COLUMN ONE : Tuning Out the TV of Tomorrow : Four years ago, GTE made Cerritos its media mega-test site. Would ordinary people use interactive cable to shop, learn and play? So far, viewer interest is fuzzy but the obstacles are clear.

What’s it like living along the information superhighway? Apparently, you don’t even notice it. After four years in the multimedia fast lane, Cerritos residents still spend more time on the Artesia Freeway than on the data expressway.

It was not supposed to be that way. Four years ago this month, GTE Chairman James L. Johnson cut a ribbon in Cerritos and proclaimed that the 8.9 square miles of pancake-flat suburb would be the site of the most sweeping test yet of interactive TV, a test that would “shape future telecommunications for the whole country.”

GTE installed what was probably America’s most sophisticated cable system, permitting many subscribers to use their TV sets interactively. The project generated a flood of attention over how residents would bank and shop at home, obtain city permits, bone up for college entrance exams, play games and access movies at the flick of a button.

But after a prolonged opportunity to serve as guinea pigs for the TV of tomorrow, hardly any residents subscribe. Most don’t even get cable TV, and many who do say they aren’t interested in ordering flowers on-line or scanning an interactive encyclopedia.

“Quite frankly, I don’t know of anyone who uses it,” said Mayor John Crawley. “For the average person in Cerritos, it doesn’t exist.”

Michael Noll, dean of USC’s Annenberg School of Communications, summarizes the Cerritos experiment more neatly: “It’s bombed.”

GTE officials insist that they are happy with the reception for their new services, although they will not discuss how often customers use them. GTE project head Don Bache cites the $15-billion annual video rental market as proof of the latent demand for interactive TV. “To us, that has always been a given,” he said.

The problem, Bache admits, has been finding out what subscribers are willing to pay for the convenience of a film that appears within minutes.

“A lot of what we’re doing here is speculation,” he said. “I don’t know if we can prove demand exists for all these services.” But, he added, interactive TV should parallel the deployment of other technologies, which often take years to catch on. “You have to in some sense create the demand, like ATM machines.”

That has not happened yet. Meanwhile, the indifference of Cerritos residents suggests that Americans are far from ready for the dawning age of interactive TV, when couch potatoes supposedly will use their remote controls like a magic wand to conjure up a world of entertainment and information.

GTE’s experiment is important because it foreshadows the much-ballyhooed era of the 500-channel, two-way cable system. The Cerritos experience suggests that if the future of telecommunications is really going to be interactive, it had better be mindlessly simple and endlessly diverting--not unlike plain old television. And it may not be nearly as big a business as some have suggested.

Those considerations are not stopping America’s telecommunication giants from charging ahead. Yet the distance from Cerritos to cyberspace is evident in the behavior and comments of residents, who have proven a bigger obstacle to interactive TV than the technology itself.

“We don’t have kids at home who would use the encyclopedia thing, and we’re not into home shopping,” said Charles Rose, a Cerritos resident who happens to be a telecommunications consultant. He notes that his home computer will do many of the things GTE’s cable project does. Interactive TV, he said, is a “solution to a problem that doesn’t exist.”

The Cerritos experiment is actually 19 experiments, some overlapping, that offer subscribers varying levels of interactivity. GTE is the local phone carrier too, so it needed a waiver of Federal Communications Commission rules to provide both phone and cable service in one community. That waiver expires in a year, and the experiment may end then.

The most ambitious of the projects is Main Street, in which only 350 households have signed up to use TV for shopping, educational and entertainment options. Another major test--with 4,200 subscribers--is Center Screen, which lets customers view a movie within 30 minutes of ordering.

But subscribers who have lived with GTE’s high-tech system report that they still would rather rent videos from the local Blockbuster because it’s cheaper, or sit down at the kitchen table to pay bills instead of entrusting the task to their TVs.

Cultural factors also play a role, Mayor Crawley said. Cerritos is 44% Asian, and these residents often place an especially heavy emphasis on education, steering children away from TV. And some customers, unhappy with traditional cable, distrust what they see as the latest gimmick.

GTE officials acknowledge that interactive TV will take longer to catch on than once thought. “Everyone has been searching for the Holy Grail over the last seven to eight years,” said Tom Greib, general manager of Main Street. “No one has found it.”

That is not for want of trying. Denver-based cable TV giant Tele-Communications is spending $2 billion over the next four years to rewire its cable systems with high-capacity optical fibers that will deliver hundreds of channels along with data and phone services. Time Warner Inc. plans to build an “electronic superhighway” to 4,000 subscribers at its Orlando, Fla., cable TV system. And with an eye toward the convergence of entertainment and telecommunications, US West is spending $2.5 billion for a 12.5% stake in Time Warner Entertainment.

Anyone about to invest billions in the information superhighway may want to visit Cerritos, 25 miles south of Downtown Los Angeles. Known as Dairy Valley until 1967, the former cow ranch mushroomed to 53,000 residents in the 1970s as a showcase planned city.

Cerritos was chosen partly because it was just the affluent, diverse and forward-looking place GTE wanted, and partly because Cerritos wanted the most sophisticated possible system and made it tough, through various restrictions, for conventional cable operators to lay lines. So GTE laid cable lines next to its phone lines.

Cerritos still seems the ideal place to build the interactive cable system of tomorrow. With its tree-lined streets, immaculate homes and $60,000 annual median household income, Cerritos is an upper-middle-class paradigm. More than a quarter of its residents are college graduates.

Moreover, the city is ethnically diverse: Residents are 44% Asian-American, 36% Anglo, 13% Latino and 7% African-American. At a time when neighboring towns such as Artesia are troubled by gangs and Lakewood has been immortalized by the Spur Posse sex scandal, the talk in Cerritos is about its $60-million Performing Arts Center, which Frank Sinatra opened in January.

Nowhere is the updated Norman Rockwell image more evident than at the Cerritos Public Library, which on a recent morning was crowded almost exclusively with Asian high school students.

This is the young, video and computer-fluent generation that GTE and others believe will take to interactive TV as if it were just another video game. But in this educated community, the students can be harsh judges.

“A couple of people know about it, but nobody uses it,” shrugs recent high school graduate Heather Mirajahangir on her way out of the library. In her home, TV is discouraged, although she describes her sister as a television addict. And what does Heather think of interactive TV? “I think it should be banned,” she says without hesitation.

Mayor Crawley says that although residents are grateful to GTE for providing cable TV, there has not been an overwhelming demand for interactive services because it has not been shown to make life easier. “There’s enough complicated things in life without this,” he said. “Personally, I like to contact people directly rather than push buttons on TV.”

If residents’ opinions are any indication, cable and phone companies should brace for an uphill battle in persuading consumers that they need these services. Even GTE executives now concede that interactive TV may have only limited appeal. Says Greib: “This is not a mass-market service. That’s one of the most important things we learned.”

Indeed, GTE’s experiment is an object lesson in the ways technology can outstrip desire.

“Cerritos continues to show us that we as technologists can have the most remarkable ideas imaginable and consumers won’t respond,” said Tom Gillette, a St. Louis telecommunications consultant and one of the project’s early developers.

GTE’s Cerritos project is only the latest in a series of interactive TV forays that have not worked as envisioned. As far back as 1974, the National Science Foundation funded research in Reading, Pa., Spartanburg, S.C., and Rockford, Ill. Although the projects indicated that interactive TV could be useful in education, by the mid-1980s the systems were rarely used.

In 1977, Warner Amex Cable began its highly touted interactive QUBE system in Columbus, Ohio, which served 30,000 subscribers. The system never lived up to expectations and was killed.

“The promises of technically sophisticated cable systems are generally made for reasons other than ‘the audience wants them,’ ” said Lee Becker, a journalism professor at Ohio State University who studied QUBE. He noted that the high-tech systems are used by their promoters to win lucrative franchise awards--as was the case with QUBE--or to gain points in the ongoing regulatory battle between the telephone and cable industries.

“In terms of interactivity, there is no evidence the audience wants to talk to the TV,” Becker said.

Main Street (at $9.95 a month in addition to regular cable fees) remains in just 350 homes out of the city’s 7,300 cable subscribers. GTE says it has kept a lid on new users because of the expense involved in the special decoder boxes. Only recently has GTE tried to market it commercially.

A smaller test has just two Cerritos households connected to a “full” video service that allows them to watch movies on demand. The homes are merely testing technology that stores and transmits the videos.

Still, GTE parades the two families--the Jukubiks and the Hyatts--as the TV users of the future. Countless interviews have turned them into savvy media pros--a Time magazine story with their photo hangs framed on the Hyatts’ wall--and GTE flew the families to Florida to appear before an industry trade group, providing limos and passes to Disney World.

“CNN has been in here three times and CBS twice,” Betty Hyatt said with a laugh.

Not surprisingly, both families profess to be interactive TV addicts--Betty Hyatt said her husband, Randy, punches up a different film every night and college-bound daughter Laura used it to prepare for her SATs.

But the Hyatts and Jukubiks are an awfully small sample. When other Cerritos residents describe using the interactive service, they seem to favor specific functions rather than a smorgasbord of options. Play seems high on the list.

“We use it every day to check our horoscope,” said 13-year-old Neha Shah as she walks out of Ralphs with her 9-year-old brother, Jay. Sensing this is perhaps not quite the right answer, she added: “And sometimes to study.”

Although many functions of Main Street have long been available on Prodigy and other on-line computer services, GTE’s Greib argues that broad-band cable TV has a strong advantage.

“This is aimed at the market that is not computer literate and looking for a simple-to-use way of using the box they always go to for information and entertainment,” he said. Furthermore, the average Main Street subscriber uses it “in excess” of 10 hours per month. That goes up, Greib said, as GTE learns more about “what the subscriber wants.”

GTE officials say they have learned that the public wants less home shopping--the big interactive networks such as QVC dominate that market--and more personal services such as the electronic encyclopedia and stock quotations.

GTE also had to make the service so simple that a child could navigate it. “User-friendly is not enough,” Greib said. “It had better damn well look like TV.”

As easy as GTE tried to make it for subscribers, they have not always responded. Homemaker Susan Strichard tried GTE’s interactive TV service for a year before dropping it. “The idea was good, but the technology was not user-friendly enough,” she said. Her two daughters found the interactive practice SAT tests “difficult to use” and the “little push button pad” cumbersome.

Even some Main Street vendors admit that they are skeptical.

“To be honest, we didn’t think people would actually use it,” said Suzanne Shao, owner of Cerritos Hill Florist. “We thought of it as a way of promotion.” During the past two years, she said, subscribers have used Main Street to order flowers about a dozen times.

Nonetheless, Shao said her two children probably spend an hour a week on Main Street’s interactive World Book Encyclopedia.

Despite its difficulties in Cerritos, GTE is encouraged enough by Main Street to begin selling the service to other cable TV systems around the country. Subscribers would be charged $10 per month--about the price of HBO. And GTE officials say purchases through Center Screen--so-called buy rates--are higher than the national average for other pay-per-view channels, although they do not know if that’s because of wider use among general subscribers or more frequent purchases by a small group of videophiles.

So far, only two cable systems have agreed to try to sell Main Street to their subscribers--Continental Cablevision outside Boston and Daniels Cablevision in Carlsbad, Calif.

Ironically, the Cerritos experiment does not even represent the latest in technology. The interactive World Book Encyclopedia only has still pictures and sound, rather than full-motion video. And most of the movies are stored in racks of inefficient VCR players rather than digitized, as would be needed for volume usage.

In fact, when a customer orders flowers by pushing a button on his TV’s remote control, it just sends a signal back to Main Street’s offices. Someone there writes up the order and sends it to the flower shop--by fax.

Test Pattern in Cerritos

GTE’s 4-year-old Cerritos cable TV project is a “test bed” for as many as 19 experiments in telecommunications services and interactive television. GTE, which built the cable system in Cerritos, leases 39 channels to Apollo Cablevision, which provides 7,289 homes with regular cable TV. GTE keeps another 39 channels for itself to test advanced services, which include:

Center Screen. A 30-channel pay-per-view system featuring movies that are available within 30 minutes of ordering. Each costs between $3.95 to $4.95. In about 4,200 homes.

GTE Main Street. Allows subscribers to shop, pay bills, check stock market quotes and news, play electronic games, make plane reservations, take sample Scholastic Aptitude Tests and scan a video-and-audio version of the World Book Encyclopedia. Costs $9.95 per month. In 350 homes.

GTE ImagiTrek. Provides simultaneous access to regular TV shows and material from an interactive compact disc player. For example, someone who is watching a program about lions and can call up more information about lions from an electronic version of World Book. Free. In 61 homes.

Full interactive video. In addition to the Main Street services, allows subscribers them to choose from a menu of movies for instant viewing. Free. In two homes.

Fiber to the schools. Video-on-demand system in two elementary schools allows teachers and students to electronically call up educational films. In addition, teachers and students in different classrooms can communicate through video conferencing. Free. In six classrooms.