Ten years ago, on Dec. 14, 1994, I joined a couple hundred of my industry colleagues in a hotel ballroom in Orlando, Fla., for a historic event: the launch of Time Warner’s Full Service Network.
On a stage before some two hundred members of the world press, Gerald Levin, former chairman and CEO of Time Warner Inc., and Jim Chiddix, then Time Warner Cable’s chief technical officer, used a TV remote to demonstrate the FSN on a large projection screen.
As the Carousel, the FSN’s navigational interface, swirled onto the screen to offer on-demand movies, interactive games, shopping and other content, the audience burst into applause. It was a spine-tingling moment that those who worked so hard on the FSN will never forget.
The Time Warner executives made the first public demonstration of full-motion video-on-demand by ordering two movies, fast-forwarding and then pausing them. They accessed a virtual shopping mall, bought two Bugs Bunny caps and then played virtual gin rummy against a family across town.
When they returned to the two movies, both were still paused where they had left them. It was a significant feat for a cable system at that time to handle all of that digital content.
Despite the impressive innovations demonstrated that day, the FSN would later be dubbed by some as a “failure.” Perhaps that’s due to the hype that surrounded the service and the fact that it could never have been rolled out economically beyond its 4,000-home service area. The focus at the time was on innovation, not scalability.
When you look back at what was achieved, it’s clear that the FSN was the proving ground for many of the digital advances that have become commonplace in the cable industry today.
The FSN marked a bold step in cable’s evolution to broadband. Back in the early 1990s, many companies came to recognize the potential for digital technology to transform cable and provide a wide range of video, data and voice services. But only Time Warner took the initiative to roll up its sleeves and deploy a comprehensive, full-blown consumer trial.
There were other interactive trials and lab experiments but none embraced the broad vision or achieved the technical success of the FSN. The demise of many of those other projects may have perpetuated the perception that the FSN was a failure.
Taking a lead role as a first mover into digital was a daunting task. To invent interactive services, Time Warner and its vendor partners, including Scientific-Atlanta Inc., Silicon Graphics Inc. and AT&T Network Systems (now Lucent Technologies), had to create much of the hardware and software from scratch.
The FSN required home communication terminals (to call them set-top boxes would be absurd) that were actually powerful commercial workstations of that day and cost nearly $5,000. By comparison, today’s set tops are far more powerful processors, many containing hard disk drives, and cost well under $500.
The VOD servers were the size of refrigerators, and we needed a room full of them to serve 4,000 customers. Current VOD technology, capable of serving hundreds of thousands of customers, fit easily in standard equipment racks. Time Warner had to set up digital production and conversion facilities because there was little digital content — and no digitized films. Warner Bros. purchased the very first MPEG-1 (Moving Pictures Experts Group) compression and authoring solution from C-Cube Microsystems Inc.
During the development phase, I was executive vice president of the Time Warner Interactive Group, which developed much of the application software. Frankly, I can’t recall a time in my career where the excitement was so great.
While VOD was a clear winner with consumers, other popular applications included multiplayer games, downloaded video games, ordering pizzas, buying postage stamps and online catalog shopping of thousands of items. The FSN discovered consumers would pay for all sorts of applications: time-shifted soap operas, educational videos and pro sports statistics. Services such as interactive local news, catalog shopping and home banking foreshadowed services on the World Wide Web, which was still in its infancy during the FSN’s development.
The FSN helped teach us which applications were best suited for TV. It put to rest the question of whether consumers would really interact with their televisions beyond just changing the channels.
The FSN demonstrated the full capability of the hybrid-fiber coaxial architecture we use today. The experience guided Time Warner’s subsequent rollouts of Pegasus digital cable and Road Runner high-speed Internet service. Many of the FSN’s lessons, such as reducing our reliance on ATM (asynchronous transfer mode) switches for VOD, have saved the cable division hundreds of millions of dollars over the years. The products that were developed and explored at the FSN have generated billions in new revenues and continue to grow. Not bad for a failure.
The FSN team employed many technologies that we now take for granted: fiber to the node architecture, quadrature amplitude modulation, packet switching and digital streaming. Before the FSN, no one had ever streamed full-motion digital MPEG video over cable plant to a television set. This is the core of digital television today, broadcast and on-demand.
I have no doubt that the industry would not be where it is today with digital cable, high-speed data, VOD and other advanced services had it not been for the FSN. Another outgrowth of that era, the OpenCable Application Platform (OCAP), will expand cable’s horizons for new interactive TV applications.
Today Time Warner Cable serves more than 1.4 million subscription VOD customers, and our average VOD customer uses on-demand services 24 times a month. We reach 4.6 million digital subscribers, 3.7 million high-speed data customers and have rolled out more than 700,000 digital video recorders. Our Digital Phone service will pass our entire footprint by year’s end.
While the direct connection may not always be apparent, I like to think that those customers are part of the FSN’s legacy.
As the FSN wound down in 1997, we were chastised by some for engaging in what was obviously an expensive initiative. We think it was worth it. Given the array of advances it helped birth; there are those today who look at the FSN investment as a relative bargain.
The FSN also was a great human achievement. It drew together thousands of people from multiple companies around the globe, united in a single cause: to transform cable, to see how far we could push the envelope.
Together, we pushed the envelope hard, we raised the bar high and the industry is better off because of it. For that reason, people like me, who were lucky enough to be involved in the FSN will always look back with proud memories.