November 19, 1998 Web posted at: 4:17 PM ET by Elinor Mills

From...

(IDG) -- LAS VEGAS - People think they're wired now, but they haven't seen anything yet. Just wait until the world is populated with silicon cockroaches - wireless devices that can communicate with each other and the Internet, said John Sidgmore, CEO of MCI WorldCom, in his keynote at Comdex/Fall '98.

These silicon cockroaches, computer-to-computer devices whose ancestors are cell phones, PCs, faxes and Web phones will multiply and become the biggest growth driver of the Internet, said Sidgmore, who is also CEO of UUNet.

"Everyone will have an average of five IP objects on their body by 2000," he predicted. Eventually there will even be digital eye glasses with voice control that would offer all sorts of information to the wearer. "Sony is working on the technology, so it'll happen. It'll cost $20."

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Meanwhile, the networks of the future will have an optical core and an IP framework, Sidgmore said, adding that optical IP-packet switching will come in the next few years. The mid-layer of switches and routers will be where the "battles [between networking equipment vendors] will be drawn and [technology] breakthroughs will happen."

There will be better fiber in the ground, digital multiplexing, faster switches and routers, caching improvements and broadband access, he continued. "Everybody knows the Internet is going to be the fabric of the future."

"Industry explosions like this are extremely, exceedingly rare," Sidgmore said. "I think 40, 50 years from today people will look back and say this was the Golden Age of Communications."

Deployment has been slow, that's why MCI WorldCom is beginning its efforts to help unclog the Internet with a widespread roll out of digital subscriber lines (DSL), "the technology with the most significant near-term potential."

MCI WorldCom has been aggressively laying down new fiber, but that's not enough to keep up with user demand, he said, estimating that the Internet has an annual growth rate of 100% and that it will represent 90% of all bandwidth by 2003 and 99% by 2004.

"We are laying new fiber, but the thing to remember about this is we still need 10x growth from fiber just to stay even with current demand," Sidgmore said.

An attendee was heartened to hear about MCI WorldCom's DSL deployment. "The state of telecommunications sucks," he said, asking that he not be identified because he works for an international telecommunications supplier that sells to MCI WorldCom.

Before the keynote the attendee said "I want them to say deployment is going to happen and happen rapidly. All of them (telcos) seem to be going slowly."

After the keynote he pointed to his pager and cell phone and said "If you think about it, if they can make the Internet work everywhere you don't need all these toys."

Meanwhile, MCI WorldCom is moving with the flow by acquiring companies -- 68 in the last few years -- which allow the telco to offer end-to-end services, Sidgmore gloated. For instance, Comdex attendees in Las Vegas can call Frankfurt, Germany, using only MCI WorldCom's network, he said. "Owning your own facilities reduces the costs and allows you to implement new services."

Last year the company tripled its local network capacity and more than doubled its backbone capacity, he said. The provider also deployed an international undersea cable in the Atlantic "with Internet demand in mind" he added. "We have bet the ranch on the Internet."

"The world believes Internet access should be really cheap and that broadband access should be a part of that. Bill Gates thinks bandwidth should be free. We think software should be free. It's not," he quipped.

MCI WorldCom will not be providing 1M bit/sec access from Las Vegas to Frankfurt for $21 per month, Sidgmore said.

Though many industry observers have considered DSL and cable technology as competing methods of Internet access for consumers, the two technologies are not likely to meet head-to-head in the market, Sidgmore said in a question and answer session that followed the keynote. "There isn't likely to be ubiquitous deployment of either cable or DSL over the next couple of years so it's unlikely that many areas will have both."

"But if you are faced with the choice, I would say the question is 'Who do you want to do business with -- a cable company or a phone company?'" Sidgmore said. The phone companies have a long history of providing communications services to consumers, he noted, but "You have to ask whether you want to depend on the cable company (to provide communications services)."

Sidgmore also said it is unlikely for circuit-switched networks to be replaced with IP-based packet-switched networks. Though new networks probably won't be based on circuit-switched technology, "the circuit-switched network works pretty damn well for voice," he said.

When asked whether it would be possible for the newly merged, giant MCI WorldCom entity to become a monopoly, Sidgmore said the company should be able to maintain its entrepreneurial nature in both the Internet and telephone markets.

"We started as a commercial entity; we built the business by competition," Sidgmore said. MCI WorldCom has far less than 50% of either the Internet access or long-distance markets and it is highly unlikely that it would reach monopoly status, he added.

Elinor Mills is a San Francisco correspondent for the IDG News Service. Marc Ferranti of the IDG News Service's New York bureau contributed to this report.