Interactive TV is getting a big boost from the computer and telecommunications industry.

Eleven of the nation’s largest players in both areas are developing a project to test the market demand for interactive TV, and eventually will design and build a prototype of a local system.

Called First Cities, the group was organized by Microelectronics and Computer Technology Corp. in Austin as an effort to gather together companies from different industries.

“There is a vague feeling that there’s a vast untapped marketplace just waiting for this stuff,” says Bruce Sidran, a MCC vice president and executive director of First Cities. “There’s a technology and development risk if you’re a company on the food chain making information or distributing it. You need the next company down the line. That’s why it’s a multi-company venture.”

The first phase has been to develop a business plan outlining the technologies involved in delivering interactive TV and potential uses, which include entertainment on demand, interactive games and customized multimedia information.

Partners including Apple Computer, Eastman Kodak Co., Bell Communications Research (Bellcore), U.S. West, Southwestern Bell Corp. and Kaleida Labs Inc., a joint venture of Apple and Intl. Business Machines Corp., are expected to spend up to $ 5 million on its initial phase.

“It’s clear that it’s going to take a lot of different kinds of expertise to build an infrastructure for interactive network services” said Mike Liebhold, a manager in Apple’s Advanced Technology Group.

“We clearly have an opportunity to develop wide ranges of new product families. It’s widely anticipated we’ll see a convergence of the TV and computer. There’ll be all sorts of devices that have a little of each in different mixtures.”

Sidran, a former Capital Cities/ABC Inc. technical manager, hinted that an entertainment industry heavyweight will be signing on for Phase II, which will develop software. “Without that, we’ve built the store without stock on the shelf,” said Sidran.

The final phase, to start in 1995, will be to wire a community of up to 10, 000 viewers. First Cities expects to license its software to others.

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