"Bandwidth on a metropolitan CATV cable plant is a resource that may be compared today with the crude oil beneath the Arabian desert at the turn of the century. It will provide a radically new two-way communications medium for homes and businesses, and it will change not only the way we communicate but possibly even the way we live." This prediction was made last year by William Zachman, vice president of research for International Data Corp. If Zachman is right, and our research tends to indicate he is, then fiberoptics will become the transmission medium that will facilitate two-way broadband communication. However, many of the multiple system CATV operators in the U.S. as well as many of the manufacturers of fiberoptic waveguide and cable believe that interactive video systems are not really very important. They are wrong. Broadband fiberoptic systems have just begun to impact the U.S. communications market. And within 5 years, tremendous changes will occur not only with regard to growth, but with regard to the supplier industry structure. Interactive, switched, video systems in the U.S. go back to the early 1960s, and the experiments at Bell Laboratories with what was then called Picturephone. This was com-pressed video transmission via telephone lines from one subscriber to another. Field trials were conducted in several U.S. cities for a period of years. But the commercial response to Picturephone at that time was so lacking that AT&T discontinued the trials and the work. But that is changing. Part of the reason for the change is due to the changing communication needs of the U.S. and of the world: the increase in the amount of information used by large numbers of people, the concurrent rise in the use of computers, the digitization of communications media, the rise in the level of experience with electronic communications, and perhaps most importantly the convergence of audio, data, image and video communications. There are technological reasons for the slow implementation of broadband fiberoptic systems. Installations have been hampered by multi-mode optical waveguide capable of transmitting only four or five channels using digital PCM. And the cost of fiberoptic systems which require transceivers for each fiber is still higher than coaxial systems. But this, too, is changing. True, coaxial cable will remain the dominant transmission medium for the U.S. CATV industry over the next 10 years. But fiberoptic systems will increasingly penetrate that market. The U.S. CATV cable market is growing at a rapid rate from $250 million in 1981 to nearly $700 million in the early 1990s. Plant mileage will grow from 234,000 km installed in 1982 to 360,000 km installed by the late 1980s. The market is not only growing, but it is also undergoing a segmentation that includes CATV, local area networks, and telecommunications. This segmentation insures a long period of maturity and profits for the supplier industry structure.