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TCI Will Launch DCT-5000 Boxes Without Full Suite of Services

Four months have elapsed since TCI
promised additional foliage in its "walled garden" of interactive services,
which started in March with a nod to BankAmerica Corp. and Intuit

Now, Tele-Communications Inc. is thinking that it will
launch the first advanced-digital set-tops -- namely, General Instrument
Corp.'s DCT-5000
line -- without a full suite of interactive services,
opting instead to get the hardware in place while the content deals catch up.

"We've unhooked the software side and the
hardware side ... the goal is to start deploying [advanced-digital set-top] hardware at
the earliest possible date, and that may well be before the initial suite of software is
ready," said David Beddow, senior vice president of TCI's National Digital
Television Center.

GI is expected to tell financial analysts this week that it
will begin volume shipments of the new DCT-5000 box by next June.

Content arrangements notwithstanding, TCI's work to
combine several software pieces is progressing well technically, said Adam Grosser, vice
president of product development for @Home Network. These include Microsoft Corp.'s
Windows CE operating system, Sun Microsystems Inc.'s PersonalJava middleware, an
as-yet-undecided navigator and an e-mail client from @Home.

Five months ago, TCI selected @Home to develop the e-mail
client and to assist the MSO in integrating the various software elements for its
interactive-TV play.

Grosser said executives from all sides -- Microsoft, Sun,
GI and TCI -- meet weekly, adding @Home has erected an entire wing to house the nearly 30
people who are now working on @Home's TV-content play.

He said the built-in animosity between Microsoft and Sun --
which recently caused TCI chairman and CEO John Malone to describe the integration as an
exercise in "mating porcupines" -- is starting to resolve itself, even though
Sun is suing Microsoft other over Java-deployment issues.

TCI executives noted early frustrations with Microsoft and
Sun because each wanted the other to produce working software before proceeding.

"With every project where there are multiple vendors,
there's always some period of 'schedule chicken' in the beginning,"
Grosser said. "But as the project gets more tangible, it becomes a self-correcting

Beddow's interactive status report showed final
details about:

How standards-based cable modems are integrated into
advanced-digital boxes;

The adoption of Sony Corp.'s version of
"fire wire" as an interim play until industry standards are completed;

An initial distribution of application program
interfaces; and

The development of a hardware reference platform for
various players to use until the DCT-5000 set-tops are ready.

He said TCI still needs to resolve what TV customers will
first see when they want to go interactive.

"[The navigation] piece is under intense scrutiny
right now," Beddow said.

That's because there are "obvious marketing and
corporate decisions" to be made about that first viewer interface, in terms of what
viewers first see and how to maintain a consistent look and feel, he said.

"There's a whole bunch of research and debate
about that right now, involving internal people and @Home and other companies,"
Beddow added, declining to name those entities.

One of those other companies, sources close to the matter
said, is Los Angeles-based BoxTop Inc., a developer of Internet content for Hollywood
companies, which is working to develop a suitable navigator for TCI.

BoxTop officials were not available for comment at press

Beddow did confirm the possibility of other banks, such as
Citibank and other regional financial institutions, entering the "walled garden"
that TCI's interactive-services group is developing.

While Beddow acknowledged that his portion of TCI's
interactive play centers mostly on the technical platform, he did not shut out the
possibility of other banks joining in. BankAmerica and Intuit are estimated to be helping
TCI to shave between $35 and $50 from the MSO's per-set-top costs, through a subsidy

He described TCI's arrangement with BankAmerica and
Intuit as "a pretty thorough memo of understanding," but he wouldn't go so
far as to call it exclusive.

And there are others. In February, TCI was close to an
arrangement with Internet bookseller, and Malone at the time made frequent
reference to some sort of travel vendor. Beddow declined to discuss specifics last week,
except to say, "There are certainly several others in the process of

But when the DCT-5000s start rolling into TCI's
subscriber homes next summer, Beddow predicted that limited interactivity will follow via
electronic software downloads when content becomes available.

He said TCI is already well-entrenched in the
software-download process as a way of maintaining, changing and updating the GI DCT-1000s
and DCT-1200s that are already installed in its systems.

"We do it now about once each month," he added.

On the overall interactive front, Beddow said APIs will
likely be issued this fall, which will help interactive-content producers to write for the
set-tops that TCI buys.

"I'd say that the final applications development
gets into full swing more in the December-January time frame," he said.