`Mating Season' For Tech Companies -- As Cable, Phones, Computers Converge, Firms See The Future

NEW YORK - Togetherness is all the rage among once-fractious high-tech companies.

Marriages between computer, telephone, cable and media businesses have been announced nearly every day in recent weeks. Although it may take months or years for such alliances to pay off in products, the companies rushing to the altar are convinced it's the only way to thrive as technologies converge.

"It's definitely mating season," said Cheryl Currid, president of Currid & Co., a Houston computer consulting group. "What this should be saying or telegraphing to the consumer is things are going to change."

The latest big alliance came Sunday, when Kaleida Labs Inc., Motorola Inc. and Scientific-Atlanta Inc. said they would work together to develop a converter box for two-way cable television.

The device would rival a device in development by General Instruments Corp., Intel Corp. and Microsoft Corp. as the hardware that turns a TV into a terminal on the powerful "information highway."

One reason such alliances are growing so fast is that so much is unresolved about how the highway will work.

For instance, will consumers access the highway with a TV, a computer or a telephone? Will information be delivered via copper, cable or fiber-optic wire or through wireless communication? And who will decide how much services cost?

"We are heading out there toward convergence, but nobody has a clue what it's converging into," said Michael Botein, a professor at New York Law School and founding director of its Communications Media Center. "But everybody realizes they've got to get off their duff."

The biggest prize for any alliance would be to create a product that becomes the industry standard for some aspect of the data highway.

For instance, the microprocessor made by Intel and the operating system developed by Microsoft are de facto standards in the personal computer industry and made those companies rich.

Many standards must be created to advance the uses of computers, TVs and telephones. Common ways must be found to link the machines and pull data from a source, for example.

"The firms are beginning to understand that standards are not something that you set. Standards are something you win," said Charles Morris, co-author of the book "Computer Wars."

Last week, Tele-Communications Inc. and Time Warner Inc. announced an alliance to ensure that whatever two-way cable system one develops separately will be compatible with the other's system.

Computer companies for years have formed alliances to develop technology, share costs and spread the risk.

They've had mixed results. PC makers jointly developed a new standard called EISA for the data pathways inside a computer. But several dozen companies last year ditched a venture aimed at developing a faster computer chip.

"Those people were competitors," Currid noted. "There's perhaps a little better chance that these cable TV alliances will work better because they're not really competing with each other."

Indeed, most of the alliances so far have crossed industry lines.

The biggest was the decision last month by US West to invest $2.5 billion in Time Warner's cable TV business.