Web May Soon Be a Click Away for Cable Users

The rise of the World Wide Web has laid to rest most efforts at creating interactive television services. Now, a 2-year-old company called WorldGate Communications is trying to use the Web to make cable television interactive.

The company’s service, also called WorldGate, allows users to access the Web on their TV sets using their hand-held remote-control devices and cable set-top boxes. With the click of a single button, users can switch from a television show to a WorldGate menu, which offers direct links to Web sites and electronic mail.

By clicking a different button, TV viewers can jump directly to a Web site linked to whatever they’re watching at that moment. For example, the service could lead from a “Simpsons” episode to the show’s official home page, or from a Jeep Cherokee commercial to the Web site of a local Jeep dealership.

The idea of using cable television networks for Web access isn’t at all novel: A number of companies, notably the high-profile start-up @Home, aims to provide high-speed Internet services over cable. And these companies aren’t standing still: The established leader, WebTV Networks Inc., now a subsidiary of Microsoft Corp., plans to introduce an upgrade of its system this week--a box incorporating a television tuner into the device, letting consumers watch television while simultaneously surfing the Web.

But those services require expensive cable modems and other equipment in the home, as well as major upgrades to the cable network itself. WorldGate, by contrast, says it has invented a way to do Web-over-cable without any special equipment at all.

WorldGate uses a simple set-top cable box to receive commands. Customers use a cursor to navigate through menus on their TV sets by punching the arrow keys on their remote controls. They can also type in Web addresses or e-mail messages with an on-screen keyboard or a lightweight wireless version.

Thanks to special software written by cable equipment makers NextLevel and Scientific Atlanta, those keystrokes and other commands are sent right up the cable lines to a computer server in the cable operator’s office. It is this server--rather then a computer in the home--that does the Web surfing. When it finds what has been requested, it reformats the data to fit a TV screen, and then transmits it in the empty portion of the TV signal known as the vertical blanking interval.

WorldGate founder and Chief Executive Hal Krisbergh drew on his experience as president of the communications division of General Instrument, a leading producer of cable set-top boxes, in coming up with this unconventional solution. And his Bensalem, Pa., firm has raised $11 million from investors, including Motorola, Citicorp, NextLevel (a descendant of General Instrument) and Scientific Atlanta.

WorldGate plans to charge $4.95 a month for the service (on top of basic cable fees), and the keyboard would rent for an additional $1.95 a month. That’s much cheaper than a $2,000 computer, or even a $250 terminal--plus $20 a month for Internet access--from WebTV.

The cost to cable operators includes $50,000 for a WorldGate server, which can handle 1,000 customers simultaneously. The cable companies are already buying the new-generation cable boxes for between $120 and $200 apiece, and manufacturers said they expect to sell 10 million next year alone.

The critical link between TV programs and commercials and their corresponding Web sites will be provided by WorldGate. The company will maintain a national “channel hyperlinking” database that the WorldGate servers can access, so that when a TV viewer clicks on a show, the system will automatically find the right Web site.

Krisbergh figures cable operators can charge advertisers when users jump from a commercial to the advertiser’s Web site. If a user visits just two advertiser Web sites a day, and if the cable firms charge 30 cents per visit (the going rate for ads on the Web), cable companies will take in $18 a month per customer.

Plus, since $18 more than covers the price for the WorldGate service and keyboard, Krisbergh thinks cable companies might even give Web access to its customers for free.

Trials of the WorldGate service got underway about a month ago with Comcast Cablevision in Philadelphia and Charter Communications in St. Louis, each serving about 200 customers. More tests are on the way, and Krisbergh and his partners hope to roll out the service around the country in the first quarter of 1998. Krisbergh hopes WorldGate will have signed up more than 300,000 of the country’s 66 million cable homes by the end of next year.

Of course, these ambitious plans face plenty of obstacles. The cable industry has been notoriously slow in delivering new high-tech services. It has often proved difficult to move from limited trial to broad deployment, in part because the condition of the cable network in different areas and the type of equipment available in subscribers’ homes varies widely.

And WebTV, NetChannel and other companies are also set on being the key provider of inexpensive Internet service to tech-shy couch potatoes.

Comcast is giving WorldGate a shot partly based on Krisbergh’s reputation in the cable industry and partly because the service is easy for the cable operator to install and maintain, said Joe Waz, a spokesman for the company.

But it’s certainly spreading its bets: Comcast is a co-founder of @Home, which hopes to provide cable modem service nationwide. WebTV parent Microsoft bought a $1-billion stake in Comcast in June.

“We haven’t figured out how to turn a TV into an interactive vehicle yet, and [WorldGate] seems to do it,” Waz said. But, he adds, “it doesn’t matter what we think; it matters what the customers think.”