By John Markoff
N.Y. Times News Service
SAN FRANCISCO _ The unobtrusive cable control box that sits
atop many television sets is about to become a new battleground
for the nation's computer, telephone and cable television
companies. The ultimate prize: control of the access to all the
video entertainment and new types of electronic information that
enter and leave the home.
The struggle will move to a higher plateau, perhaps as early
as next week, when three companies each dominant in their fields
_ Microsoft, Intel and General Instruments _ are expected to
announce that they are jointly developing a set-top device that
combines the functions of a cable converter box and a personal
computer, according to industry executives. The three companies
are still working out final details of their agreement.
The new device is expected within a very few years, when cable
television systems will probably offer as many as 500 channels
and set-top units like the one envisioned may be the portals
through which virtually all video signals flow.
The power of a personal computer will be helpful not only for
selecting from all the movies and countless clones of popular
television programs that are sure to evolve.
But the computer might also make possible "interactive"
television tasks like assembling newscasts tailored to a viewer's
particular interests, browsing through video versions of the
encyclopedia or summoning on-screen shopping services in which
the models in the Eddie Bauer or Victoria's Secret catalogs
parade their wares at a viewer's command.
"There really aren't any bigger battles than this," said Mark
Stahlman, an industry analyst at New Media Associates in New York
City. "Telephone companies, cable operators and computer
manufacturers are racing into your bedroom."
Besides Microsoft, Intel and General Instruments, a range of
computer makers are anxious to form partnerships with both cable
and telephone companies to attack the new interactive market.
In addition to Apple Computer and International Business
Machines Corp., which is each still looking for a teammate, video
game makers such as Nintendo and Sega are each exploring
relationships, and 3DO, a Silicon Valley start-up company with an
advanced video player, is also looking for alliances.
Each company vying to establish the industry standard for the
devices that will control all this action is buoyed by the
knowledge that whoever seizes control of the set-top stands to
make billions of dollars and help determine what type of
information pulses into and out of millions of homes.
But of the teams formed so far, the one made up of Microsoft,
Intel and General Instruments may be the most powerful and seems
closest to bringing a product to market.
General Instruments, a leading provider of set-top cable
television decoders, has already been at work with the largest
operator of cable systems, Tele-Communications Inc., to create
the data-compression technology that Tele-Communications has said
will make it possible to squeeze 500 channels into a single cable
And now, Microsoft, which dominates the personal computer
software market, and Intel, the world's largest computer chip
maker, will cooperate with General Instruments in designing the
computerized set-top device that will contain a version of
Microsoft's popular Windows software and be powered by Intel's
386-series personal computer chip.
A model geared to today's cable systems, priced between $250
and $300, is to be available later this year. Next year, a more
advanced version will add the digital-compression technology. In
both cases, the set-top device will be operated with a
remote-control unit that is similar to control devices used for
today's cable boxes and televisions.
"Interactive multimedia is just a wild frontier," said Bishop
Cheen, a senior analyst at Paul Kagen Associates, a media
research firm in Carmel, Calif. …