DiviCom InterSect Gives Cable Operators New Interactive Service Capabilities.

AMSTERDAM, Netherlands--(BUSINESS WIRE)--Sept. 11, 1998--

DiviCom Introduces Industry's First DVB/DAVIC-Compliant Controller, Delivers TCP/IP Traffic to Set-Top Boxes for Interactive Applications

DiviCom Inc. (NASDAQ:CUBE), a leading provider of compression systems for digital television, today created another opportunity for cable operators to increase revenue streams with the introduction of InterSect, an interactive set-top box controller.

InterSect allows cable operators to deliver reliable TCP/IP traffic to devices such as set-top boxes; which can deliver exciting interactive applications such as Web-browsing, e-mail, stock ticker, and electronic program guides.

InterSect is the first DVB/DAVIC headend product designed to control DVB/DAVIC based set-top boxes. DVB and DAVIC are worldwide standards organizations working to define specifications and practices for digital video implementation. The InterSect controller supports the out-of-band DVB/DAVIC specification allowing cable operators to deliver video and data at the same time.

One example of an integrated video/data service is the bundled transmission of a sports match with statistics on the major players. A subscriber could browse through information on the player of his choice while watching the game.

An example where the video and data are not integrated is when a subscriber pays to have certain data continually downloaded to his set-top, such as stock quotes or e-mail, regardless of the video channel to which he is currently tuned.

InterSect supports these types of applications today, and DiviCom is actively working with several manufacturers creating interactive DVB/DAVIC set-top boxes and will announce certification upon completion of interoperability testing. Cable operators will be able to take advantage of these integrated solutions by the end of 1998.

"By delivering TV-based Internet access and other real-time interactive services, cable operators will generate new revenue and differentiate their offerings from competitive broadcast digital video providers," said Michael W. Harris, president of Kinetic Strategies Inc., a leading broadband research firm.

"InterSect enables cable operators to deliver a range of interactive services over their DVB/DAVIC video networks."

Timing is Everything

"The technology is finally catching up with the dream. Combined with our MediaView encoder products, InterSect can help our customers expand their revenue streams," said Tom Lookabaugh, president of DiviCom. "These standards-based products allow cable operators to create an infrastructure for delivering both high quality video entertainment and interactive data services to their subscribers."

Since 1993, interactive television services have been promoted in the media, but cable subscribers' access has been limited to electronic programming guides and pay-per-view movie purchases.

Both Cable Operators and Subscribers are Ready

Internet content has increased dramatically. Set-top boxes are more intelligent. Standards such as DVB and DAVIC define how data will be delivered over two-way Hybrid Fiber Coax (HFC) connections. Data display formats such as Java and HTML are readily available and HFC networks are expanding.

Our vision at DiviCom has been to bring the highest quality digital video entertainment and interactive solutions to the consumer. InterSect is helping to make that vision a reality.

InterSect provides a means for cable operators to differentiate themselves from Direct Broadcast Satellite (DBS) providers by offering new revenue generating applications. Savvy cable subscribers are looking at the latest technologies and asking, "What's next?" With InterSect, the question becomes, "How soon?"

InterSect Controller Benefits

Cable service operators can enhance revenues by using the following key capabilities of the InterSect controller: -0-

--   Offering interactive data based services such as stock ticker,
     customer news, e-commerce -- while subscribers are simultaneously
     watching TV programming

--   Create/integrate into a standards-based transmission environment

--   Use a single InterSect to support thousands of set-top boxes

InterSect Controller Features

     The InterSect meets current cable transmission requirements and
provides future friendly technology with the following key features:

--   DVB and DAVIC compliance

--   Management capabilities for both central and distributed
     diagnostic control (SNMP is the key protocol)

--   Modular/reliable system design with a hot-swappable power supply

--   Supports a wide variety of set-top boxes

--   Support for standard input/output interfaces

-0- DiviCom Inc.

DiviCom develops and integrates products that make digital video networking possible. Products include audio/video encoding, data broadcast solutions, network management systems, consulting and integration services. Based on the MPEG-2, DVB and ATSC international standards, DiviCom's products enable digital video broadcasting over a variety of networks including satellite, wireless, fiber and cable.

DiviCom is a wholly-owned subsidiary of C-Cube Microsystems Inc. (NASDAQ:CUBE), and both companies are based in Milpitas, Calif. C-Cube is the leading provider of digital video silicon solutions for the communications and consumer markets. DiviCom can be reached at +1.408.944.6700 or on the World Wide Web at http://www.divi.com.

This press release contains forward-looking statements that involve risks and uncertainties. The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

The successful deployment and release of interactive DVB/DAVIC set-top controllers and set-top boxes is subject to potential delay and other risks inherent in hardware/software development.

Also, there is no assurance that such set-top boxes will achieve market acceptance, due to the rapidly changing market for such products, competition and other factors.

All forward-looking statements included in this press release are based on information available to DiviCom on the date hereof, and neither C-Cube Microsystems Inc. nor DiviCom assumes any obligation to update any such forward-looking statements.

Information for Editors About DVB and DAVIC

The Digital Video Broadcasting Project (DVB) is a consortium of over 230 broadcasters, manufacturers, network operators and regulatory bodies in more than 30 countries worldwide, committed to designing a global standard for the delivery of digital television. Numerous broadcast services using DVB standards are now operational, in Europe, North and South America, Africa, Asia, and Australia.

The Digital Audio-Visual Council (DAVIC) is a non-profit association based in Geneva, Switzerland, aimed at promoting the success of digital audio-visual applications and services based on specifications that maximize interoperability across countries and applications/services.

With DAVIC, producers of digital audio-visual content can reach the widest possible audience, users can have seamless access to information, carriers can offer effective transport, and manufacturers can provide hardware and software to support unrestricted production, flow and use of information.

    CONTACT: DiviCom Inc.
              Anne Hohenberger, 408/490-6688
              [e-mail]