Bye Bye TV Aerial.

The streets are being ripped up all over Britain for cable TV. Beside our roads appear strange metal towers, on the roofs of tall buildings sprout complex antenna clusters. All the phone numbers in Britain are about to gain an extra digit. What is it that links these changes and the coming revolution in communication?

Physicists and chemists talk about a phase change: the point at which the rules we've known suddenly vanish, and a substance behaves in completely new ways. At 0 degrees water becomes a solid, at 100 it's a gas. Today we're watching something very similar happen to the ways in which we communicate. There's a phase change happening. At MIT's famous Media Lab Nicholas Negroponte has watched it coming, in influential business magazines and a series of books the economist George Gilder has charted its inevitable progress.

As you subscribe to cable TV or buy a mobile phone you are bringing about this change.

And this phase change is really very simple: what used to be carried by twisted wires and cables will cross towns and cities by radio, and what once flew over the radiowaves will speed across the fibres and cables of the infobahn.

The process has been called the Negroponte switch, and today in Britain we're slap bang in the middle of it. The telephone system as we know it will soon vanish, turning into a complex web of cellular networks and high speed fibre optic trunks. Terrestrial television broadcasts will start to fade away, overtaken by cable and digital satellite transmissions (sell those shares in Granada and Carlton and buy BSkyB now!).

So why is this change happening? Consider the telephone. It's a simple tool, a mature technology little changed from Alexander Graham Bell's first prototype, designed to carry the low fidelity, low data rate human voice from point to point, with just a pair of cables carrying voices to and from your home. If you were to transmit these signals digitally all you would need is a data rate of 64 thousand bits per second - with 32 thousand bits per second considered to be more than adequate.

Now consider the television. Again another simple device, not much has changed in the last twenty years or so. It's a receiver, ready to show pictures transmitted from radio stations miles away. Pictures of high resolution, high quality, many thousands of colours, complete with a stereo sound-track. The best data rate you'd get from a highly compressed digital television system is around 2 million bits a second - over 30 times as much as required for a single telephone conversation. The analogue television signals we're familiar with require over 8 times as much bandwidth as an equivalent digital signal.

There's only room for 4 and a bit wireless television channels in the UK, and there are a lot of problems with squeezing the new Channel 5 in - among which is the need to retune every single video recorder in the country. There's enough room for over 500 channels on a bit of coaxial cable, as well as several hundred telephone conversations and a high-speed Internet connection. Any wonder that the cable TV market is possibly the fastest growing part of the British economy? Any wonder that the American regional telephone companies have taken advantage of Britain's deregulated cablecoms market to develop their vision of the infobahn before unleashing it on the US of A?

The folk at BT aren't blind. They've seen the future coming and are struggling to catch up with it. Experiments with video transmissions over the humble telephone line are taking place, whilst BT struggles to escape the entanglements of regulation. But it may be too late for them, with the American phone companies' cable TV franchises taking customers away, seduced by the prospects of an interactive on-line future of 500 channels of digital TV and free local phone calls.

So why the extra digit on the phone numbers? It's all part of the pattern. Fast forward a year or two on from Phoneday, and you'll have to dial every digit of a number. The need for local codes will have disappeared, vanishing in the complex web of the intelligent network. You won't be able to tell if an 0181 number is in London or York, and that's not the end of it. Not long afterwards numbers will become portable, following us from our digital phones in our homes plugged straight into the cable infobahn, to our cellular and satellite mobiles, to our desks at work, to friends' homes... everywhere we could possibly be.

Welcome to the Telecosm: the world predicted by George Gilder in his eponymous book. A world where communications unlimited by bandwidth is redefining society. It began with the Microcosm, the silicon chip and the computer. Now it's moved on with the development of fibre optic communications networks and powerful digital coding systems. We're now standing on a hill looking out over a new land: a place full of hidden machines, computers in the background, a world of dark fibre pushing billions of bytes of data around the world, to homes, to cars, to our pockets.

When General Cornwallis surrendered his troops to the American militias at the end of the War of Independence, the band played "The World Turned Upside Down". Today, as the old TV and telephone companies face an uncertain world where everything they understood to be true is becoming its opposite, the band is playing again.