Cable TV attracts high-speed speculation: A Telephony staff report

Microsoft's interest in cable TV's broadband pipe heightened last week with reports that the company is talking with Time Warner and U S West's cable TV operations about building a high-speed Internet access service.

The companies would not confirm the speculation, but analysts agreed that Microsoft is hedging its bets while CATV operators rally for open Internet specifications. CableLabs' executive committee last week put its OpenCable project-aimed at fostering interoperability among digital set-top boxes-into high gear to promote competition among vendors for key elements of digital cable networks.

Some 23 computer and consumer electronics companies responded to CableLabs' request for information concerning key interfaces for high-speed Internet connections and those required to write interactive applications. The R&D consortium has reached a consensus on the majority of those interfaces and expects to publish the specifications soon.

In essence, the industry is leaving behind its legacy of proprietary systems, said Jerry Bennington, senior vice president of Internet technologies for CableLabs. Besides Bill Gates, the industry wants leaders like Intel's Andy Grove, Oracle's Larry Ellison and Sun Microsystems' Scott McNealy to "exploit our broadband network in ways they have the expertise to do," Bennington said.

@Home Network, which operates its own Internet access service through agreements with cable TV operators, said it would in no way compete with Microsoft if Microsoft created its own service.

Gates' latest reported actions, including a possible $1 billion investment in U S West's MediaOne cable spinoff, reflect Microsoft's vigilance in obtaining a stake in the media that may ultimately control a video-centric, interactive communications industry. None of Microsoft's investments in cable TV companies produces more than a 12% ownership stake, however.

"When it becomes difficult to determine what the dominant technology will be-as it is today with cable, satellite, wireless and the traditional carrier technologies going through so much growth-it makes sense to build bridges like this," said Jeff Kagan, president of Kagan Telecom Associates. "They can afford to do it, so why the heck not?"

Microsoft may have an advantage in the cable TV world because of its experience marketing to consumers, but its dabbling may attract the Justice Department's antitrust officials, other analysts said.

As for telcos that have cable TV divisions, Ameritech New Media would say only that it supports more choices for customers. "We have concentrated on providing competition in cable TV," a spokesman said. Ameritech New Media has no plans for cable modems now, but is watching field trials, he said.

Ameritech unveiled plans last week to offer local and long-distance service as a competitive local exchange carrier in the St. Louis metropolitan area and Cape Girardeau, Mo. Missouri regulators approved Ameritech's CLEC status earlier this year and endorsed its interconnection agreement with Southwestern Bell Telephone Co. last week.

The St. Louis and Cape Girardeau markets are natural extensions of Ameritech's five-state region because the carrier has strong name recognition and already provides cellular, paging, wireless data and security monitoring services to thousands of customers in the area, said Thomas E. Richards, executive vice president of Ameritech's Communications and Information sector.

Ameritech will offer a consolidated bill for local, long-distance and cellular service. The carrier filed a basic local exchange tariff and a packaged services tariff with the Missouri Public Service Commission. If approved, the company could roll out the packaged offerings in early 1998.

CATV TARGETS TELECOMMUTERS

The cable TV industry's top players announced an agreement with @Work, the business-focused division of @Home Network, to develop and deploy a remote service that will give large companies an always-on connection to the Internet. The service will provide a high-speed extension of a corporate LAN to the employee's home. The cable operators involved are Tele-Communications Inc., Cox Communications and Comcast Corp.

NEW YORK MARKET HEATS UP

Bell Atlantic petitioned the New York PSC last week to provide long-distance service in the state. The carrier argued that it sold more than 108,000 lines wholesale to competitors, spent $1 billion regionwide on number portability and other market-opening moves, and connected more than 20,000 lines to competitors with unbundled network elements.

ON-LINE

Looks like a winner

Pocketing a whopper order from Teligent gives Nortel enough confidence in the future of broadband wireless to buy a company devoted to it.

Technological gift

PrimeCo strengthens its unique ad campaign by naming its pink alien Primetheus, a play on Prometheus, the mythical Greek hero who stole fire from the gods and gave it to humans.

OFF-LINE

Cable me, Bill

Microsoft is rumored to be making overtures to MediaOne and Time Warner so it can scatter more seeds along the cable TV landscape. Will competition have a chance?

America off-line again

Brownouts continue to plague AOL, freezing users out of their mailboxes for five hours last week. At least employees who missed e-mail from the boss have a legitimate excuse.