TCI Taps At Home to Upgrade the Cable Box

At Home Network won a contract Monday to integrate the software inside up to 11.9 million cable TV set-top boxes, pushing the Redwood City company beyond its core business of providing Internet access through cable wires.

Cable titan Tele-Communications Inc. selected At Home--a company in which it owns a 40% stake--for the job over a handful of other candidates that both firms declined to name. But they hinted that Microsoft Corp. and Sun Microsystems--the two firms supplying the bulk of the software for the new digital boxes--were among those interested. Neither At Home nor TCI would disclose the dollar value of the deal.

TCI is At Home’s largest shareholder. Other cable firms, including Comcast Corp. and Cox Communications, also have stakes in At Home.

Tom Jermoluk, At Home’s president, chairman and chief executive, said that in addition to integrating the software, his company would build e-mail capability into the boxes. At Home will take a cut of the revenues related to the e-mail product, which he predicted could be worth “hundreds of millions of dollars.”

Down the road, other Internet applications could be built into the boxes, Jermoluk said.

“Web surfing on your PC is not the end goal” of At Home’s technology, he said. “That’s just one application . . . there are many other applications of [Internet] connectivity that are going to come along that are at least as interesting.”

Jermoluk said it would take 50 engineers until the end of the year to complete the integration job and build the e-mail system.

At Home’s stock rose $4.81 to close at $33.94 in Nasdaq trading Monday, a 16.5% gain.