(FORTUNE Magazine) – Interactive television, which will enable consumers to order products, compete in game shows, and pay bills via their TV sets, has so far shown more promise than profits. But companies that have invested heavily in the technology hope to see that change soon. Recent developments are: -- The FCC has allocated a portion of the broadcast spectrum to interactive television and will award licenses to investors who can show they'll be able to serve large markets. TV Answer, a private company in Reston, Virginia, wants to help contestants put their business plans together. The company's national ad campaign alerts potential customers to the lottery the FCC will use to pick winners. TV Answer wants to hook winners into a national interactive TV network, which includes land cell sites and a satellite. (See diagram for how the system would work.) -- Interactive Network already provides subscribers in Sacramento, California, with a system that lets them play TV game shows just like the contestants, except the viewers compete privately with each other. Investors include General Electric's NBC and A.C. Nielsen, the ratings firm. -- Further down the line, interactive TV may offer consumers a much wider range of products. Entertainment, consumer electronics, and computer companies including Apple Computer, Sony, and Toshiba are exploring ways to mesh their capabilities. For example, IBM and Time Warner (which owns FORTUNE's publisher) are discussing ways to combine Big Blue's data-transmitting expertise with the media giant's cable TV systems, TV shows, and movies. - R.T.

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