CURRENT ONLINE

Now they're selling over-the-air interactivity

Businesses set sights on viewers in the easy chair

Originally published in Current, April 29, 1991

By Steve Behrens

The latest schemes bringing interactivity to broadcast and cable TV would give public broadcasters new opportunities for revenues as well as service:

Possible educational uses of interactive broadcasting "deserve exploration," says Edward Coltman, CPB's director of policy development and planning. Coltman says he may commission a study to determine the most needed educational services the technology could provide.

Both TV Answer and Interactive Network pursue the same dream that failed to catch on with consumers in cable TV's famous Qube service and numerous costly videotex failures in the early 1980s--a vision of consumers playing games and shopping in their easy chairs, their eyes fixed on the living-room TV screen.

This time, however, the entrepreneurs hope to piggyback to a large extent on the established programs and vast audiences of existing broadcast and cable TV. They also have millions from investors, patented 1990s technologies, extensive use of memory chips, and test-marketing results that presumably give them confidence to go ahead.

TV Answer has FCC's ear

The biggest splash so far has come from TV Answer, a Mexican-backed start-up that is based in Reston, Va.

Reacting to the company's 1987 petition, the FCC three months ago proposed rules for a new "Interactive Video Data Service," using a small chunk of spectrum in the VHF band. Comments on the rulemaking (docket number 91-2) are due at the commission June 10.

Rather than using the spectrum to broadcast its entire service, TV Answer would use airwaves to provide two-way data channels that complement existing broadcast or cable TV channels in town.

For $12.95 a month, subscribers would get a joystick remote control they could use to place orders for merchandise or pay-per-view programs, sound off in opinion polls or put public-TV donations on their charge cards--responding to programs carried on various channels. They could also call up services unrelated to broadcasts--ordering pizzas or monitoring their bank accounts--and use on-screen menus to set their VCRs or consult cable channel listings.

The service would be conducted over a two-way radio datastream between the subscriber's set-top transmitter-receiver and a local hub serving about 10,000 homes, modeled after cellular phone systems. TV Answer claims each "cell" could handle 720,000 responses per minute. To interact with various service providers such as broadcasters, educational institutions, banks and stores, subscribers would communicate through the local cell, a satellite link and TV Answer's central computer.

Some of the responses they send back to TV Answer might be college students' answers to multiple-choice quizzes given in connection with televised lower-level "gut courses," says TV Answer spokeswoman Sallie Olmsted.

To work with TV Answer, broadcasters would pay a commission on responses that Olmsted says would be half the cost of calls using telephone 800 or 900 services.

One possible clash between public TV and TV Answer may have been resolved. The service plans to use VHF frequencies just above Channel 13, which raised fears of radio interference with TV stations broadcasting on that channel. But the company has pledged to avoid interference, and the Association for Maximum Service Television (MST) has endorsed proposed steps to avoid interference.

If the plan has the approval of MST, a zealous protector of broadcast frequencies, "it looks like things are probably OK," says Lawrence M. Miller of Schwartz, Woods & Miller, which represents KERA, Dallas, and WQED, Pittsburgh and other stations that broadcast on Channel 13. The law firm has advised those clients to have their technicians review the revised TV Answer plan.

Perhaps TV Answer's greatest achievement has been to come within reach of obtaining valuable spectrum. "One of the hardest things to get in the world today is electronic spectrum below 1,000 mhz," says Steve Symonds, a telecom consultant and former CPB staffer who helped organize TV Answer as its chief operating officer. "You need a certain amount of entrepreneurial chutzpah."

The idea and the chutzpah came from a complete outsider in U.S. media--Fernando Morales, a Mexican broadcast engineer. He is backed by $138 million capital from Mexican investors, according to Olmsted.

The company stands ready to begin service immediately in affluent McLean, Va., where it held its field test, as soon as the FCC gives permission, Olmsted says, and would then move into the country's "wealthier suburbs" stocked with two-salary households.

TV Answer sought to do this as license-holder in each market, but the FCC now proposes to hold lotteries to select two separate licenses in each market. "Of course we would like to get a nationwide license," says Olmsted, but the company could still supply know-how and equipment and "would definitely need business partners" in any case.

Americans want to play

Across the country from TV Answer, in California's Silicon Valley, another venture is touting its plans to let consumers compete at Jeopardy! and predicting National Football League plays. They're working with WGBH, Boston, to develop an at-home game that supplements the forthcoming game show Where in the World Is Carmen San Diego?, says President David B. Lockton. And, in continuing Sacramento field tests, the network (19 percent owned by NBC) is holding electronic issue polls during the NBC Nightly News.

All the market research, by his company and others, has been unanimous so far, says Lockton. "When asked what is the No. 1 thing you want to do, people say, to participate in contests and games."

Videotex ventures failed in the early '80s because people aren't willing to buy a product to give them home shopping and other transactional services that videotex touted, he says. "We think Nintendo is a better model." Education is also "high on our list," says Lockton. "Quite frankly," he adds, "people don't go out and invest in equipment solely for educational purposes."

And it would be an investment. Interactive Network wants to sell its high-tech control unit for $399 in addition to charging $15 a month for service. The hand-held unit contains a small keyboard and a backlit liquid crystal display that carries games and other options to the users.

TV Answer, in contrast, would provide its control unit without extra charge and would take a different two-way route to the easy chair and back.

Lockton, who built Dataspeed stock quote service by putting data on subcarriers leased from public radio stations and other FM broadcasters, plans to use subcarriers again as a "downstream" leg of the circuit. In areas where subcarriers aren't available, that job will be done by public TV stations. PBS National Datacast is already putting out the data nationally--though there are few receivers outside Sacramento--over public TV stations' vertical blanking intervals, according to Lockton.

The upstream leg would be occasional 20-second bursts of data delivered over phone lines from the subscriber's control unit, which will have a built-in FM subcarrier receiver.

Lockton says the network is expanding slowly in Sacramento, will open in the Bay Area this fall, and will go statewide next spring.

If having important friends can make a success, Interactive Network has a big edge. Chairman John D. Lockton Jr.--David Lockton's cousin--was president of Warner-Amex Cable, which developed the ambitious (though now defunct) interactive Qube cable systems. Engineering V.P. Robert J. Brown had a key early role at Atari. Board member Thomas S. Rogers, now head of NBC Cable, was senior counsel of the House telecom subcommittee. Board member Jerome Rubin designed the highly successful Lexis and Nexis research systems. Advisory Board member Nicholas Negroponte directs the famed Media Laboratory at MIT.

Perhaps more important, investors include United Artists Entertainment, the Kagan Venture Fund, A.C. Nielsen, Cablevision Systems, British television's Granada Group and the Canadian cable firm Le Groupe Videotron, in addition to NBC.

 

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Later news: Six years later, another entrepreneur is renting VBI capacity from PBS National Datacast to develop a data service that bypasses the Internet to reach home computers.

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