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FUTURE PHONE?

Just how will consumers get onto the Information Superhighway? Some companies say you'll use a personal computer. Others say it will be a souped-up cable-TV converter box. It could even be some specially designed gizmo none of us has heard of yet.

If American Telephone & Telegraph Co. has its way, consumers would tap into the promised flood of digitized movies, games, and data by that most ubiquitous of communications gear: the telephone. Under a hush-hush program called Project Sage, AT&T engineers have reinvented the phone to act as the central controller that will funnel information to and from the TV, video-game player, PC, fax machine, VCR, answering machine, and video camera. After Sage hits the market, maybe as soon as 1995, "it's going to be increasingly difficult to figure out what's a game machine, what's a computer, and what's a telephone," promises AT&T Consumer Products Div. President Carl S. Ledbetter, who heads the effort.

To work its magic, this phone will pack the power of a PC and special software and circuitry to manage the digitized information coming into the home over phone or cable-TV wires. But if it works as promised, it won't be any harder to use than today's telephone.

MASTER MIMIC. The Sage phone will accept electronic plug-in cards slightly bigger than credit cards. Each will mimic an existing appliance or connect to one. A digital phone-machine card would store messages. Another would function as the set-top control box for cable TV. Another would act as a Sega video-game machine. Yet another would connect your PC to the network. AT&T will even offer a card that enables the camcorder and TV to make video calls.

The software making all this possible comes from AT&T as well as from General Magic Inc., a startup in which AT&T is an investor. General Magic has designed an "agent," a type of software that can perform such tasks as calling out across the Information Superhighway to find all the programs about, say, gardening.

Sage could be a big gamble. AT&T must convince cable-TV and local phone companies, among others, that they would benefit by using compatible equipment. "We want to build a standard that people can rally around," Ledbetter says. AT&T will allow others such as Microsoft Corp. to create the software for the TV-screen menu that consumers will use to navigate through the digital data. But Microsoft is readying its own system for the Information Superhighway. And cable and phone companies are already working with other suppliers to devise their own proprietary home controllers.

AT&T has some pluses, though: its strong brand name, its distribution in consumer-oriented stores, and some useful alliances, including an investment in 3DO Co., whose game machines will double as cable converters. And by the time Sage prototypes emerge late this year, a revamping of national communications policies may open cable and phone systems to all equipment suppliers (page 88). That would help AT&T make sure that the telephone, a marvel of this century, remains a staple in the next.Bart Ziegler in New York


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