At last week's Western Cable Show, Microsoft's Ultimate TV and America Online's AOLTV made it clear that the future is here.

For years, media companies have promised the convergence of TV and the Internet. At last week's Western Cable Show, Microsoft's Ultimate TV and America Online's AOLTV made it clear that the future is here. The AOLTV service, which requires a $249 box and $14.95 monthly fee on top of the usual $21.95-a-month AOL subscription, is available nationally at Circuit City stores. And Microsoft's Ultimate TV — a $350 DirecTV satellite receiver with built-in personal video recorder and $29.95 monthly subscription fee — will be marketed later this month. But the ultimate goal is to entice cable system operators, who are installing millions of their own set-top boxes in homes, into offering the services as step-up features to their subscribers. ''We're showing what's possible,''Microsoft's Ed Graczyk says. ''This will totally change the way people watch TV.'' Two cable companies have signed up for what's called Microsoft TV, software that allows subscribers to check e-mail, shop and surf on TV. Rogers Cable in Toronto just started offering Microsoft's boxes to its subscribers, and AT&T has committed to launching the service in the first quarter on some of its systems, signing up for 7.5 million software licenses from Microsoft to be used with set-top boxes. Microsoft already markets WebTV to about 500,000 households.People who don't want to deal with computers can surf the Web and send e-mail via remote control and wireless keyboards. Ultimate TV, marketed directly to consumers, and Microsoft TV, targeted to the cable industry, are similar vehicles for making money off subscribers through interactivity.