Giving Microsoft Corp.'s interactive television strategy a big boost, Charter Communications Inc. said late Wednesday that it would deploy the Microsoft TV software platform to 1 million subscribers over the next seven years.
Charter, which has been a champion of the "thick-client" advanced set-top approach, said it would offer Microsoft's software on Motorola Broadband-built DCT-5000 boxes and run applications supplied by Digeo Inc.
The deal also brings together two long-time colleagues: Paul Allen and Bill Gates. Allen, a Microsoft co-founder, heads up Vulcan Ventures, and Charter and Digeo are part of his "Wired World" of company holdings.
Charter said it plans to offer the advanced boxes with the Microsoft-Digeo combination to customers early next year. Presently, the MSO is conducting a technical field trial involving the DCT-5000, Microsoft and Digeo apparatus with an undisclosed number of customers in St. Louis. Charter launched the trial in early August.
Charter said it initially would offer e-mail, Web browsing and a variety of content from Digeo, including "on-demand" news, shopping, games and streaming media services powered by Microsoft's Windows Media Technologies platform. Charter's future plans call for Wink Communications Inc.-enabled programming, video-on-demand from Diva Systems Corp. and the Gemstar-TV Guide interactive program guide.
"Using a DOCSIS modem integrated into a digital set-top receiver, we will be the first to deliver an interactive TV service that incorporates Internet-based streaming audio and video and Flash animation," said Charter Executive Vice President and Chief Technical Officer Steve Silva, in a press release.
M3 Sweatt, director of business development for the Microsoft TV properties, said Microsoft would supply the Microsoft TV middleware, which hooks into the WindowsCE operating system. Sweatt added that the Charter deployment will offer the new Microsoft TV Advanced 1.5 version and the recently released Windows CE 3.0 OS, which are both tooled to comply with DOCSIS- and EuroDOCSIS-based cable systems.
Sweatt wouldn't disclose specific financial terms, but said the deal involved software licensing and didn't include an equity investment. "Microsoft does not have an investment in Charter," he said.
At the same time, Charter's agreement with Microsoft is not exclusive. Earlier this year, the MSO committed to offer Liberate Technologies' middleware for high-end boxes to 300,000 subscribers.
A Liberate spokesman said the Charter-Microsoft deal wasn't a surprise. "We fully expected to share [Charter's] business with Microsoft," the spokesman said, noting that Charter's implementation of the Liberate platform is currently in the lab trial phase.
AT&T Broadband, the nation's largest MSO, has also committed to deploy the Microsoft TV platform, but in June the operator said it would first hammer out a method to deploy basic iTV applications to millions of legacy thin-client DCT-2000 boxes.
AT&T Broadband has yet to say which middleware it will deploy first. Both Liberate and Microsoft offer software designed for thin-client set-tops.
Charter's planned deployment would mark the first U.S. cable launch for Microsoft TV, which today powers the satellite-based UltimateTV service. Microsoft's advanced set-up is also undergoing a number of trials with operations based outside the U.S.