In suburban Orlando, Fla., hundreds of onlookers packed into a Sheraton Hotel ballroom off Interstate 4 to witness something that had never been seen before: a two-way digital-cable system capable of streaming video-on-demand movies and interactive- TV applications, including home shopping, video games and, yes, ordering pizza delivery.
It was Dec. 14, 1994, and it marked the official launch of Time Warner Cable’s Full Service Network, an historic undertaking that helped to produce many of the digital innovations that the cable industry profits from today.
On the hotel ballroom stage, Jerry Levin, Time Warner Inc.’s chairman and CEO at the time, and Jim Chiddix, then the chief technical officer for the cable division, prepared to click a remote to launch FSN and demonstrate the power of interactive digital cable. The audience could not have realized how difficult it was for the FSN developers to have reached this point, nor how uncertain it was for the launch to go off as planned.
“I was nervous as hell,” Chiddix said in a recent interview. “I knew way too much about what was behind the curtain. We were leap-frogging technologies in several dimensions, which was risky. There was lots that could go wrong. And I was pushing the button seemingly in front of every journalist in the Western world.”
Ever since Levin had announced the FSN plan in January 1993, the project had been beset by technical hurdles and delays. Nearly every key component had to be created from scratch. Time Warner wanted to demonstrate the advantages of digital technology, but first there had to be digital technology to demonstrate.
Twenty years ago, there were no digital set-top boxes, digital video transport equipment or even digitized movies for VOD. FSN software engineers had to write more computer code than it took to land a man on the moon, as Joe Collins, then the chairman and CEO of Time Warner Cable, told the hotel audience.
For set-tops — if you could call them that — developers mashed together a Scientific-Atlanta converter and a Silicon Graphics Inc. Indy workstation to create large Home Communications Terminals that the cable company said cost about $4,500 each.
Despite the difficulties, Levin believed deeply in cable and interactive media and pushed the project onward. As the launch event began, he told the audience, “Sooner or later, every significant player in the information and entertainment industry is going to have to understand the implications of broadband interactivity.” FSN, he said, was “an irreversible step across the threshold of change.”
No Animals On Roller Skates
Then, Levin and Chiddix sat down in front of a widescreen TV while the audience watched on a giant projection screen. “This is not hype. We’re on the cable system,” Levin explained. “There are no animals behind here on roller skates.”
After conducting a brief closed-circuit discussion with Jim Ludington, who oversaw construction of the FSN network-operations center (NOC), it was showtime. The future of Time Warner and the cable industry was in Chiddix’s hand as he aimed the remote.
If the network crashed, the developers recall, they were to throw a switch to run backup demos, including a complete demo on Laserdisc. They called it the “Oh Jesus” switch.
“Well, Jerry, let’s just turn on our television and …” The hushed ballroom watched nervously as a blue-andwhite FSN logo came onto the screen, followed by loud,swirling music and colorful shapes that formed into the FSN’s Carousel on-screen navigator, turning to offer Movies, Shopping and Games.
It worked! The audience burst into applause. It was a moment of elation and relief that FSN developers say is one of the highlights of their lives. Watching from the NOC, Ludington called it “spine-tingling.”
Then Levin scared the engineers by going off of their script and taking the remote from Chiddix. He ordered The Specialist, a new Warner Bros. movie; hit fastforward, and then paused it where actress Sharon Stone places a flower on a grave. Then he ordered a second movie, The Client, so that two movies were being held on the network simultaneously.
The two executives went into a Warner Bros. virtual store and bought a pair of Bugs Bunny caps, then played gin rummy remotely with the Willards, America’s first FSN family. When they returned to The Specialist, there was Sharon Stone placing the flower on the grave.
The network performed flawlessly. The Oh Jesus switch and the backups never had to be used, the developers said.
Another hotel room exhibited early prototypes of HBO On Demand, Sports Illustrated TV and a planned music service fronted by rock musician Todd Rundgren, present in red-and-black checked clothes.
Nearby, reporters could tour the Home of the 21st Century, an upscale 3,700-square-foot house full of home-automation electronics that were presided over by a virtual on-screen butler named Alfred.
That night, developers held a victory celebration at the Home of the 21st Century where some were pushed into the pool. “Hijinks ensued,” Chiddix recalled.
Compared to Kitty Hawk
Media outlets around the world hailed FSN. USA Today declared: “The future of television landed in a tiredlooking Sheraton outside Orlando.” A cable trade-magazine editor compared the Orlando launch to Kitty Hawk.
Over the next two and half years, FSN rolled out to a trial market of about 4,000 homes in Orlando’s northwest suburbs. Customers could order VOD movies; play networked games against neighbors; shop using Spiegel and other catalogs; access Orlando Sentinel news; watch time-shifted soap operas; get sports statistics and check their bank accounts.
Ford and Procter & Gamble tested interactive advertising, but FSN’s small audience size yielded a limited track record, developers said.
FSN even tested a Web-on-TV service and telephony using personal communications service (PCS), a wireless technology, said Mike Hayashi, now executive vice president of architecture, development and engineering at Time Warner Cable.
Many of the applications were for pay and most found an audience, developers said. Ordering stamps from the Post Office, in the days before email took off, reportedly was the most popular interactive commerce application. And yes, users could place orders with Pizza Hut on TV.
But FSN was too expensive to roll out on a mass scale, developers said. In April 1997, Time Warner Cable announced it would phase out the trial, take its lessons and apply them to VOD and Pegasus, a digital cable plan that Ludington called “the deployable FSN.”
The company has never disclosed FSN’s total costs, only saying that it was a worthwhile investment in research and development.
At the time of the phase-out announcement, press reports quoted anonymous sources who estimated the total cost to be about $300 million to $500 million.
After all of the hype, industry observers debated over whether FSN was a harbinger of the future or a gigantic waste of time and money. Detractors and competitors derided FSN as having accomplished little more than the ability to order pizzas by TV.
The Lessons of FSN
With the passage of time, FSN’s implications are becoming clearer.
“The FSN has had so many influences on the industry today,” said Yvette Kanouff, executive vice president of engineering and technology at Cablevision Systems, who was part of the FSN software engineering team.
“We learned about digital settop boxes, which ended up turning into the SA Explorer 2000,” she said. “We learned so much about VOD management, which turned out to be the VOD standards of the industry. Network infrastructure and modulation techniques are still implemented today.”
Developers learned about consumer behavior around user interfaces and interactive applications, she added.
In addition to digital video, Mike LaJoie, executive vice president and chief technology officer of Time Warner Cable, called FSN “the germination point” for the company’s high-speed Internet and telephone services. LaJoie, who was involved in FSN from its earliest days, said the engineers tested data and voice technologies and realized their product potential there.
“It was the foundation for so much rich entertainment and information communications product that it’s phenomenal. The billions of dollars generated from what we learned in Orlando is pretty hard to count,” LaJoie said.
Daniel Howard, senior VP and CTO of SCTE, noted that FSN relied upon integrated, network-based services and now MSOs are taking a similar tact with IP-based service delivery. “It really was a cloud before there was a cloud,” he said.
The Great Motivator
To appreciate FSN today, it has to be put into historical context, said Chiddix, who is now semi-retired and sits on company boards. In the early 1990s, he recalled, cable’s prospects were fading and it had a great motivator: fear.
Cable faced emerging all-digital competition from direct broadcast satellite, while Bell Atlantic, under chairman and CEO Ray Smith, was preparing an interactive TV service. Congress re-regulated cable in 1992 and many system owners were selling out. The World Wide Web was being developed.
The Digital Age was dawning, the Information Superhighway was being paved and cable either could become a leader or become road kill. Cable used digital technology to take a bold stand. John Malone’s Tele-Communications Inc. embraced digital compression and the 500-channel universe while Viacom Cable began developing an interactive service in Castro Valley, Calif.
Meanwhile, Wall Street was scrutinizing the debt load from the 1989 merger of Time Inc. and Warner Communications. Levin, who had recently succeeded the late corporate chairman Steve Ross, saw the value of new technology as a lead player in HBO’s pioneering launch on satellite in 1975. An interactive cable system could unite the divisions and brands of the Time Warner empire — home video, movies, music, magazines, video games, television and cable assets — in a global bid for digital domination.
Chiddix said he and the company management wanted to push the prospects for emerging HFC (hybrid fiber coaxial) architecture. They realized that true VOD could be a big hit, based upon a near-VOD offering on a 1 GHz service called Quantum in Brooklyn, N.Y.
But they underestimated how difficult it would be to implement the requisite technologies, Chiddix said.
Cable, computer and telecommunications engineers had to combine their technologies through “brute force integration,” said Ludington, now executive vice president of national network operations at Time Warner Cable and program chairman of this year’s SCTE Cable-Tec Expo in Orlando.
FSN relied upon HFC and 1 GHz of bandwidth for analog channels, digital services and a high-end return path. To route digital video, it used one of the first ATM (asynchronous transfer mode) switches ever built.
The VOD-server technology seems laughable by today’s standards. The NOC, Ludington recalled, contained “huge cabinets of 3- and 6-Gig drives. Half a Terabyte of storage took up half a room back then and now it takes half a rack.”
Tom Feige, FSN’s president, struggled to assimilate developers from the different cultures of cable, telecommunications and Silicon Valley. “We were all talking different languages during the first year or more,” Feige, now CEO of Internet-security firm idRADAR, said.
For example, when the cable guys said “programmer” that meant a cable-TV network person, but to Silicon Valley developers, that meant someone who wrote computer code.
A MARKETING PLAYGROUND
FSN became a trial market — and a marketing playground — for young executives like Bob Benya, now president and CEO of In Demand.
Benya was thrust into multiple roles, including working on an interactive program guide to “stop that incessant scrolling,” stocking the Home of the 21st Century with home-automation electronics and developing an “FSN University” training program for employees.
Since the HCT was big and had accessory components, including a Hewlett-Packard printer and an Atari game player, special consoles had to be built and installed inside homes. The task of getting the consoles fell to Benya.
“So now I was in the furniture business,” Benya said with a laugh. “You can’t make this stuff up.” FSN “really opened our eyes and emboldened us to understand what was important for the consumer: control, convenience and choice,” he said.
FSN became a mecca for “executives, politicians and royalty” who toured the facilities, Benya said. Along with their Walt Disney World souvenirs, they could take home FSN Frisbees, pens, caps and other premiums.
As the Web’s potential rose, developers learned what would work better using the Internet rather than TV. For outside content creators, producing interactive content using the Internet’s open standards and ubiquity became more attractive than developing interactive TV for a closed cable environment.
In certain respects, Ludington said, “Lean-forward technology won over lean back.”
Many think FSN became a victim of its own hype. Feige noted that the original plan in 1993 was to create a deployable service, then it got recast as a trial, and then the trial was delayed. The expectations did not match the actual development cycle, he said.
MORE CREDIT TODAY
Today, FSN’s accomplishments are getting more credit and Time Warner Cable says it is benefiting from its results.
Last year, 17 years after the launch, Time Warner Inc. and Time Warner Cable (now separate corporate entities) were honored with an engineering Emmy, the Philo T. Farnsworth Award, crediting FSN as “the forerunner to robust video-on-demand and other entertainment and communications services consumers enjoy today.”
Time Warner Cable executives said they transferred FSN’s lessons into the development of digital set-tops, network architecture, VOD, program guides, interactive applications and broadband service.
Many of those involved with FSN hold top leadership positions today, including Glenn Britt, chairman and CEO of Time Warner Cable, and Carl Rossetti, president of Time Warner Cable Ventures. FSN alumni populate many parts of the industry today. There is an FSN alumni group on LinkedIn.
Today, Levin is reticent about his role in the early days of digital cable, saying he defers to the “many dreamers” who made it happen. He serves as chairman of StartUp Health, which supports health and wellness entrepreneurs. He recently moved to Maine and enjoys his 10 grandchildren.
Beyond the technology, FSN is a story of human achievement. Hundreds of people from different walks of life came together to overcome odds and create innovations in a relatively short timespan. The experience produced a vibrant spirit that FSN alumni still talk about today.
From 1994 to 1997, the Full Service Network in Orlando pioneered digital cable advances, including:
The first streaming of full-motion digital MPEG video over cable plant to a television set;
The first launch of true two-way VOD service, including movie ordering, rewind, fast-forward, pause and play functions;
A proving ground for HFC architecture, QAM modulation, digital set-top management, transport and two-way communications;
Development of new user interfaces, interactive program guides, VOD menus and TV remote-control navigation;
Creation of interactive-TV applications including shopping, games, news, sports, advertising, banking and ordering services.
Source: Time Warner Cable; Interactive TV Works research
Craig Leddy attended the FSN launch as editor of Cablevision magazine. Today, he is president and senior market analyst for Interactive TV Works.