Comcast Launches Microsoft Close to Home

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After several years of failing to crack the U.S. cable market, Microsoft Corp. has scored the first wide deployment of its Microsoft TV Foundation set-top software and interactive program guide on Comcast Corp. systems in Washington state.

Beginning this week, Comcast will slowly roll out TV Foundation, offering the new IPG and interactive news, weather and sports content to customers that take Motorola Inc.’s dual-tuner digital video recorder. The MSO will expand the Microsoft deployment to HDTV customers in December. Come January, Comcast will switch all digital-cable subscribers in Washington to TV Foundation, offering it in up to 1 million homes. It will replace Gemstar-TV Guide International Inc.’s TV Guide Interactive.

“It’s really a non-event. We’ve known that it’s been coming for a while,” said Todd Walker, general manager of advanced TV at TV Guide Television Group.

Microsoft, which in the late 1990s had been expecting to distribute software on advanced digital set-tops — before the former Tele-Communications Inc. abandoned plans to roll out Motorola’s ill-fated DCT-5000 receiver — cut a deal with Comcast last May to license TV Foundation for up to 5 million set-tops.

After Microsoft invested $5 billion in AT&T Corp. in 1999, it inked a pact with the software giant to license up to 7.5 million copies of Microsoft TV software for its AT&T Broadband cable systems, which were later sold to Comcast.

Comcast inherited that software deal with its 2002 merger with AT&T Broadband, but Microsoft TV director of marketing Ed Graczyk said there are provisions in the agreement the MSO signed with Microsoft six months ago that would supersede the AT&T contract, if the nation’s largest operator hits certain milestones.

Through a GuideWorks joint venture it formed with Gemstar in February, Comcast has also been developing its own IPG. The Gemstar agreement included a $250 million payment to the IPG vendor that allows Comcast to combine Gemstar’s intellectual property with any guide that it deploys.

Comcast recently began rolling out a new i-Guide that it developed with Gemstar.

MSO spokeswoman Jenni Moyer said i-Guide, which allows subscribers to easily jump from linear TV to VOD content, has been rolled out in Philadelphia; Portland, Ore.; Nashville, Tenn.; Jacksonville, Fla.; and parts of Michigan.

Comcast senior vice president of digital TV Mark Hess said he likes both the Microsoft TV IPG and the i-Guide.

“Neither [Microsoft or Gemstar] is advantaged,” Hess said when asked about future IPG rollouts. “We like to have two companies. They’re both innovative.”

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