Competing companies in the bid to become the U.S. standard for high definition TV delivery agreed Monday to join forces and unite behind a cooperative effort.

The agreement in principle calls for formation of a “grand alliance” among the three remaining competitors in the HDTV hunt: Zenith Electronics and AT&T; General Instruments Corp. and the Massachusetts Institute of Technology; and a consortium consisting of the European firms Philips Electronics and Thomson and the U.S. firms NBC and the Sarnoff Research Institute.

Announcement of the merger came at a press confab in D.C., where representatives of the competing systems had been holed up for days hammering out the fine print of the alliance. The proposed merged system will have a digital format for HDTV transmission and should place the U.S. on the cutting edge of video delivery.

The all-digital standard will also be designed to allow interoperability among broadcasters, computers and other telecommunications technologies.

House telecommuncations subcommittee chairman Ed Markey (D-Mass.) said after the announcement of the alliance that his panel will review the merger at a hearing Thursday. “Digital HDTV could be the beginning or a new era in prosperity for American industry and American workers,” said Markey. “But the standard chosen must be the one that benefits the broadest number of workers and the broadest number of industries.”

Markey said the FCC, which will test the grand alliance system before signing off on the new standard, “must make sure the alliance has pushed the edge of the envelope on the interoperability question.”

Markey wrote to the FCC in April asking the commission to consider job creation as a factor in the HDTV selection process. Gov. Robert Casey (D-Pa.) and Labor Secretary Robert Reich have also asked the FCC to weigh job creation in its selection of an HDTV system standard.

Supporters of the grand alliance concept argued that merging the systems would limit the litigation threat if just one of the systems was declared the outright winner. Under the grand alliance, all of the companies will share in the millions in revenues expected to be generated by HDTV deployment.

The merged system will employ “progressive scan transmission”– which allows entire picture frames to be trasmitted sequentially — and “square pixels”– where the dots on a TV screen are arranged in equally spaced rows and columns.

Also, the HDTV participants agreed that all large-screen HDTV receivers (34 inches in diagonal and above) will incorporate a 60-frame-per-second, 787.5-line or higher progressive scan display mode. On smaller screens, progressive display will be optional.

Members of the alliance also agreed that all transmission of film material will be in a progressive scan format at the outset of HDTV service.

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