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TCI eyes TV set-top computer

The cable giant is in talks with Microsoft, Intel, and others about its planned next-generation digital set-top box with PC-like features.

Cable TV giant TCI (TCOMA) is talking to a number of companies, including Microsoft (MSFT) and Intel (INTC), about its plans to develop a next-generation digital set-top box with more computerlike features.

"The set-top box can be the much-heralded NC. This is WebTV squared or the NC cubed. These devices can offer PC-like functionality to a whole new demographic," said TCI chairman John Malone at the cable TV industry Western Show last week, as reported by CNET's NEWS.COM.

Malone was referring to the low-cost, low-maintenance Network Computer, or NC, that Oracle CEO Larry Ellison has been hawking. The NC relies on getting its data from a central computer.

Microsoft, Intel, Oracle affiliate NCI, Cisco (CSCO), Sun Microsystems, and others are all angling to have their technologies included in digital set-top boxes.

Yet Malone and other top executives in the cable industry remain adamant that Microsoft's and Intel's dominance in the desktop PC world won't be replicated in their industry.

Malone envisions a variety of digital set-top box designs from different manufacturers that offer different levels of performance and range in cost from $200 on up.

The various models would start off with performance and features ranging from the "Chevy" model, he said, with a processor capable of 50 MIPS (millions of instructions per second) and the ability to offer email and basic Internet browsing. The "Cadillac" model might come with a processor capable of 200 MIPS and the ability to offer Internet telephony, voice services, and video on demand.

Cable companies, meanwhile, could offer a host of new services. "We can offer high- and slow-speed bidirectional Internet service," Malone said. "We can offer Internet services where someone can both watch [TV] and browse at the same time, or supply the PC in the home with a high-speed connection." Best of all for cable companies, they can charge varying prices depending on the services ordered.

The only way the industry will adopt devices affordable for deployment, however, is if it moves past the proprietary cable boxes used in the past.

"This could change the dynamics of our industry," Malone said, but first the industry needs to figure out how to mass produce these devices at low cost. OpenCable is the key, he said, because it mandates that all of the new set-top boxes will be interoperable.

OpenCable project is headed by the CableLabs, a research and development consortium of cable television system operators.

The initiative is an attempt to develop a set of hardware and software standards for digital set-top boxes that can allow for use of a variety of processors or operating systems. These devices would replace the converter boxes on top of television sets that now merely unscramble TV signals. The net result of the OpenCable initiative is a major role in how the computer industry moves its technology into homes.