GI, WorldGate Target Thrifty Web-TV Surfers

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Aiming for a potentially lucrative low-end market niche,
General Instrument Corp. introduced a sub-$100 cable set-top box that provides Internet
access using WorldGate Communications Inc. technology.

The "SURFview" advanced-analog set-top will be
offered to cable operators for $99 apiece under a joint marketing agreement between GI and
WorldGate, with the first shipments expected to begin in January to Brazil and Argentina.

SURFview's price -- about one-half that of typical
advanced-analog set-tops -- is intended to help operators use cheap Internet access as a
tool for selling other new services to customers from unpenetrated market niches. Those
include nonsubscribers, subscribers who don't use converter boxes, subscribers who won't
pay for digital cable and non-computer-owning households.

SURFview also supports pay-per-view and applications such
as electronic program guides that the operator can download over the cable network.

"This will allow you to sell all of those other
services and use the Internet as a vehicle to get into homes that traditionally have been
reluctant to get into those services," WorldGate CEO Hal Krisbergh said.

Krisbergh added that Scientific-Atlanta Inc. is also
working on a similar, lower-cost box incorporating WorldGate as a native application, and
other major vendors are expected to follow.

WorldGate's current service -- which has been deployed at
individual systems owned by Comcast Corp., Bresnan Communications, Charter Communications
and others -- uses an operator's existing platform and the viewer's advanced-analog or
digital set-top, along with a wireless keyboard or remote control.

Krisbergh said much of the cost reduction for SURFview
comes from its ground-up development as an Internet-access tool, eliminating the separate
module operators must add to current boxes to support the WorldGate application.

SURFview uses a custom ARM (advanced
reduced-instruction-set computer machine) processor providing speeds of up to 54 million
instructions per second (MIPS) -- about 50 times faster than GI's current advanced-analog
box chips -- plus improved SVGA graphics capability, said John Burke, vice president of
marketing for GI's advanced-network and telecom-systems business.

Also incorporated are more advanced security features, such
as dynamic line shuffling and enhanced access-control algorithms.

GI and WorldGate are apparently subsidizing the box in
order to support the $99 price point. They declined to provide details, except to say that
the wholesale price exceeded production costs.

Burke said some international cable operators have had
their hands on beta versions of the box, although GI has not yet shown it around
domestically. Foreign markets are a more immediate opportunity, as digital rebuilds abroad
have not yet progressed as much as in North America.

"The international markets are more traditional in
terms of their needs for access control and additional video security," he added.

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