Motorola sets stake in Internet TV >BY SHIRA LEVINE, New Media Editor

Motorola has invested in an equity stake in Internet TV service provider WorldGate Communications.

While other Internet TV services such as Web TV require a dedicated phone line and a high-end set-top box, WorldGate's service lets cable operators deliver data services over their existing hybrid fiber/coax plant using the vertical blanking interval. Customers can access the Internet at speeds of 100 kb/s downstream for $4.95 a month, using an advanced analog set-top box and a remote control.

"People who use our CyberSURFR [cable] modems are typically those who are familiar with the Internet and use it on a regular basis," said Doug Robertson, director of business development for Motorola Multimedia Group. "But 89% of the country doesn't have PC access, and we wanted to figure out how to tap into that market.

Once consumers get used to WorldGate's data rates, which are three times faster than 28.8 Mb/s dial-up modems, they may be more likely to upgrade to a cable modem, Robertson said.

Other investors in WorldGate include Citicorp, venture capital firms Needham & Co. and Advent International, and Cablevision Industries founder Alan Gerry. The total investment is $11 million.

WorldGate announced testing agreements with several cable operators last October, including Comcast, Cablevision Systems, Adelphia, TeleWest and Charter Communications. Initial deployments are expected to begin in the first quarter.