What's Hot? Plain-Jane Phone Lines.

Byline: Rana Foroohar

In an age in which anyone can provide almost anything over the Internet, including telephone calls, you'd be forgiven for thinking that old-fashioned fixed-line phone companies, the kind that actually just own wires, are passe. You'd be wrong. In fact, they may be the next big acquisition target for the world's major media and technology companies. Just witness BSkyB's purchase this past October of Easynet, a small network rival to British Telecom. Easynet, which is mainly a business-to-business network, has only about 21,000 residential customers, but the News Corp. subsidiary paid a handsome 211 million pounds for it.

Rupert Murdoch is one of the savviest business minds around--so why would he shell out big bucks for an also-ran network? Because Internet real estate still matters. To survive in the 21st-century media game, companies will have to offer three things: voice services, broadband data and video on demand. That's what analysts call "the bundle" or "the triple play." Companies are betting that consumers will be happiest getting all three services from just one provider (on one bill). And since all data, from voice to text to video, is becoming digital, all of it can be delivered over the Net by a wide variety of firms. That's why companies like Google and Yahoo are now getting into the triple play, offering TV and phone calls.

But even as the Net offers new opportunities, it also presents a problem because it's not that secure. (Remember how Napster disrupted the music business via peer-to-peer file sharing over the Internet?) Lack of security on the public Internet is a big reason that movie studios and other content companies are loath to release their properties onto the Web, which makes it easy to send viruses, hack files and engage in illicit file sharing.

Enter fixed-line broadband networks like C&W, Colt and FastWeb in Europe, or Hanaro, Dacom and VSNL in Asia. Not only are they fast, but they offer potentially much higher levels of security than the public Internet. By owning your own wires, and adding security-enhancing software and ...