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WorldGate Nabs Charter

Charter Communications Inc. is set to announce this week
that it is moving to commercial rollout of WorldGate Communications Inc.'s Internet-TV
service, marking the first foray into Web access via the TV by the cable industry.

Charter, starting in St. Louis this week and moving in the
months ahead to additional markets, may soon be followed by other MSOs in the launch of
the WorldGate system, according to vendor and MSO sources who have been monitoring trials
of the technology.

Set-top makers expect more WorldGate deployments from MSOs,
according to John Burke, vice president of marketing at General Instrument Corp., and
Steve Necessary, vice president and general manager for analog-video systems at
Scientific-Atlanta Inc. GI is supplying the DCT-2200 advanced-analog set-tops for
Charter's rollout, and S-A clients are testing the service.

Both S-A and GI have equipped their boxes to accommodate
WorldGate. The service allows users to access the Web through the vertical-blanking
interval of a 6-megahertz cable channel at a rate of 128 kilobits per second, and it does
not require the use of personal computers or other ancillary set-top devices.

Charter's decision came after a five-month market trial
involving 130 customers, said David Barford, senior vice president at the MSO, which has
1.1 million customers in 18 states.

"We think that it's going to be a strong
business," Barford said.

Charter is introducing the service for $15.95 per month in
a handful of St. Louis-area communities where it has upgraded systems for two-way

Customers who get the service will be equipped with the
set-tops at no extra cost, giving them access to an electronic programming guide, a
digital-audio-music service and, in the near future, Wink Communications Inc.'s
enhanced-broadcasting service.

"The [WorldGate] service is easy to use, and it's much
faster and much less expensive than dial-up," Barford said, noting that 90 percent of
the test customers said they would take the service at the $15.95 rate.

Charter, with plans to introduce high-speed-data service
via cable modems within the next couple of months, sees WorldGate as a complement to cable
modems, rather than a rival, Barford said.

Charter introduced the service at Oakville Elementary
School last week, with Rep. Richard Gephart (D-Mo.) in attendance, marking the first step
in the fulfillment of a commitment to provide the service at no charge to 400 schools in
the St. Louis area over two years.

The company hopes to pass 150,000 households with WorldGate
by year's end, Barford said.

Cable operators have been divided over the usefulness of
Web access via TV, as well as over the appropriate means of offering such access.

Burke said that since WorldGate is now ready for
deployment, MSO interest has risen.

The leading competitor for cable's attention in TV access
is Microsoft Corp.'s WebTV Networks, which has been working with some MSOs to test the
marketability of cable access.

WebTV's system requires the use of a computerized set-top

"We're still not sure that there's much incentive to
surf over the TV, but we're trying to stay open-minded about it," said one senior
engineering executive, asking not to be named, whose company has ordered OpenCable digital
set-tops for Internet delivery via cable modems.

MediaOne, which has committed to using advanced-analog
boxes on a large scale, is also looking at how WorldGate fits into its strategy, said
MediaOne spokesman Dave Wood.

Canadian MSO Shaw Communications Inc., which is testing
WorldGate in conjunction with its rollout of digital boxes supplied by GI, is devoting a
6-MHz channel to the service, allowing users higher-speed access than is possible over the
analog system, said Michael D'Vella, senior vice president of planning at Shaw.

"The first question that we have to resolve is whether
there's a market for this service and, if there is, how best to pursue it," D'Vella

One intriguing possibility would be a tie-in between the
WorldGate service and @Home Network, where the TV-access experience might be enhanced by
allowing customers to participate in @Home's broadband-purposed content, D'Vella said,
noting that Shaw is an @Home affiliate.

WorldGate has been in discussions with @Home, but no deals
have been struck, said WorldGate CEO Hal Krisbergh.

Krisbergh said WorldGate is working with advertisers and
programmers to take its hyperlinking capabilities to the next level, which would allow
viewers of TV-program advertising to push a button on their remotes and activate a link to
the advertiser's Web site as its ad is running.

"We're sorting through the business arrangements for
doing this," he said, noting that the company's technology allows operators to keep
track of all hyperlink click-throughs.

Hyperlinking over WorldGate -- which Barford described as a
popular feature among its trial participants -- is available through connections to more
than two-dozen programmers. Viewers click on an icon, or at the instance of an on-screen
prompt, and they are taken to the programmer's Web site or, in some instances, to a Web
page specific to the programming that they're watching.

WorldGate is also working on deals with suppliers of
audio-streaming and video-streaming software so that users can access graphic elements
that require downloading plug-in client software, Krisbergh said.

While users can surf the Web, scroll through pages and
access Java-enhanced sites, they can't get streamed video at this point, which has been a
subject of some criticism from operators that view video as an important component of any
TV-Web-surfing experience.

"It will be up to the cable operator what the video
parameters will be for streamed content, but the faster access potentially gives viewers a
much better performance than is possible over dial-up," Krisbergh said. Operators
that want to enhance video capabilities even further will have the option to devote a full
6-MHz channel to the service, Krisbergh added.