Firms in the past used two fundamentally different types of networks: telephone networks and computer networks. Telephone networks historically handled voice communication, and computer networks handled data traffic. Telephone companies built telephone networks throughout the twentieth century by using voice transmission technologies (hardware and software), and these companies almost always operated as regulated monopolies throughout the world. Computer companies originally built computer networks to transmit data between computers in different locations.
Thanks to continuing telecommunications deregulation and information technology innovation, telephone and computer networks are converging into a single digital network using shared Internet-based standards and technology.
Telecommunications providers today, such as AT&T and Verizon, offer data transmission, Internet access, mobile phone service, and television programming as well as voice service. Cable companies, such as Cablevision and Comcast, offer voice service and Internet access. Computer networks have expanded to include Internet telephone and video services.
Both voice and data communication networks have also become more powerful (faster), more portable (smaller and mobile), and less expensive. For instance, the typical Internet connection speed in 2000 was 56 kilobits per second, but today the majority of U.S. households have high-speed broadband connections provided by telephone and cable TV companies running at 3 to 20 megabits (millions of bits per second). The cost for this service has fallen exponentially, from 50 cents per kilobit in 2000 to a tiny fraction of a cent today.
Increasingly, voice and data communication, as well as Internet access, are taking place over broadband wireless platforms such as mobile phones, mobile handheld devices, and PCs in wireless networks. More than 70 percent of Internet users (232 million people) in the United States use smartphones and tablets to access the Internet, as well as desktop PCs.
Source: Laudon Kenneth C., Laudon Jane Price (2020), Management Information Systems: Managing the Digital Firm, Pearson; 16th edition.
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