Energy transfer

Attention, class. Today's lesson is on the laws of thermodynamics-the transfer of heat. (Wake up in the back, there.)

Everything is made of smaller parts. When you apply energy to those parts, they begin to move faster and bounce off one another. This creates more energy-making them move even faster and bounce even more.

This is the physics behind boiling water. It's also what creates an avalanche.

Seemingly energized in all its business parts, AT&T is making many moves at once, and the energy of these moves seems to be feeding out from the company to the telecom industry as a whole.

Whether AT&T will turn out to be boiling water or an avalanche remains to be seen.

If AT&T is allowed to merge with TCI and gain a stake in @Home, its immense marketing reach could put cable modems in a lot of homes.

If the rumored sale of AT&T WorldNet to @Home takes place, more than 2 million dial-up Internet customers would be encouraged to switch to high-speed cable access. That makes broadband Internet a contender almost by itself. And @Home's deal for Excite would add another 20 million registered users.

It also applies heat to dial-up Internet king America Online, which has high-speed access deals with Bell Atlantic and Qwest. Eventually that heat radiates down to lower-profile players such as Internet portal company Snap, which announced plans to partner with Bell Atlantic, SBC and GTE for fast Internet connections to a new, multimedia-rich Web site.

But wait.... What's that rumbling?

According to Internet service providers, it's an avalanche headed straight for their markets. A number of cities are seeing challenges to the transfer of TCI's franchise rights over to AT&T and demands that the company unbundle. This has already resulted in one lawsuit-more may be on the way.

And that's just the cable end of the AT&T-TCI deal. Add in the move to offer local phone service in 10 markets by the end of the year, the INC package of enterprise offerings, and the AT&T Personal Network that offers a single-fee monthly package for all telephone service, wireline or wireless. That makes for one energized company that can either spread that vitality around the telecom industry or, if not properly constrained, plunge it into the stone age of virtual monopoly.

Call it the law of telecom thermodynamics.

There will be a test.