Road West Leads to High Tech

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If the show floor at last week's Western Show provided any indication, home-networking technologies and interactive-television applications have been thrust to the forefront of the cable industry's priority list.

On the home-networking front, wireless technologies appeared ready to make a huge impact, with protocols such as "Bluetooth," "802.11b" and "HomeRF" leading the way.

Even a wired platform such as "Home Plug"-a protocol that taps a residence's existing electric wiring to transfer data from device to device-also appears to be making some headway. That's thanks to recently developed interoperability standards and the support of major cable-equipment players, such as Motorola Broadband Communications Sector, which has taken a minority stake in Home Plug specialist Intellon Corp.

Even some executives at Ericsson Inc., which is plotting a plan to create a separate company dedicated to the development of the Bluetooth platform, appear to be fans of Home Plug's potential.

Home Plug "will eventually make its mark," admitted Ericsson Vice President and General Manager of Home Communications Bjorn Krylander.

Still, expect Ericsson to keep its sights firmly trained on Bluetooth. The company, through a 50-50 partnership with home-appliance company Electrolux, is testing a Bluetooth-based "ScreenFridge" with 50 homes in Denmark using asynchronous digital subscriber lines.

ScreenFridge, which will become commercially available by the third quarter of 2001, features an imbedded Web pad. When linked to a residential gateway that shares the bandwidth flowing into a home, the high-tech ice box allows tech-savvy consumers to watch television, read and send electronic mail, build shopping lists and maintain family calendars.

A digital-video camera mounted within the Web pad also lets mother, father or sister leave short video messages.

If a refrigerator-based Web pad isn't mobile enough for the average customer, Ericsson's Linux-based "Screen Phone" should hit store shelves by the first quarter of 2001.

Show-goers also gawked with amazement at Simple Device Inc.'s home-networking products, which Motorola demonstrated at its booth. Simple's sharp-looking "SimpleFi" box streams CD-quality MP3 files wirelessly from cable modem-connected PCs to home stereos.

Meanwhile, its wireless personal digital assistant sled, dubbed the "SimplePad," essentially morphs an ordinary Palm Pilot into a device that enables users to play on the Internet, send instant messages and, eventually, monitor a home's security system.

On the interactive-television front, observers wondered whether the fortitude of the 2001 video-on-demand trend line would spell financial trouble for other, less on-demand styled interactive services.

With public markets in turmoil-and interactive deployments aside from VOD potentially stalling until the second half of next year and into 2002-questions emerged about who has enough money to survive in yet another lean year.

One interactive supplier bucking that trend at the show was Wink Communications Corp., perhaps the one bright spot in L.A.'s somewhat blurry picture.

Wink hooked a deal with Comcast Corp. that calls for the MSO to deploy its service with all 1.5 million of its digital subscribers. Wink also advanced further into Time Warner's Los Angeles division, doubling its exposure there.

Across the show floor, in briefings, and in aisle chatter, cable's suppliers and observers fretted over the profound psychosis of the public equity markets. Some pointed to an inevitable consolidation or door-shutting in at least two categories next year: cable modems and ITV suppliers.

The reasoning: More than 35 manufacturers have obtained the Data Over Cable Service Interface Specification (DOCSIS) stamp, providing the underpinnings for a maturing retail market.

Cable's big tech suppliers showed up with both new products, and contextual references to cable's pursuit of new cash streams. Scientific- Atlanta Inc. CEO and president Jim McDonald walked reporters at a Wednesday press conference through an economical depiction of how digital set-tops can lift today's average monthly cable bill.

"If you can move (per-sub monthly revenues) from $40 to $65, you've taken the industry up by a factor of 60 percent, which represents about $18 billion," he explained.

Plus, said McDonald, it's no accident that cable's digital TV service prices parallel direct-broadcast satellite's average monthly haul of about $58 per subscriber.

"It's the same stuff," he said. He was referring to overall digital offers, consisting of additional channels, digital music and more pay-per-view offers. The next logical step: More on-demand and time-shifting services.

Echoing the comments of most MSOs, McDonald said VOD will drive the way in 2001 interactive additions, followed by Internet-styled data service, commerce, and connectivity/home networking features-all of which could attract an incremental $40 per customer, per month.

Foot traffic on the show floor itself listed heavily toward technology suppliers, lending further credence to a Western Show thinning in program networks and thickening in high-tech.

But even among technology suppliers, attendees were fickle. While Liberate Technologies' and OpenTV Inc.'s booths were so full people spilled into the aisles, but America Online Inc.'s "AOL TV" display looked fairly lonely.

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