Microsoft’s TV Platform Makes Broadband Services a Reality for Cable Industry

CHICAGO, June 14, 1999 — It hasn’t quite been the search for the Holy Grail, but it’s been challenging enough.

For several years, players in the broadband market – including companies offering Digital Broadcast Satellite (DBS), Digital Subscriber Line (DSL), and cable – have been searching for ways to bring comprehensive broadband services to consumers, services that could include everything from Internet telephony and electronic commerce to high-speed Web access and interactive programming. For consumers, achieving this goal would herald unparalleled convenience, allowing access to information and services anywhere, at any time, from virtually any device such as a phone, television, set-top box or computer. For the industry, broadband offers the opportunity to provide additional services that could result in increased revenue.

However, turning this vision into reality hasn’t been so simple. A chicken-and-egg dilemma has seen industry participants reluctant to make major investments without proof of consumer demand, while consumers have been reluctant to sign on before being convinced that new broadband services are truly compelling and available in substantial quantity. The industry needed some way around this problem.

It appears that the solution is well on its way for cable, one of the most viable ways to deliver broadband to the home. If the talk around “Cable ’99” – the National Cable Television Association (NCTA) Show here in Chicago – is any indication, 1999 is shaping up as the year that ushers in the broadband millennium. Companies from AT & T to Panasonic, Sony, CNN Interactive and The Weather Channel have now taken major steps to deliver significant pieces of the broadband vision to their customers.

What’s made the difference, in part, has been the fruits of work by several companies, including Microsoft. Microsoft’s goal has been to help jumpstart broadband with demonstration projects and research investments that build consumer interest. At the same time, the company has been working to overcome technology hurdles and to encourage industry support for open market standards.

“Our goal is to make interactive television a reality for television viewers as quickly as possible,” says Alan Yates, director of platform marketing at Microsoft. “In order to expedite the availability of both content and delivery mechanisms, we have focused our efforts on developing a platform, working with the content industry on standards for developing interactive content, and encouraging the rapid buildout of a broadband infrastructure.”

Microsoft’s WebTV Network service, Internet terminals and receivers have proved that interactive television and integrated Web-based services are practical for the industry and popular with consumers. Now, Microsoft has combined its key television technologies into a comprehensive software platform for the television industry called the Microsoft TV Platform Adaptation Kit (TVPAK). Industry participants can use Microsoft TVPAK in whole or in part to offer innovative products, services and content, as well as complete server-to-client service management.

“The Microsoft approach — built in part on the WebTV platform with additional interactive features — offers cable operators a wide array of services that they can pass along to their subscribers,” says industry analyst Gary Arlen, President of Arlen Communications.

Through the Microsoft TVPAK, network operators can use as little or as much of the platform as they wish to offer their subscribers services including interactive TV programs, electronic programming guides, and e-commerce. Manufacturers can use the platform to create Internet terminals, advanced set-top boxes and integrated televisions. Content providers working with the platform and the compatible, Advanced Television Enhancement Forum (ATVEF) specification can more easily produce interactive programming for this market.

The industry is responding, using the Microsoft platform to turn the broadband vision into reality. Major network operators, including AT & T, United Pan-Europe Communications N.V. (UPC), and TVCabo, have pledged support for the Microsoft television platform. AT & T last month agreed to use the Microsoft platform for up to 10 million set-top boxes – up from five million under an earlier commitment – as well as licensing Microsoft server software to support its provision of email and interactive television entertainment to customers. In Europe, UPC is also deploying the Microsoft platform.

“We chose TVPAK as the end-to-end platform for our upcoming digital services because it is the most comprehensive, flexible, and functional TV software out there,” said Scott Bachman, Chief Technical Officer of UPC. “We view our use of TVPAK as a significant and integral part of our effort to provide customers in the Netherlands and Europe with broadband benefits, including speedy Internet access and interactive television programming.”

In addition, more than 30 leading OEMs, systems integrators and content service providers are also taking advantage of the simplicity and flexibility of the Microsoft platform, including Broadcom, CableData, Diva, General Instruments, Intel, Intertainer, Matsushita Electric Industrial Co. Ltd., Philips Digital Video Systems, Scientific Atlanta, SeaChange, Sharp, Sony Electronics, Inc., Thomson, and others.

Meanwhile, content providers are moving to ensure that there’s an ample supply of interactive programming that takes advantage of the Microsoft platform, giving more choice to consumers and more ad revenue opportunities to network and service operators. In addition to the numerous cable channels already offering some interactive content, interactive programming will soon be available 24 hours a day, seven days a week on four top cable channels: E! Entertainment Television, TheWeather Channel, HGTV’s Do-It-Yourself Network, and MSNBC. Another eight weekly shows will begin interactive programming this fall on HBO Sports, A & E/History, Lifetime, the Discovery Channel and the Learning Channel. Content providers – as well as the network operators and consumers who depend on them for interactive content – are getting a boost from the ATVEF specification. The ATVEF specification, co-created by ATVEF founding-member Microsoft, defines a standard format for digital- or Web-enhanced television content. Thus, programming that supports ATVEF can be delivered by virtually any compatible system – analog or digital, terrestrial, satellite or cable – to virtually any compatible consumer device: set-top boxes, digital televisions or PCs. By eliminating the need to create multiple versions of programming for each of these systems and devices, ATVEF is accelerating the rate at which the industry and its customers can adopt and expand into interactive programming.

The industry is moving to rally behind this important specification. For example, Microsoft and Wink Communications Inc. earlier this month announced an agreement to promote the creation of television content based on ATVEF. Both companies maintain that the more ATVEF-based content available, the sooner interactive television will become a common reality for viewers.

However, expanding creation of ATVEF-based content alone cannot ensure that interactive television becomes an integral broadband feature. The software necessary to run such content must ensure not only that consumers have a satisfying experience but also that network operators are able to easily and inexpensively manage the service. As such, Microsoft TVPAK contains software for both the client and the server. The Microsoft TV Server, built on Windows 2000 Server, Microsoft BackOffice and WebTV technologies, both improves the consumer experience and makes the network operator’s job easier by integrating with the operator’s existing systems for tasks such as billing and customer service.

In addition, Commercial Service Providers (CSPs) have the option of using Microsoft’s Commercial Internet System Version 2.5 in conjunction with TVPAK. With MCIS 2.5, CSPs and Network Operators can provide customers with services such as virtual private networks and roaming solutions, advanced Internet/Intranet and commerce enabled Web sites, and communications services including mail, news, and conferencing.

And what can television viewers expect when such service is delivered to the home? Microsoft TV, the client portion of the Microsoft TVPAK, allows the viewer to enjoy the best of interactive programming and Internet access and includes an optional Microsoft electronic programming guide (EPG) with advanced interactive features. The Windows-CE based client supports both new Internet/TV devices and existing cable connections and TV sets. In addition, it allows the network operator to customize the user interface to online content. Broadcasters and producers can use it to take advantage of their existing video programming and Internet expertise as they develop new interactive programming and content.

“Broadband services have been a dream for long enough,” says Microsoft’s Yates. “It’s very gratifying to see participants throughout the cable industry – producers, network operators, hardware and software makers and others – adopting a platform that can bring the benefits of broadband and interactive television to the industry and to cable customers everywhere.”

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