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Year's Secret Work at Tiny Irvine Firm Produces Videophone Breakthrough: Full Motion, Color

August 25, 1987|JAMES S. GRANELLI | Times Staff Writer

It's been 23 years since AT&T first demonstrated a "picture phone" at the World's Fair in New York, and engineers ever since have been trying to devise an economical way for telephone callers to see the people they're talking with.

Now, a tiny Irvine company working in secret for more than a year has made a technological breakthrough that will allow it to produce video telephones showing full-motion color pictures--the combination of sight and sound previously available only to Dick Tracy, Captain Video, the Star Trek crew and other figures of fantasy.

Universal Video Communications Corp. actually has made two breakthroughs.

The first is a technological triumph. Universal's videophones are the first to transmit full visual motion over ordinary telephone lines.

The second is a financial breakthrough. The cost of using ordinary telephone lines to transmit video is about half the cost of the cheapest alternative method now available for combining video and audio communications.

"The whole world is wired, and you can plug this machine in anywhere there are normal phone jacks," said John E. Looney, chairman and president of Universal Video. "It's a tremendously exciting kind of technology. And this is the first step in universal video communications."

AT&T executives who have reviewed Universal Video's technology in three visits to the company are anxious to see the finished product, which is due by November.

"Their technology is unique," said John W. Zellweger, venture manager for AT&T. "The ability to send a freeze-frame (snapshot) over ordinary telephone lines has been there, but the ability to send motion has not been."

With advancing technology and falling prices over the years, he said, consumers will soon "expect it" in their homes.

"It is unique indeed," Elliot Gold, an industry commentator, said about the new technology. "It sure will make a difference. There's a helluva business market that will emerge."

But Gold, who publishes an industry newsletter through his TeleSpan Publishing Corp. in Altadena, warned that while average consumers often believe they need a videophone, "they haven't figured out what to use if for."

Until now, transmitting full motion and sound could only be done over special wide-width cables, with or without satellite assistance, and could cost thousands of dollars an hour.

For instance, AT&T and Hilton Hotels have set up a joint venture offering businesses in certain cities a meeting room and top-of-the-line teleconferencing services. Total cost for a call from Los Angeles to New York is about $1,170 for a typical 1 1/2-hour meeting, and two rooms--one at each end--would cost an additional $1,050, said James Posko, an AT&T video-conferencing staff manager.

Even the cheapest video communication--a hazy motion picture over narrower special lines--currently costs $80 to $100 an hour, Gold said, and customers would need to buy a decoder box that costs about $68,000 to get that picture, he said.

Plugs Into Phone Jack

The UV Communicator, Universal Video's new product, plugs into a regular telephone jack. A second line is needed for the telephone.

With both lines working on a call from Los Angeles to New York, the cost would be about $40 an hour, not including the cost of the machine, Gold said.

The UV Communicator will go on tour around the country in November and will be ready for sale to businesses before March at a price of about $12,500 apiece, Chairman Looney said. A simplified videophone will hit the consumer market for $3,500 by the fall of 1988, he said.

Announcement of UV Communicator comes at a time when other companies are starting to market devices that do much less--and also cost much less.

Last Thursday, for instance, FiberNet Communications Corp. in Portland, Ore., introduced a video telephone that sends black-and-white snapshots over telephone lines and rents for $25 a month.

About eight or 10 companies, from giants like Mitsubishi and Canon to small shops with unfamiliar names, have come up with devices that transmit color snapshots over regular telephone lines or moving pictures that must be transmitted over special lines.

Small Towns Out of Reach

"Video teleconferencing is not new. AT&T is doing it at higher band widths," Zellweger said. "In most cases, those higher quality lines usually run more money to use per minute--from a couple of times to five or 10 times the cost of ordinary lines."

Even more important, Gold noted, those special lines may not reach small towns or remote areas--like Amarillo, Tex.; Tonopah, Nev.; or Pigeon, Mich.--places where grandma and grandpa might live and would be willing to pay a little extra to "watch" their grandchildren grow.

Those lines also don't reach most major foreign cities, though AT&T has some joint operations with Hilton in Tokyo and some European cities.

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