In a joint corporate experiment that could have a signficant impact on the future of the emerging home-computer information industry, CBS Inc. and American Telephone & Telegraph Co. yesterday announced plans to test jointly a two-way home-information system for consumers.
The formal announcement by the two communications giants confirmed earlier reports that the two companies were about to enter a joint venture to explore the technical and economic feasibility of this new industry.
Under the experiment, CBS and AT&T will provide a videotext system for 200 households in Ridgewood, N.J. The system, which will be offered for free, will permit participants to receive up-to-date news, sports, stock market data, weather, education and entertainment information on specially provided video terminals and screens.
The system, called "videotex," will also allow participants to shop and bank electronically.
CBS will be solely responsible for all of the system's information content. Advertising will be accepted; however, CBS, not AT&T, will originate it. AT&T will provide the telephone lines and all computer facilities, including the video-display terminals for homeowners.
The exclusion of AT&T from participating in the information and advertising content will help ward off criticism from newspaper publishers who argue that given AT&T's large resources, the phone giant would have an unfair advantage over newspaper companies and other would-be videotext competitors if AT&T controlled both the telephone network and the information flowing into the home.
The CBS-AT&T experiment is to begin a year from now and run for seven months.
It is the second videotext trial in which AT&T has been involved. Just last month, AT&T and Knight Ridder Newspapers Inc. concluded a 14-month videotext experiment in Coral Gables, Fla.
In that experiment, 160 homes were supplied with a variety of electronic data, such as shopping guides and education material assembled by the newspaper chain.
As a result of that test, AT&T and Knight Ridder have announced plans to launch a commercial operation -- for which participants will have to pay -- in 5,000 South Florida homes in 1983.
Although the CBS-AT&T experiment is not much larger than the first test, it is significant given the size of the two companies. AT&T is the largest in the world, with assets of $125 billion. CBS is one of the nation's biggest communications concerns, with assets of $2 billion. In addition to controlling a vast worldwide news-gathering network through its broadcast holdings, CBS owns several dozen magazines, including Woman's Day and Mechanix Illustrated, and six book lines -- all of which probably will be used in the New Jersey videotext experiment.
"CBS expects the market for videotext to be substantial," said Harry F. Smith, the CBS vice president for technology. "This text will help us determine the level of initial demand for a number of 'videotex' services that CBS is well equipped to offer."