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Ted Rogers’ acquisition of Groupe Vidéotron Ltée for $6-billion or so makes it clear that the race for ownership of the information pipeline is heating up. Mr. Rogers and other cable companies see the coaxial cable snaking into most homes as the premier route for high-speed Internet access, phone service and digital TV. Telephone companies like Bell Canada, meanwhile, see advanced telecom technologies such as digital subscriber line (DSL) as the Holy Grail.

In some cases south of the border, companies are hedging their bets by buying into both sides of the issue: for example, last year telecom behemoth AT&T bought Tele-Communications Inc., one of the country’s biggest cable providers. Ma Bell also owns a stake in Excite@Home, which operates a high-speed cable service — a service that both Rogers Communications and Shaw Communications of Calgary license and offer over their own networks.

In the early days of high-speed Internet access, it was assumed that cable would dominate the market. Phone companies didn’t have a great track record with new technologies, being more focused on selling high-margin business lines. In the past year or so, however, companies in Canada and the United States have stepped up the pace of their high-speed offerings.

Although both sides like to get into heated arguments about whose service is a) faster and b) more reliable, most analysts agree that DSL (Digital Subscriber Line) and cable access will probably continue to co-exist. Some feel DSL will likely be adopted faster by businesses because they already have the phone lines, while cable has been accepted more quickly by consumers because most — especially in Canada — have cable at home.

When it comes to investing in this market, you’re probably better off staying away from the actual cable providers such as Rogers and Shaw and going after the so-called “plumbers” — the companies that make the cable modems and DSL routers and other equipment that Rogers and Shaw and other companies use. This market is rapidly becoming neither cable- nor telecom-centric but rather fusing into a single networking equipment market.

Many of the existing telecom equipment companies are involved, such as Lucent Technologies, Motorola and Nortel Networks. There are also younger players such as Juniper Networks — whose stock is up 460 per cent since last July — Sycamore Networks, Efficient Networks and Copper Mountain. The latter two specialize in DSL equipment, while the others are trying to become suppliers of choice for either fibre-optic or coaxial cable, or both.

When it comes to cable, Motorola and Nortel are two of the leading makers of older-style cable modems, along with General Instrument (now part of Motorola) and 3Com Corp. But they are not as big a factor when it comes to the newer modems, which can be used with any cable service, that are seen as the future of the industry. In that end of the market, the stars include two smaller and lesser-known companies: Com21 Inc. and Terayon Communication Systems.

Terayon has done deals with Rogers and Shaw, and as an incentive has given both an equity stake. Network equipment giant Cisco Systems also owns a stake. The explosive increase in Terayon’s stock price since it went public in 1998 — up more than 850 per cent to $140 (U.S.) — has helped boost Shaw’s results, because it sold shares last fall for a healthy profit.

Another fast-growing network equipment maker is Redback Networks,which went public last summer at $30 and has climbed more than 600 per cent. Redback recently bought a networking technology company called Siara Systems for $4.3-billion, even though Siara had no revenue whatsoever. Redback is building systems that can handle either cable or DSL, and speed up Internet traffic by sorting the bits of data and routing them more effectively.

Next Level Communications,a General Instrument spinoff, is selling technology in partnership with USWest that it says uses a variation of DSL to provide enough bandwidth for full-motion video broadcasts, as well as high-speed Internet access and telephone use, on a single copper phone line — although a user has to be no more than 3,000 feet from a phone company switch. Its shares have climbed to about $120 from about $50 last fall.

A California company called Jetstream Communications,meanwhile — which is expected to go public in the near future — says its equipment will allow users to have up to 16 virtual phone lines as well as high-speed Internet access using a single copper phone line. Its main competitors are a company called Accelerated Networks,also said to be planning an initial public offering (IPO) soon, and another privately-held equipment supplier called Coppercom.

While the big U.S. phone companies focus on selling DSL in large centres, there are a whole series of smaller companies that are focused on smaller areas. These companies — who install their own DSL equipment in the central switches belonging to the phone company and then lease phone lines — include Covad Communications (whose stock has climbed to $80 from less than $30 last year) and Northpoint Communications,as well as privately-held New Edge Networks,which is expected to do an IPO soon.

If that helpful neighbour in the movie The Graduate were to whisper one word to the young hero today, it would probably be “fibre” instead of “plastics.” Not the kind of fibre you get in cereal, but the kind that is made from spun glass and buried in the ground — optical fibre, the kind every telecom and computer networking company wants a piece of, so they can beam Internet data, voice and digital TV around the globe at high speed.

Every few days there seems to be another fibre-related deal: JDS Uniphase, for example, said last week that it is merging with fellow fibre company E-Tek Dynamics of San Jose, Calif., in a $15-billion (U.S.) deal. JDS Uniphase — itself a product of the $6-billion merger of Ottawa’s JDS Fitel with Uniphase Corp. just a year ago — is already one of the largest fibre-equipment companies, and well on its way to becoming what analysts call the Intel of fibre (referring to Intel’s dominance of the computer chip market).

The comparison with Intel could be apt. Just as the battleground of the past was the personal computer — a war Intel and Microsoft have won — some industry watchers feel that the battle of the future will be over who has the biggest and fastest and most agile network, able to offer the best route for high-speed, intelligent Internet traffic, voice and digital entertainment. Companies such as JDS Uniphase won’t have their names on the product, but like Intel, they will be providing the underlying firepower.

Another company trying to marshall its artillery is Nortel Networks. Using its high-flying stock, Nortel has been buying its way into the business: Last month, it paid $3.2-billion for Qtera Systems, whose technology boosts the carrying power of fibre. Its competitors aren’t standing still, mind you: In August, Cisco Systems paid $7-billion for an optical startup called Cerent, and Lucent Technologies paid $1-billion for Nexabit, a company with no sales.

Nortel and its larger cousins also have to move fast because some of the industry’s small fry are growing so quickly that they are pricing themselves out of reach even for the big guns. A small fibre-optic company called Sycamore Networks now has a market value of more than $23-billion, while the formerly unknown Redback Networks has grown to the point where it is now making billion-dollar acquisitions — such as last month’s $4.3-billion purchase of Siera Corp., a fibre-equipment company with no revenue.

Another Canadian company trying to position itself at the forefront of this industry is little-known Worldwide Fiber Inc. of Vancouver, a privately held unit of a construction company called Ledcor Industries. Worldwide Fiber became a lot less unknown earlier this year, when it said it had convinced Microsoft’s chief financial officer, Greg Maffei, to join the company as CEO. This was a fairly major coup — like an unknown bar band convincing Keith Richards of The Rolling Stones to join the group as lead guitarist.

What helped Mr. Maffei make the decision was revealed last week: He got a loan of $77-million from Worldwide Fiber to buy 31 million shares of the company, which has said it will file later this year for an initial public offering. But despite the inducement, the fact is that a senior executive of the world’s most valuable company decided to join an unknown in Vancouver.

Worldwide Fiber is currently in a race to wire the globe with fibre-optic cable. The company, which began laying cable as an offshoot of its construction work, has bundles of fibre — each strand of which can carry 320 gigabits, or the equivalent of 5.7 million Internet connections — stretching across the country, and is halfway through a similar network in the United States. It is also building an undersea cable to join North America and Europe, and recently acquired fibre linking 11 European cities.

The Vancouver company isn’t alone: Its strategy is similar to that of a U.S.-based company called Global Crossing, which turned an undersea fibre cable into a multibillion-dollar market valuation — allowing it to make a $35-billion offer for US West (it lost out to a higher bid from Qwest Communications). Tyco International, the U.S. company that is laying the undersea cable for Worldwide Fiber, also recently announced that it plans to lay its own fibre network at the same time and go into the networking business.

Cementing the impression of fibre as the pipeline business of the future, U.S. energy giant Enron — which made its name with old-fashioned gas pipelines — also has a sizeable fibre-optic network it acquired when it bought a regional utility. The company rents it out to other companies, and says it is developing a trading network that will allow companies to buy and sell capacity on fibre-optic networks the same way companies trade capacity on natural gas pipelines. One of its first customers: Global Crossing.

If you want to build an information superhighway, you’ve got to have a road — and fibre, it seems, is the road-building material of choice.