BROUGHT TO YOU BY TAXMAN / Sc@@pex

SAY IT WITH A CALLING CARD

Subject: NS Video
Content-Length: 11368

FOR RELEASE: MONDAY, MAY 4, 1992

MORRISTOWN, N.J. -- AT&T said today it will provide technology and
equipment to companies to help them deliver a host of new entertainment
offerings -- including pay-per-view and video-on-demand services -- to
their customers.
Using digital compression technology, AT&T will offer an "end-to-
end" system -- ranging from equipment used by program providers down to
the set-top box in people's homes -- to help speed the delivery of
entertainment services to consumers.
Today's announcement is the latest in a series of offerings
reflecting AT&T's commitment to visual communications over a variety of
media and through various providers.
"Digital signal processing is one of AT&T's key strengths," said
Robert M. Kavner, group executive, communications products. "AT&T
expects to use this strength to become a leader in visual
communications, including both transmission products and services for
digital standard and high-definition television."
Working with partners such as the ComStream Corporation and News
Datacom, AT&T will provide an integrated system to deliver entertainment
programming via satellite to headend locations and then to people's
homes, said Bob Stanzione, vice president- transmission systems.
ComStream Corp., a leading supplier of satellite products and
networks, will work with AT&T to provide the equipment needed to
transmit compressed channels via satellite to the headend location.
News Datacom, a subsidiary of The News Corporation Limited, will
provide the systems needed to authorize and process customer requests
for programs. The company's encryption/security system uses "Smart
Card" technology to give cable operators the highest level of protection
against program theft by unauthorized persons. AT&T initially will
provide the satellite program delivery system needed to carry channels
from programmers to the "headend" office of cable television service
providers. The system is comprised of compression, transmission and
access control network elements at the satellite up-link and down-link
sites.
Following testing later this year, equipment for the satellite
delivery system will be available for sale in 1993.
At the same time, AT&T is exploring potential partnerships for and
continuing development of the cable-plant portion of the system -- from
the cable headend to consumers' homes. The company ultimately plans to
offer an end-to-end system that will boost the capacity of today's cable
networks 3-13 times.
 The digital compression technology underlying today's system
announcement is key to paving the way for new entertainment options for
people.
AT&T's video compression algorithm for cable television service is
based on the one used in the high-definition television (HDTV) system
that AT&T and Zenith Electronics Corp. are asking the Federal
Communications Commission (FCC) to adopt as the U.S. HDTV standard.
The technology -- an outgrowth of advanced research in Bell
Laboratories -- allows programmers to squeeze 4-18 television channels
onto a single satellite transponder, and 3-13 digitally compressed
channels onto a conventional analog cable channel. Without digital
compression, only one channel could be transmitted over a single
satellite transponder to the cable headend.
Bottomline, the technology is expected to have a dramatic impact by
making available to consumers hundreds of new entertainment offerings in
movies, live-action sports, homeshopping, in-home education services,
etc. Not only that, it will give people the shows and services they
want, when they want them.
AT&T already is working with U S WEST and Tele- Communications,
Inc. (TCI) to explore two video entertainment services -- enhanced pay-
per-view and video-on-demand -- in a market trial set to begin this
summer. The trial, which uses existing technology, is designed to
measure customer reaction to and acceptance of these services.
AT&T's commitment to create innovative visual communications
products and services has been demonstrated through several earlier
announcements this year.
In January, AT&T introduced the VideoPhone 2500, which delivers
images of calling parties through ordinary phone lines. The company
subsequently introduced the AT&T Group Video System, a compact,
rollabout system that can extend digital videoconferencing throughout a
business. Global Business Video Services recently expanded its service
offerings, and NCR announced a multi-media automatic teller machine
(ATM) with video-conferencing capabilities.
In addition, AT&T Microelectronics introduced a video codec chip
set that will permit videoconferencing and full-motion video on
equipment as compact as desktop PCs and video telephones, and as varied
as teller machines and point-of-sale terminals.
Digital compression technology will be demonstrated in AT&T's
exhibit at the National Cable Television Association (NCTA) convention
this week in Dallas, Texas.
By offering compression technology and equipment to cable and
telephone companies, AT&T expects the entire market for visual
communications will grow to the benefit of all.
# # #

Backgrounder
on Digital Compression
Technology
 Digital compression uses computer and algorithm techniques to
compress a video signal from 216 Mb/s (CCIR-601) or 120 Mb/s (NTSC) to
between 1.5-8 Mb/s while maintaining good picture quality. With digital
compression, more programs can be squeezed into a single transponder,
and more channels can be packed into a 6 Megahertz slot on the broadband
cable spectrum.
The technology promises a host of benefits to cable programmers,
operators and subscribers. For programmers, it means up to 18 programs
can be transmitted via a single satellite transponder to the cable
headend. Up until now, a single satellite transponder could only handle
one program per channel.
With this technology, the amount of compression -- also known as
the compression ratio -- can be flexibly selected by a service provider
to match a particular service offering like pay-per-view movies and
video-on-demand, live-action sports, in-home education, homeshopping,
etc.
For example, compressed rates as low as 1.5 Mb/s can be used to
provide fairly inexpensive -- but highly compressed -- VCR- quality
services from film sources. On the other hand, an 8 Mb/s compression
rate can transmit the most complex video material -- a Superbowl game,
for example -- while maintaining the highest "broadcast quality" picture
for viewers or other distributors.
Digital compression not only provides programmers with tremendous
savings, it offers spectrum capacity that wasn't previously available
for new types of programming.
Once the technology is fully deployed, it's expected to boost the
capacity of today's cable networks 3 to 13 times. With more programs
and channels squeezed into a set amount of space, the technology
ultimately will allow hundreds of programs to be transmitted from cable
operator "headend" locations to subscribers' homes.
More channels for cable operators means, of course, new sources of
revenues. For cable TV subscribers, digital compression will provide a
wealth of new video services. Enhanced pay-per-view -- giving people
the shows they want, when they want it -- video-on-demand and
interactive services are just some of the possibilities. In fact, the
technology promises applications that have yet to be developed or even
imagined.
AT&T's video compression algorithm is based on the one used in the
high-definition television (HDTV) system that AT&T and Zenith
Electronics Corp. are asking the Federal Communications Commission
(FCC) to adopt as the U.S. HDTV standard.
AT&T proposed its program delivery system to CableLabs, Inc.
(CableLabs), Tele-Communications, Inc. (TCI), Viacom International and
the Public Broadcasting System (PBS) last December after the industry
consortium asked companies to describe how digital compression
technology could be deployed.
# # #

Backgrounder on AT&T/TCI/U S WEST

 Video Services Trial

This summer, AT&T, Telecommunications, Inc. (TCI) and U S WEST will

begin a market test of two services -- enhanced pay-per- view and video-
on-demand -- in a suburb of Denver, Colo. The test, which will use
current technology, is being conducted to measure customer reaction to
and acceptance of "viewer-controlled cable television" (VCTV) services.
The trial will allow customers to view programming in two ways.
Half of the more than 400 customers participating in the test will use a
remote control device to select more than 1,000 movies and special
events from a printed guide. Customers will have total control over
what to watch and when, without having to leave home. They'll also be
able to "pause" programs for up to 10 minutes at a time.
The other half of the test group will be able to watch any of 15
movies and features a day, at least six of which will be available at
any one time.
About halfway through the test, both groups will receive both
services. In all cases, the services will be offered in addition to
TCI's regular cable service. And Denver-based consumers who do not
currently subscribe to cable TV will be able to participate in the test,
which is expected to run for between 12-18 months.
AT&T is participating in the trial to gain insights into customer
desires so it can develop and deploy technology that best meets
customers' needs.
Jerrold Communications, a division of General Instrument Corp.,
will supply the set-top equipment that will be installed in customers'
homes for the duration of the test, as well as the modulators, encoders
and scramblers for the video source systems.
Optical Networks International is supplying the AT&T LaserLink II
optoelectronics and AT&T fiber-optic cable that TCI and U S WEST will
use for their portions of the test network.
TCI, headquartered in Denver, is the nation's largest cable
television company. It serves 11.3 million cable customers in 48
states.
AT&T Network Systems, headquartered in Morristown, N.J., is among
the world's largest suppliers of communications network equipment.
AT&T's equipment is designed by AT&T Bell Laboratories, the research and
development arm of AT&T. Its products include digital switching and
transmission equipment, fiber-optic and copper cable, operations support
and data networking systems, and wireless systems for mobile phone
networks.
U S WEST owns companies involved in communications, marketing,
services and financial services, as well as cable and telecommunications
operations in the United Kingdom, France, Hungary and Scandinavia. U S
WEST Communications provides telecommunications services to 25 million
customers in 14 western states.
# # #