THE C WORD IS BACK: CONVERGENCE NOW IN VOGUE

Author:
Updated:
Original:

Atlanta -- Industry suppliers are saying that they expect
to sell twice as many advanced set-tops with integrated modems than stand-alone cable
modems over the next four years, marking the beginning of what many are calling
convergence all over again.

"The set-top-box numbers far exceed the cable-modem
numbers now," said David Robinson, vice president and general manager of General
Instrument Corp.'s Digital Video Division. That's because cable's core business has always
happened in the living room, and not in the room that houses the personal computer, he
said.

Broadcom Corp., the leading supplier of chips for both
cable modems and advanced-digital set-tops, said its product road map calls for a
standardized modem that sits on a single chip by autumn.

Those developments, in conjunction with moves by OpenCable
to finalize advanced-digital set-top specifications, combined to elicit the
"convergence" word in conversations all over the National Show here last week.

This time around, operators and their equipment suppliers
envision a blended in-home-electronics environment that serves as the common denominator
for a similar melding of future, cable-delivered services.

Kicking off the week's worth of set-top news was a
formalization between Tele-Communications Inc. and Microsoft Corp.

Earlier this year, TCI gave Microsoft the nod for 5 million
copies of its Windows CE operating system, but it repeatedly referred to the arrangement
as "an arm's-length agreement." That "arm's-length agreement" turned
into an as-yet-undefined second step in the very early hours of May 2, at Microsoft's
headquarters, executives said.

Advanced set-tops -- like General Instrument Corp.'s
DCT-5000, Scientific-Atlanta Inc.'s Explorer 2000 and Pioneer New Media Technologies'
Voyager, among others -- are expected to be ready in prototype form later this year and
commercially next summer.

But at last week's show, all of the vendors were displaying
a tantalizing mix of new services that, if doable, could strengthen cable's position as a
not-just-TV player.

For example: An in-home wiring section in GI's new,
14,000-square-foot booth showed how technologies from GI's new part-owner, Sony Corp.,
could let subscribers purchase a digitized song and zip it over for permanent storage to a
DVD (digital versatile disk) or CD player.

Or, the set-top could become the connection point for a
"Babycam" application, where a tiny camera is placed in the crib, linked to the
set-top over in-home wiring and displayed on the TV -- a sort of visual baby monitor.

"You map [the camera's Internet-protocol packets] into
MPEG-2 transport protocol, ship it around over 1394 [fire wire] in the home, and there's
nothing that says that you couldn't put that out on the Web so that you could access it
from your neighbor's house," said Geoff Roman, executive vice president of GI.

GI was not alone in showing a blending service mix over
advanced-digital set-top prototypes. WebPassport Network, for example, used S-A's booth as
the venue for a TV-based phone service that will let future digital set-top users identify
callers, redial, forward calls, engage in conference calls and build phone directories
while watching TV, said Paula McDonald, senior vice president of the New York-based firm.

S-A also firmed up an order with Comcast Corp.'s Comcast
Cable Communications last week, saying that it will supply the MSOs Chamblee, Ga., system
with 3,000 Explorer 2000 set-tops, as well as headend components and a
digital-network-control system.

The boxes that Comcast will take will include Sun
Microsystems Inc.'s MicroSPARC II RISC processor cores for application processing;
reverse-path data transmitters for two-way communication in real-time; and 10baseT
Ethernet interfaces.

Both GI and S-A hosted a gaggle of software developers --
which they called independent-service providers -- in their booths.

But they acknowledged that the more advanced applications
are not right around the corner. Likely to come first are TV-based Internet access, e-mail
and video-on-demand.

Videophone is a longer-term play, because it is more
complicated to integrate into broadband plant, executives said.

"It's a matter of figuring out how to best set up
calls into the system from the long-haul networks," Roman explained. "You get
into all of these transmission issues, like what are real data rates that have to be
supported, and how to manage quality-of-service issues," which determine network
latency and constant bit rates.

On the OpenCable front, the first two in a series of
OpenCable specifications are now complete and in the hands of vendors.

Described by MSO executives as a product, process and
architecture, OpenCable is the cable industry's method to ensure that future advanced
set-tops work with one another, regardless of MSO franchise boundaries.

The first two documents detailed service and functional
requirements, Cable Television Laboratories Inc. executives said.

The "services" document described what types of
applications should be supported by the OpenCable boxes, while the "functional
requirements" spec detailed what technical capabilities are required in the box.

Laurie Schwartz, project manager for OpenCable, described
the specifications as "the first in a series that are in the pipeline." She said
to expect more, like detailed interface specifications, by mid-June.

Don Dolchinos, director of business development for
CableLabs, said publishing the specs keeps OpenCable on track for a complete specification
this year, "which was the original goal of the project."

In a related move, CableLabs said "harmony"
technology -- which was hammered out two years ago to establish interoperability between
GI's and S-A's core encryption methods -- is being tested, so that cable operators could
feasibly use both GI's DigiCipher and S-A's PowerKEY in the same system.

Related