- - - TiVo-America Online Partner For AOL TV - - -

TiVo, the developer of personal television services, and America Online announced an alliance Tuesday to develop the interactive offering for AOL TV.

The two companies will collaborate by combining TiVo's personal television solution, which enables consumers to create a customized programming lineup, with America Online's Internet service. Future versions of TiVo's personal video receivers are expected to be created for consumers to access these new services.

As part of the deal, America Online made a minority equity investment in TiVo.

TiVo President and CEO Mike Ramsay said, "By partnering with the world's leading interactive service, we will be better able to provide our customers with enriched interactive television viewing that provides a new kind of connected television experience."

Earlier this summer, AOL announced agreements with DirecTV, Hughes Network Systems, Philips Electronics and others. The development of AOL TV is behind this collection of partnerships.

- - - Illinois Town Battles Cable With Dishes - - -

One Illinois town is using the small dish to battle a big cable company and its lock on the local multichannel market.

Officials with Itasca, Ill., are giving $100 rebates to the first 100 residents who buy satellite dishes and can show they have hooked up with a satellite provider. The idea was to provide more competition for the local cable provider, AT&T.

"The whole point is to give choice to residents," Itasca board member Roger Geske told the Chicago Daily Herald. "This will exemplify what we set out to do, which is to provide competition."

To help boost the campaign, both DirecTV and EchoStar's DISH Network are working with town officials to enhance the incentives for Itasca residents.

DirecTV's Gina Scalise said, "We are very enthusiastic about Itasca's offer," and the company is in contact with Itasca officials regarding additional deals for residents. She had no specifics on any new offer.

EchoStar's Marc Lumpkin said his company is "excited that the folks in Itasca want to cut their ties with the high prices and poor customer service of cable television. We are working on a very lucrative offer that will encourage residents to switch to DISH Network." He said additional details will become available later in the week.

- - - Iridium Shareholders Asked To Share Pain - - -

Iridium is asking shareholders to accept a cut of more than 40 percent in their interests as part of the company's restructuring, the Financial Times reported in its edition today.

The report said Iridium Chief Executive John Richardson is asking bondholders to convert all their debt into equity. The move would leave them owning 25 percent of the company.

Last week, Iridium filed for bankruptcy after defaulting on more than $1.5 billion in debt.

- - - DISH Wins Boost-Hughes Gets Downgrade - - -

On Tuesday, EchoStar got a boost from Wall Street while Hughes Electronics saw its stock get a small rating reduction.

Donaldson Lufkin & Jenrette analyst Karim Zia cut his rating on Hughes Electronics to buy from top pick. Zia also raised his rating on EchoStar Communications to top pick from buy.

The new rating helped DISH shares jump more than $7 to $72.75 in Tuesday trading. Hughes stock fell slightly to $51.88.

- - - FCC Files Brief In Portland Case - - -

The Federal Communications Commission, writing in a friend-of-the-court brief regarding AT&T's case against Portland, Ore., said local officials could create "regulatory disparity" by exercising authority over cable companies offering Internet service.

In its brief, the FCC said it alone has authority over all providers of high-speed Internet service. Local regulation of cable Internet services "might pose a significant risk of regulatory disparity with respect to all other broadband service providers," the FCC wrote in the brief.

Portland area officials want AT&T to open its lines to rival Internet competitors. A federal judge has upheld that decision. Currently the case is before the 9th Circuit Court of Appeals.

- - - COMP WATCH: - - -

• Forrester Predicts Hearty VOD Revenue By 2005 -
  A new report from Forrester Research, an independent firm that analyzes technology and its impact on business and society, determines that video-on-demand (VOD) services will generate $3.1 billion in revenues for cable operators by 2005. The reports says cable-based VOD will spread into homes along with digital cable; that 22 million homes will have broadband access by 2003; and that cable operators will recover the costs of their VOD investments in as little as two years.

• Researchers Issue Hardware Requirements -
  Cable Television Laboratories, a research and development consortium, has issued a final set of hardware specifications that form the foundations of the cable industry's OpenCable advanced digital services project. The specifications are formerly known as the Unidirectional Functional Requirements, the Bi-Directional Functional Requirements and the OpenCable Network Interface. Their purpose is to spell out how cable operators envision different elements of future digital video systems. For more information.

• CSG Goes To Work For Classic Cable -
  CSG Systems, a Denver-based customer care and billing company, has signed an eight-year corporate agreement with Austin-based Classic Cable to provide services for a minimum of 300,000 subscribers. With the recent acquisition of Buford Television and a subscriber count of around 360,000, Classic Cable is the 14th largest MSO in the country.

• Road Runner Sponsors Kids' Contest -
  Road Runner has launched a web site-building contest for kids called Web-A-Rama. Contestants, which are broken down by age group, will choose from several themes including "The Weirdest Thing I Ever Saw" and "If I Had a Million Dollars." The sites will be hosted on the subscriber's personal Web page space provided by their local Road Runner affiliated cable operator. Road Runner, a cable broadband online service with more than 320,000 customers, is a joint venture among affiliates of Time Warner, MediaOne Group, Microsoft, Compaq and Advance/Newhouse. Web-A-Rama entries must be received by Sept. 15.