the deal signed between Microsoft Corp. and Rogers Communications has Canadian producers and multimedia content providers brainstorming on how they fit into the fast-approaching world of interactive television.

The agreement, which saw Redmond, Wa.-based Microsoft invest $600 million to help the Canadian cable company develop advanced Internet and television services, is being touted as a major step toward convergence of the two media within the next few years.

‘I think it’s great for new media developers and it’s great for television producers,’ says Keith Durrant, vice-president of market development at Extend Media of Toronto.

Extend Media, which is already involved in developing Web-based projects with Microsoft, is now focusing most of its attention on interactive tv, Durrant says.

The Rogers deal, he adds, will accelerate the process by which other Canadian developers begin to move toward interactive tv because it will speed up the deployment of digital set-top boxes.

Toronto-based author and new media content developer Richard Bingham says until he heard of Rogers’ development deal, he didn’t believe Canadians would have a significant impact on the whole interactive tv medium.

‘This is going to be great for Canadian multimedia producers because it’s going to vault Rogers ahead in terms of needing content,’ says Bingham, owner of Flex Media Design & Communications.

Bingham adds, however, that the type of programming currently being produced for Web tv has a long way to go. ‘So far Web tv content has been pretty lame. You’ve got to do better than putting up recipes beside the cooking show,’ he says. ‘Hopefully the need to create new content is going to push people into trying newer and more interesting things with the medium.’

Still, Microsoft and Rogers representatives are quick to point out the advent of interactive tv is still to come. Under the July 12 pact, Microsoft will, by about mid-2000, provide e-mail and Web browsing functionality to Rogers which Canadians will begin accessing through their tvs. The software will be available on at least one million set-top boxes.

Rogers’ digital set-top box, designed by Scientific-Atlanta, will be powered by Microsoft’s Windows ce as an operating system, says Dermot O’Carroll, vice-president network engineering and operations at Rogers. ‘We held off until now to launch digital because we wanted a box that had real interactive capabilities,’ he says.

On top of Windows ce, Microsoft tv will provide functionality for both the digital video display and operation of the industry-standard docsis cable modem.

Rogers has also licensed the Microsoft TV Server which will provide high-speed Web-based services over cable lines such as e-mail and, down the road, the ability to hyperlink between tv programs and the Web. Once that is established, customers will have access to a wide range of interactive options through their sets such as e-commerce and the ability to interact with programming, O’Carroll says.

Establishing interactive tv has not come cheap. Last year Canadian cable companies spent $900 million on capital investment. The industry has dumped $3.5 billion over five years to build an infrastructure – fibre-optics lines, upgraded systems – which can handle coming enhancements.

Separate from the Microsoft agreement, Rogers also plans to introduce video-on-demand by the middle of next year. This, O’Carroll says, required a major re-orientation of their cable networks.

Rogers’ main rival, Calgary-based Shaw Communications, also plans to roll out its own versions of e-mail and Web browsing next year. And although it doesn’t have a high-profile partner like Microsoft, Shaw senior vice-president operations Peter Bissonnette says the cable provider is keeping pace all the same.

In fact, Bissonnette says, the Rogers-Microsoft deal bodes well for the entire industry. ‘We’re delighted with it,’ he says. ‘It’s a reaffirmation of the work that we’ve done. Rogers hadn’t launched a digital (package) in any way yet and this was good for them.’

Bissonnette says Shaw is looking at several software providers to begin facilitating e-mail and Web browsing by October for its set-top box, the DCT5000, designed by General Instruments. In fact, Microsoft is one of those software providers, he says.

David Daniels, manager of Internet platforms at Microsoft, says the software developer has been working with a number of Canadian cable companies. ‘We see the real value in having high-speed access for Canadians.’

Daniels says the delivery of content through a broadband network is going to act as a catalyst for Canadian producers to begin thinking about producing programming in non-traditional ways.

‘We believe this is the thing that is going to accelerate interactive tv to millions of Canadians.’