Cable operator Charter Communications will distribute Microsoft’s interactive TV software to a million homes, under a deal unveiled yesterday (Wednesday). Financial terms were not disclosed.

Charter will use the technology to offer subscribers a premium package, bundling cable TV with entertainment and information services such as video-on-demand, news and sports, high-speed internet access, shopping, games and email. The Microsoft service is currently being tested by a small number of Charter customers, but is scheduled to roll out in early 2002.

The agreement is a considerable boost to Microsoft’s TV arm, which earlier this year saw a planned deployment of its set-top boxes by AT&T dramatically scaled back by the cable firm.

Charter also has an agreement to use the technology of Liberate Technologies, a rival TV software company, in 300,000 homes, though the date for this distribution has not yet been set. Declared Charter: “We’re going to continue to use Liberate and Microsoft, but right now for this initial field trial, it’ll be Microsoft.”

Liberate seemed unconcerned by the deal, saying it had always expected to share Charter’s business with Microsoft, given that the cable firm’s chairman is Paul Allen, who founded the software titan in 1975 with Bill Gates. However, unlike many existing customers of Microsoft’s TV business – such as Portugal’s TV Cabo [WAMN: 08-Dec-00] – Charter has received no investment from the software firm.

News sources: Wall Street Journal; Financial Times