News

GI, Antec: Marketers Taking Over

10/18/1998 8:00 PM Eastern

Digital's here, telephony's on the way, and
it's all a matter of marketing now, the heads of two cable-hardware firms said last
week.

Speaking at a technology panel at last week's Atlantic
Cable Show in Baltimore, Ed Breen, CEO of General Instrument Corp., rattled off the
requisite numbers about the status of digital video: 600 headends and 2 million digital
set-tops are in the field now, representing one-third of all cabled homes passed.

But by this time next year, Breen said, 75 percent to 80
percent of the industry will be offering digital and marketing it to the consumer.

"It'll be the rare operator that's not
putting this technology in," Breen surmised.

At the same time, telephony services -- whether
circuit-switched or Internet-protocol -- are poised to ramp up quickly, said John Egan,
president of Antec Corp.

"We've been concentrating on the slow process of
getting into the telephone business," Egan said, referring to Antec's dogged
pursuit of cable telephony for several years through its Arris Interactive holding (a
joint venture between Antec and Nortel).

Egan said the cable-telephony landscape looks all the more
encouraging now because of the increasing availability of two-way cable plant -- a
prerequisite for telephone services.

"Today, there are 100,000 homes passed per day that
are being turned over from engineering to marketing -- an enormous critical mass is
happening," Egan said.

Both Breen and Egan agreed that marketers are now in a good
position to "do their thing" to exploit cable's two-way plant and the
"convergence electronics" that will be attached to it. That includes GI's
forthcoming DCT-5000 set-top box -- an advanced unit due out in limited quantities around
the time of the Western Show in December.

"Cable operators, and rightfully so, don't know
how [applications] will transition," Breen said, explaining the overall importance of
downloadable operating systems for the DCT-5000 and other OpenCable-type boxes. "With
this type of platform and this type of horsepower, it really becomes a marketing
issue."

GI is likely to advance its presence on the video-on-demand
front at the Western Show, while making continued progress on the DCT-5000 as a device
with a built-in cable modem and IP-telephony capabilities.

John Sie, chairman of Encore Media Group, said programmers
view the coming "convergence" applications as ones where viewers can remain
passive TV-surfers, but where they have access to additional information if they want it.

"Viewers can enjoy whatever they're watching, in
a semipassive mode, but with more value," Sie said.

One of the ideas, he said, is to make access to the Web
available without having to type in lengthy URL (uniform resource locator) addresses --
through a sort of "enter" button toggle that flips viewers back and forth
between Web information and regularly scheduled TV programs.

Sie said his biggest concern -- which he described as
"a shameful thing" -- is the industry's continued lack of focus on the
consumer-electronics segment.

March