Corrections or additions?

This article by Dina Weinstein was prepared for the November 22,

2000 edition of U.S. 1 Newspaper. All rights reserved.

AgileVision & DTV

When Anthony Gargano was 10 years old his Uncle Mario

gave him an old short wave receiver as a birthday present. Little

Tony was fascinated with it.

From the apparatus, he could hear the British Broadcasting

Corporation.

In those Cold War years he could also hear information from the United

States government’s Voice of America and the Soviet propaganda tool

Radio Moscow. But it wasn’t enough to just enjoy the messages from

around the globe. Tony was curious about how the receiver worked.

Uncle Mario offered some explanations about how broadcasts and

information

from around the world could be heard in a South Philadelphia bedroom.

This led Gargano to a neighborhood radio club, where, at the age of

13, he learned about ham radio, short wave broadcast transmission

and participated in Cold War era weekly civil defense drills.

Electronics and communication are still Gargano’s passion. To this

day he has a ham radio apparatus in his car. On it he communicates

with fellow operators from around the block or around the globe. And

now he heads AgileVision, a start-up company being incubated at the

Sarnoff Corporation and formed by Sarnoff and Mercury Computer

Systems,

a Massachusetts-based producer of digital image processing systems.

The goal of the new company is to provide video processing systems

that will make the change to DTV less painful and more profitable

for approximately 1,600 U.S. broadcast companies and nearly 10,000

U.S. cable operators as they transition over the next few years.

AgileVision

offers the first scalable, multifunctional device that can splice,

insert, and manipulate Digital Television (DTV) stream content. By

saving an expensive step — changing from a compressed format to

a more easily handled mode and back again — it preserves quality

and saves money.

Mastering gadgets and communication is a theme in Gargano’s life.

"My wife calls me gadget man," he says. His son, Anthony Jr.,

is a daily sports talk show host on WIP 640 AM. Daughter Christine

is a graphic designer. And he’s come a long way from humble

beginnings.

Gargano’s father was a bartender, his mother a seamstress, both

first-generation

Americans, says Gargano.

Gargano, 58, comes to AgileVision from Sony Electronics in Park Ridge,

where he was senior vice president of the communications systems

division,

broadcast and professional group. He did communications maintenance

in the Air Force, and on the GI Bill went earned his bachelor’s degree

and MBA from St. Joseph’s University. Prior to joining Sony, Gargano

spent more than 10 years at RCA/GE in a variety of positions,

including

manager of video systems for RCA Broadcast. Gargano also spent 10

years at General Instruments, where he developed expertise in the

cable industry.

Communications has come a long way since Gargano’s radio

club days. Global information is available for many, now that today’s

cable, satellite, and Internet communications make the world a much

smaller place, where instant broadcasts from around the world are

taken for granted.

Not so in 1957, the year the Russians sent the satellite Sputnik into

space. "They claimed victory for being the first in space,"

Gargano says. "There were articles in the paper that you could

hear broadcasts from the Russian satellite. So people in my

neighborhood

came to me because they knew I was into ham radio. There was a lot

of interest and people wanted to hear those broadcasts."

Gargano chuckles to remember 1953, the year England’s Queen Elizabeth

was crowned. "The broadcast networks were fighting over who would

fly the footage back to America to be the first to broadcast the

footage

here."

Gargano now waits for the latest revolution in digital communications

to take off. In 1996 Congress authorized the creation of digital TV

standards and the implementation of digital TV broadcast starting

in May, 1999. They gave every broadcast station another channel to

broadcast digitally. This means eventually analog broadcasting will

vanish. By 2006 all broadcasters are expected to exclusively broadcast

digital signals and analog bandwidth is returned to the Federal

Communications

Commission (FCC) for reassignment.

"There’s no turning back," says Dennis Wharton, vice president

of the Washington, DC-based National Association of Broadcasters.

"It’s either go digital or go dark, whether it’s telephone, cable,

computers, or radio. Broadcasters at TV stations can’t stand still

or the government will take back their licenses. Digital is the

future."

That’s what Gargano is banking on. When TV converts from analog to

digital signals, it exponentially improves the picture and sound

quality.

It also allows broadcasters to multicast — to give more program

choices on the same airwaves. And because it can simultaneously offer

voluminous amounts of data, it lets the formerly passive viewer have

an interactive experience. Want statistics on the player who just

made the touchdown? Or a printout of the recipe being demonstrated

on the cooking channel? With DTV, you can get that instantly.

"It’s all part of the digital revolution we’re undergoing,"

says Gargano. "In the audio world we have gone from analog records

to CDs, in video, it’s VHS to DVD. And even in the movie industry

there are digital applications for film distribution."

On the fourth floor of the studios of the Garden State’s

public broadcaster New Jersey Network (NJN), a cozy corner is arranged

for viewing high definition television. The Public Broadcasting System

has set up a loop of digital programming which airs on a large

television

screen. Next to it, sit two computers displaying digital content.

One shows Internet content streaming digitally. The other monitor

shows the same video image from the television displayed on the

computer.

It’s an experiment, explains Richard Williams, assistant director

of engineering. NJN’s location and involvement in digital broadcasting

makes it a test bed for, as Williams puts it, "Digital Alley and

companies located from Cherry Hill to Murray Hill." Beyond New

Jersey there are dozens of companies in the digital field. NJN is

one of 22 PBS stations streaming a digital signal. More than 150 TV

stations have made the transition nationwide. Williams has found the

AgileVision product, the AGV-1000, helpful because it allows engineers

to insert the NJN and PBS logos while a show is running without

altering

the broadcast image.

"That’s a big deal because branding is important," says

Williams,

noting that broadcasters like PBS try to distinguish themselves from

the History Channel or Discovery Channel. The software allows NJN

to insert commercials or underwriting into the programming to meet

obligations to funders. When necessary, the AGV-1000 will insert the

Emergency Alert System within the digital compressed stream. That

is difficult in the digital realm Gargano explains: "Because

everything

is changed to 1s and 0s. You basically lose the image."

But NJN sees digital TV as more than just a great picture and the

same old programming. "There’s an opportunity to add educational

content to TV shows," says NJN official Ronnie Weyl. "For

teachers and students, they’ll be able to click on a program about

Frank Lloyd Wright, for example, and get more information about him.

We compare ourselves to a library with too much stuff to put on the

shelves. So in digital broadcasting we’re interested in having

multiple

channels: an educational channel, an arts channel, a public affairs

channel where people could go to the legislature, an interactive

channel

where people can talk to public officials.

Gargano is also testing the AGV-1000 at WCAU-TV, the NBC affiliate

in Philadelphia.

AgileVision bills its product as "DTV in a box." Williams

and Gargano say the alternative to the device for DTV providers is

a whole rack of equipment. The NAB estimates each television station

is budgeting $10 million for new equipment to make the digital

transition.

AgileVision is trying to address not only the cost of the transition,

but the possibility that the technology may change quickly.

AgileVision is working on upgradeable software for computers rather

than developing dedicated hardware. "That is the right approach

for broadcasters in this new technology that’s going to be changing

very rapidly," says James R. Carnes, Sarnoff’s CEO. "So they

can buy a piece of hardware and then keep implementing newer and newer

versions of software as the technology advances."

Gargano estimates the $225,000 AGV-1000 will be available for sale

to providers in January, and he projects $30 million in revenue the

first year. Even though the product sounds useful and economical,

Gargano has a hard time convincing potential investors that High

Definition

TV and DTV is going to take off. "The pace of implementation of

digital broadcast has not gone as fast as we had anticipated because

there’s controversy about some aspects of the standards," explains

Carnes. "Broadcasters are a little slower than we had hoped in

terms of implementing this digital system until these controversies

get squared away. And that’s been impacting the pace and growth of

revenue for the company."

Carnes blames the broadcasters for not changing over to DTV fast

enough.

Recently FCC commissioner William Kennard lambasted broadcasters for

dragging their feet. He’s going to ask Congress to impose spectrum

fees and to make all TVs manufactured after 2003 to have a DTV

receiver.

The NAB’s Wharton thinks Kennard should take some of the blame.

"The

FCC has exhibited a startling lack of leadership," says Wharton.

"We’re over two years into the transition and they haven’t

established

rules that would benefit consumers and spur sales of digital sets.

Consumers have to go to Circuit City and have the assurance that the

set will work properly. We’ve asked the FCC to establish a cable

carrier

requirement so customers who watch cable will be serviced."

Wherever the blame lies in this sphere, Gargano must convince

investors

that the transition to digital broadcasting will occur on time and

that consumers will jump onto the new technology. "The technology

is terrific," Gargano says, "but I’m still looking for

investors.

But we are in positive discussions with several VC firms and strategic

investors." He guards against pursuing technology for technology’s

sake. "You must not lose sight of it. Technology must have a real

application, it must have a deliverable value. And it must be easily

absorbed."

— Dina Weinstein

AgileVision, Fisher Place, Sarnoff Corporation,

Princeton 08540. Anthony Gargano, president and CEO. 609-514-4032;

fax, 609-514-4029. Home page: www.agilevision.com.


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