AT&T Names Three WorldGate Cities

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AT&T Broadband plans to launch WorldGate Communications Inc.'s product in three cities, but the top MSO says it's still not sure when or how it might market Internet-over-television services to the rest of the U.S.

Last week, AT&T said it had launched WorldGate in Waterloo, Iowa, in October, and that it would soon deploy it in Cedar Falls, Iowa, and Tacoma, Wash.

While AT&T called the WorldGate launch a commercial deployment, executives said they would test different pricing and marketing strategies for a possible wider deployment of an Internet-to-the-TV service.

AT&T is charging digital subscribers in Waterloo $4.95 for electronic mail and $12.95 for e-mail and Internet access. The company will experiment with pricing on the other systems, said Rich Fickle, AT&T Broadband program director of ITV.

One striking aspect is that AT&T will use an interactive program guide from the TVGateway consortium-which WorldGate and several MSOs formed last summer-in the markets where it will launch WorldGate service.

AT&T's Liberty Media Group unit holds a stake in chief TVGateway rival Gemstar-TV Guide International Inc., and AT&T Broadband has an exclusive 10-year deal to deploy TV Guide's IPG.

Fickle said AT&T decided to go with WorldGate's IPG because integration work between WorldGate and TV Guide wasn't complete. Once that task is done, TV Guide Interactive will replace TVGateway, Fickle said.

"Our commitment remains with TV Guide," Fickle said.

Fickle wouldn't say whether WorldGate would be involved with the MSO's advanced digital rollout, set to begin next year. The company plans to conduct trials with Liberate Technologies Inc. and Microsoft Corp., beginning later this year.

This marks the first announced deployment for TVGateway. WorldGate recently claimed that it shipped TVGateway hardware to other MSOs, but didn't name the operators. Gemstar-TV Guide president Peter Boylan said he did not oppose the temporary rollout of TV Gateway. AT&T wants to generate revenue from the Motorola Broadband Communications Sector "DCT-2000" digital set-tops it has deployed, Boylan said.

"AT&T is under a fair amount of pressure with their stock price to demonstrate that these revenue streams are indeed real, which I believe they are," he said. "Until we have the integrated product successfully tested and debugged, you certainly don't want to put it into a customer's home."

Meanwhile, Boylan said Cablevision Systems Corp.'s Boston system, which launched Source Media Inc.'s IPG, will switch over to TV Guide Interactive after it is sold to AT&T Corp. Boylan cited assurances he received from the MSO.

"Unfortunately Cablevision selected somebody other than the guide that AT&T ultimately plans to choose, and unfortunately, the result is that the poor consumer is the person who gets messed around with," Boylan said.

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