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Can set-tops live up to the hype?

TV set-top boxes are being touted as providers of computer-like services, but the technology finally must demonstrate its use to consumers.

    Much hype has been bestowed upon the television set-top box as provider of interactive computer-like services, but with the upcoming roll-out of Scientific-Atlanta's cable TV set-top box, the technology finally must prove its worth to consumers.

    Scientific-Atlanta's Explorer 2000 cable set-top box offers many of the features industry watchers say are integral to the platform's acceptance: email, movies-on-demand, and high-speed Web access through a cable modem and Ethernet technology.

    But there are still some basic infrastructure issues that must be addressed before consumers can take full advantage of Explorer 2000 and other products like it.

    First, a quick look at what advanced cable TV set-top box suppliers are touting:

  • Email and Web browsing: surf the Internet or send and receive email at high cable modem speeds, many times that of the fastest dial-up modem. No waiting for dial up or connections, always connected.

  • Movies on demand: obviates the need to make a trip to a video rental store. Select from a library of movies and request to see them "on demand."

  • E-commerce: Set-top boxes (such as Scientific-Atlanta's) have a public/private key security system to allow secure home shopping. And it comes with a smart card slot so users will be able to insert a debit card to pay directly for purchases over their TV. Also, a smart card can be used to transfer electronic cash from their bank account onto the card.

  • Cable modem: set-tops come with an Ethernet connection "port" and integrate a high-speed cable modem. Supports hook up to a consumer's PC and can function as a stand-alone cable modem. Can use the set-top on both the TV and PC.

  • Hundreds of digital channels: high-resolution images and high-quality digital music--and interactive games.

    But this will not be automatic. Rather, it will be decided by the local cable company--not the set-top box maker. "The cable operators sit on their imperial thrones, and they decide what's going to be offered to subscribers," said Seamus McAteer, an analyst at Jupiter Communications, predicting that few cable service operators will opt to provide costly services like email and full Internet access.

    "Who pays for the boxes in people's homes? The cable operator. How much they want to offer, depends on how much they want to pay."

    Scientific Atlanta says services are generally rolled out gradually. "Most cable operators follow digital video services with email, then web browsing capabilities, and finally video-on-demand" which is the high revenue-generating killer applications, according to a Scientific Atlanta spokesperson.

    The cable box supplier also extols the fungibility of the device, saying that set-top boxes like the Explorer 2000 can be used as a cable modem for PCs. This draws skepticism from McAteer however.

    "There is a pent-up demand for [high-speed] Internet access among PC owners, but TV viewers who don't have a PC are really not that interested," he said. "And do you really want to string a line from your PC to your set-top, which are usually in different rooms? Probably not."

    Improved programming guides may drive browsing
    Still, these devices are at an advantage since they are being deployed by cable providers who possess a distribution channel already accepted by consumers, according to Forrester Research. News, sports, and talk shows will gain "lazy interactivity," the report says.

    This interactivity will be accompanied by more advanced electronic TV program guides. "As cable's channel choices expand and [channel] surfing becomes unwieldy, viewers will demand more sophisticated guides from cable operators," the Forrester study says. The report cites advanced electronic TV programming guides that quickly sort through hundreds of channels.

    Movies-on-demand is the next feature most likely to succeed, McAteer says, because it is a service that television viewers have already demonstrated a demand for.

    "You're going to see a lot more video programming in this new stream," he said.

    Despite all these tantalizing features, it is unclear how many people nationwide will have access to set-top boxes like Explorer 2000 in the next year, notwithstanding Scientific Atlanta's announcement today that cable subscribers in Buffalo, New York, and Glendale, California, are accessing SA's digital cable services. The bottom line: Service with all the bells and whistles could be very patchy for a few years yet.

    Although 14 cable operators have made "commitments" to Scientific Atlanta's digital network service, representing approximately 16 million subscribers, it is unknown at this point what services will be offered, and in what time frame.

    The need for speed
    Moreover, to realize the full potential of cable set-top boxes for Internet use, two-way high-speed connections are essential. But many cable providers across the country are still upgrading their networks to provide such two-way services. Services that are not two-way provide a slow dial-up connection for sending data, because a separate phone line connection is required.

    Thus, few cable operators are expected to offer services for the full spectrum of hardware features Explorer 2000 supports.

    Finally, the promise of high-resolution digital programming is at least a few years off because the infrastructure for high-definition TV is just beginning to be built.