The recent collaboration between a prominent software company and a leading long-distance telephone service provider marks a significant development in the technology and communication sectors. This partnership aims to position the software company strategically within the expanding broadband market, especially with the impending acquisition of MediaOne by the telephone service provider, which will solidify its position as the nation’s largest cable company.

Microsoft’s existing investment in Comcast, one of the top cable operators, underscores its commitment to this sector. The agreement entails AT&T incorporating Microsoft’s software into its television set-top boxes, paving the way for joint market tests of innovative digital cable services in select U.S. cities. Additionally, AT&T plans to expand its utilization of Microsoft’s Windows CE operating system software in set-top devices, signaling a deeper integration of technologies between the two companies.

Importantly, this collaboration does not restrict AT&T to solely using Microsoft products, fostering an environment conducive to engaging multiple vendors for hardware and software procurement. The focus remains on fostering an open ecosystem for developers, as emphasized by both companies, with the provision of relevant Windows CE application programming interfaces (APIs) for interactive TV enhancements and content development.

Despite the substantial financial investment by Microsoft in AT&T, both companies affirm their commitment to remaining technology-agnostic, with investments and partnerships spanning various technological domains like DSL, wireless, and satellite. The revenue impact of this partnership on Microsoft’s financials is projected to be minimal in the foreseeable future, underlining a long-term strategic outlook on the collaboration.

Overall, this collaboration sets the stage for innovative advancements in digital cable services and interactive TV experiences, driven by the synergies between two industry leaders. Amidst evolving technological landscapes, this partnership signifies a forward-looking approach to harnessing the potential of broadband technologies for enhanced connectivity and user experiences.


  1. What prompted the collaboration between the software company and the telephone service provider?
    The collaboration aims to capitalize on the broadband boom and strategic positioning following AT&T’s acquisition of MediaOne.

  2. What role will Microsoft play in AT&T’s television set-top boxes?
    Microsoft’s software will be integrated into AT&T’s television set-top boxes as part of the partnership.

  3. Will AT&T be limited to using only Microsoft products?
    No, the collaboration allows AT&T to engage multiple vendors for hardware and software procurement.

  4. What market tests are planned as part of the partnership?
    The companies will conduct market tests of new digital cable services in undisclosed U.S. cities.

  5. How will Microsoft’s Windows CE operating system be utilized by AT&T?
    AT&T will increase its use of Windows CE in set-top devices, expanding beyond the current license agreement.

  6. What is the focus on providing relevant Windows CE APIs for developers?
    The provision of APIs aims to facilitate interactive TV enhancements and content development by developers.

  7. Will the collaboration venture into the content business?
    Both companies affirm their focus on TV and interactive TV content without venturing into content ownership.

  8. What financial investments will Microsoft make in AT&T?
    Microsoft will invest $5 billion in newly issued AT&T preferred securities and warrants as part of the partnership.

  9. How will the revenue impact of the collaboration affect Microsoft?
    The revenue impact is expected to be minimal in the near future, according to Microsoft’s CFO.

  10. What other technological domains do the companies have investments in?
    Both companies have investments and partnerships in DSL, wireless, and satellite technologies, besides cable.

  11. What is the long-term outlook for the collaboration between Microsoft and AT&T?
    The collaboration aims to drive innovation in digital cable services and enhance interactive TV experiences, with a focus on long-term strategic growth.

  12. How does this partnership reflect the companies’ approach to evolving technological landscapes?
    The collaboration highlights a forward-looking approach to leveraging broadband technologies for enhanced connectivity and user experiences.


The collaboration between a renowned software company and a leading telephone service provider signifies a strategic move to capitalize on the expanding broadband market. The integration of Microsoft’s software into AT&T’s set-top boxes and joint market tests for digital cable services herald a new era of innovation in the technology and communication sectors. Emphasizing an open ecosystem for developers and a commitment to technology-agnosticism, the partnership aims to enhance interactive TV experiences while fostering long-term growth opportunities. The minimal near-term revenue impact underscores a broader vision for leveraging broadband technologies across various domains, showcasing a forward-looking approach to connectivity and user-centric experiences. For readers keen on exploring transformative technological partnerships and industry advancements, this collaboration sets a promising trajectory for future innovations.

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