PRO CEE J IN S- Twenty-fourth Annual Meeting

Theme: "Transportation Management, Policy and Technology"

November 2-5, 1983 Marriott Crystal City Hotel Marriott Crystal Gateway Hotel Arlington, VA

Volume XXIV • Number 1 1983

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TRANSPORTATION RESEARCH FORUM 733 Teleconferencing!Intercity Business Travel Substitution: Some Problems by Geok-Koon Kuah*

ABSTRACT connect up to 80 sites in an audio meeting (2). THE GROWING INTEREST in tele- conferencing as an alternative to Conferencing intercity business travel is due to a be- In a video conference, participants lief that teleconferencing: 1) saves can watch each other on video travel time, direct and indirect travel screens. Videoscreens can also be costs, and travel fatigue, and 2) en- used as a device for plotting and hances productivity among business peo- presenting graphs. The system is ple through efficient use of time saved designed to duplicate as closely as and. ease of communication. Teleconfer- possible the environment of a face- encing has been in use for some time, to-face meeting without imposing Yet its growth has been impeded. This the burden of travel. paper examines some major hindrances of using teleconferencing as a substitute Conferencing for intercity travel. These include tech- In a computer conference, users nology limitations of the medium used, communicate to each other through stimulated travel because of increased computer terminals by entering cpmmunication, government interven- typed messages at the terminal and tion, security of in telecon- sending them to other participants. ferencing, cost of teleconferencing, com- Thus, the computer is used as a petition from the airline industry, and "meeting place" for the discussion. non-business benefits of business travel. It also keeps a complete record of It is concluded that in the short-run. the meeting and retrieves informa- teleconferencing will have no substan- tion upon request. tial impact on intercity air travel. 1.2 Limitations of Each Medium 1. INTRODUCTION for Teleconferencing Teleconferencing is an alternative to While the mix of teleconferencing me- face-to-face business meetings that has dia provide technological options for been in use for nearly ten years. Tele- business meeting substitution, each op- Fonferences are meetings in which visual tion has its shortcomings in terms of images, spoken and/or written messages the process of conducting meetings. are exchanged electronically among peo- Most of these shortcomings arise be- ple who are spatially separated. There cause of the interjection of a technology exists a variety of technologies for tele- as a substitute for face-to-face commu- onferencing. The major teleconferenc- nication. The relative weaknesses of ing modes are described in the next sub- each medium are discussed as follows section. (9)• Problems of Audio Teleconferencing 1.1 Teleconferencing Modes The Audio is not satisfactory for tasks three major teleconferencing which str ess INTERPERSONAL modes are audio, video and computer conferencing. COMMUNICATION, such as nego- Audio Conferencing tiation, resolving disagreements. Audio may Audio conferencing refers not be completely satis- to a con- factory for GETTING TO KNOW ference call among three or more SOMEONE. persons. It usually takes place in an acoustically designed room, which Audio is not satisfactory for COM- provides high-quality voice trans- PLEX TASKS. mission. Facsimile machines are usually available for sending mes- Audio can create an IMPERSONAL, sages. The technology to date can UNCOOPERATIVE, and evon HOS- TILE communications environment. *Northwestern University, Evanston, Audio may be LESS PRODUCTIVE Illinois. THAN OTHER MEDIA. 734 TRANSPORTATION RESEARCH FORUM

Audio meeting are DEMANDING can, for instance, give his password AND TIRING; it's hard to maintain to a subordinate to retrieve and en- group organization. For a large ter messages) can INHIBIT TRUST audio meeting, speakers need to and security. they identify themselves each time extent identification alone is The next question concerns the speak; voice is altered not enough. to which the outcome of a task usually if it is conducted by a teleconference Problems of Video Conferencing medium instead of face-to-face. Studies on effectiveness of Video may be satisfactory for peo- (15) found that relatively simple tasks, ple of HIGH rank who wish to com- such as exchange of information are municate with those of LOW rank; unaffected by the medium used. 'More but subordinates do not feel it is complex tasks requiring more inter- satisfactory for communicating with personal involvement, such as bargain- their superiors. ing and negotiation, are affected if con- ducted by a teleconference device. It has questionable utility for tasks BAR- The effectiveness of a teleconference involving PERSUASION and on the GAINING. medium also appears to depend nature of the task (purpose of the meet- While it provides a visual image, it ing) to be accomplished (19). Table 1 does not always provide the sense summarizes the optimal allocation of of • PERSONAL CONTACT and meeting tasks to communication media presence found in face-to-face meet- based upon laboratory experiments (15, ings. 19, 16). It is clear that no single medium can People who use video feel that the replace face-to-face meetings. In fact, system is LESS PRIVATE than meeting choices are not discrete as im- face-to-face. plied by the previous categories. A mix context for Video is susceptible to the "HOL- of media may give the best a particular meeting. Elton (5) suggests LYWOOD SYNDROME"—p eople me- assume a kind of "studio" behavior, creative uses of teleconferencing as models dia—embedded teleconferencing media. using film or people may for how they behave. For example, one or two travel to an all-day face-to-face meeting INHIBITING CREATIVITY—people in which is embedded a one-hour video feel awkward in videoconferences, conference with others. This video con- and it inhibits creativity. ference may be with analysts to answer technical questions or superiors to ratify Problems of Computer Conferencing an agreement. Harkness (6) suggests that teleconferencing should be viewed Written communications may be as a supplement rather than a pure sub- LESS EFFICIENT than other me- stitute for physical travel. The mixture dia; fewer messages can be ex- of various methods of communication changed in a given time period than can supplement face-to-face meetings, by face-to-face. allowing companies or associations to meet more frequently, involve more peo- People may be RELUCTANT TO ple, and make more informed decisions. MAKE CERTAIN STATEMENTS IN WRITING. 1.3 Levels of Travel/ REGULARITY OF PARTICIPA- - Substitution TION is difficult to enforce: nobody "calls" you to tell you to come to a The widespread use of telecommuni- computer conference. cation in human activity such as catalog shopping, working at home, and using Participants must learn NEW electronic mail, has led to increasing .SKILLS, such as how to use a com speculation that telecommunications puter terminal or how to send vari- could substitute for travel. Substitution ous types of messages. represents the use of telecommunica- tions to eliminate the need to travel INFORMATION OVERLOAD can physically. occur because it is relatively easy In general, two levels of substitution to transmit a large amount of data. between travel and telecommunications literature: intercity Participant's sense of INTERPER- are discussed in the is some- and intracity (3). Intracity substitution SONAL INTERACTION process of replacing a wide times weak. refers to the variety of activities within a city with The use of surrogates (a participant a large number of electronic services. TELECONFERENCING/TRAVEL SUBSTITUTION 735

TABLE 1

ALLOCATION OF MEETING PURPOSES TO COMMUNICATION MEDIA

FAIRLY DEFINITELY TENTATIVELY Inspection of fixed Conflict ALLOCATED TO objects Negotiation FACE-TO-FACE Getting to know Disciplinary interview someone (presentation of report) ALLOCATED TO Forming impressions Giving information to VIDEO of others keep people in the picture Problem solving Discussion of ideas for ALLOCATED TO Information seeking • large group AUDIO Discussion of ideas for two people ALLOCATED TO Exchanging (technical) Generating ideas COMPUTER information Staying in touch Asking questions

These activity changes normally require b. Generation —improved telecommu- a shift in household and office locations. nications lead to the Such changes are the long term impacts stimulation of n e w of telecommunications and will not be travel demand. discussed in this paper. c. Modification—in the long t er m Intercity substitution refers to the telecommunications Process of replacing certain types of may alter existing intercity business travel with teleconfer- trip patterns, alter encing. The majority of intercity busi- urban and regional ness travels are regarded as an inelastic development patterns, segment of the air travel market, be- and modify the cause business travellers usually have structure of trans- restrictive time constraints and little portation demand. budget limitation. Airlines can charge complexity of high business travel Figure 1 represents the fares for intercity telecommunications and intercity busi- Without the fear of losing customers. In effec- the of the air travel ness travel interaction. Improved United States, 55% efficiency of teleconference is that of business travel (6). The rev- tiveness and enue systems will stimulate communication generated from intercity business decentralization travel forms a substantial portion of activity, rate of office total and the fraction of communication ac- revenue for the airlines. Thus any telecommunications. major substitution of business air travel tivity carried by bY This in turn stimulates the total volume telecommunications would have ma- Although in- jor impacts on the airline industries. of telecommunications. Some creases in total volume of communica- authors (12) speculate a 20% intercity substitution of business travel by tele- tion activity generates more business travel (generation), increases communications; this means a loss of decentralization and more than 10% of total air travel. in the rate of office fraction of communication volume car- telecommunications impede in- 1.4 ried by Types of Impacts on tercity business travel (diversion and Intercity Air Travel Demand modification). The net effect on intercity business travel depends on the inter- Telecommunications can affect inter- action among the three impacts. city air travel demand in three ways (13): It is clear that diversion is not the only travel impact resulting from the a. Diversion —the direct substitu- interaction between telecommunications tion or elimination and transportation. Generation of new of the need for some travel due to telecommunication is also intercity business an important impact. For example,the use trips. of telecommunications to substitute for 736 TRANSPORTATION RESEARCH FORUM

INTERACTION BETWEEN TELECOMMUNICATIONS AND INTERCITY BUSINESS TRAVEL

improved competitiveness of teleconference systems (effectiveness and efficiency 1

rate of fraction of total volume office communication volume of communi— decentralization carried by cation 1 telecommunications activity

total volume of volume of telecommunications intercity business travel

+ means STIMULATE

— means IMPEDE

Source: (14) FIGURE 1

face-to-face meeting saves time for bus- The invention of the serves iness people and stimulates their voca- as a good example to illustrate that new tion trips. The concept of generation is communications technology stimulates consistent with the concept of travel more travel. Since the use of the tele- time budgets which assumes that travel- phone early in this century, the nature lers allocate threshold times for travel of human communications was altered and if these threshold values are ex and business travel was stimulated by ceeded, they will reduce travel. This ex- better and faster communications. plains an observation found in Bell Can- ada's Study (14) that the desire to de- 1.5 Benefits of Teleconferencing crease travel increased with seniority. That is senior staff wanted to reduce The use of teleconferencing as an al- travel because they traveled more fre- ternative for face-to-face meeting has quently than did junior staff. Their some benefits: First, it saves travel fa- threshold values for travel may be ex- tigue, travel time, direct travel cost and ceeded. The use of telecommunications travel associated cost (e.g., lodging and substitutes part of senior staff's total food). Second, it enables faster commu- travel, but it enables them to make more nications and more timely information vocational trips. The trip purposes exchange, thus enhancing faster decision change, but travel remains. making. More important, business peo- TELECONFERENCING/TRAVEL SUBSTITUTION 3,7

pie may improve their productivity venience of remote access through the through use of time saved by not trav- telephone to a distant computer, it alio elling. increases the likelihood of defraudifft Despite these benefits, the use of tele- that computer by remote control, br conferencing is not widespread and it more precisely, using the telecommuiii- seems to be inhibited by a number of cations/computer *combination to :de- f.actors. This paper examines some ma- trates the points of vulnerability of the jor hindrances of the use of teleconfer- fraud some organization. Figure 2 illuS- encing as a substitute for intercity air time-sharing system: travel. The programmers who write the software can subvert supposed pro- 2- FACTORS INHIBITING tective features or install "trap- TIIE DIFFUSION AND USE doors" for subsequent entry. Oper- OF TELECOMMUNICATIONS ators may have daily opportunity to data Factors that inhibit diffusion of tele- tamper with or files. Mainte- se- nance men may incorporate subver- communications include information instructions curity problems, high cost of owning and sive into the test pro- using grams they .employ to test for mal- teleconferencing, lack of product functions. Wiretaps standard, perceived benefits of travel, and various and airline industry competition. bugging devices can intercept data transmissions or even pick up elec- tromagnetic emanations from wires 2.1 Security of Information and terminals. The tappers may Use intercepted passwords to "mas- Breach of security can range from ac- querade" as legitimate users, or cidental leaks (where a or data line may even insert "piggyback" data goes to someone else's printer) to tap into legitimate transmissions. Some- Ping of telephone lines from the audio and times legitimate users borrow pass- video conferencing networks, delib- words to masquerade or browse on erate industrial espionage, crime and other people's files. And persons fraud. posing as legitimate users may em- The abuse of in-house has ploy a large .repertory of tricks . to been receiving some public attention penetrate operating systems from since the widespread use of computers afar. bY individuals and organizations. The Wedding of telecommunications and com- Telephone lines forming the net Puters has elevated the security problem of video and audio conferencing lem because almost all computers are can be wiretapped to reveal passwords, connected to a telecommunications sys- identifying signals, and data flowing. in tem (7). Though this provides the con- the system (20). Dickson and Bowers •

POINTS OF VULNERABILITY OF TIME-SHARING SYSTEM

Systems Progrsmmers Tappers ------,,, ri) disabling protective /1) recording features of software / 2) "masquerading" ,, Disk i 2) installing "trapdoors" / 3) "piggy-backing" User Files 1 in operating system Terminal' i 3) disclosing protective i/ 1 measures to outsiders i I if Maintenance Personnel 1) using test programs if to "browse" in files X Central Switching 2) using test programs \ Processor Center to alter system software 3) disabling protective User hardware Terminal I

Tape Files Operators' Useri 1/ 1) substituting "contaminated" 1) "browsing" User I programs 2)2:masquerading" Terminal 2) copying files 3) falsifying files 3) disclosing procedural 4) penetrating safeguards 'operating system

FIGURE 2 73i3 TRANSPORTATION RESEARCH FORUM losing sys- (4)- state that "Commercial spying de- Also, the risk of adopting a information proceSs- tem is high because some suppliers (sys- signed to intercept mar- ipg activity over video telephone -and tems) might be forced out of the used to transmit ket. These factors impede widespread video telephone lines small high speed facsimile can be expected to adoption of telecommunications by increase substantially.", Some informa- firms. Vim :is sensitive and would cause busi- ness' organizations major difficulties if 2.3 Cost of Equipment and Conipromi:.3ed.- For example, the decision Consumer Attitudes of .a, bank to change. its prime lending rate, .or the decision of -a bank to make Cost of telecommunications equipment a:Joan to a company nearing financial and usage is high. If the equipment goes collapse. Outsiders with such inside in- into mass production, costs will drop. forMation could make-a lot of money.by Mass production of the equipment is trading it on the stock .market. Also, if sensible if there is a large market for a. company's secret, information is com- it. But now the consumers are hesitat- promised by its rival; its survival in .a ing, waiting for costs to drop (18). The market might be threatened. attitude of the consumer toward tele- • 'Present relevant,criminal laws are in- communication is "wait and see." Many adequate concerning the security ,breach firms are watching some innovative through wire-tapping. (20), since it. is firms experiment with the new technolo- necessary for interceptors to 'disclose gy. This conservative attitude is wide- the information to some third person'be- spread and is expected to continue for a fore they can be considered criniinals. few years. Interceptors who are in a similar busi- The adoptors of teleconferencing re- ness may gain information to.. achieve main the large and innovative firms and unfair business advantage against the specialized broker s. Teleconferencing firm being taped and remain free from starts with large firms and later, prosecution so long ,,as they remain si- through brokers, it becomes available to lent over the stolen, information.., , smaller innovative firms that lack the to innovate in-house. .`• Security of telecommunications Can be sufficient funds by the present tech- These brokers either provide their own nearly guaranteed participants lielogy. However, such security usually studios which conference Companies cannot come to for the meeting, or they can comes at a high price., The technology evolution to provide bring equipment to the firm itself. rely :on probably one of the effective security safeguards at lower Holiday Inn chain is technology. evaluation, uSually best-known brokers. A market consist- cost, Since some specialized a long time. Thus, if a firm per- ing of large firms and takes large enough to justify ceives that its information that.„would brokers is not the proposed teleconferencing; mass production of the equipment. trow .on lower networks is too sensitive to risk . Further, the expectation of the firm might forego' the op- equipment and usage costs delays inno- promise, higher cost tion of teleconferencing. " vation by firms because the of adopting now cannot be earned back through the advantage of being an early 2.2 'Lack of Product Standards innovator. Teleconferencing now can only only three basic economically substitute for travel Though there are to one hour teleconferencing systems (au- for meetings of one-half types of at a distance of more than 50 video, and computer conferencing), duration dio, km, at introductory service rates (18). the number of firms providing such sys- tems is large. Firms marketing their particular systems are eager to monopo- 2.4 Perceived Benefits of Travel market, and thus capture the ad- lize the meetings as a vantage of being the monopolist. Many Many view face-to-face are lobbying gosvern- human need. It is natural and desirable big manufacturers their help proliferate their systems. for business people to travel from ments to and be in a new In the next few years keen competition offices to meet people various suppliers is expect- environment. These people value social- among the communication. ed. To date no nation has yet explicitly ization and non-agenda system through its They realize that information is ex- regulated a certain communica- public service regulatory agencies (18). changed through informal based on dif- tions, and that communication is more Teleconferencing systems Airlines ferent technologies are incompatible, than speaking. As American for use in. Vice President Ditmars states, "there is !and thus can not be connected peo- Lack of product, stand- a certain reluctance on the part of teleconferencing. where person-to- ards, and uncertainty as to product ple raised in a world enormous pressure on person contact is a necessity to talk to quality, imposes screen" (6). users to select one system over another. people on a television TELECONFERENCING/TRAVEL SUBSTITUTION 719 In a study on traveler's attitudes 3. GOVERNMENT INTERVENTION toward business travel conducted by : Bell Canada (14) it was found that there The current federal role in telecoin- is a strong correlation between the de- munications is defined by the Commtmi= sire to increase trips and the presence cations Act of 1934' and the Communica- of three nonbusiness activities, visiting tions Satellite Act .of 1962 (13). Th another part of the country, visiting earlier Act established the Federal Com- friends, or visiting family, during the munications Commission (FCC), and the trips. Individuals perceive personal, non later established- .the Communications business benefits from linking these ac- Satellite Corporation (COMSAT).. FCC tivities with business travel. Thus, the regulates rates,- entry and exit, and it ability to engage in non-business activi- promulgates and enforces equipment ties during business travel is one of the standards and operating practices. The factors that impedes telecommunication/ recent regulatory reform movement has travel substitution. led to the passage of the Communica- tions Act of 1978: transporta- 2.5 Industry Telecommunications and Airline Competitiveness tion are closely related, but it is net, As telecommunication suppliers strive clear whether there- ought to be a fed- to produce teleconferencing systems eral role in telecommunications-trans- With low cost and better service through portation interactions. The government technology improvements and market- can encourage research on telecomt- ing, parallel improvements in travel in- nication usage .to. improve the aece0t- dustry (airline industry) have taken ability of the technology, collect and dig- Place. For example, the application of seminate known information to facili- Videotex systems by travel agents to tate the diffusion-of the products and book airline flights, hotels, and make eStablish equipment standards to *allevi- Other travel arrangements increases the ate the problem of' equipment incom- seat occupancy of flights. The use of patibility among the various systeni. modern engines with computer con- However, such interventions may not 'be trolled fuel consumption reduces fuel appropriate to the sOciety at large. consumption. A massive research de- Currently there is no organization in velopment effort is underway to auto- place to reduce or restrict physical'air mate air traffic controlling in the United travel, but there' are' a large number. of States. The concepts of remote airport institutions and organizations to facili- terminals as a means of reducing land- tate travel, organizations which have n, side congestion at metropolitan airports stake in maintaining a growing trans- has been realized. For example the Fly- portation sector:. the automobile and air- Away bus system, an express 'bus serv- industries, the *port construction ice that links Los Angeles International industry, local transportation services Airport with a suburban area (San Fer- (rental car and :taxi), hotels, etc. -These nando Valley) that contributes about 15 industries require",Inuch air traVel, ;to Percent of the airport's passengers, dem- maintain their businesses (9). Thus;: onstrated that the remote terminal con- direct government-intervention to pro- cept works well and is cost-effective mote the use of' telecommunication at (11). the expense of the travel-related ,indus- Recent airline deregulation has result- tries is not likely to happen, in the near ed in a greatly improved matching of future. types of equipment with types of mar- ket. This is due to the withdrawal of the 4. CONCLUSIONS:, big jets from the thin, short hauls and the entry of the commuters to serve the Recently there a substantial in- small communities. Fares on long-haul, crease in computer'sales and their prices high density routes decreased tremen- are increasingly more affordable. •Al- dously after deregulation (10). The though the grOwth in the use of com- overall effect is that the airline industry puter can substitUte some intraurban IS operating more efficiently after dereg- travel such as work,trips, intercity busi- ulation than before deregulation. ness travel is not.. strongly affected by All the above-mentioned innovations this growth in computer sales. Inteireity applied to physical travel may control business travel may be reduced if the rising costs and maintain the competi- majority of the arms decide to use tele- tiveness of physical travel for many conferences to substitute for face-to- communication purposes. New telecom- face meetings. The growth of teledon- munications technology might not have . ferencing has been, slow, and it is, ex- the chance to substitute for physical pected that telecorimiunication will have travel if airlines can produce more at- negligible impact' on' intercity business tractive travel (lower cost, batter serv- travel in the 1980's. The main hindrances ices) options. to teleconference 'growth are: 740-, TRANSPORTATION RESEARCH FORUM

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