Convergence Watch, Walls crumble between TVs and PCs But will a TV/PC device really fly? >BY Telephony

It may have taken several years to admit it, but carriers are finally coming to terms with the fact that interactive video services are at least some years away.

At the same time, multiple system operators and telcos alike are realizing the enormous potential of the Internet and on-line services as a revenue opportunity, ramping up their cable modem, asynchronous digital subscriber line and ISDN plans to tap into the enormous consumer demand for high-speed Internet access.

Unfortunately for carriers, changing courses from interactive TV to Internet access has a serious downside: while the average American home has at least one television set, a far fewer number have PCs. Undeterred, several consumer electronics manufacturers are searching for ways to tap into that market by developing a combination television/personal computer.

Consumers avoid buying PCs because of the cost and their confusion, said Edward Lee, director of headend systems at Trevose, Pa.-based WorldGate Communications.

"Look at VCRs or any other consumer appliance," Lee said. "Only early adopters, techno-nerds or wealthy people can afford them at first. Most of the public does not have a personal computer, and those that do only use about 1% to 5% of their computer's capacity."

WorldGate's TV On-Line, on the other hand, uses a server located at a cable company's headend to deliver Internet access over the vertical blanking interval. Most consumers without PCs probably won't be downloading the kind of information that requires a full 6 MHz channel and cable modem speeds, Lee said. But they will appreciate speeds up to three times faster than telephone modems, allowing the cable TV company to conserve channels.

Internet access through a TV set also means relief for the vast majority of Americans that may be interested in the Internet but find even the simplest PCs too complicated, said Patrick Custer, president of Dallas-based consumer electronics manufacturer Curtis Mathes, which is introducing a large-screen "computerized television" for Internet access.

"There's an intimidation factor that keeps people from buying a computer," Custer said. "A lot of people are intimidated by simply trying to load in a floppy disk and are worried about what to do if the computer quits or gets stuck. But at the same time, these people are interested in finding out what the Internet does."

And with most programmers, vendors and carriers admitting that today's on-line content could metamorphose into tomorrow's interactive TV content, the lines between TV and PCs may begin to blur. "Right now, people expect different kinds of content from televisions and personal computers, but there is not a fundamental difference in terms of the technology," said Nevet Basker, group manager of public network systems at Microsoft. Basker said she expects a mental shift to occur, leading people to accept the same content over either medium.

But while the TV On-Line service is expected to cost subscribers only about $5 per month, the price tag for a large-screen computerized television is expected to run about $3000. And while consumers may like the simplicity of a TV/PC, they may prefer to forego the Internet altogether rather than pay those kind of prices.

"Unless these companies get their prices way down, they won't reach the masses," said Jim Heisler, executive vice president and director of information technology and telecommunications practices at the Opinion Research Corp. in Princeton, N.J.

Most users of the TV/PC won't be the technophobes that consumer electronics manufacturers expect, Heisler predicted. "Inevitably, early adopters of anything are those who are already technology-oriented to begin with," he said. "I don't think the entry point will be people who are technology-averse."