Communications breakdown

The electronic highway was supposed to bring new firms that would develop entertainment content and provide bundled communication services through single delivery channels. Some have been chasing the holy grail of convergence — often with disastrous results. The 500-channel universe may have arrived, but we're still waiting for real convergence.

PIPE DREAMS
Canadian firms awake to the potential of convergence in the early '90s, but opportunities are limited by government regulations that bar the entry of telecom firms into broadcasting and the involvement of phone companies with cable operators. "Now is the time," says Bell Canada president Robert Kearney, "to open up all telecommunications markets."

WIRE TO WIRE
Convergence arrives with a bang in spring 1993, when US West, a regional US phone operator, announces it will buy 25.5% of media and cable giant Time Warner Inc. Less than a year later in Canada, Rogers  Cable has announced a $3.1-billion takeover bid for publisher Maclean-Hunter Ltd.

HYPED DREAMS?
By the mid-'90s, convergence already seems like a money-losing prospect. The Wall Street Journal calls the strategy a "highway of hype," warning costs will be high and consumers have limited interest in the idea. Meanwhile, a January 1995 survey reveals 31% of Canadians have never even heard the phrase "information highway."

STREAMING AHEAD
The rush for companies to acquire partners leaves some heavily in debt, but a dra-matic merger between Time Warner and Internet pioneer America Online in 2000 prompts another surge of Canadian unions. In the same year, Teleglobe, CTV and The Globe and Mail are snapped up by BCE, and Quebecor buys Le Groupe Vidéotron Ltée.

REBOOT TIME
By 2004, the architect of BCE's disastrous strategy is dropped and his replacement returns the firm to a focus on its previous core business of telecommunications. AOL Time Warner sheds US$180 billion in shareholder value in the years after the merger.

Steve Brearton