Steve Perlman is out to change the way we receive electronic entertainment and information at home -- again.

The restless Palo Alto entrepreneur unveils his newest company today: Moxi Digital, which has developed a VCR-size box that ties together every digital device and service in the house.

The Moxi Media Center, or MC, is a satellite or digital cable receiver, a DVD player, a digital video recorder, a computer networking gateway, a music jukebox and even an Internet-based telephone.

A small extension unit called the MCx will funnel all these functions through televisions in other rooms.

The first Moxi boxes will be field-tested this summer by some subscribers to the Dish Network satellite-TV service. EchoStar, Dish Network's parent company and a Moxi Digital investor, could start offering Moxi to all its subscribers as soon as year's end.

The MC will cost about $350 to $450 to manufacture, according to Perlman, while the MCx will run about $50 -- the same or less than advanced digital cable boxes just now coming on the market. Consumers would likely pay much less, or could even get the hardware for free from cable- and satellite-TV providers in exchange for higher monthly fees.

Perlman, best known in Silicon Valley for creating the WebTV Internet access device and then selling the 2-year-old company to Microsoft in 1997 for $425 million, realizes the many functions of Moxi can sound confusing. In an interview last week, he quoted the classic "Saturday Night Live" TV commercial spoof: "It's a floor wax and a dessert topping!"

But Perlman, 40, insists Moxi isn't some engineering fantasy run amok.

"We finally pulled the pieces together," he said. "This is not a technology. It's a solution. There's a big difference," he said.

Indeed, Perlman has a very detailed argument for why Moxi will finally allow cable and satellite operators to deliver on long-delayed promises of next-generation interactive services. He'll make his case this afternoon at Moxi Digital's official launch event, a news conference at the big Consumer Electronics Show in Las Vegas. Perlman started the company in early 2000, but operated in "stealth mode" under the cover name Rearden Steel.

There's no single function Moxi performs that consumers can't do today, but Moxi -- acting as a kind of digital brain -- offers the possibility of simplifying things that are now complicated and expensive.

The Moxi MC connects to all the wires coming into the home: a cable or satellite line for television programming, a DSL phone line or cable-modem connection for high-speed Internet access and a regular phone line for those without high-speed service.

Inside the MC is a DVD drive for playing movies and music CDs, along with an 80-gigabyte hard drive -- enough to store 60 hours of video and 500 digitized CDs.

Plugging in

A single TV and stereo receiver can be plugged directly into the MC. To reach TVs and computers elsewhere in the home, Moxi offers three alternatives: standard coaxial cable lines, already built into many houses; Ethernet computer cables, which are very inexpensive; or a wireless connection using a new standard with the awkward name IEEE 802.11a.

If the MC is set up in the family room, for instance, an MCx linked wirelessly or by wire could play live TV, shows stored on the hard disk, music from a disc in the DVD drive or music from the hard disk through a television set in the master bedroom. Another MCx could provide the same functions in a child's bedroom. Three family members in each room could be enjoying different TV shows or music, all at the same time and all through the MC.

Any computer hooked to the MC, wired or wirelessly, could share the Internet connection as well as playing TV shows or music.

Such a seamless digital network could become a platform for online services that aren't practical today. One example: The major record labels desperately want to sell music online, but recognize most consumers don't want downloaded songs locked inside a personal computer. Music downloaded into the Moxi, however, could easily be heard throughout the house, even through future stereo systems designed to work with wireless home networks.

Perlman isn't introducing Moxi alone. His company raised $67 million last year from powerful backers including AOL Time Warner, Cisco Systems and Microsoft co-founder Paul Allen.

What's more, analysts briefed by Perlman are confident he can make Moxi work at the promised price.

"It's the right product at the right time," said Josh Bernoff of Forrester Research in Cambridge, Mass.

The risks revolve around what happens once Moxi is ready to ship. Will satellite and cable operators have the financial resources and customer-support savvy to sell a complex new product? Will consumers be willing to pay enough for Moxi's many functions to cover the industy's cost to install them?

Ahead of itself?

"This could very well be the way consumers ultimately interact with digital media. But is it a 2002 product or a 2010 product?" said Steve Vonder Haar, a Dallas-based researcher for The Yankee Group.

"Consumers don't yet understand the value proposition of a hard drive in a set-top box," added P.J. McNealy of GartnerG2 in San Jose.

At the Consumer Electronics Show this week, only EchoStar is expected to announce plans to deploy Moxi. Despite investments from three cable operators -- AOL Time Warner, Paul Allen's Charter Cable and the Washington Post's Cable One -- no cable company is expected to endorse Moxi at its launch, even though Perlman insists Moxi is a less expensive way to offer advanced services than next-generation cable set-top boxes the industry is now ordering.

Finally, there is the threat of competition. No product on the market today or announced comes close to what Moxi offers, but several technology heavyweights have talked long and loud about their desire to dominate the digital home of tomorrow.

The loudest voice is Microsoft, Perlman's former employer -- he worked at the company for two years after the WebTV acquisition, leaving in frustration with Microsoft's slow pace and insistence on cramming a version of its Windows computer software into TV-based devices. Moxi uses the Linux operating system and Macromedia Flash animation software.

"We couldn't do the things we are doing with Windows XP," Perlman said, referring to the most recent version of Microsoft's flagship operating system. "The best broadband (home) networks out there will be the ones that don't use Microsoft technology."