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Big TV change is anything but remote

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It's a commercial bonanza with few precedents in American business history: Starting next year, consumers will have to replace every one of their televisions with new digital models - as many as 230 million new sets that could cost $150 billion over the next decade.

Two powerful industries have very different visions of what these new TVs will be.The computer industry wants to muscle its way into the television market and believes the digital capabilities of the new TVs will open the door. Big-screen "PC theater" products, due to go on sale during the next few months, will offer both traditional TV programming and computer functions in the same unit. Starting next year, every PC sold in this country - 15 million or more each year - will include a digital television receiver.

The television-manufacturing industry has its own plans to offer digital sets next year that are designed to receive the crystal-clear, high-definition programming and CD-quality sound that TV stations expect to have ready about the same time. Television makers say that by 2002 or 2003 they hope to be selling 1 million digital sets a year, although few are likely to offer Internet access or other computer functions.

Computer executives insist that the game will already be over by then.

"By 2003, we'll already have between 20 million and 50 million `sets' in people's homes," said Robert Stearns, a senior vice president for the Compaq Computer Corp., the world's largest maker of personal computers. "What we're trying to say" to the broadcasters and consumer electronics manufacturers "is that if you don't listen, you're going to be a buggy whip."

But Carl Yankowski, the president of Sony Electronics Inc., an American unit of the Sony Corp., noted that 99 percent of American homes own at least one TV. "And after 15 years," Yankowski said, "the computer industry has achieved penetration into only about 35 percent of American homes. I would call that a failed product launch."

Such are the opening volleys in what promises to be a bruising commercial battle.

The computer industry believes that Americans are no longer interested in simply watching television. Instead, computer executives say, most consumers will want to supplement traditional television with browsing the World Wide Web and other forms of interactive entertainment, like e-mail, online computer games and other advanced digital services only being imagined now.

The computer and consumer-electronics industries have each already put a product on the market that tests the public's appetite for interactive television. So far, however, neither has been a rousing success.

"At present we are not planning to put any intelligence capabilities in our digital TVs," said Richard Kraft, president of the Matsushita Electric Corp. of America, a subsidiary of the Matsushita Electric Industrial Co. in Japan, which makes Panasonic and Quasar televisions.

"We don't believe in this `convergence' everyone is talking about," Kraft said. "I think people will buy these TVs for entertainment - a great high-definition picture on a big screen."

The television industry contends that computers are too finicky and complex for most Americans, and that few people will want to buy a computer-TV.

"One of the reasons we are ubiquitous in American homes is that TVs are simple and easy to use," Yankowski of Sony said. "I think we are more sensitive to that than they are on the computer side."



In just 18 months?

Federal regulators and broadcasters are moving toward agreement for stations to begin rolling out cinema-quality digital television to the public in 18 months. The Federal Communications Commission is scrambling to adopt plans by April 3 that would clear the way for the biggest change in television since color in the 1950s. Staffers for the four FCC commissioners have been trying to agree on how rapidly TV stations must begin providing digital broadcasts, power levels of digital TV stations and whether the stations will owe the public in return for free use of the nation's airwaves. The FCC is expected to vote April 3 on the issue.