"When we lose X amount of applications, I’m will go ask the Minister of Communications: ‘Why don’t you give me a license? License me for areas where I can set up our system.’ Maybe she’ll say okay, you can have the license, if you have an agreement with the cable companies with a limitation on their share in the company, and if porno programming is censored, etc. If I had a license, there are 15,000 households in Israel to whom I could provide service."
The speaker is Shabtai Shoval, formerly chairman of the Cable Television Operators Union and today a sourcer of business opportunities in the communications field at Telrad Holdings. In this capacity, Shoval is the man heading the cable TV multimedia project at Media Net, a joint venture of Telrad Holdings, GlobesCom (under control with the "Globes" newspaper), Gideon Lev and Amos Lasker.
MediaNet’s virtual mall, where visitors can wander around in 3D virtual reality, is not yet ready. There are shops, and a supermarket, you can move the mouse and go from room to room, but the stairs leading up to the second floor throw you so far out of the building you have to press the Reset button. The stores are empty of products and furniture. After all, who would be willing to invest some $100,000 in setting up a 3D store, at no return, as the Ministry of Communications has categorized the project as a technological experiment, where subscribers can access all services for free. The Ministry was not willing to license the project as a commercial experiment.
In the beginning, Media Net was Gideon Lev’s baby. Lev, who in the distant past was the director general of the Ministry of Communications and afterwards the General Manager of Bezeq’s underwater cable subsidiary. He brought over Video Way technology, used in transmitting multimedia programming over the cable network to home TV sets. Video Way is a subsidiary of Canadian cable firm Videotron, which serves the Quebec region, numbering 500,000 subscribers. Videotron’s UK subsidiary serves several hundred subscribers.
The technology is uni-directional, not interactive, employing a sophisticated set top box at the customer’s house with a 250 kilobyte memory and a special remote control. Interactivity is between users and the set top box, with its large-scale memory. For instance, a game can be downloaded in the set top box and users play against the box.
The systems’ advantages are its simplicity and accessibility. The system can be used during commercial breaks, when users are in front of the TV set in any case. The system’s disadvantage is low data capacity. Interactive multimedia games of the level currently played on personal computers, cannot be played on the system.
Two years ago the other three multimedia cable licensees - Net Game, IBM and Meimadim - offered their own technologies to the Ministry of Communications. MediaNet spoke instead of migrating Video Way’s technology. The ministry did not like the word "migrate" and there were those who considered not including MediaNet on the list of participants in the experiment. This did not come to pass, however. The company did receive the license and, with hindsight, it now appears not being committed to a proprietary technology may be a great advantage.
When it became apparent that the Video Way technology was out of date, the company immediately began seeking out other technologies. They found US firm LANcity’s cable-modem, which proved to be a revolution in concept. Until that point, MediaNet saw the television set as the primary receiver for multimedia programming. From the moment Internet connectivity became a necessary part of service, it was clear the technology must enable transmission to personal computers. But despite outward appearances, Media Net did not neglect the television set.
LANcity, the start-up company that first developed the cable-modem, was recently acquired by Bay Networks. The company’s competition includes Zenith, Intel, Motorola, Hewlett Packard, Com 21, General Instruments and others. Most of the competition is still in the development stage.
MediaNet has agreements in place with most of the independent cable operators, in places like Karmei Yosef and the Jerusalem corridor, with cable company Gvanim in Shoham, and Matav in Netanya. The company is negotiating with cable company Tevel for a joint project with Idan in Tel Aviv, and with Golden Channels.
MediaNet’s experiment is the most advanced of its kind in Israel. The pilot program in Shoham, already has 20 subscribers. There is a distinction made between the Internet and intranet services; the latter is centered around the virtual shopping mall and other VR services, including multi-user games via Internet or intranet. There is also a CD ROM-on-demand service. Additional applications planned for the pilot include video-conferencing, telephone conversations via Internet using VocalTec software, community services, tele-medicine and others. As stated, MediaNet has not forgotten television and is awaiting the first set-top box that will turn ordinary TV into Web-TV. There are many products on the market, but none yet being used in the field. There is also a Web-TV consortium, comprising Sanyo, Netscape and others, but a finished product is not expected for another 2-3 years.
Globes: When you mention the applications you want up and running before requesting a license, which do you mean?
Shabtai Shoval: "The applications are Internet telephony, an electronic mall with three stores which at first will be 2-dimensional, video conferences, the ability to operate 7 or 8 CD ROMs properly, a community of 100 users with a newspaper, school, home page and electronic mail."
If you use German firm ComBox’s technology, which of the applications will you be able to run?
"Anything that works is good for me. This technology can run CDs and to a limited extent, Virtual Reality. The 3D avatar that takes products off the shelf and checks them requires greater bandwidth than the telephone line can provide."
Your competitors says it was no trick to set up the Shoham system, because you laid down new cables. In cases of an existing infrastructure, the ComBox technology can be a source of disturbances, as signals come in from all subscribers. For this reason, it may be preferable at this stage to work with telephone modems.
"As concerns infrastructure, I know that as long as the ratio is 500 households per fiber optic cable, LANcity’s system works well. This is true even with old infrastructures. In Lansing, Michigan, there is a system working at this ratio."
Why do you need a system with a 10 megabyte transmission rate?
"I want to be open to all possibilities. If I want an Internet highway, I need a 30 megabyte rate and 200 households per optic fiber."
Are you planning on using 30 megabytes?
"Yes. I’m open to this kind of experiment, just as I am open to uni-directional modems. I am negotiating with PhaseCom, which is now developing a new generation of bi-directional 30 megabyte modems."
Which applications are available in the Shoham elementary school?
"There is an actual desktop with interactive educational aids on it. Move a block and you see it on-screen. The children move things in space and see it expressed on the computer. The product belongs to PMD, which tailors the program to the curriculum. The supplier in Shoham has three desktops but no permission from the Ministry of Education to put the product into operation. We made a request which went unanswered.
What about a tele-medicine application?
"I am negotiating with a subsidiary of Giltek which deals in tele-medicine. The software will allow doctors in Shoham to view transmissions of X-rays from the hospital. This will require cooperation from the cable companies. Another application is a diagnostic device used by chronic patients, but it is hard to transmit the data in real time. The idea would be to do this via the Internet.