Rumblings that cable bellwether AT & T Broadband might opt to use interactive-television-software platforms other than Microsoft Corp.'s sent the stock prices of Liberate Technologies and OpenTV Corp. soaring last week.
One industry analyst believes AT & T Broadband is in discussions with both OpenTV and Liberate to launch a few trial deployments or, at the very least, a series of beta-tests.
The rumors emerged in the wake of Microsoft software delays that have scaled back AT & T Broadband's initial plan to aggressively roll out Motorola Broadband Communications Sector-built "DCT-5000" advanced digital set-tops that run high-octane interactive-television applications.
Instead, the MSO disclosed recently that it plans to deploy a slim-featured version of the box later this year, then upgrade those devices for more robust functions later via software downloads when Microsoft's software is ready for primetime.
Initially, those boxes will support functionalities similar to those of Motorola Broadband's lower-class "DCT-2000," although they will still offer a few advanced applications, such as e-mail, electronic commerce and interactive advertising.
AT & T Broadband said it was still on track to launch a pilot this year of DCT-5000s with a more sophisticated software stack, but the MSO acknowledged that it wasn't ready to "pull the trigger on a full deployment," chief technical officer Tony Werner said recently during a conference call with reporters.
Microsoft delays have also affected European MSO United Pan-Europe Communications N.V. (UPC), which still expects to launch interactive-television services in the first or second quarter.
UPC, the cable division of UnitedGlobalCom Inc., said last month it might seek out "appropriate" vendors such as Liberate if Microsoft middleware delays continue.
When asked whether OpenTV or Liberate will figure into AT & T Broadband's interactive-TV plans, a company official said the company has made no such announcements, but quickly pointed out that the MSO's set-top software arrangement with Microsoft is nonexclusive.
Liberate and OpenTV officials, meanwhile, did not return calls seeking comment.
Because of delays involving Microsoft's interactive-TV software, UPC and AT & T Broadband are "going to have to" seek middleware vendors other than Microsoft if they plan to deliver advanced interactive-TV services to customers with any urgency, said The Carmel Group vice president of business development Sean Badding, who covers OpenTV and Liberate.
"Common sense says AT & T Broadband will have to at least shop around, and that means looking at the best ones out there, which are Liberate and OpenTV," Badding added. "These rumors have some legs to them, because it's likely that it's happening. While Microsoft is tripping over itself, it's opening up the door to the competition."
Badding said he wouldn't be surprised if AT & T Broadband decides to use Liberate and OpenTV for trials, or at least beta-tests.
He noted, however, that Microsoft, which is an AT & T Corp. investor, will likely continue to play a prominent role in the MSO's interactive-TV plans.
BellSouth Corp. became the latest company to jump on the Liberate bandwagon last week when it announced that it would use Liberate's platform to deliver interactive-TV applications to its satellite-TV customers in the Southeast.
BellSouth has also ordered 200,000 digital boxes from Pace Micro Technology plc to fuel its direct-to-home play, which could reach 50 million marketable homes if the telco decides to offer the services outside of its territory.
Badding said that deal could be a sign of how the competitive interactive-TV landscape is shaping up. "Major MSOs will be looking seriously at which [software vendors] they'll use for interactive television. It's going to be a fierce battle between OpenTV, Liberate and Microsoft," he added.