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Digital TV's technical difficulties

Whether it be phones lines, cable, or wireless, the issue of broadband transmission threatens to render moot the promises of the much-hyped media miracle called digital television.

Tele-TV chief executive Howard Stringer and his lieutenants had a dream: to bring interactive television services, such as movies on demand, to customers of Bell Atlantic, Nynex, and Pacific Bell--a new venture for the telephone companies. The way Stringer saw it, customers could come home from work and call up their favorite movie or choose from a slew of specialty programs, all through a highly automated interface with a remote control.

Millions of dollars later, the plan has fizzled as the partners got gobbled up in mergers--Nynex with Bell Atlantic and Pac Bell with SBC Communications--and cost-cutting took precedence. The failure was underscored by this week's resignation of Stringer, the former CBS Broadcasting boss, and layoffs that felled half of Tele-TV's staff.

Despite all the bad publicity, though, Tele-TV still survives and is gearing up to launch a TV product just in time to ride the new wave of interest in digital television generated by recent news. And while not fully interactive, it could lead to the marriage of TV, telephones, and the Internet in a single package.

As in many other industries, the project's difficulties can be traced to delivery of the product and not the product itself, a challenge that has already become a major obstacle for digital television. Whether it be phones lines, cable, satellite, or any other communications technology, the issue of broadband transmission threatens to render moot the many promises surrounding this much-hyped media miracle.

"The problem with cable and other high bandwidth is the 'last-mile syndrome'--getting it to the home," said Stephan Somogyi, principal of the San Francisco consultancy Gyroscope. "Satellite is another interesting problem because it has no back channel. It can do push-related stuff but has no upstream."

"The problem with cable and other high bandwidth is the 'last-mile' syndrome -- getting it to the home."
--Stephan Somogyi,

Nevertheless, given the enormous profit potential of this burgeoning business, there is no shortage of enthusiasm to try whatever might work to bring interactive digital TV to the home.

Rather than take on the challenge of full interactivity, most companies are biting off chewable pieces first. Some cable operators, for example, are working on high-bandwidth projects that will provide sharper TV images with more than 100 channels.

This year, Tele-Communications Incorporated, the nation's largest cable TV operator, rolled out a form of digital television dubbed All TV. The product, which promises far better picture quality than current analog broadcasting, costs between $35 and $65 per month depending on the tier of service.

TCI hopes that All TV will be a "DBS killer," referring to the technology that is slicing into its profits. DBS, or direct broadcast satellite, refer to the pizza-sized dishes that receive more than 150 channels for service subscribers. In a sword-to-plowshares tale, defense contractor Hughes Electronics, among others, has turned the product into a moneymaker.

But neither DBS nor All TV, in their present forms, have become truly interactive by marrying television with the Internet, for example. That would require having the ability to send data two ways: from the network to the home and vice versa so that data signals could be sent from households requesting specific information, such as Web sites.

Pac Bell, through Tele-TV, hopes to offer yet another technology by June, one that it calls "wireless digital TV." The service offers more than 140 channels of television through microwave signals beamed to homes using a lightweight antenna that looks like a cracker box. Onscreen TV guides, somewhat less interactive than what Stringer had in mind, are selected with a remote control.

Wireless digital TV is meant to compete with cable and satellite television. Unlike satellite, however, Tele-TV's digital TV receives local channels, a big plus for many consumers. Pricing hasn't been firmed up, but it is expected to be comparable with cable and satellite rates. Pac Bell will pay to maintain the rooftop antennas.

Interactivity will require major changes in all bandwidth technologies.
The phone companies also have the capacity to offer digital TV over the same cable line that provides phone and Internet access. In San Jose, for instance, Pac Bell offers 66 channels of cable TV over two-way cable networks for as low as $28.95 a month. It offers phone service over the same lines and is testing Net access as well.

Analysts think it is inevitable that telephone carriers such as Pac Bell will bundle cable TV, phone service, and Net access, laying the groundwork to offer robust interactive products. But the telcos, not known for their marketing prowess, have a long way to go.

Pac Bell, for one, still sends its cable customers in San Jose a separate bill for cable and phone services. What's more, the 66 channels are still analog, although the network is digital. The company won't say when, or if, it will convert the channels to a digital format.

Managing editor Mike Yamamoto contributed to this report.