NCI in set-top software deal

General Instrument (GI) will use Network Computer Incorporated's DTV Navigator browser software in upcoming digital TV set-top boxes for the international market, a deal that will allow the Oracle unit to focus on signing up cable operators as licensees of its set-top solution.

Announced today by the two companies, the agreement is a major design win for NCI, which aims to establish its software as a front-running operating environment in the nascent set-top market. Cable and Wireless (CW), the British cable provider that will buy GI set-top boxes with DTV Navigator, has an estimated 11 million subscribers.

Financial terms of the agreement were not disclosed.

DTV Navigator is a modified version of Netscape Communications' Navigator browser code, optimized for the limited processing power of set-top boxes. NCI licenses the DTV Navigator architecture to set-top box manufacturers (such as GI) and to cable companies, which then lease NCI-equipped set-top boxes to their customers.

With DTV Navigator, users can access video-on-demand services, Internet access via an embedded cable modem, an electronic television program guide, and multimedia email applications.

In March, U.K.-based CW agreed to make General Instrument's Dvi-2000 set-top terminals available to its subscribers. As CW announced earlier this year that it would license NCI's server technology for use with its cable television products, it was only a matter of time before GI announced it would port NCI's set-top (or client) software to set-top boxes made for CW, analysts say.

"Today's news wasn't totally unexpected," said Sean Kaldor, an analyst from market research firm International Data Corporation.

Now that NCI has inked deals with GI and Scientific-Atlanta, the two major set-top box manufacturers, its next major objective is to sign up more cable operators as distributors. "We're executing our strategy," said Dave Limp, vice president of marketing for NCI. "GI is the last of the major top-tier hardware vendors to sign up."

Although cable giant Tele-Communications Incorporated (TCI) already has signed on with competitor Microsoft to use Windows CE in TCI set-tops, several large cable companies have not yet specified their set-top plans, according to Kinetic Strategies cable industry analyst Michael Harris.

"NCI's basically got all their bases covered from a hardware standpoint. Now they need to find cable operators who want to deploy that implementation," Harris said. Time Warner, US West's Media One, and Comcast all are looking for set-top alliances, he noted.

NCI reportedly has been negotiating with Time Warner to provide set-top box software. Additionally, parent company Oracle also is reported to have made a bid on on Time Warner's Road Runner, which provides high-speed Internet access via its broadband cable network.

The Oracle unit added today that it will make further announcements regarding its cable strategy later this year.

"NCI is making a lot of moves in the cable space. They've definitely identified the cable space as a focus for them to sell applications," Kaldor concluded.

NCI is perhaps best known for its network computer (NC) software, but unlike the set-top box, the NC hasn't been able to generate much market momentum.