Time-Warner employee newsletter. The corporate publication for Time Warner employees. Pegasus.............................................
pathfinder.com
November/December 1997
FEATURE
CABLE'S ODYSSEY ÿ THE NEW BOX ÿTEAM PEGASUS
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CABLE'S ODYSSEY
THE PEGASUS PROGRAM
By Jack Mason
Illustration by Mirko Ilic'
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The Pegasus Program is the name that Time Warner Cable has given to its commercial deployment of digital, interactive television. If you're up on your Greek mythology, Pegasus immediately brings to mind a winged horse striding across the heavens. The image pretty much sums up the high hopes of Time Warner Cable's Advanced Engineering Group, which has been mapping out the future of cable television for more than two years.
Today, after a process of careful planning and testing that began with the rollout of the Full Service NetworkT(FSN) in Orlando, Fla., Pegasus is ready to fly off the drawing board--or, more accurately, the "white board." Blooming with diagrams and flow charts, the white board is the high-tech icon that sums up the collaborative nature of working science. On just such group thinkpads in suburban Denver, the six-member engineering group has taken Pegasus on its odyssey from concept to reality.
According to Jim Chiddix, FSN architect and Cable's chief technology officer, Pegasus started out as a horse of a different name. Says Chiddix, "Our earliest idea, which came right out of our experience with the FSN, was to get an affordable, powerful digital set-top device into consumers' homes. We thought of this as our Trojan horse. Once we got it into the home, we could eventually roll out the Greek soldiers [interactive services like video-on-demand (VOD) and digital music channels, that had proven popular with real-world users in Orlando]."
As recently as 18 months ago, in the face of such other emerging delivery systems as direct broadcast satellite (DBS) and the Internet, Wall Street seemed to have soured on cable. But the strong rally of Time Warner stock this year has been in large measure a reaffirmation of the company's continuing confidence in cable. Says Joe Collins, chairman and CEO of Time Warner Cable, "Thanks to the combination of our investment in upgrades for two-way, digital technology, our clustering strategy and the aggressive rollout of Road Runner, our high-speed Internet service, we're perfectly poised for Pegasus to take off."
The plan that grew into Pegasus began gestating within Mike Hayashi's Advanced Engineering Group (see Team Pegasus), key developers of the FSN prototype, almost immediately after its closely watched test launched in December 1994. By March 1996 the team published a massive "request for proposal" that outlined a two-phase strategy and set detailed standards for developers of interactive applications, programs or services. This month, the first of the next generation set-top boxes Scientific-Atlanta is building to the Pegasus network specs are arriving for lab testing.
If all goes well, by this time next year these sophisticated devices, a million of which are being built by S-A, Pioneer and Toshiba over the next three years, will be in homes serving up enough conventional analog and digital channels to compete directly with DBS. And with these hot boxes--computers really (see Cable Box)--in place, the Pegasus system will be poised to let loose those Greek soldiers, chief among them video-on-demand, a digital videostore service that allows a user to pick from a wide range of films and press buttons to start, pause or rewind at any time.
As exciting as the prospects for the Pegasus program are, it's important to understand it as a long-range, market-driven strategy, with the sexy digital services factored into the business plan only as revenue gravy. Pegasus, Phase One, is straight (albeit expanded and improved) cable service that will be rolled out carefully to a small sector of subscribers under an as-yet-to-be determined brand name. The network will offer more channels anddigitalvideo services(e.g., multiplexing premium services such as HBO and mega PPV--say, the top-10 new movies starting every 30 minutes).
"Our first goal is to target customers who are potential defectors to DBS," notes Rob Sadler, VP of advertising and promotion. "We think we can offer them a highly competitive service that includes the broadcast channels DBS doesn't provide." Of course, as a kind of supercable, the Pegasus Program can also serve as a value-added proposition in those areas where Time Warner divisions face competition from other fronts such as telephone or wireless cable companies.
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PROTOTYPE OF INTERACTIVE PROGRAM GUIDE
Down the road, with a relatively small additional capital outlay, is Phase Two: offering VOD and other popular interactive services such as E-mail, chat and Web access. One possibility is for Time Warner to offer the Road Runner service directly through the TV set, in addition to computers via cable modem. Another is plugging game machines into the box's built-in Ethernet dataport which enables consumers to download and play a range of titles.
Since Microsoft acquired WebTV and invested a billion dollars in Comcast cable earlier this year, interest in delivering interactive services through cable systems has increased. The appetite for interactive and Internet television services will be whetted further by new players such as Netchannel, Wink and Worldgate.
The explosive growth of the Internet and related computer technologies has been a critical factor in making the Pegasus Program commercially feasible. For example, S-A's Explorer 2000 set-top box, which will cost about $400, has as much--and in some ways, more--real-time, two-way computing power as the far more expensiveboxes built for the FSN three years ago.
At the other end of the cable system, the media server computers needed to store and distribute digital content--films, music, games--have also significantly dropped in price, while increasing in performance. What's more, the MPEG-2 transport standard for digital video (also used in DBS transmission) has madevideo-on-demand more practical and
feasible.
Perhaps most important, the Internet has driven home a critical lesson: the value of open standards, protocols and platforms. To help explain this, Hayashi naturally gravitates towards his white board. "An advanced, two-way cable system has three big cost centers," he explains while scrawling three balloons: SERVER
NETWORK/DELIVERY SET-TOP.
"We've concentrated on building the system from the set-top on back to support well-developed, public standards such as WWW [World Wide Web], HTML [the Web's Hypertext Markup Language], and IP [Internet Protocol], so that developers can quickly and easily create compelling interactive services," Hayashi says. In other words, a Pegasus cable network can work a little like a local intranet, built and managed with lots of off-the-shelf, Internet-flavored hardware and software, rather than writing custom code and developing applications from scratch.
Because proprietary tools and technology are expensive and inefficient, the Advanced Engineering Group and theDenver-based industry consortium CableLabs are spearheadingthe OpenCable proposal. This initiative will extend the Pegasus philosophy across the industry by approving industry-wide set-top box standards so that popular interactive or digital services can quickly ramp up to mass-market levels.
In the final analysis, with 50% of TWCable systems already upgraded to support the Pegasus architecture (and the rest scheduled to be finished by 2000), the plan seems to have an excellent chance to fulfill the vision for mass-market interactive television that Time Warner has pioneered.
So watch out. With a little luck, those byte-size Greek soldiers will soon be marching out of a cable box into your living room.
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Q: WHAT'S SMALLER
AND (A WHOLE LOT)
SMARTER THAN A BREADBOX?
A: CABLE BOX ON STEROIDS
<Picture>A peek inside the Explorer 2000 set-top device that controls the Pegasus system's mix of analog and digital channels reveals a pretty serious computer. After all, this box does much more than tune and change stations--it can manipulate digital content, the same kind of bits and bytes that flow through computers and the Internet. In fact, its heart is a chip from Sun Microsystems, makers of some of the most serious computers and servers on the market. That computer brain runs an operating system--think of it as the box's Windows 95--developed by Power TV, a company that grew out of Kaleida, an earlier strategic joint venture between Apple and IBM. The first generation of this box sports another special chip for displaying graphics. Other components receive and decode the digital video stream that will deliver video-on-demand--instantaneous pay-per-view movies or shows that you can pause, rewind and fast-forward. And this machine can also serve as a kind of digital radio with Dolby digital audio channels that can be played--commercial free--through your stereo system. What's most surprising about the Pegasus set-top (which is slightly bigger than the typical cable box on top of your TV) is that all its power is stuffed into a package about a third the size of the bulky FSN set-tops.
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TEAM PEGASUS
It's hard to believe such a small group has devised such big plans for cable's future. Mike Hayashi, VP advanced engineering, leads a tightly knit (if not so tightly wound) group of five engineers who seem to have more fun than their intense workload would allow.
Everyone credits Hayashi as the inspiration driving the camaraderie as well as the demanding development schedule. Soft-ware program manager John Callahan, the team's wry guy, says it best: "We know we have the greatest jobs in the world, so we don't complain too much when asked to do twice as much in half the time." Most of the group have telecommunications backgrounds, and all cut their teeth on the FSN prototype as lead technical developers. Hayashi even worked on Warner Cable's fabled Qube interactive cable systems in Ohio during the early '80s.
While they're busier than ever gearing up to test Pegasus in the field, the group still finds occasions to stop brainstorming on the conference room white board and hit the local links--the Inverness course, for one, beckons just yards outside their office park. One recent afternoon senior project engineers Michael Adams and Louis Williamson sat at the conference room table discussing their proposed specs for the OpenCable initiative and the acute challenge of working on the cutting edge of technology. "It's like trying to build a better mousetrap without ever having seen a mousetrap before," says Adams. Senior software engineer Ralph Brown, who has come in to take a break from work on the interactive program guide that will be the system's visual interface, equates the work with his experience mountain-biking in the Rockies. "If you aren't a little in fear of your life, you aren't having fun!" The trio then called Callahan, at home recuperating from back surgery, on the conference phone to tell tales about Hayashi-led business trips to Japan and swap stories about the previous evening's social outing.
"They're definitely a dynamic, hard working team," says administrative assistant Nancy Peters-Offerson, who organizes the controlled chaos. "Travel and meeting schedules have been consistently grueling, but I think the group's sense of humor has helped us through it. It's easy to respect Mike's leadership. He's built a great little organization here." |
