Details of the expanded alliance were disclosed today at a press conference at the National Cable Television Association trade show in Atlanta.
The agreement, which expands upon an earlier alliance between the two companies, adds another link in a technological chain that will allow the cable giant to create a subscriber-only entertainment and information network based around Internet technologies.
Through these standards, TCI aims to create an environment where the interactive digital equivalents of HBO and ESPN can come into being and then sold to consumers on a closed network, according to David Beddow, senior vice president at TCI.
"We'd like to develop enough applications where people have to watch television 24 hours a day, 7 days a week," Beddow joked. "A lot of these applications are going to wind up running initially in test markets to find out what consumer reaction is...Then over time you will develop the stars among them, like the HBOs and CNNs as video equivalents.
"It is a natural selection process that will probably go on for two to three years," he added.
While these set-top applications will be based on Internet technologies, they will not be Internet applications per se. TCI will run them on a closed network that the company controls, Beddow noted. "We operate a closed network. There has to be a certain amount of control on that network."
The deal also marks TCI's latest effort to accommodate both Sun and Microsoft, or at least play the two off each other. On Monday, the cable operator said it would adopt Windows CE for at least 5 million of the approximately 11 million set-top boxes the company plans to roll out by next year.
Under today's agreement, TCI will include PersonalJava in all of its set-top boxes. Sun will receive a per-unit license fee for all of the set-top devices it deploys.
For its part, Sun will provide the means to "port" the PersonalJava software to set-top boxes running Windows CE. TCI has also licensed the JavaOS, which is already compatible with PersonalJava, to use on set-top boxes not running Windows CE.
PersonalJava is a slimmed-down subset of Sun's Java language. By incorporating it into set-top boxes, TCI (as well as third-party application vendors) will be able to deliver Java-based content and services to homes without worrying about compatibility.
Beddow repeatedly refused to state how many set-top boxes would use Sun's operating system software.
By the second quarter next year, TCI will have approximately 10 million intelligent set-top boxes installed, as well as a rudimentary network of interactive TV services that can be accessed through the boxes. The company hopes to reach an installed base of 25 million three years from now.
Earlier this year, TCI announced that it would start to roll out "intelligent" set-top boxes to its customers as part of a plan to expand TCI's services. These new set-top boxes will allow consumers to receive digital TV signals, but also surf the Web and run still-to-come interactive applications. Deployment will begin in the second quarter of 1999.
General Instrument will act as the primary supplier for TCI's set-top boxes, although TCI will also purchase boxes from other manufacturers.
Sun CEO Scott McNealy stated that the agreement will benefit Sun, but also its application developers as they will become one of the primary conduits for this new era of applications.
The extension of the agreement also means that Microsoft will have to ensure that CE works with PersonalJava. "They will have to pass a compatibility test," he added. "They will have to make sure they do not trample on any IP [intellectual property]."