Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, December 12, 1993                   TAG: 9312100075
SECTION: BUSINESS                    PAGE: F4   EDITION: METRO 
SOURCE: David Bank Knight-Ridder Newspapers
DATELINE: ANAHEIM, CALIF.                                 LENGTH: Medium

BELL ATLANTIC CEO PREDICTS VAST CHANGES IN CABLE TV

Now, the chairman and chief executive of Bell Atlantic Corp. is treated like a celebrity and considered a visionary who has unlocked untold riches in the explosive telecommunications industry.

On Thursday, Smith, who engineered the October announcement of Bell Atlantic's $30 billion merger with the nation's largest cable operator, Tele- Communications Inc., modestly predicted that developments in the industry "will change everything."

The money to be made from the first five "killer applications" of full- service interactive multimedia are too huge to even estimate, Smith said at the Western Cable Television Conference here. That's because telephone-television providers at first simply will pick off existing customers from other businesses by giving them better and more convenient service, Smith said.

"The real shocker will be how fast the market develops," Smith said.

The five businesses, Smith said, are:

Video-on-demand, by which viewers will have the ability to pause, fast- forward and reverse movies that are available instantly from huge libraries. Smith advised owners of neighborhood video rental stores to look for a new line of business.

Home shopping that goes far beyond today's cheesy pitches for zirconium rings. Shoppers will be able to browse through brand name shops and catalogs of their choice. Smith said television would seize the market of today's mail-order catalogs.

Video games, a growing $6 billion market that can be served cheaply and quickly over the new network, eliminating the need for game cartridges.

Gaming or gambling, replacing services such as off-track betting and state lotteries, and adding the ability to compete from home for prizes from television game shows. Advertising, taking business from today's

direct-mail operations by delivering direct-TV advertising, giving advertisers the ability to deliver a commercial to exactly their target audiences.

Smith said there were still privacy issues to be worked out before, say, the TV addresses of home-shopping buyers of Nike tennis shoes could be delivered to rival Reebok. But, he said, "It's going to be dynamite."

Smith said that Bell Atlantic has a head start in solving the problem of helping viewers navigate through the multitude of choices. All of the services are to be linked together in an electronic "mall" the company has deployed in its test market in Arlington, Va. In the StarGazer system, customers point-and-click through "shops," such as the MGM film library or a designer clothing label. Unlike a VCR, Smith said, no instruction manual is required.

The company, which won a lawsuit in August to become the only regional phone company with the right to offer video programming in its own service area, is moving quickly to sign up customers for the new services. In its mid-Atlantic region, the company is installing fiber-optic strands to the curbside, a more expensive and higher capacity network than is planned by any other telephone company.

Smith said he expected to have more than 125,000 customers by the end of next year and that the services would be available to nearly 9 million homes by the end of 2000. "This industry transformation, however you compute

it, will change everything," Smith said. "Your computer will speak, your TV will listen, your telephone will show you pictures. It is going to happen."