THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, July 7, 1994 TAG: 9407070541
SECTION: BUSINESS PAGE: D3 EDITION: FINAL
SOURCE: BY EDMUND L. ANDREWS, THE NEW YORK TIMES
DATELINE: WASHINGTON LENGTH: Medium: 65 lines
In a move that will make New Jersey one of the first battlefields pitting telephone and cable television companies against each other, the Federal Communications Commission approved an application Wednesday by Bell Atlantic Corp. to offer interactive television service for 38,000 homes.
This is the first time the FCC has cleared the way for a telephone company to offer commercial cable television, and it suggests similar action on a backlog of 21 similar requests from other regional Bell companies that would cover millions of homes nationwide.
Dozens of applications have been pending before the commission, some of them for more than a year.
Bell Atlantic has said it will spend more than $15 billion in five years and plans to start networks in six metropolitan areas, including Norfolk.
Though the agency has in principle been enthusiastic about competition between telephone and cable television, officials have been hesitant thus far to approve anything more than technical trials. The cable TV industry, meanwhile, has filed a blizzard of objections in an attempt to stall their well-financed would-be rivals.
Bell Atlantic executives said they intend to build an advanced fiber optic network within the next year capable of transmitting 384 TV channels in Toms River, N.J. The company said it would immediately undercut existing cable television prices by 20 percent, and executives predicted competition would eventually drive prices even lower.
``We want to give them what they're getting now, at a lower cost, with interactivity,'' said Bob Schena, president of FutureVision of America, a small company that has teamed with Bell Atlantic and will assemble the programming.
Initially, the new system will offer 60 to 80 channels of television and a modest array of interactive features. Among them will be the ability to subscribe to premium channels or ``pay-per-view'' movies and sporting events just by clicking a remote control device at on-screen menus. Local businesses will be able to send electronic messages to homes, and customers will be able to request more information in response to advertising.
In its decision, the FCC said Bell Atlantic's plan would ``promote the public interest'' by stimulating investment in new technology, increasing competition in video services and promoting lower prices for consumers.
``A new day is dawning,'' FCC commissioner Susan Ness said. ``No longer will telephone companies simply provide telephone services and cable companies merely provide video programming services.''
But the commission also ordered Bell Atlantic to build a network that could accommodate independent programmers, separate from FutureVision, its designated partner. Bell Atlantic had proposed that its system would provide less than 100 channels initially, and all but a tiny fraction of that capacity would have been allocated to FutureVision. Under the terms outlined Wednesday, Bell Atlantic will have to start transmission with a system that delivers 384 channels.
The National Cable Television Association immediately vowed to fight Wednesday's decision in court.
KEYWORDS: CABLE TELEVISION by CNB