A new interactivity: Putting the Internet on the TV presages a new broadcasting paradigm

The people's voices matter, and nowhere is that proving more true than in interactive broadcasting. The 500-channel universe heralded three years ago ran aground because viewers want more than "I Love Lucy" reruns.

Interactive TV's reincarnation has a different premise now, and even its supporters say it may take five to 10 years to become a mass medium. This time it is grounded in the Internet, where the ability to interact with a remote application and request customized information is fundamental. A better term for today's technology might be Internet TV, with true interactivity awaiting the arrival of high-definition TV (see sidebar).

Interactive vendors such as WebTV and Wink Communications embed digital data, often drawn from the Internet, into the existing analog spectrum of a cable TV network. A modem-enabled telephone connection provides the return path. The appeal of television is that it allows these vendors to reach the majority of households that are not yet computer-savvy, says Chris White, lead user interface designer at WebTV. Fewer than 15% of U.S. households use the Internet in any meaningful way, he says, yet 98% of American homes have televisions.

Besides content, another key difference driving interactive TV is interoperability-primarily of the set-top boxes and cable modems that enable interactive services. CableLabs and its members have set up Open Cable, a project aimed at getting interoperable, plug-and-play set-top boxes with a common framework on retail shelves.

The Open Cable initiative is fraught with more political land mines than was the effort to develop a cable modem standard, says Jerry Bennington, senior vice president for Internet technology at CableLabs. "This time, there are a lot of legacy systems and players," he says.

But the goal is standards-based plug-and-play devices that can be operated through the television's remote control. Earlier this month, CableLabs solicited proposals to define the next generation of set-top boxes that will bring digital video and the World Wide Web into people's homes.

"We want to run our networks in a way that's agnostic in regard to operating systems," Bennington says. "Do I expect to see cable devices that run Windows CE? Yes. A Web device that will work with either a Sony or a network computer? Of course. I don't see why we can't do it."

In other words, cable operators are in no hurry to remain in the analog equipment days when two suppliers have long held a stranglehold on the market. And they have no interest in getting involved in the battle between Microsoft and Oracle for global dominance of an operating system.

The major players are expected to show prototypes of their standard-compliant boxes at the Western Cable Show in Anaheim, Calif., this December. The alpha and beta versions will follow in the first and second quarters of next year.

The next generation Internet TV isn't waiting for standards, however. That became obvious when two separate but similar announcements were made the same week in mid-September.

WebTV Networks, backed by Microsoft, and NetChannel, whose RCA box is supported by arch-rival Oracle, both kicked off plans for $19.95-a-month Internet access over cable networks using set-top boxes costing less than $300.

WebTV's new service emphasizes its set-top box's storage capability, letting users load and play back full-motion, full-screen video files from World Wide Web sites and Usenet groups.

Initially, viewers can play back video clips up to 15 seconds long, including movie trailers, commercials and short animated features. Unresolved is whether Microsoft, the CATV operator or some combination will collect the revenues from these enhanced services.

The system uses the vertical blanking interval-now used for closed captioning-to transmit HTML Web pages and hyperlinks. The process treats part of the TV screen as bits and downloads data continuously on every channel. Consumers' boxes can be programmed to accept only the information they purchase or want to see, says Joe Ternasky, director of external engineering for WebTV, Palo Alto, Calif.

"I would call it trickle downloading," he says.

WebTV's new service uses the WebTV Plus Receiver, an enhanced version of its original set-top box. The system features an advanced cable-ready tuner that lets viewers view TV and Web programming at the same time. The picture-in-picture capability is made possible by a 3-D graphics engine that's part of a new chip designed by WebTV called Solo. It lets viewers switch between full-screen TV, full-screen Web and combined Web and TV.

Key to this effort is basic image processing hardware built into the WebTV box, Ternasky says. It modifies Web content by taking into account television's inherent sensitivity to certain colors such as white and red, as well as horizontal lines that can distort the picture. The new set-top itself has a 1.1 Gb disk drive and 8 Mbytes of RAM.

WebTV also has devised an easier-to-use format for its home page that features a "Site Showcase." The page tells users about the best new sites and includes a rotating spotlight of WebTV's content partners, including PBS Online, Discovery Online and Warner Bros. Online (Table 1).

The estimated 150,000 people who have existing WebTV systems will get a free upgrade, which includes the redesigned home page, more chat services, and the company's VideoFlash technology for loading and playing back video clips.

Yet WebTV is not designed to conform to cable operators' priorities, Bennington says. For example, many CATV operators have signed bilateral agreements not to use the vertical blanking interval for a private business' money-making venture.

The WebTV electronic program guide also fails to integrate with viewer guides that come with some set-top boxes.

Microsoft is supporting cable modems as well as digital subscriber line (DSL) and satellite technologies, says Pierre de Vries, director of advanced projects in Microsoft's consumer platform division. "Going forward, we're looking at ways future versions will support methods-other than cable-of delivering television to the box," de Vries says.

NetChannel, which debuted a day before the updated WebTV, bills itself as a ubiquitous service provider, independent of hardware and software companies.

In addition to offering Internet access, the Web-enhanced TV service uses intelligent agents to send personalized information to customers from the Internet. Users can customize the system to receive the information they want. The set-top box automatically retrieves the latest programming listings and makes them available each day. "People have said they are not interested in the Internet on TV. But what NetChannel is doing is providing the Internet and TV," says Jim Gustke, director of marketing for NetChannel, South San Francisco, Calif.

Source Media's Interactive Channel also will offer Internet access through the TV using industry-standard digital and advanced analog set-tops, eliminating the need for customers to pay for extra hardware or system upgrades, company officials said. The company previously offered localized interactive TV content, including interactive TV versions of local newspapers and a service that provides parents with a child's homework assignments.

Another player that uses existing advanced analog or digital set-top boxes to deliver Internet content is WorldGate. Its service transmits at 192 kb/s through the vertical blanking interval in analog boxes and up to 27 Mb/s through a shared 6 MHz cable channel in the higher-end devices.

Although the set-tops require some configuration changes to support WorldGate's service, no extra hardware or cost is involved, says Hal Krisbergh, chairman and chief executive officer of WorldGate, Bensalem, Pa. Specifically, the analog box's store-and-forward return link module must be replaced with a real-time return link. Future upgrades can be completed at the headend.

"We're going after the 85 million homes that are not connected," Krisbergh says, noting that WorldGate's basic Internet access package starts at $4.95 for five hours a month. Besides the lower cost, Krisbergh believes his business model makes sense because research shows people resist PCs' rapid obsolescence.

NextLevel Systems (formerly a division of General Instrument) and Scientific-Atlanta are investors in WorldGate, and the system works off their platforms.

NextLevel and Scientific-Atlanta earlier this month cross-licensed technology so that their respective security and access control systems could reside together on an operator's network. While the operators still have to maintain separate headend control systems to control each supplier's set-top box, the conditional access data for the systems can be carried in a single unified bit stream.

The key question remains whether WorldGate can deliver its promised services over existing cable plant-only about 10% of which is outfitted for true two-way interactivity, says Peter Krasilovsky, an analyst at Arlen Communications.

Where next? Next generation systems are being proposed every day.

For example, Fantastic Corp. aims to combine the power and speed of broadcasting with the Internet's interactivity and the multimedia capabilities of the PC. The Swiss company vows to solve the Internet's Achilles' heels of speed, security and the need for compelling content, says Peter Ohnemus, president and CEO. Its platform's key components include the Channel Management Centre, which supports multiple bit streams feeding into one or more carrier signals, and the Channel Editorial Centre, which provides a common interface for the media provider to the broadcaster.

The server technology is protocol-independent and can feed transmission media as diverse as DSL, digital video broadcast and vertical blanking interval.

Fantastic recently announced agreements with carriers and content providers to offer its turnkey solution for multimedia distribution. Deutsche Telekom is using Fantastic's Channel Editorial Centre platform to support content aggregation so it can provide multimedia services for corporate intranets. Deutsche Telekom will deliver the services through ESM/Astra-Net's digital satellite broadcast platform.

Fantastic and Deutsche Telekom also are conducting field tests before delivering a service that will broadcast channelized content-news, sports, entertainment, weather and business information-over a digital terrestrial network to residential and business PC users in Germany.

"It's as much a matter of business models catching up as it is the technology itself," says Bill Correll, worldwide market development manager for media, entertainment and publishing at Sun Microsystems Computer Corp. Before that happens, infrastructures must be secured. Then transaction, rather than subscription or advertiser-based services, will prevail, he predicts.

Clearly, the paths to interactivity are many. Watching the various methods unfold and seeing which ones prevail should prove as exciting as using interactive services.