CS 420

The Promise of Interactive Television: 2 May 1994

An Ideological and Technical Study
1st Draft: 2356 words
2nd Draft: 4826 words
Final: 8709 words

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 VCR-
clocks, 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 Tele-
communications 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. Vice-
president 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 mega-
corporations 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-on-
demand 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-on-
demand, 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 1-
GHz 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 Hewlett-
Packard 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.