Charter Communications, the fourth largest U.S. cable TV provider, will use Microsoft TV (MSTV) software to offer enhanced TV services to 1 million customers over the next seven years. The agreement calls for Charter, which is majority-owned by Microsoft cofounder Paul Allen, to deploy the MSTV Advanced client software in 1 million set-top boxes and MSTV Server on the back end. Charter's enhanced TV service will initially offer e-mail, Internet access, and content (such as games and interactive video content) from interactive TV provider Digeo, which is also part of Allen's empire; it will eventually include interactive programming from Wink Communications, video on demand (such as feature movies) from Diva Systems, and an electronic programming guide from TV Guide.

The deal is not exclusive: Charter has been using MSTV competitor Liberate's technology in trials since Mar. 2001 and has agreed to deploy Liberate in 300,000 homes. Nonetheless, it boosts MSTV's prospects in the wake of AT&T's recent decision to delay rolling out new set-top boxes with MSTV Advanced. (See "Microsoft TV Facing Uncertain Market" on page 15 of the July 2001 Update.)

This is the second recent agreement between the two companies. In Sept. 2001, Charter said it would offer MSN content and services to its cable Internet access subscribers. (See "MSN, Cable ISP Sign Agreement" on page 16 of the Nov. 2001 Update.)

For more background on MSTV, see "Enhanced TV Strategy Takes Shape" on page 17 of the Mar. 2001 Update.