Gates faces cablers

Microsoft chief predicts big future for boxes

ATLANTA — Bill Gates, chairman of Microsoft, predicted that as it “rebuilds its plant and partners with technology companies,” the cable industry “should be rolling out millions of set-top boxes early in 1999” that will link up with personal computers to provide warp-speed access to the Internet.

These set-top boxes “will become the central hub” of the 21st-century household, Gates said, speaking at the Monday opening general session of the National Cable Show at the Georgia World Congress Center here. Cable television will be only one function of these boxes, Gates continued. Other functions will include video mail, Web browsing, paperless banking, telephone services and electronic games.

After Gates gave a 75-minute presentation of all of Microsoft’s research and development in these areas, Jeff Greenfield, senior analyst for CNN, asked Gates to address the cable industry’s fears that Microsoft will become such a dominant player in the digital universe that it will end up collecting tolls on every transaction made by a cable subscriber.

Cablers’ profit

“There’s no need for paranoia by the cable industry,” Gates said. “Microsoft is just one software provider. It’s an enabler. The cable operators pick the technology, and the customers are theirs. The profits will accrue to the cable industry.”

One executive who is not convinced that Gates is so benign is John Malone, chairman of Tele-Communications Inc., the second-largest cable operator in the U.S., behind Time Warner Cable. After Gates left the stage, Malone told a group of reporters: “The paranoids are the ones that end up surviving.”