Microsoft dials TV

Tech giant signs 10-year agreement with SBC

HOLLYWOOD — After years of effort and billions of dollars of investment, Microsoft has landed its first major TV deal.

Tech giant announced Wednesday it had signed a 10-year agreement worth more than $400 million with SBC to provide software for the telcom to use in new television services.

Advanced TV service will deliver video over high-speed broadband lines and utilize Internet delivery. Dubbed Project Lightspeed by SBC, it will begin rolling out late next year and is projected to reach 18 million homes by 2007.

Microsoft software will allow SBC to include interactive capabilities in the video feeds as well as features like video-on-demand, customizable channel lineups and advanced security.

“Project Lightspeed and the Microsoft and SBC relationship underscore what the future holds for consumers: a virtually unlimited opportunity for innovative, cross-device services and entertainment experiences enabled by the marriage of powerful broadband networks with the magic of software,” said Microsoft CEO Steve Ballmer.

SBC began experimenting with video services with Microsoft technology in the middle of the year before deciding on a major commitment.

Deal is part of a larger plan that SBC announced in June to spend between $4 billion and $6 billion to bring video and high-speed data services to consumers over fiber-optic lines. Telcom is expected to purchase much of its content from marketing partner EchoStar, parent of satcaster Dish Network.

Agreement is a big win for Microsoft after years of disappointment in the TV space. Company has spent nearly $10 billion in various cable investment and deployed a number of interactive small-screen services such as UltimateTV and WebTV that failed to take off.

Microsoft recently signed a deal to provide interactive television software that cable operator Comcast will deploy to 1 million homes in Washington state.

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