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CS 420 The Promise of Interactive Television: An Ideological and Technical Study 1st Draft: 2356 words 2nd Draft

: 4826 words Final: 8709 words

2 May 1994

DRAFT TWO Major Changes: Expanded history of cable industry; discussion of TCI’s John Malone; review of problems facing interactive television. FINAL Major Changes: Style revision; format/layout revision; addition of abstract; discussion of various technical systems likely to be used in interactive television; predictions for various companies offered; conclusion added. ABSTRACT The future of television is interactive. Viewers will have a greater say in what appears on their television and what services they have access to. First, however, the government and the private sector must work out some differences regarding the cooperation of telephone and cable television companies. Once they do so, cable and telephone companies must design services appropriate to its customers’ desires, and engineer systems capable of delivering these services. Cable and telephone companies will be the driving forces behind the continued construction of the information highway. When interactive television (ITV) is widespread, viewers will communicate with each other and with information servers in useful and innovative ways. THE PROMISE OF INTERACTIVE TELEVISION Television, some cynics argue, is furniture. Unresponsive and lifeless, a television sits in a living room, attracting dust, supporting picture frames, music boxes, and porcelain statuettes, and occasionally emitting a soft blue light to talk or nap by. For these people, the virtues of television end there, and the problems begin: TV talks and talks without input; the barrage of images lulls viewers into a dangerous passivity; politics has become a contest of the best on TV; special effects obscure the lines between the real and the produced. These cynics only reluctantly admit some of the more positive cultural implications of TV, the way in which it has revolutionized politics, art, education, and even thought, in only the thirty or so years since it has found a place in most Americans’ homes. A quick thought as to the way these disciplines would be different without television reveals the true power of the device. That power, I think, contributes to many people’s dislike of television. Watching TV sacrifices authority over the information content in one’s home. The TV gains access to the home and spouts an endless stream of data, over which the owner has little say. It is a looming intruder, or a talkative guest who occasionally may quiet down, but refuses to leave. For some, its force cannot be simultaneously controlled and admired. In other words, if a person wishes to have control over her television, she must do one of two things: (1) change the channel, or (2) turn it off. A viewer cannot admire what is on TV without admitting a forfeiture of control, simply because she has only a tiny role in what comes out of her TV. Because television comes only with a speaker, and not with a microphone, it falls short of its potential as a device of political and cultural empowerment. To be sure, television has made inaccessible worlds accessible, brought home the wars and the conflicts, given us a look into the lives of our politicians and heroes, but American’s rarely find the opportunity to respond in any significant way. While accessible to over 90% of American households, televisions do not seek the input of those households. The only dialogues between the audience and the producers generally involve corporate advertisers as mediators, a problem which allows viewers to be valuable only insofar as they are consumers. Most efforts to

change programming content begin with refusals to purchase products of corporations who sponsor the programs, whereas support of programming is wholly passive. Just watch. Watch the news, but don’t question it. Watch the movies, but don’t make any requests. Watch the sports, but don’t ask to see the home team. This passivity has angered many over the years, and the industry may now be beginning to listen. Many hope that the days of authoritative, unresponsive television are reaching their end, and new technologies will make it possible for television to exchange information, rather than merely supply it. Everyone in the industry agrees: television is going interactive. Many believe interactive television (ITV) will be the biggest revolution in television since color, and corporations wager billions on that expectation. Innovative devices from the headend to the end user will provide access to an array of choices in all the major disciplines of television - news, sports, entertainment, home shopping, advertising, public access, etc. - and they eventually will develop a communications center in every home, in which the TV, telephone, and computer are integrated. The possibilities are as exciting as they are endless, but before this electronic wonderland supplants our current reality of technophobes, blinking VCRclocks, and legally shackled communications companies, some major changes must occur, both philosophically and technologically. In these changes lies the future of interactive television. Users and producers scramble to determine the systems and the opportunities that will provide entertainment for some and billions of dollars for others. Currently, the rise of ITV, closely tied to the construction (or refurbishing) of the information highway - the array of fiber optics, copper wires, coaxial cables, radio waves, and satellites through which electronic data runs - is just far enough along that one can explain and explore the possibilities, but cannot to guarantee the outcome. Regardless of the specific result, there is no questions that once the new systems are in place, television -and American culture - will never be the same. In many ways, a discussion of the possibilities of ITV cannot be complete without a review of the technical means of supplying those possibilities. Perhaps the clearest, most coherent way to explain the future of ITV would be to discuss some of the many services that will be available, highlight the engineering behind them, and then move into a technical overview of some widespread plans offered by major communications companies. Approaching the topic this way will allow the reader to first see the opportunities in his own home, and how his home will fit into the larger networks. HISTORY Though now one of the largest industries in the world, the cable industry has humble origins. Beginning as an opposing force to broadcast technology, which had been the status quo since television’s origins, cable television was a messenger without a message. All the production companies wanted to stay with the broadcast network, and none wanted to deviate from the mainstream. John Malone of Telecommunications Inc. (TCI), says his company: “We started with six-channel cable systems, and we could only find three channels” (Malone, 1994). By sticking to two guiding principles, Malone asserts, his company eventually grew to be the largest of its kind. The first principle was that “by expanding viewing choice to customers, we could gain subscriptions” (Malone, 1994). Second, Malone decided early to “go for growth.” He and his partners chose to pay low salaries, compensate employees with stock in the growth in the company, and not pay dividends on that stock. Malone calls this approach “sweat equity.” Constantly working to improve the technology led to improving his company. TCI continually reinvested in technology and system capacity, effectively reinventing the industry every three years, “adding channels, adding capacity, adding channels, adding capacity, gaining subscribers through a very tough period in the early ’70s” (Malone, 1994). Malone in part thanks the government for helping TCI during that decade. In 1972, the FCC demanded that the cable industry originate its own programming. This opened the door to both smaller production companies and

larger cable systems, the former creating low-budget material for the latter. Malone concludes, “Pursuing that strategy consistently - reinvesting, continuing to grow - has pretty well got us to be a successful enterprise.” In a strange twist of a traditional capitalistic supply-and-demand scenario, the cable industry supplied improved technologies not because the consumers asked for it, but because of companies like TCI were able to. Malone’s aggressive development strategy centers on pushing the state of the art further and further, paced only so as not to immediately overwhelm the consumer. A company as large as TCI does not fear watching its products become obsolete, simply because its dominance in the industry assures that almost any new technology will be their technology. Malone’s stint as chairman of Cable Labs, and his past work for Bell Labs, has shaped his strategy. He puts a quality product first, and has faith that consumers will seek the best product or service available. Malone astutely realized that this maxim holds true even in a monopoly or oligopoly, in which consumer can compare only a company’s product with its other products, not with products of other companies. Malone gambled that people will pay more for more services, even when they are content with their current services. At this stage, Malone seems to have reached the pinnacle of what TCI can do alone. He has maximized the technology, but that has not kept him from looking further into the future, outside the perimeters of his own company. Realizing that the public could get little more out of sitting on a couch and staring at a glowing box than it had for the past forty years, Malone pursued ways of getting the audience involved with the programming. Because this required direct, real-time communication between the viewer and the viewed, telephones seemed like the cheapest, easiest answer. But because the FCC denied cable companies the right to provide phone service to areas they supply with television, Malone had to turn to the phone companies. To him, it seems like a natural move. “This is really a converging thing - the computer industry, the communications industry, the cable industry, the broadcast industry on a worldwide basis are converging because of technology, because the digital technology is now making possible new things at lower cost than was ever dreamt of in the past” (Malone, 1994). Once cable companies gain access to telephone lines, whether on their own or with local phone companies, the new technology will be interactive. SOME POSSIBLE PROBLEMS Public & Private Opposition. While the movement into telephony could bring the cable industry its greatest strength, the transition leaves the industry in its most vulnerable position. At the same time the government broke up AT&T stranglehold on telecommunications in 1984, the FCC also moved to prevent cable industries from providing phone service and phone companies from providing television service. This step, apparently taken without serious regard for the future of television, has hindered both regional bell operating systems (RBOCs) and cable companies in their attempts to link the viewer to the viewed. Since the FCC first made this decision, the government has interpreted the ruling (and consequent legislation) as related to anti-trust concerns. They argued that one company should not have the opportunity to control of information input and output of any given home. The government feared out-of-control price hikes and mega-corporations beyond the supervision of local, state, or even federal government. In 1984, AT&T certainly seemed headed that way. No company could even think of challenging Ma Bell’s market dominance. To be sure, the battle between AT&T and the government was brutal and grueling, and irreparably damaged the relationship between the federal government and the communications industry. The government fears information brokers more powerful than it can handle, while the industry fears crippling regulations. Both entities’ fears are justifiable, but a compromise might promote technological advances and widespread enjoyment without forcing utility monopolies on Americans. Recently, phone companies began to argue that restricting the providing of television service to cable companies infringed on the phone companies freedom of speech. The phone companies argued that since their wires were running into homes,

they should have the right to say what data flows over the wires. The government (especially the Reagan and Bush Justice Departments) fought this argument vehemently, and the case reached a US District Federal Court in Alexandria, Virginia, a city in which Bell Atlantic was hoping to provide interactive television service. The federal judge involved, TS Ellis, seemed to agree with Bell that the 1984 ban is directed at content and not, as the defendants argue, simply regulation of the delivery of video signals. The law prohibits telephone companies from offering programming comparable to what was on the air in 1984. In his opening remarks at a hearing, Ellis said he thought that the ban, as worded, effectively knocked out a “category of speech.” He likened it to a rule restricting telephone companies from carrying any show listed in 1984’s TV Guides. When Justice lawyer Sarah Wilson tried to argue that the law regulated transmission but not content, Ellis did not agree it. “It is form versus substance,” Wilson said. “But it shuts up the speaker,” Ellis responded. (Bell Atlantic, 1993). Judge Ellis’s decision supported Bell Atlantic’s efforts to provide television programming to its subscribers. Soon after, Bell Atlantic announced its proposed merger with TCI, a deal that fell through in March 1994 after the FCC announced a new rate regulation. The case of Bell Atlantic highlights the government’s ambiguous approach to the information age in general and interactive television in particular. While Judge Ellis repudiates the government for antiquated bans on commerce and speech, clearing the way for Bell Atlantic and TCI, the FCC cuts price limits, forcing the two companies to abandon their $33 billion deal. The government seems unable to make up its mind about which direction it wants to see the information superhighway lead. Even the federal and legislative branches are divided on the question. Vicepresident Al Gore has won favor with the communications industry for his outspoken support of technology and data infrastructures. Gore is an excellent example of compromise between the government and industry. In his landmark January 11, 1994 speech to the Television Academy, Gore dared the industry to work against creating information “haves” and “have-nots”: I challenge you, the people in this room, to connect all of our classrooms, all of our libraries, and all of our hospitals and clinics by the year 2000. We must do this to realize the full potential of information to educate, to save lives, provide access to health care and lower medical costs.ÉThe best way to do so is by working together.ÉWe must build a new model of public-private cooperation that, if properly pursued, can obviate many governmental mandates. (Gore, 1994) As an expression of its support of Gore’s proactive stance on technology, Bell Atlantic and Pacific Telesis quickly announced plans to donate hook-ups to all the schools in their respective local areas. The industry’s relationship with the legislative branch of the federal government seems less positive. Certain members of Congress are eager to stamp out the perceived evils of big business, and occasionally hasten to do so, even at the expense of technological progress. While these members may be correct in assuming that corporations are more interested in making money than looking out for the best interest of their customers, they cannot deny that this greed produces competitive markets and better quality goods for consumers. The opinions of these legislators, whether misguided or accurate, could be dismissed were it not for the great power they hold in the regulation of the communications industry. One figure intent on subduing the industry’s drive toward interactive television is Senator Howard Metzenbaum. Sen. Metzenbaum clearly evinced his feelings when TCI’s John Malone testified before the Senate Judiciary Committee: I believe your company has a track record of hiding that which would appear to others as being monopolistic, anti-competitive practices behind the rhetoric of competition. And frankly, I’m afraid your proposed merger with Bell Atlantic is a continuation of this behavior. I just hope that the antitrust authorities see through the rhetoric and meet their responsibilities to the American people. I also hope that the White House politicos permit the Department of Justice and the

FTC to exercise their best independent judgment. (Malone, 1994) Metzenbaum went so far as to assert his dedication to the cause of stopping megacorporations from monopolizing information, even if the presidential administration allowed it. “If they [allow communications megamergers to occur] andÉmake an effort to put pressure on the antitrust agencies, you and the rest of the country may be certain we in Congress will not sit idly by” (Malone, 1994). Metzenbaum appears unwilling to compromise on many points central to the development of interactive television, and if enough senators and representatives share his beliefs, the government could stall developments in the field. If any plan for ITV is to succeed, it first must answer the fears of government officials whose philosophy does not tolerate entities such as a Bell Atlantic / TCI merger. Public Disinterest or Fear. Assuming some plan, whether sponsored by a RBOC (regional Bell operating company), a cable company, or both, jumps through the appropriate government hoops, the sponsoring company must get the public interested in its services. That those services are nothing like anything the public as seen before is both a blessing and a curse in this instance. Certain industry analysts predict consumers will take all they can get, loading up on ITV services like squirrels hoard nuts. Other, more skeptical, critics argue consumers will be overwhelmed with the multiplicity of choices offered them. They say it is overly optimistic for industry executives to assume viewers who cannot program their VCRs will want to use a large controller to conduct business, select movies, or play along with game shows. As one Yale computer scientist suggested, most people who watch television do so precisely because it is not interactive (Washington Post, 4/3/94). A TV that requires the viewer to do anything but view ceases to be a TV; it becomes a threat. TVs currently do not require interaction either with the TV, the network, or even the viewers’ family. Once the viewer realizes he has to think about his TV, the entertainment value - or some less definable value - of the TV diminishes. Many people like to be soothed by their television, without having to worry about keying in special combinations or scanning through hundreds of channels. Television’s history, from the viewer’s perspective, is a passive one. Color television took many years to catch on (although its popularity sky-rocketed after all TV was broadcast in color) (CED, 1992). The two major revolutions - color TV and cable - were motivated almost entirely by the industry, creating a market for better technology it had developed. Before TV, no one sat around clamoring for TV; before color TV, few people (presumably) refused to buy one simply because it was not color; before cable, everyone, including the government, thought broadcast technology more than sufficed. Those viewers who are unsatisfied with what cable has to offer buy satellite dishes. Very possibly, nearly everyone else has had enough TV. On the other side, the industry optimists expect that once a consumer gets a taste of the services offered in conjunction with her phone lines, she will pay to get more. When a large number of people purchase the services, the popularity will induce the remainder to “catch up,” until shopping through television is as common as watching television is now. If that occurs, some say, the television and related enterprises will reap hundreds of billions of dollars yearly. It is just a matter of people opening themselves to the future. PROBABLE FUTURE SERVICES There seems to be no end to the features analysts predict will be available once interactive television develops. Some ideas have been predicted for so long, they already seem obsolete. Malone, widely regarded as one of the two or three most knowledgeable men in the communications business, lends a certain gravity to his own predictions, mostly because little seems to succeed in television that does not have his approval. When Malone predicts something, he plans something. The services that we talk about that we try and project the demand for - video on demand, random access to any movie or television show whenever you want to see it. Video telephony, the ability to see your grandkids in very high quality at a very

affordable price. Broad-band telecommunications of all kinds - high-speed faxes, the ability to send high-quality photographs in very short order, very important in moving medical records around, things of that nature. All of the multimedia applications - interactivity on a client-server basis, the ability to, instead of going to the Yellow Pages and calling a doctor at random, you’re going to be able to go in and see who you can choose amongst, what their specialties are, and even see a video clip of the doctor explaining to you their practice, their style of medicine, and you get some sense of the personality of the physician. [sic] (Malone, 1994) Home Shopping. One of the prototypes of interactive television is home-shopping networks. In such an enterprise, a viewer accesses the network as she would any other on a cable TV system, and watches as a variety of goods, offered at discount prices, are displayed. When the viewer sees something she likes, she reaches for the telephone, calls the network’s phone bank, and places her order. This is interactive because the network directly inspires the viewer to do something, to correspond with the source of the images on her TV. In some instances, the viewer’s purchase is even represented on the screen, as a expression of the number of units sold, and in rarer cases, the viewer speaks with the network host, in real time, and is able to explain to other audience members why she purchased a particular item. In a primitive way, the viewer becomes the host of her show for the duration of her call. She participates in the production of what she watches. In its early years, home shopping took some important steps, both ideologically and technically. First, no real programming exists on the network. In a reversal of the roles offered on other networks where corporations sponsor the producers, at the shopping networks, the producers “sponsor” the corporations by ceaselessly pushing their goods. This broke down the idea that in order for a network to succeed, it must have definable “shows” and boundaries between program and advertisement. (MTV also seems to have contributed to this.) With the rapid and startling success of home shopping (over $2 billion business in 1992), the industry began to see new directions in which to take their trade. One of the few weaknesses of home shopping, they realized, is that the shopping networks have no way of customizing the assortment of goods to individual viewers - each viewer sees the same goods at the same time as every other viewer. So despite the availability of technology to track the spending habits and interests of each purchaser, the networks cannot offer goods only to particular viewers, as direct mail marketers could. The development of new, more interactive technologies would allow the networks to contact its viewers directly and on an individual basis, as though they had received a special offer in the mail. Such a technique gives the viewer the illusion of empowerment (I must be special to get a special offer), but it is really an empowerment of the advertisers, who would be, for the first time in almost twenty years, free from “channel surfers” who use the remote control to avoid advertisements. John Reardon, former president of MTV is currently developing a product at his company, ZING, that will take away much of the risk for advertisers while targeting individual viewers. In an article bluntly titled “How to Make Cybercash,” Jim Jubak details the irresistible nature of the ZING device: “The ZING device is handheld, sleek, and user-friendly. A tiny LCD screen receives messages from the TV. When the ZING beeper sounds and the ZING logo appears on the LCD screen, Reardon explains, viewers will be able to pile up ZING points, which will be something like green stamps, just by clicking. Of course, there'll be prizes for the big ZINGers. And of course, a lot of the ZING moments will occur during commercials, discouraging channel surfing by ZING viewers intent on piling up ZING points. The entire ZING system will sell for $150 per handheld unit” (Worth, 9/93). By transforming shopping from chore to game, the ZING device revolutionizes shopping in the home. And, perhaps more remarkably, the ZING has the potential to change every channel into a home shopping channel. The ZING home base will record the interests and tastes of each ZING owner, and then automatically make sales pitches based on that information. Suppose a ZING

subscriber is watching Nancy Kerrigan in 1998 Winter Olympics. Kerrigan, having scored a contract with Revlon Cosmetics immediately after winning the silver medal four years earlier, looks more beautiful than ever as she stands on the medal platform, bending over to receive the gold medal. The subscriber, almost in tears at the drama of the movement, thinks just how lovely Nancy looks when - ZING! she gets the chance to buy the same makeup Gold Medal Winner Nancy Kerrigan is wearing right now. “‘It asks me, “Would you like to purchase this product, yes or no?” And I press yes, enter,’ Reardon says. “‘And it asks in what quantity, and I say one, enter. It says my state, my style, color, and all those things. It’s all downloaded in a flash. Now this will do the calculations and come up with the sale price and the total price and the shipping and handling and all that. And to order press phone.’” Reardon points the ZING unit at the black box near the phone. “‘Now that’s the prototype of the ZING dialer’” (Worth, 9/93). The presence of a ZING dialer or similar device in millions of American homes will probably be one of the first steps in interactive television. The device suggests the growing relationship between cable and telephone companies. Cable will have difficulty financing and delivering two-way communications without assistance from the phone industry, and the telephone companies, yearning to deliver video-ondemand and other services most likely will be limited by the thin copper wire originally designed only for voice transfer. The parent company of the two largest shopping networks, John Malone’s Tele-communications, Inc. (TCI), will probably have more to do with the future of home shopping in particular and ITV in general than any other corporation. Already the country’s largest cable company, TCI is always looking to expand. Despite the recent breakdown of its $33 billion deal with Bell Atlantic, TCI expects to build alliances with at least one Regional Bell Operating Company (RBOC), and seems to turn up in nearly every discussion of ITV innovation. Channel Navigation. TCI’s Malone is so powerful in the communications industry, his words for some take on gospel truth. Pushed by a reporter to estimate how many channels would be possible with an upgraded system, Malone tossed out the number “500.” Since that moment, 500 channels has been the mantra of nearly everyone in the field. But Malone may have played Dr Frankenstein in suggesting 500 channel monster. A system that large has some inherent problems that could scare away many potential customers. For instance, the contemporary remote control would be woefully inadequate. In the new math of ITV, 500 = •, how can viewers hope to cope with this ostensibly infinite array of choices? TCI, through its subsidiary Liberty Media, and in cooperation with Rupert Murdoch’s corporate entities, is working on an application that they hope will tame the beast. Known as TV Guide On Screen, the program driver will sit on top of the television like 60 million cable boxes do now. But this box will be almost completely different. TV Guide On Screen will aid the subscriber in navigating the giant system, deciding what shows to watch, previewing shows all over the system, even reminding him of shows he intended to watch. All this for less than the cost of a weekly hardcopy TV Guide. Of course, TV Guide On Screen is not solely a public service sponsored by Malone and the other good-natured altruists at TCI. They are in it to sell. Every product has an angle that will enlist the support of major corporate sponsors. TV Guide On Screen, Worth’s Jubak notes, is a Trojan horse for a wide variety of other gimmicks, hooks, and soft sells. The major difference between this device and the ZING is that TV Guide’s offers a greater variety of services, rather than simply tangible goods. “For instance, clicking a pay icon lists all events, movies, and premium services. A viewer who sees a listing for a premium program offered on a service to which he doesn’t subscribe can order it by simply pressing the icon” (Worth, 9/93). TV Guide On Screen almost certainly will lead to expanded capabilities, accessible from the set-top box. “Still another icon is a gateway to the four interactive services that have been hooked up for this demonstration. A click on the X*PRESS icon calls up a video text menu. Want to see the day’s headlines on screen? How about all the recent sports scores? This isn’t just passive data, either. The stocks icon yields continuously updated prices of the

shares held in a personalized portfolio. In the future, a viewer might call up an accounting icon and pay all of his or her bills” (Worth, 9/93). THE SYSTEMS Before wonders such as ZING! and TV Guide On Screen can astonish viewers across the country, phone and cable companies must literally lay the groundwork through which the new services will pass. The innovation most fundamental to interactive television, and the one which distinguished ITV from regular TV, is a two-way communication system. Currently, TV-oriented signals enter the house, but they do not leave. A single source sends identical information to thousands of homes. Telephones, on the other hand, are by nature two-way, or point-to-point. The secret to ITV, then, is mixing the two systems to create a flexible, fast method of sending data both “downstream” (i.e., from the headend to the viewer) and “upstream” (i.e., from the viewer to the headend). Such a system will open the way to customizable home shopping, video-on-demand, interaction with various networks (such as the Internet or America Online), and televised “virtual” classrooms. Clearly, each of these options will require enormous data transmission facilities, capable of sending data as complicated as continuous full-motion video with stereo sound in real time with little or no signal loss. The current information infrastructure is not sufficient to handle these complex information interchanges. It can handle telephony, and it can handle TV, but it cannot yet cope with a hybrid of the two. The continued construction of the information highway is a multi-billion dollar project that will be divided not between the public and private sectors, but rather between an assortment of enormous communications companies. Cable companies like TCI and Cox Cable will work either with or against telephone companies like Pacific Telesis and Bell Atlantic in expanding the network of fiber optics, copper wire, coaxial cable, and radio waves that now serve as a barebones outline of what is to come. Eventually, out of the tangled assortment of wires and radiation will come several standards of communication, and those companies which create, promote, or align themselves with the standards will profit immeasurably. Because of the reality of competition, each of the driving forces behind the infrastructure will be forced to commit hundreds of millions, perhaps billions, of dollars to the building and implementation of the highway. No savvy corporations would enter this unless they knew they had the opportunity to win back many times their investment. If a company is fortunate (or clever) enough to set the standard in a given medium, all other companies will have to accept the standard or fold. ADSL. Most of the companies have just left the starting gate in this race to deliver a standard for the data highway in general and ITV in particular. Some phone companies, especially the RBOCs, look to the already-installed copper phone, or twisted pair, wire as a cost effective means of providing video and other services to their customers. Bell Atlantic, for example, has used a new technology called ADSL (Asymmetrical Digital Subscriber Line) that lets copper plant carry up to 1.54 megabits per second (Mbps) of data - enough to deliver one channel of precompressed movies to a single viewer (Byte, 1994). The movie signal is sent through a phone network to a set-top box that will decompress it and convert it from digital to analog, then port it to the TV. Such a system, when matched with telephone service, could allow for a basic version of true video-ondemand, which is to say any subscriber could view a film at any time, regardless of other viewers. ADSL, writes Andy Reinhardt in Byte, is “a quick-and-dirty way to pump digital video over existing copper plant” that does not really compare to the expansive capacity (bandwith) of coaxial cable or fiber optics. But if a RBOC could offer its subscribers this service as only a part of the subscriber’s total communications package, so viewers could choose programming from either a RBOC or a cable company. The latter, of course, would continue to provide nearly as many channels as it could squeeze into its cables, but phone companies might be able to get interactive ADSL running sooner, because of its direct link to telephony. A

variation on ADSL, called DMT (Discrete Multi-Tone) compressed four one-way video channels into twisted-pair wiring, in addition to a two-way interactive channel and two-other channels, all while leaving room for ordinary analog phone service (Byte, 1994). Industry analysts expect ADSL to quadruple its capacity to 6 Mbps by late 1994. After that time, set-top box computers will be quick enough to offer real-time decompression of video and sound signals, which would allow for live digital TV (Byte, 1994) Fiber Optic and Hybrid Systems. A more aggressive system, also being pursued by Bell Atlantic, involves fiber optics - glass-like threads which transmit pulses of light as digital information. Two fiber optic strands, together as thin as a single hair, can hold a sophisticated interactive interchange from subscriber to head end. Like ADSL, this system makes use of phone switching mechanisms, but the optics provide much faster service than twisted pair copper wires because the former employs light, not electrical current. Working with Broad-Band Technologies (BBT) of Durham, North Carolina, Bell Atlantic has devised a system of many components. The system still uses copper wire and coaxial cable, but much of the head end work passes through optics. The technique, if adopted, would be a watershed, because in its early stages it would almost guarantee deep cooperation between telephone and cable companies. The technology may be promising enough to aid the companies in their legal bids to merge. Byte’s Reinhardt concisely describes the BBT/Bell Atlantic process: A host digital terminal combines telephony feeds from central phone offices and digital video feeds from cable headends and sends them over a single paired-fiber cable to an optical network unit.ÉThe optical network unit, located at or near the customer site, then splits the signal back into digital video and analog telephony and sends them, respectively, via coaxial cable to a digital set-top box and via copper wire to a standard phone. Returning signals follow the reverse path. (Byte, 1994) This process could well overcome those companies who put their money into ADSL. While initially less expensive, ADSL cannot provide comparable bandwidth to a fiber optic and coaxial system. Once ITV catches on, customer will look for high quality, high capacity networks that can deliver a variety of video options and easy, clear telephony. ADSL runs the risk of providing one low quality channel, and status quo (at best) telephony, while BBT’s plan would deliver crystal clear, digital television along with improved telephone clarity. Proponents of ADSL might argue that copper plant already exists, and that will save ADSL servers from rewiring their customers homes but, according to Reinhardt, most telecommunications and cable companies are already rewiring to the curb with fiber optics. The BBT program rests on the notion that with ITV, two wires will run into every home - the coaxial cable and the twisted pair copper wire. The coaxial cable will provide the bandwith necessary for diverse programming, and the copper plant will allow for the inherently interactive nature of telephony. Once the cable gets to the curb, the fiber optic strands will pick up the signals and transmit them at light speed to the host digital terminal, where a computer will decide what the subscriber requests. Predictably, some leaders of cable companies would like to see only one wire entering the house - a coaxial cable. Since cable companies already have coax running into 60 percent of American homes, continued with that medium would be easy and would allow them control that they would not have if they bowed to phone companies’ ideas of twisted-pair wiring. Fiber optics at first might seem like a compromise, but running fiber into the home, rather than just to the curb, is beyond the financial means of even the strongest telecommunications companies. Estimates for that kind of work range as high as $400 billion to outfit every home, business, and school in the United States (Byte, 1994). These cable companies will have to reach a compromise with telephone companies that wish to use only twisted pair ADSL. The Bell Atlantic/BBT might be one solution to competing desires, as might Pacific Bell’s system that counters recent

predictions that all information devices in the home will be integrated into a single device. Moving toward a video dial tone, Pac Bell wants to rewire California with fiber and coaxial cable system that would emulate a telephone system more than and cable-access television (CATV) operation. Such a set-up would be point-to-point and symmetrical, giving the user the ability to send as much data upstream as the server can downstream. This, some argue, is an empowering element of television. The hierarchy of corporation over user begins to break down with the introduction of symmetrical operations. Over the short run, Pac Bell does not plan to provide its customers with the integrated box. Instead, it wants to explore a heterogeneous mix of end-user devices, such as standard analog phones; standard cellular phones; personal computers linked (with either digital or analog modems) to a cable/phone network; modems that attach cable television to a PC; analog set-top boxes; advanced digital set-top boxes; and regular cable-ready TVs and VCRs (Byte, 1994). Such an plan would allow customers to maintain much of their older equipment, and would eliminate the need to spend several hundred (even thousand) dollars frequently just so they could access new services. It also removes the phone company from the difficult position of trying to sell non-standard television to families who may still be angry over the cable box that made it difficult to record with their VCR. In the next few years, I believe an incremental approach may be the best way to obtain customer satisfaction and trust, a feature which may become increasingly important as various information companies are allowed to compete against one another. If I had to choose between a phone company that would allow me to keep my VCR, my computer, my television, and my phones, all while having access to interactive services, and cable company that was pushing me to buy expensive cable boxes that merely compresses much of the electronics I already own, I would choose the former. The Pac Bell system would work similarly to the BBT/Bell Atlantic switched systems. Headends would send signals through fiber to neighborhood nodes of, say, 500 customers. Fiber nodes would branch of into coaxial cable. The signal is then split into copper wire and more coaxial cable to video and telephone devices. A Pac Bell analyst says such a plan would open enough band width to provide video telephony (Byte, 1994). The video dial tone presents the intriguing (perhaps dismaying) possibility of callers to talk shows actually appearing on the talk show. Larry in Peoria could appear alongside neurotic cross-dressers on Oprah. At the same time, the phone wire would allow customers to navigate on-screen menus which would provide them with a wide array of viewing choices. Set-top Boxes. Once incremental systems have run their course, and more and more subscribers opt for set-top boxes as complicated as today’s higher end PCs, another battle will begin in the ITV war. The largest companies, like the RBOCs and the cable companies, will have other companies manufacture their set-top boxes. Silicon Graphics and General Instruments, two firms responsible for most boxes in use today, likely will bid savagely on the contracts, since the cable companies would nearly be dependent on their products. In the future, a TV without a decoder box would be like a telephone without a handset. The box will handle all incoming and outgoing data, facilitating communication between the subscriber and the headend. In the first few years of the ITV war, box manufacturers will do equally well, since their assembly processes will be flexible enough to shift from one cable companies requirements to another, without much attention paid to standards. But as one cable or phone company dominates the market, that companies box manufacturer also will take over the field. That partnership will result in enormous profits for both companies, but will involve less risk for the box manufacturers. By the turn of the century, set-top box production is sure to become one of the fastest growth industries in the world. Just as the cable and phone companies will depend on their box manufacturers, so will the box makers depend on computer chip manufacturers. Two of the largest chip producers, Intel and Motorola, already consumed in battles over the new Pentium and Power PC chips, will embroil themselves on yet another front of chips

for set-top boxes. Byte’s Tom Halfhill predicts a typical set-top box might involve a powerful CPU, such as a 486, Power PC, or Mips R4000. Add 1 to 3 MB of RAM; a high-speed graphics chip for screen overlays and video games; a display chip; a 1GHz RF tuner; a demodulator; an error-correction chip; an MPEG-II decoder; logic to strip the audio soundtrack from the incoming video; a Dolby decoder; two 16-bit audio D/A converters; a video RGB converter; and RF modulator; and infrared interface for remote control; flash ROM for the operating system; a security chip to prevent theft of service; and a switching power supply (Byte, 1994). Currently, a PC outfitted with all these utilities would run between two- and three-thousand dollars. In the next ten years, the price of such a device for a television has to drop to about $300 to be commercially viable. Computer companies like Apple, IBM, and Microsoft have all realized the trend of ITV and the necessity of set-top boxes, and they are scrambling to write the software that will emerge as the standard for television boxes. Apple already has released the MacintoshTV, a device that looks exactly like it sounds, but is not yet sophisticated enough to handle the computing challenges of ITV. The MacintoshTV serves as an interesting prototype, however, of what a future TV might look and act like. Programming Content and Management. With the fibers, cables, wires, and set-top boxes in place, cable and phone companies will need to provide programming to fill all the bandwith capacity. At the headend, video servers will require massive storage drives to maintain and transmit data. One firm dedicated to enormous storage systems is Oracle of Redwood Shores, CA, up to now has focused on supplying hard drives to industries like credit history, where a great deal of vital data on millions of individual must be tracked, stored, and available for access. One credit history has a database approaching 1 TB (1034 gigabytes), but the ITV industry eventually will require many times that to store information like the world’s entire film library (estimated at 63,000 films), historical news footage and popular TV shows, electronic catalogs, and interactive encyclopedias. The films alone add up to about 95 TB (at 1.5 GB per film in MPEG-II) (Byte, 1994). Oracle and companies like it will profit immensely from the needs of ITV companies, who always will require more films and services than the competition. I suspect optical drives in the next few years will be designed to hold several GB, since a single compact disc today can hold about .7 GB. A viewer will choose from an index or menu of thousands of films, matched to his individual taste, a signal will run from his phone line to a central office where an enormous jukebox system will copy the film onto a local mass-storage device, buffering it in RAM for smooth transmission, relay data through fiber-optic trunk, into coaxial cable, into a set-top box, and then into the television. Such a system eventually would allow for VCR-like control of the film, including pause, cue/review, even zoom. The obvious problem with such a system is maintenance of the hundreds or thousands of hard disks necessary to the storage and delivery of video. According to MTBF (meant time between failure) statistics, “an array of 1000 hard discs will lose and average of one drive per day” (Byte, 1994). This conjures the image of harried, frantic technicians scampering down rows and rows of drives, replacing failed units with working ones. The computers needed just to monitor the drives would be Herculean. Many analysts believe such a system requires a reconception of the way computers are designed. A large-scale video juke-box, likely to be one of the most popular features of any ITV system, would present an interface nightmare to any system programmer. Protocols and processing speeds capable of handling problems like five thousand people ordering the same film in one night can only be dreamt of now, but it will be a very real issue in the near future. One expert at HewlettPackard says of the video jukebox, “It’s really and I/O machine.ÉWe’re trying to come up with the architecture that is appropriate to this problem. It’s a problem of I/O and mass storage, not a problem of MIPS” (Byte, 1994). Comparable to contemporary frustrations with busy messages at services like America Online, or

less recently, the intermittent buzzing before call waiting, a jammed video jukebox will only irk cable customers, rather than provide them with a product they will be satisfied with. There can be little doubt, however, that flawed systems will reach a wide market before perfect ones, and irate customers will provide the feedback that will motivate soft- and hardware engineers to design a quicker, less frustrating I/O system. PROSPECTS AND CONCLUSION By extension, one might argue that it is ultimately the user of prototypical ITV systems that will decide the direction they take. Once the government has worked out its differences with the private sectors, once the phone companies match up with the phone companies, and the entire information industry - from Hollywood producers to cable manufacturers to John Malone - decides how much it wants to spend and dreams of how much it could earn, truly interactive television will become a reality. The stunning speed of both ideological and technological developments in the information industry suggests that ITV will be find a standard within the next ten or fifteen years, and this standard will be defined as much by viewer as by the CEOs. This is the empowerment almost inherent in ITV, the release from passivity which some viewers have yearned and others have feared. It is my hope that the balance of power between information consumer and information supplier be as symmetrical as the systems that will make up the information highway, that the public will embrace the opportunities available in ITV and its correlative technologies. After examining the current crop of information industry giants and start-ups, I am inclined to believe the giants of today will be even bigger in the future. TCI and Malone seem to show up either behind or in front of every major project planned in ITV. Bell Atlantic, too, has been wise enough to investigate several methods of incorporating ITV into American culture, rather than steadfastly lock themselves into a single method. Microsoft has been quick to endorse radio communications and set-top boxes as growth industries, and Bill Gates’ penchant for software-based near-monopolies will no doubt effect the future of ITV. Motorola and Intel will struggle with each other over this and many other projects, both producing innovative products and racing toward market dominance. Their competition will end in many great results both for ITV and computer technology in general. Silicon Graphics and General Instruments are on the path to becoming the Motorola and Intel of the ITV industry, but their weapons will be set-top boxes instead of computer chips. Looming above the entire industry, backing winners and perhaps contributing to the defeat of losers, will be AT&T. I believe that more than any other company, AT&T will guide the flow of information. It will invent more powerful computers, larger storage drives, faster fiber cables, better satellites, and other products that will revolutionize the way people conceive of and use information. I would not be surprised to see AT&T defeat government restrictions and buy cable companies, production studios, a television network, or even one of its long-distance competitors. The ever-expanding appetite of the American television viewer will look for more technology, despite an occasional fear of it. Only corporations as large as AT&T will be able to satiate that appetite, but companies like Bell Atlantic and TCI seem to have an equally large desire for earnings. As those two firms showed in late 1993, phone and cable companies are more than willing to negotiate their differences to pursue greater profits. It is conceivable that future mergers between these kinds of companies will spawn corporations the size and might of AT&T, corporations that will have behind them the power of 10,000 hard drives, 60,000 movies, and an interactive audience of 200 million. If that day comes, television will provide services considered technically outrageous or impossible today, but will be realized through interaction - conversational and financial between subscribers and providers. This movement’s meager origins in John Malone’s three-channel cable system will grow, hopefully, into a future of enfranchised viewers who will make informed

choices about the programming that enters their home. ITV has its dark side, certainly, but the potential for expansion of communication between viewer and corporation, and from person to person, outweighs the negative aspects. If a corporate quest for a better way to market ceramic statuettes to people results in video dial tones and high-speed data transfer, then ITV will have made some positive impact on American culture. Better communication, in the future, is what matters.

Sources: ( denotes electronic text, found via Gopher or FTP) Wired, December 1993. Communications Technology, December 1992. Utne Reader, Jan / Feb 1994. CED (Premier Magazine of Broadband Technology), July 1992. Byte, February 1994. Worth, September 1993. John Malone’s Testimony to the Senate Judiciary Committee, 1994. VP Gore’s Speech, January 11, 1994. Interview with Bill Gates in EduCom Magazine. Bell Atlantic Press Releases. Waiver from US District Court regarding Bell Atlantic’s bid to provide television service. Bell Atlantic Internal Report. Pacific Bell Press Release re: Internet Billing.