TW finds roadblock on infopike

In a setback, Time Warner will delay the roll out of its interactive full-service network in Orlando, Fla., this April, putting the project off at least six months.

Late Tuesday, the company said technological glitches will slow its plans to offer 4,000 Florida cable subscribers video-on-demand, home shopping, interactive videogames and news-on-demand until the fourth quarter.

The project has been a high-profile one for Time Warner, with the company boasting a year ago that it would have the nation’s first full-service system. With Tuesday’s announcement, it appears unlikely that Time Warner would meet that goal. Bell Atlantic has said it plans to roll out itsinteractive multimedia system in Alexandria, Va., next month.

“What we are announcing today is a new time frame for the network’s availability to the first customers,” Time Warner Cable chairman Joseph J. Collins said in a statement.

Boxed in

Specifically, the company blamed the delay on problems with the system’s software and home set-top converter box designed by Scientific-Atlanta Inc. and Silicon Graphics Inc.

“We are moving the date because elements of the set-top box need further refinement as does the operating system,” said Time Warner’s Mike Luftman, insisting that the delay will give the company time to refine service and add new features.

Time Warner, the nation’s second-largest cable operator, has already invested a good deal of time and money in the Orlando project, laying more than 1,000 miles of fiber-optic cable and establishing a distribution network of video servers and data switches.

There had been some speculation that the Orlando project was moving slower than planned, so Tuesday’s announcement came as little surprise to analysts.

“What we are beginning to see here is a not unexpected pattern of delays of a new technology … I think it’s definitely taking longer to make some of these components work,” said Larry Gerbrandt, senior analyst at Paul Kagan Associates.

Set-top boxes may wind up being a sticking point for a number of companies looking for a spot on the infopike. In January, TCI delayed its purchase of 1 million converters, because set-top boxmakers have failed to set an industry standard.

There is little doubt, though, that Time Warner will go through with its plans.

“I would think Time Warner has too much invested from a P.R. and investor perspective to pull away from this thing,” said Peter Gross of Cowan, Gold, DeBaets, Abrahams and Gross.

“I’ve heard Gerald Levin (Time Warner’s chairman and CEO) say he’s betting the company on the full-service network … he may be hedging the bet right now, or want a little more time to make sure it’s a winning bet,” Gerbrandt said.

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