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OPS ADVANCE IP, MODEM PLANS WITH SAMSUNG, CANADA DEALS

5/24/1998 8:00 PM Eastern

Two separate moves on the data front last week showed signs
of what happens when consumer-electronics companies and standards-based modems collide,
and of how a Canadian cable operator is pushing harder on an already-aggressive
high-speed-data-deployment schedule.

•Samsung Electronics America
last week detailed an IP-based (Internet protocol) Web telephone that was originally
developed for the French MiniTel service, and that is now a ready candidate for domestic
broadband use.

Called "Web Video Phone," it handles Internet
browsing, videoconferencing and telephony, all over an IP network, said Mark Stubbe, vice
president of networks for Samsung.

• Also last week, Shaw Communications
Inc.
upped its order for cable modems made by Motorola Inc., building on an
earlier, 50,000-unit purchase agreement, said Peter Bissonnette, senior vice president of
operations for the MSO.

Shaw will deploy the modems, as well as associated headend
gear made by Motorola, in Toronto; Edmonton, Calgary and Fort McMurray, Alberta; and
Saskatoon, Saskatchewan, Bissonnette said.

Dick Day, vice president and general manager of Motorola's
multimedia group, said last Tuesday that the Shaw arrangement "is sort of the
blueprint of what we had hoped for in our product planning."

Day was referring to Motorola's recently initiated plans to
help its wide base of existing customers to shift to Motorola's standards-based products
via a trade-in program.

He said operators that bellied up for proprietary cable
modems so far "shouldn't be faced with a forklift migration path."

For its part, Shaw continues to plow ahead with a decidedly
heady deployment pace for the @Home Network service that it provides. Last month, Shaw
invested in and purchased 40,000 cable modems from Terayon Communication Systems, one of
Motorola's competitors. Terayon executives at the time suggested that Shaw's installed
base of data customers represented 20 percent of @Home's 100,000 customers, but @Home
executives wouldn't confirm that.

Bissonnette said Shaw's data-subscriber total stood at
30,000 last week, describing what he characterized as "a very, very aggressive
approach" to deployment of the Shaw@Home service.

"I think that a lot of the manufacturers used to think
of us as this little cable operator up in Canada," Bissonnette said. "The truth
is, our scaling has been tremendously fast, and we expect it to continue through the
year."

Day agreed. "They are one of our biggest customers,
currently," he said.

Shaw is also running WorldGate Communications Inc.'s
Internet-TV service in its systems, and it has been similarly aggressive with its rollout
of a digital-video service, using set-tops made by General Instrument Corp.

Plus, Shaw is working with several retailers in its service
footprints, and it is "learning some great lessons" that will also benefit
Motorola and Terayon, executives with the manufacturers said.

Bissonnette said Shaw will use headend and cable-modem gear
made by both Terayon and Motorola in Toronto, adding that it can do so because of the way
that market is segmented into five smaller systems via its fiber architecture.

As for Samsung's plans to integrate cable modems into
consumer products, the Web Video Phone "is only the beginning," Stubbe said. He
added that Samsung is in discussions with cable operators to determine other flavors of
IP-based consumer products that are optimized for broadband speed and always-on
connections.

The stand-alone Web Video Phone integrates a screen, a
camera and both a standard telephone keypad and a pullout alphanumeric keyboard, Stubbe
said. He declined to discuss pricing, saying that is still being resolved, but at least
one analyst put the product's price tag at about $1,500 in trial quantities.

Michael Harris, an analyst with Scottsdale, Ariz.-based
Kinetic Strategies Inc., said the Web Video Phone "points to the types of innovation
that the consumer-electronics companies bring to the DOCSIS space." DOCSIS, for Data
Over Cable Service/Interoperability Specification, is a cable-modem standard.

"It's an early example of the kinds of things that
we'll see as the big consumer companies -- Sony [Electronics Inc.], Thomson [Consumer
Electronics] -- start cranking up," he said.

Also last week, Samsung's "InfoRanger" cable
modem went into field trials with unspecified cable operators, in anticipation of a July
commercial rollout, said David Lin, senior manager of cable-modem-program management for
the manufacturer.

Lin said @Home is also testing Samsung's modems, which he
called "another important milestone," in addition to certification by Cable
Television Laboratories Inc.

In the meantime, Samsung will also clear the way for a
retail-migration path, Stubbe and Lin said.

Noting that Samsung's retail play already touches
mass-market electronics stores, computer stores and mail- and phone-order segments, Stubbe
said Samsung "is focused on each and every one and looking for trials with
them."

A commercial, retail strategy should be well under way by
the Christmas buying season, if not sooner, Stubbe said.

September