Interactive TV: Inquiries and Promises
Just days after regulators in Washington opened an inquiry into the implications of interactive television, some of technology's top names will be opening their bag of tricks and revealing their latest plans for the over-promised, under-delivered evolution of what, 30 years ago, a former FCC commissioner called a "vast wasteland."
By Nico Detourn (TMF Nico)
January 22, 2001
Media convergence is the theme at this year's annual National Association of Television Program Executives (NATPE) Conference in Las Vegas. It's also one of the concerns of the Federal Communications Commission as it attempts to get a grip on technologies and industries that can no longer be shoehorned into neat and orderly categories.
The FCC Thursday launched a formal inquiry into interactive television (ITV) and will seek comments on matters as basic as the definition of ITV itself -- and whether the commission even has the authority to regulate it.
The FCC inquiry was inspired partly by its approval earlier this month of the AOL Time Warner (NYSE: AOL) merger. The deal left FCC Chairman William Kennard concerned, he said last week, that "a vertically integrated ITV service provider might have the incentive and ability to discriminate against unaffiliated ITV service providers.''
It's unknown how far the commission's probe will reach, however, as Friday was Kennard's last day on the job. The Democratic Clinton appointee is expected to be replaced by a Bush Republican, which will tip the balance of the five-member commission to the latter's party. Speculation is that the inquiry may head down a path leading to fewer or different regulations.
For now, though, the FCC is examining whether a cable provider could gain "substantial advantage" in offering ITV services by discriminating against competitors and steering customers toward its own programming. Although the AOL Time Warner deal was approved unanimously, the Commission voted 4-to-1 to avoid the ITV issue at that time. Separately, the Federal Trade Commission placed non-interference conditions on the company when it OK'd the deal in December.
Republican FCC Commissioner Harold Furchtgott-Roth said ITV regulation was inappropriate while the industry and technology were in a "gestational period." On the other end of the political spectrum, Democratic Commissioner Gloria Tristani thought the Commission should have gone directly to the rule-making process rather than get bogged down in a prolonged inquiry.
That slower process doesn't bother the National Cable Television Association, which sees no evidence suggesting regulation is called for. Association President and CEO Robert Sachs said he was pleased the FCC was taking a fact-finding route, though he questioned whether even that might have been going too far. "Asking dozens of hypothetical questions about regulating a business which has yet to take form," he said, "still puts the cart before the horse."
Think interactive
But no matter how things play out in Washington, interactive TV won't be stopped, and new tools for speeding its arrival was the message Microsoft (Nasdaq: MSFT) and Motorola (NYSE: MOT) brought to Las Vegas -- and to the 20,000 TV executives attending NATPE 2001 -- Monday.
Microsoft said it is teaming with Motorola's broadband communications division to offer advanced set-top boxes through the new Microsoft TV Content Builder Initiative (CBI). CBI is part of the Microsoft TV Content Developer Program and allows selected companies to develop and test enhanced TV applications and made-for-TV Web content on the same Motorola set-top boxes used by consumers.
Microsoft says this will speed delivery of interactive broadband services over the Microsoft TV platform that will be deployed by cable, terrestrial, and satellite TV system operators.
"The best interactive programming is achieved when the content and interactivity are devised in sync," said Internet consulting firm Agency.com (Nasdaq: ACOM), a participant in Microsoft's CBI program. The new Microsoft initiative plays directly to that objective and "should play a key part in encouraging content producers to think interactive from the start."
InfoSpace (Nasdaq: INSP) is also participating in Microsoft's CBI program and will "integrate and extend" its broadband services and ITV applications to the Microsoft TV platform. InfoSpace said it is "thrilled to be collaborating with Microsoft," while Microsoft said InfoSpace is "just the type of forward-looking, capable partner" it is eager to work with. Other companies Microsoft's CBI includes are Razorfish (Nasdaq: RAZF), Sony (NYSE: SNE) Pictures Digital Entertainment, The Weather Channel, Discovery Channel, and MacNeil/Lehrer Productions.
Interactive applications software Liberate Technologies (Nasdaq: LBRT) is also displaying at NATPE and will use the show to announce the opening of its PopTV Lab, a new interactive TV facility. The PopTV Lab "recreates domestic and international interactive TV deployments" and lets content developers build applications in a real-world environment, Liberate said.
Liberate will also show the PopTV Variety Pack, a set of pre-packaged branded content that gives set-top operators "a head start with interactive television pilots." NATPE attendees will also see demonstrations of applications including Liberate's TV Mail, TV Ticker, TV Chat, and low-end set-top boxes running PopTV Java-based applications. Programming and applications for the Philips (NYSE: PHG) AOLTV receiver and Motorola digital set-tops will also be demonstrated.
While the tech firms promise and the FCC inquires, the analysts count. According to Forrester Research, the number of North American households currently using interactive TV services is minuscule -- less than 1%. That number is expected to reach 2.5 million over the next 18 months and hit 17 million by 2004, according to Gartner Group.
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