Set-top box technology advancing

A Dallas, Texas-based company called Source Media (SRCM) today demonstrated technology at an industry conference that would allow cable companies to offer Internet access to customers through more advanced versions of the cable boxes which sit on top of many TVs.

The company joins a crowd of competitors interested in supplying cable companies with technology for the next generation of interactive television services, including Microsoft (MSFT), Worldgate Communications, Wink Communications, and numerous others.

A typical set-top box issued by a cable company allows subscribers to view numerous channels and pay-per-view programming, but little else. By next year, however, newer digital set-top boxes as well as "advanced" analog set-top boxes are expected to bring new capabilities to the television, such as Web browsing, email, and chat.

While the PC is currently the means of choice for Internet access, cable set-top boxes in the home are expected to slowly catch on as Internet-access devices, and may eventually overtake the PC, possibly by the year 2005.

However, cash-strapped cable companies have been slow to upgrade their networks with the ability to do two-way communication through coaxial cable. Source Media claims its content can be delivered to homes without upgrading to costly two-way systems.

Since last year, Source Media has been working on interactive services with NextLevel Systems, a worldwide supplier of systems and components for high-performance cable, satellite, telephony, and data networks. NextLevel is a spinoff from General Instrument (GIC), which along with Scientific-Atlanta (SFA) comprises the two largest set-top box makers in the U.S.