Stepping out onto mainStreet GTE breaks new ground with interactive TV service >BY SHIRA McCARTHY, Associate Editor-News

Like many of its Bell company counterparts, GTE opted to roll out cable modem service last month, offering Internet access at speeds up to 4 Mb/s over its hybrid fiber/coax network in Clearwater, Fla.

But GTE took a step ahead of the pack in another area, announcing the availability of interactive video services over the same network. GTE mainStreet is being offered by Continental in Boston and by Daniels Cable in Carlsbad, Calif., but both systems are traditional one-way services, meaning that customers must use their telephone lines for the return path.

GTE's rollout of the mainStreet service is the first time a telco has commercially deployed an interactive TV application over a two-way cable system.

Using telephony return has been necessary until now because so few cable systems have been upgraded to support two-way services, said Tom Grieb, vice president and general manager for GTE Main Street Inc. Migrating the service entirely to the HFC network makes the service much more palatable for the consumer and the carrier, Grieb said. The consumer doesn't need a second phone line, and the carrier can eliminate the need for telephone modem banks at the headend to receive the upstream traffic.

The hardware being used to deliver the mainStreet service is entirely proprietary, from the servers at the headend to the set- top "sidecars" that operate in conjunction with cable subscribers' advanced analog boxes from General Instrument, Grieb said.

The mainStreet service offers 85 interactive video applications, including interactive learning tools, games, home shopping and financial information. Consumers will also be able to participate in interactive TV shows produced in GTE mainStreet's interactive "virtual" TV studio in Santa Monica, Calif. MainStreet's first interactive TV show, a children's program called Virtuality that will be introduced in early 1997, will let consumers use their remote controls to select sets and characters.

GTE has been delivering the mainStreet service over the California and Massachusetts networks for the last two to three years. Take rates in both communities have been "decent," Grieb said, but he declined to be more specific.

The mainStreet service had been previously offered on an a la carte basis, but GTE now believes that was the wrong approach, Grieb said. In Florida, mainStreet will be offered to GTE Americast customers only in conjunction with premium channels such as HBO or Showtime.

If take rates have been less than stellar, it's likely because consumers aren't yet ready for interactive TV and regard it as no more than a novelty, said John Aronsohn, senior analyst for The Yankee Group, Boston.

"If people don't have to pay for it, then they're willing to try it out," Aronsohn said. "As a stand-alone application, mainStreet's chances are limited right now. GTE hasn't figured out how to turn it into a saleable service.

The telco plans to roll out mainStreet to 20,000 customers in the Clearwater area by the end of 1997 and will offer the service in other markets later this year.

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