TV Answer, an interactive television service based in Reston, Va., last month announced development of a device designed to place the TV set at the very core of the American lifestyle for the 21st Century.
At a press conference that stopped just short of hiring cheerleaders and a brass band, the company unveiled a set-top unit that Hewlett-Packard Co. plans to put into production by the end of this year. Using radio-frequency technology similar to that employed by cellular telephones, it will turn home television into a tool for banking, bill paying, home shopping and programming the VCR.
It will be an arena in which games may be played for fun and profit and in which a host of other services will be available in addition to simple passive viewing.
TV Answer`s founder and president, Fernando Morales, called the development ”the birth of a new industry.”
Hewlett-Packard Vice President Bob Frankenberg claimed that the box his company will build and retail (initially at $700) represents ”the creation of the industry`s first interactive television device.”
”This brings together the most powerful information tools available to the consumer today-the television and the computer,” Frankenberg said. ”In the process, both of them are transformed. The sterile, complex computer becomes warm, interesting and easy to use; one-way cable or broadcast television becomes a live, two-way interactive medium.”
What neither Morales nor Frankenberg discussed, however, were three competitors who already have interactive devices.
They are poised for immediate entry into the market and, this week, two of them threatened to sue for patent-infringement the minute the first TV Answer device rolls off the Hewlett-Packard assembly line.
David Lockton, president and founder of the Silicon Valley-based Interactive Network, has been operating since March 1990 on a test-market basis in the San Francisco Bay area, ”to perfect the process.” But he said because he has access to the nation`s 93 million homes through a carriage agreement with PBS stations, he is poised to start marketing his hardware and service nationwide at any time.
Interactive Network investors include NBC, United Artists, Cablevision Systems, Rainbow Programming, A. C. Nielsen Co., Le Group Videotron, Granada Group PLC, Paul Kagan Venture Fund and Ameritech.
Lockton said his system can do everything TV Answer claims it can do, but he restricts it to games-playing because ”research has shown us that is the only thing the viewers are willing to pay money for.”
Lockton said he holds the patent on technology allowing the two-way playing of games, ranging from syndicated game shows and sporting events to contests created around such prime-time hits as ”Murder, She Wrote” and ”60 Minutes.” Most of the play is a leisure activity, though some involves prizes.
”Their box will do that, too, but that doesn`t mean they won`t be sued and enjoined from doing it,” Lockton said in a telephone interview from his Mountain View, Calif., headquarters. ”You can`t sue anybody for talking; you can only sue somebody that does it, but when they finally get out there, they`re not only going to face a lawsuit, but also, obviously, willful infringement and triple damages because they can`t say they didn`t know about it.”
Mike Faber, president of Insight Telecast in Palo Alto, Calif., also may have a legal bone to pick with TV Answer. His service, which is being test-marketed, is set to roll out at any time to 50 million households.
Like Interactive Network, his technology is transmitted to the home via PBS-and potentially by way of as many cable and broadcast stations as he can sign up-through the vertical blanking interval, which is the line seen between frames when a television picture rolls.
The line may not look like much to the viewer, but it is an electronic envelope into which a myriad of digital signals can be packed and opened up with the proper conversion box.
Insight`s service consists of television logs, seven days in advance and constantly updated, though Faber said interactive sports, news, weather and even astrology may be added.
Insight also programs a VCR simply by indicating the name of the show to be recorded.
VCR-Plus, unveiled last year in two new Zenith VCRs, also features automatic programming, but it depends on code numbers printed in newspaper and magazine program listings, and though both TV Answer and Insight may threaten its existence, it offers no threat to the patent Faber said Insight holds on its system. He said TV Answer`s proposed technology is another matter and that he, too, will sue if necessary.
”That`s absolutely correct,” he said in a telephone interview.
”We have patented the interactive program guide and control of television tuners, and our corporate partners (Viacom, Tribune Co., PBS, Sumitomo, TV Host, TV Listing and Taft Broadcasting) have looked in depth at our patent position. We actually started this many years ago, long before TV Answer ever had a glimmer of an idea.”
Lauren Battaglia, general counsel for TV Answer, denied the allegations.
”We`ve done a thorough patent search, and to the best of our knowledge there are no patent infringements,” she said. ”The Interactive Network system operates with a phone line; ours does not.”
Lockton, however, said phone-line use is limited to eight seconds of data-gathering per game and claimed that is not a difference sufficient to keep TV Answer out of court. In any case, he said that because TV Answer must, under new FCC spectrum guidelines, license 10,000 cell sites to service participating homes, and because Hewlett-Packard will not go into production until near the end of the year, he doubted if the project will get far enough off the ground to land in court.
”They`re five years and $1.7 billion in infrastructure development behind where we are today,” Lockton said. ”We`re kind of flabbergasted that a company could make such a big deal out of going after a market that`s got patent protection and industry support.”
Faber, whose television listings go for ”less than the price of a `TV Guide` subscription,” agreed.
”I can`t tell you what our piece of hardware will cost, but I can tell you that it will make TV Answer`s Hewlett-Packard deal of $700, going down to $300, look ridiculous,” he said.
But potential lawsuits, costs and delays are not the only hazards faced by TV Answer in its quest to found ”a new industry.” SkyPix, based in Kent, Wash., and Frox, in Sunnyvale, Calif., both are coming on-line with systems designed to make the viewer a participant in the program.
Frox hit the market two weeks ago with a system that is for the customer who can afford everything. It consists of a video preprocessor, computer-like serial ports to accommodate burgeoning interactive technologies, a special monitor and a line-doubler that simulates high-definition television on ordinary sets. Frox already supplies updated television logs and a CD music database and, by midyear, will provide a number of interactive services-all for $10,000 per package.
SkyPix will premiere a direct satellite-to-home-antenna service in April, offering subscribers 200 movies a day, 2,000 times a month on a pay-per-view basis.
Because SkyPix has developed a digital-compression technology that permits it to cram eight channels on a single satellite transponder, the system will have 80 channels by the time it rolls out in the U.S. and Canada, and the digitized signal can be picked up by a dish antenna measuring just 30 to 48 inches in diameter, depending on geographic location.
It also will work with the 3.3 million big-dish antennas in use in the United States.
At the moment, movies, and eventually, in an increasingly regulation-haunted industry, cable services, will be SkyPix`s central product, but company spokesman Sanjeet Saxena said the technology will handle interactive services as well.
Once the service is established, a wide range of them may come into play, he said.
”We`re the gate,” he said. ”After it opens, anything can happen.”
