Saint John-based Fundy Communications has announced plans to bring digital video compression to its New Brunswick customers with the introduction of a digital set-top box by November or December of this year.

Fundy, the second Canadian company to launch the digital compression service using digital set-top box equipment (behind Shaw), says the service, in its short-term applications, will enhance customers’ channel capacity, provide superior digital picture quality, add control over viewing, including customized menu packaging, and allow the addition of new services such as digital music.

The digital set-top box technology is based on MPEG-2 compression which allows from six to 12 video channels to be squeezed into the space currently occupied by one analog channel.

Fundy will offer customers the option of buying or leasing the set-top equipment. The boxes, provided by Pennsylvania’s General Instruments Corporation, currently cost between us$305 and us$325 and initial rental prices will be in the $10-per-month range, which will include a basic service subscription.

Fundy president Tony Cassetta says packaging of services is still underway, with input from the company’s customer advisory council, and will likely be decided by September.

Fundy plans to begin offering 32 channels of commercial-free digital music for about $3 per month when the box is introduced. The service will be offered initially in Saint John, followed by Moncton and then province-wide.

The digital video compression technology will also pave the way for future Internet and interactive services, says Fundy’s Mario Theriault. These will be facilitated by the existing hybrid fiber-optic network constructed by Fundy three years ago at a cost of about $80 million. Fundy uses the network to transport phone calls and for its Internet service. It will also be a key ingredient in enhanced tv efforts, says Theriault.

Fundy vp engineering Philip Olivero says the digital set-top boxes will have cable modem functionality for high-speed Internet and broadband capability by the second quarter of ’99.