell Atlantic Corp. says it will invest $15 billion over the next five years, assuming regulators don’t block its merger with cable-television giant Tele-Communications Inc. ‘What you now have is an acceleration of the investment cycle,’ says Eli M. Noam, a Columbia University economist. If other Bell operating companies follow suit, the Baby Bells during the next five years could boost their capital spending by $25 billion to $50 billion, on top of the $100 billion they were previously projected to spend. This investment increase could rival the rise in business spending on computers in the past several years [$22 billion]. It could rival federal spending on the new interstate highway system during the late 1950s and early 1960s [$38 billion]. With revenues of more than $80 billion and sterling balance sheets, the Baby Bells can easily afford such a spending splurge.”
Date of prediction: November 1, 1993
Topic of prediction: Information Infrastructure
Subtopic: Cost/Pricing
Name of publication: BusinessWeek
Title, headline, chapter name: What’s Arriving on the Information Highway? Growth
Quote Type: Direct quote
Page number or URL of document at time of study:
Page 40
This data was logged into the Elon/Pew Predictions Database by: Anderson, Janna Quitney