Remember interactive television? It's back, albeit in a limited way via the Internet and plain old telephone lines.

Unveiled in splashy announcements several years ago by major entertainment and telephone companies, interactive TV never developed as expected and system tests were canceled.

But this holiday season three companies, WebTV and Japanese manufacturers Sega and Bandai are selling electronic devices that allow users to surf the Net on a TV. In their own way, the devices have put the word "interactive" back in front of TV.

Commonly called "Net on a Set," these devices give general consumers inexpensive access to the Internet -- a global computer network that previously has been the stomping ground of computer users. Moreover, they are creating an entirely new product area that is spawning new businesses and expected to be hotly competitive in 1997.

"WebTV merges the information and entertainment value of the Internet with the television set in the living room," Chip Herman, vice president of marketing for WebTV, said in an interview.

WebTV devices, made by partners Sony and Philips Electronics, are available in consumer electronics stores at prices ranging from about $325 to $350.

The small, black boxes are no bigger than cable TV set-top boxes and can be installed in about five minutes. WebTV comes with a remote control that is nearly identical to a television remote, and a cordless keyboard is available for an extra $50.

Herman notes one of the key features is the ease of setting up and logging on. Users do not have to buy a modem or acquire browser software. WebTV offers Internet access through several providers at a flat fee of $19.95 per month, which is the standard access fee for most Internet providers.

Bandai's Pippin, which is based on hardware from Apple Computer, offers the ability to use some Macintosh-based financial and entertainment software. It comes with a CD-ROM drive and keyboard for $499.

Sega's NetLink adds on to Sega's video game player, Sega Saturn. Users can buy NetLink separately for about $199 or they can purchase NetLink along with Saturn for a total $449, which includes several games. Any standard keyboard can be attached or users can surf the Net using the game controller.

The devices target general consumers who are unwilling to spend $1,500 to $2,000 for a PC or do not need computing software like word processors or financial spreadsheets.

These consumers want to surf the Net for information or entertainment, and they want to send and receive electronic mail, the manufacturers believe.

In fact, Sega has found NetLink, which was designed to enhance the Saturn for online game playing, has tapped an entirely new audience. "Right now, the functionality NetLink has created has little to do with games, and it's sort of taken on its own product identity," said Kerry Bradford, general manager of Sega Online.

The notion of huge numbers of consumers surfing the Internet has Hollywood executives scrambling to create new content. Companies like CyberStudios are providing seed money and professional services to Web site start ups. Outfits like American CyberCast and Eonline! are touting themselves as the first "networks" or "channels" on the Net with many different pages of interactive programming.

One downtown Hollywood company, NetCount, is selling software that audits the number of visitors to a site, segments the audience into groups and provides information to advertisers that is akin to the Nielsen ratings for TV.

"The average person absolutely wants the information on the Internet," said Paul Grant, NetCount's founder. "And when you give them a couple of days, they get incredibly proficient at finding things."

Though a company like NetCount can segment users on the Net, nobody knows exactly how large the potential market for "Net on a Set" customers is.

Sega's Bradford said his company has shipped 100,000 units to retailers for the holidays but still did not meet demand. Sega expects to sell 100,000 more units by the end of March.

Spokesmen for Philips and Sony declined to talk about projected sales but both said retailer requests for WebTV devices have been very strong. And an official with retailer Circuit City Stores said early shopper interest has been good, though actual sales have yet to pick up.

The devices are similar in their ability to allow users to customize pages and menus, freely surf the Net and protect children from sexually explicit material.

But WebTV uses its own browser software that locks users into a system that could fall behind as technology and the Internet change, detractors say. Herman counters by noting the company has built a system that can easily be upgraded at no extra cost to the user.

NetLink and Pippin use browser software and hardware based on open systems that can change as industry standards change. Users can choose their own Internet access company or use one that is provided by the company when they sign on.

WebTV comes with a built-in credit card reader to ease on-line shopping as more secure systems become available.

NetLink and Pippin give users the ability to play online games, whereas WebTV does not.