Thanks to growing competition from satellite and the threat from telcos, interactive television is back on the agenda for American cable networks.

According to an editorial in CED Magazine, which specialises in broadband technology, many multiple service operators are responding to the challenge by ramping up their interactive offerings.

Insight and Charter are both reviewing their services, and Time Warner Cable and Comcast are also actively looking at the opportunities.

Operators are still looking for the killer application. While games may offer revenue opportunities, customer care applications which provide self-service subscription management, can help to reduce operational costs.

“For iTV, operators will certainly move at different speeds and take different paths in 2005. But it’s abundantly clear that interactivity has moved back on operator agendas, and holds much more substance this time around,” writes editor Jeff Baumgartner.

Referring to the success of BSkyB in the UK and the opportunities for DIRECTV in the US, he notes that it’s amazing what the spectre of Rupert’s ‘Red Button’ can do to more an industry that rode the interactive television bandwagon into the ground.

Jeff recalls the hype of the boom and the battle of press releases giving vague announcements about possible trials with unnamed cable operators, most of which came to nothing. Such failures and smokescreens gave rise to a cynicism about interactive television.

Five years later, with deployments of two-way digital networks and video-on-demand services, cable faces competition from satellite and now needs to come up with something special.

As CED publishes its annual Broadband 50, Comcast is still number one, followed by Time Warner Cable, both ahead of EchoStar and News Corp. The rest of the line-up makes interesting reading as a review of the state of the industry and emerging new entrants.