Videoconferencing has long been an expensive technology. While systems for connecting groups begin at a heady $40,000 per site, even simple gear that plugs into a desktop PC can start at a pricey $5,000. Why? The heart of these systems is dedicated compression hardware and software that squeezes video and audio signals onto a digital telephone line. To date, only about 30,000 of these systems have been sold to big corporations, according to market researchers.

Now comes what its developer says is the first software-only videoconferencing package. It's from startup Vivo Software Inc. in Waltham, Mass., and uses the PC's microprocessor for muscle. The rest of the video capture-and-transmission job is done by off-the-shelf cameras and network cards. To kick-start sales, Vivo is offering the package with a digital video camera from Logitech Inc. and an IBM network card--all for $1,995. Next year, Vivo expects to sell the software for under $1,000, assuming PC makers build in cameras and network gear. One problem: The setup still requires Integrated Services Digital Network (ISDN) phone lines, which are limited to large cities.

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