The Interdependence of Communications and Data Processing: Issues in Economies of Integration and Public Policy

In the past few years computers and communications have become closely related. In many computer systems presently in operation it is quite difficult to separate the communications and data processing functions, while many communications systems use computers to either switch circuits or messages. This paper uses currently available information to examine whether there are economies to be achieved if the common carriers are allowed to offer data processing services, since many of the communications and computing functions might be integrated. This subject is particularly relevant in view of the recent decision of the Federal Communications Commissions to allow some of the carriers to operate arms-length data processing subsidiaries. The paper then focuses on the future when distributed computer networks will likely be a reality and poses certain policy questions which should be examined in anticipation of these developments. This discussion is preceded by a short description of communication and computing services, methods, and terminology.