A consortium led by Groupe Videotron anounced last month it will spend up to $750 million to introduce a consumer electronic superhighway into 80% of Quebec homes by the year 2002.

The consortium – called UBI (‘universality, bidirectionality, interactivity’) – is looking to become the main network for the electronic distribution of goods and services in 1.4 million Quebec households within seven years.

ubi eventually intends to expand its service to the Canadian and international markets.

The technological groundwork for the UBI announcement took shape more than a year ago when Videoway Communications, a subsidiary of Montreal-based Videotron, undertook the development of a second generation of the Videoway terminal. New to the phase-two terminal is the added capacity of bidirectionality and transactional multimedia services. In addition, phase two lays the foundation for phase three, the creation of a new technological platform incorporating digital video.

Videoway’s phase two represents a vast undertaking intended to introduce a seemingly unlimited number of possibilities in television communications – electronic banking, home shopping, video games and home automation.

Alain Philippe, interim general manager for ubi, and his colleagues have been working on the system for over a year, consulting with a wide range of experts from the computer, marketing, financial, legal and telecommunications sectors.

A little history helps put the latest development in context.

The Videoway system, launched in 1990, converts any existing cable television network into a data or information highway through the conversion of tv channel broad-band capacity into data channels. These channels are used to offer multimedia services with video, sound and data components. The system is addressable, supporting individual, group and global addressing with applications for pay-tv, broadcast teletext access, closed captioning (nci or wst), multiplexing, interactive tv, pay-per-view, database service access in ascii, naplps, prestel or teletel (Minitel) display formats, the downloading of software and video games, e-mail services and impulse ppv, or hybrid telephone modem applications.

As a commercial and technological venture, Videotron’s investment in Videoway – company chairman and ceo Andre Chagnon says the outlay to date is in the order of $100 million – is based on the widely accepted premise that market demand for personalized services will push cable tv companies in the direction of optional and interactive television, and, of course, transactional services.

At the technological center of the Videoway system is the Videoway Terminal, the ‘set top box’ in industrial jargon.

The phase two terminal is equipped with a Motorola 68020 cpu, has two megabytes of memory and the processing power equivalent to the most recent pc computers, says Daniel Lavoie, chief architect on the ubi project.

New to the phase two terminal, says Lavoie, is the interface component for ubi and a Power Line Carrier (cebus) controller for the measurement of electricity used in the home.

ubi’s system architecture consists of four levels – home, network, system servers and supplier, explains Philippe.

The home platform includes the Videoway Terminal, a programmable keypad (or remote control), and a transactional module consisting of a printer, a personal identification number keypad, a magnetic card reader and a smart card. A new feature of the phase two remote control unit is a complete alphabet.

The cost of the home platform hardware for phase two applications is between $400 and $500, says Lavoie.

The ubi home setup is installed with no charge to the user. The founding consortium members, service providers and down-the-line revenues are supposed to pay the entire system cost. Videotron has guaranteed consortium members an 80% penetration in Quebec by the end of the setup phase in 2002.

The second, or network-level architecture, consists of Videotron’s bidirectional cable tv network, using fiber optics, coaxial cable and microwave, and digital headends.

The third, or server-level, is composed of four servers, designed for the macro-management of the ubi system.

The server functions are: the payment service, the transactional data service, the postal or addressing service, and the information services, which include all content material, images, data, sound, etc.

The fourth architectural level is the service provider server, the related interfaces and gateways required by the ‘seller’ to access the network. The initial phase of the ubi project, a $21 million investment, is the creation of a 34,000-home network in Chicoutimi and the Saguenay region of Quebec by mid-1995. Philippe says ubi expects some 200 service suppliers to exploit the network.

The ubi system smart card is produced by GemPlus of Marseilles, France, the world’s largest producer of smart cards. The card ‘acts like a portable terminal with functions that include connectors, controllers and memory,’ says Lavoie. Also known as ‘an electronic wallet,’ the smart card incorporates a micro-processor inside its computer chip.

According to Philippe, there are three primary requirements for cable operators seeking to reproduce a ubi-type system in their region – a bidirectional cable system, the distribution of terminals (set-top boxes) to cable subscribers and thirdly, connection to a ubi cable headend.

In terms of programming, Videotron communications director Jean-Paul Galarneau says interactive and traditional broadcasters, producers and commercial producers will have to rethink program or commercial on-air content.

This ‘rethinking’ process, says Galarneau, is anchored in direct marketing philosophy.

In bidirectional broadcasting, one-quarter screen overlays act as windows to more detailed information, whether applications for education-style programming or the outright selling of services and products. This additional information – produced in the form of electronic text, sound and images – will necessitate new production on behalf of service providers, says Galarneau. The new production will range from an extended order-out restaurant menu, to the downloading of video games, and long-form graphic and audio/ video catalogues.

‘Ultimately,’ he says, ‘it’ll mean new opportunities for graphic artists and perhaps many smaller suppliers.’

The non-programming ubi system, which does not need crtc certification, will permit the general public to transact with various service suppliers by cable from their homes. The project requires investments of $750 million ($250 million in equity investment) over the next five to eight years, creating over 1,000 jobs in computer specialties – telecommunications, marketing, media and graphic arts.

Phase one of the project, equipping 34,000 homes in the Saguenay region, is expected to cost $80 million in technical infrastructure and service development.

According to Gerard Tremblay, Quebec minister of industry, commerce, science and technology: ‘The new service is simple for the consumers, (but) the project requires avant garde technology that will have major repercussions in the field of communications in Quebec, and it will be exportable.’

The six founding ubi consortium members are: Videotron (20%), the National Bank of Canada’s financial services division (10%), Hydro-Quebec’s client information, network management, energy efficiency and home automation services (20%), Loto-Quebec’s products and services branch (12%), Canada Post Corporation’s electronic mail and addressing services (18%), Videoway Communications’ classified advertising service (10%) and Hearst’s business directory services (10%).

In passing, the name ubi is short-form for ‘ubiquity,’ meaning ‘omnipresence,’ according to Jean-Luc Viard-Gaudin, general manager of Geyser Branding Consultants, the Montreal firm which developed the ubi brand name.

Following is a brief outline of ubi transactional services:

– Video game application software: the Videoway graphic display resolution and its downloading capacity support customized presentations of video games for a variety of uses including specialized application software on tv sets.

– Loto-Quebec: ubi users will be able to obtain results, subscribe to or participate in lottery games and pay for these services with the ubi electronic wallet.

– Home automation: a standard power line carrier protocol interface turns the phase two Videoway terminal into a ‘home central controller’ for home automation functions such as energy management, security, lighting and appliance control, water management, communication and entertainment.

– Home banking: ubi’s built-in security allows for banking transactions including account balance, bill payment and account transfers.

– Canada Post E-Mail: the Videoway address capacity and the ubi smart card together with the ubi pin number make it possible to send messages to groups and individuals on a secure and priority basis. Canada Post will also be able to store messages on behalf of service providers for later retransmission.

– Flyers: the combination of audio/video catalogues and the in-home printer produces electronic flyers and discount coupons.

– Home shopping: home users can purchase products and services from multimedia catalogues or data magazines. Telepayment, with the use of the pin number, permits immediate payment.

Unlike similar electronic superhighway developments in the u.s., ‘ubi is no longer an experiment,’ says Videotron’s Chagnon.

A spokesman for Hearst seems to agree. At the Jan. 24 press teleconference outlining ubi’s plans, Frank Bennack, president and ceo of Hearst, said the company had evaluated a number of emerging systems but found that ubi and Videoway ‘gives Hearst the best commercial learning experience.’ He went on to say that the Videotron project was selected ‘in part because this company (Videotron) is already providing the first generation of interactive services in Montreal and the u.k., and because of its distinctive features.

‘Perhaps most importantly,’ says Alfred Sikes, president of Hearst new media and technology division, ‘Videotron is able to set technical standards for an important economic unit which avoids the standard balkanization that will occur in the early years in the u.s.’

Hearst says the range of services offered consumers is yet another draw for the ubi system as is the fact that ubi will be paid for by service providers, not the consumer. Sikes says ubi’s universality and diversity assures ‘critical mass’ – an essential boost for all service providers. He says Hearst is impressed with the ‘well-conceived nature of the product’ and ‘unlike other trials that have been announced (as many as 36 dozen across the u.s.), ubi is designed to be an ongoing business from the onset, rather than a laboratory experiment.’