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Finally, the long-awaited Microsoft TV platform is seeing the light of day. After a series of delays that let competitors take the upper hand in the battle to provide software for set-top boxes, Microsoft is rolling out its system this month to a select group of consumers.

In a flurry of deployments designed to show the potential of the platform, Microsoft TV will be used to deliver interactive television to analog TV sets in France, digital cable subscribers in Portugal and satellite TV subscribers in the U.S. (See "TV as You Like It: New Tricks for the Old Box.")

"We are providing the broadest offering with the most flexibility for our network operators," says Ed Graczyk, Microsoft TV's director of marketing. "Each of these services represents something unique to the operator."

The first substantial deployment of the Microsoft TV platform will come at the end of December, when America's biggest satellite television operator, DirecTV, will offer Microsoft's long-awaited "Ultimate TV" service to a select group of subscribers.

Ultimate TV is the next generation of WebTV, which Microsoft bought in 1997. The service was planned for a pre-Christmas rollout, but delays have pushed the date when it will be available to most consumers into early next year. (See "Fast Net Access Could Invigorate Your TV.")

European Expansion

In the meantime, Microsoft is making a play in Europe for digital cable customers as well as the estimated 80 percent of European TV viewers who don't subscribe to cable.

In Portugal, Microsoft TV is testing an interactive television service with the country's largest cable operator, TV Cabo. The service, which initially will be offered to 1000 digital cable subscribers, includes e-mail, a program guide, banking, shopping, and Internet access. TV Cabo, which has 880,000 analog and 106,000 digital subscribers, expects to sign up 300,000 users for its interactive service during the next three years.

In France, Microsoft is making a play for consumers who don't subscribe to cable by shipping the Microsoft TV operating system preinstalled on analog televisions. The interactivity comes via a phone line plugged into the back of the set.

Built by French electronics giant Thomson Multimedia, the televisions come with a modem and keyboard and will cost $740 to $2015.

"It's a digital product that works in an analog environment," says Marc Meyer, a spokesperson for Thomson. "We believe the Internet is just another channel that people will want to access."

Microsoft is an equity investor in Thompson, which had sales of $6.5 billion in 1999 and is the largest manufacturer of televisions in the U.S.

Datamonitor predicts that 34.4 million homes in the U.S. and 33 million in Europe will have interactive television by 2003. (See "I Want My iTV.")

Dominic Gates contributed to this report.

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