To: BillyG who wrote (38926 ) 2/12/1999 8:10:00 PM From: DiViT Respond to of 50808
MediaOne Plans To Work With Philips To Develop Digital Set-Top Boxes By Leslie Cauley, Staff Reporter of The Wall Street Journal 02/08/99 Dow Jones Business News (Copyright (c) 1999, Dow Jones & Company, Inc.) MediaOne Group Inc. plans to work with Philips Electronics NV of the Netherlands to develop digital set-top boxes for the U.S. cable market, a move aimed at driving down prices and giving consumers more choice. The plan, which is expected to be announced Monday, is also aimed at cracking open the domestic equipment market for set-tops, which for years has been dominated by U.S. companies General Instrument Corp. and Scientific-Atlanta Inc. If all goes according to plan, MediaOne expects to begin selling digital set-tops directly to consumers this summer. That is well ahead of the federal deadline for making the boxes available to customers on a retail basis, now set for July 2000. The first digital set-tops are expected to cost around $300 but to decline in cost over time. "Consumers will finally get the kind of choice and flexibility that they really want," said Bud Wonsiewicz, chief technical officer of MediaOne, the Denver-based cable company. In addition to Philips, MediaOne is expected to buy digital equipment from DiviCom Inc., a unit of C-Cube Microsystems Inc., based in Milpitas, Calif., and digital-broadcasting software from Canal+ Technologies, a digital-software company based in France. MediaOne's move comes amid a big push in the cable industry to eliminate proprietary technical standards for cable set-tops, which descramble programs such as Home Box Office so consumers can tune in. By moving to "open" cable technical standards, the cable industry is hoping to spur innovation among manufacturers, attract other companies to enter the market and drive down prices. The new digital boxes, which are really minicomputers, are needed to handle the panoply of new digital services that cable companies eventually plan to offer, including interactive video, Internet access and phone service. Once set-tops become available in retail stores, customers will still have the option of leasing their gear. Over time, many observers expect consumers routinely to buy their set-tops, much like they now do telephones. General Instrument and Scientific-Atlanta have indicated they intend to open up their technical platforms, paving the way for a bevy of rivals to enter the set-top market. But they have been slow to actually do it, in part because the cable industry hasn't settled on open specifications. The MediaOne move should help spur things along. MediaOne, which has about five million cable customers across the country, is continuing to work with General Instrument and Scientific-Atlanta on opening up the industry's technical standards. That effort has been spearheaded by Cable Labs, a Louisville, Colo.-based consortium that serves as the cable industry's research arm. Copyright (c) 1999 Dow Jones & Company, Inc. All Rights Reserved.