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 Internetaccess using WorldGate Communications Inc. technology.

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

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

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

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

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

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

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

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

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

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

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

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