Huntington Beach, Calif. — The journey to an all-digital world where entertainment and communications will easily flow across many devices won't be an easy one, but computer pioneer Paul Allen thinks it is one in which cable operators are poised to take the wheel and drive.

Speaking here at the SCTE Conference on Emerging Technologies, Allen, co-founder of Microsoft Corp. and owner of Charter Communications Inc. parent company Vulcan Ventures, took the crowd through a wide-ranging roadmap of future services, telling the cable engineers that "we're in the driver's seat — we have the superior platform," to create and field the multimedia and communications services consumers will want.

But he also noted the challenge lay in pulling together wired and wireless technologies for data, television, voice and mobility — the latter ranging from Wi-Fi to cellular systems — via a common digital network base.

"We have to have great operations in the field to make all of this work together," Allen said. "We have to figure out ways to make that happen, with seamless integration."

The industry is already starting to see this trend with the growing popularity of HDTV and on-demand video. While Charter's HD content takes up only 5 percent of the video channel space now, that will grow over time, and "we're going to have to think about how that fits into our roadmap," Allen said.

Video-on-demand, meanwhile, has taken off, and some cablers are reporting average customer usage at 20 streams per month, Allen said. But with that comes the challenge not only to improve navigation tools and to keep video libraries updated, but also to find the necessary bandwidth, particularly for HD-VOD content.

Given the fact a single HD stream consumes a little more than 19 Mbps, it is likely cable operators are going to have to think about MPEG-4 and advanced compression to cope, Allen said.

At the same time, cable operators also face challenges from the galloping rate of innovation.

"Every year we see the technology side of the products become better," Allen noted, but he also warned that "one of the things we have to internalize is these things will be happening faster, and at a rate we haven't seen in the past."

That phenomenon extends to good-old telephony, where VoIP is fast developing to include video. The number of things one can do with the technology "are pretty amazing," Allen said. And cable data services are now able to lash together multiple data channels to offer hundreds of megabits per second to customers.

"Who ever thought when we first started that customers would want hundreds of megabits in the home, but they will," Allen observed.

Key to developing all of these services is the migration to an all-digital platform. Pointing out that Charter's Long Beach all-digital deployment was a step in this direction, he advised that once cable operators have moved a majority of their customers to all-digital transmission systems, "you can find ways to subsidize moving the rest to digital."

Such a move will not only supply the crucial bandwidth but also deliver better video quality to compete with satellite providers.

"Well, we've got digital, and it is actually better than satellite," he said. "And I think that is a great thing for cable to say."

Over time, however, consumers come to expect more services from their cable operator than just video, and on-demand would be the major theme, Allen noted. On-demand entertainment, information and communications would become the products cablers would provide in the home.

"All of these functions are integrated, and our point of contact with the customer is the screen," he said. It makes us think more about the UI and whether these things are properly integrated."

With this much content available in the home, customers are going to want to watch it on other TV sets or even cell phones, and they will want to be able to archive it. So Allen showed the crowd a view of a hybrid home networking scheme, mixing wired and wireless access surrounding a computer-like main server box. The system would use a combination of coax, 802.11 and 1394 Firewire over Ethernet and connect devices ranging from dual 802.11 and cellular phones to wireless smart display screens, home PCs and an array of audio and video equipment.

"This is exciting because if you can combine it and consumers love it ...they can see us as a central provider of these capabilities," Allen said.

If cable operators can overcome the inherent hurdles, they should be well positioned to offer the best vehicle for next-generation services in the future, he concluded.

"What is happening on the cable platform is the true vision of entertainment," Allen said. Despite the challenges "this is going to happen in the next five years, and that is very exciting."