THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: FRIDAY, June 17, 1994 TAG: 9406170561
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
DATELINE: 940617 LENGTH: Long
Bell Atlantic Corp. said Thursday that parts of Chesapeake, Hampton, Newport News, Norfolk and Portsmouth will join the Beach over the next three years in receiving its ``video dial tone'' services.
{REST} The disclosure was in an application for the services filed by Bell Atlantic with the Federal Communications Commission.
By 1997, the company said it intends to offer as many as 675 channels of video programming - ranging from movies on demand to electronic shopping catalogs - to 3 million households and businesses in the mid-Atlantic. About 140,000 households in Hampton Roads are now part of that $1.5 billion three-year construction plan.
A month ago, when Bell Atlantic detailed its intentions for video services, Virginia Beach was the only local community listed in its plans.
It's not clear from Bell Atlantic's application how prominently traditional cable-TV programming, like the MTV or CNN networks, will figure in its near-term plans. But executives have indicated that such programming will eventually be an important part of its video mix.
Contrary to the video plans of some other big phone companies and its own early experiments in the Washington area, Bell Atlantic said the service territory for video dial tone that it outlined Thursday would be heavily populated by blacks and other minorities.
In Hampton Roads, for instance, 38.5 percent of the households that would have access to its new video services within three years would be minority, said Paul Miller, a Bell Atlantic spokesman. Minorities make up 33.7 percent of its total residential customer base in Hampton Roads, Miller said.
Telecommunications companies have in the past year come under increasing criticism for allegedly bypassing minority customers while launching their ambitious plans for advanced information and entertainment networks. Last month, a coalition including the National Association for the Advancement of Colored People asked the FCC to stop the alleged practice - which it referred to as ``electronic redlining.''
Bell Atlantic's filing should ``put to rest'' any concern that it would engage in redlining, said Edward Young, a Bell Atlantic vice president and associate general counsel. ``The racial diversity in the areas served by this new network is greater than that in the overall Bell Atlantic territory,'' he said.
The company's deployment strategy is ``extremely politic given the concern of minority groups and community groups about access to the information superhighway,'' said Robert Rosenberg, president of Insight Research Corp., a telecommunications market-research company based in Livington, N.J.
Bell Atlantic said if the FCC approves, it intends to start getting the new services to some customers in Hampton Roads, Washington, Baltimore, Philadelphia, northern New Jersey and Pittsburgh by early 1995. It plans a hybrid network of fiber-optic and coaxial cables in Hampton Roads and most of the other regions.
Miller, the Bell Atlantic spokesman, said the first local neighborhoods to be turned on will likely be in Virginia Beach. It's too early, he said, to identify them.
He pointed out that Bell Atlantic plans to eventually expand its video services throughout Hampton Roads and the rest of its territory.
A major challenge for the phone company, however, and probably its biggest, will be overcoming opposition from cable-TV operators.
Though Bell Atlantic last year won a landmark court ruling allowing it to offer video services and though Congress seems likely to eventually back the ruling with a law knocking down barriers between communications companies, the case is under appeal by cable operators. And the cable industry is considered likely to file numerous objections with the FCC over the deployment plans Bell Atlantic filed Thursday. That could significantly delay Bell Atlantic's plans.
``This is something that, of course, needs scrutinized,'' said Richard Carlton, executive director of the Virginia Cable Television Association. The biggest question, he said, is how much Bell Atlantic is subsidizing its planned video services with revenues from existing phone customers.
``We don't mind competition,'' added Bill Day, manager of Warner Cable in Hampton. ``We just have said we want to make sure it's fair and equitable.''
Bell Atlantic said its phone customers who sign up for video dial tone would pay an added basic network charge of $8 to $12 a month. It said there would be other charges depending upon how much people used the network and what channels they selected. Executives declined to predict how much an average customer would spend each month for video services.
Among the 497 to 675 total channels it said it anticipates offering, Bell Atlantic said 23 to 37 of them will be for local broadcast-TV channels, community-access channels and program menus. Those channels would be transmitted in analog form, meaning that customers with so-called ``cable-ready'' TVs wouldn't need set-top converter boxes to receive them.
Bell Atlantic said 188 channels would be for video information providers that use the Bell Atlantic network, while 272 to 464 more channels would deliver ``interactive multimedia'' programming like games or catalogs. All of those channels would be transmitted digitally, so customers would need set-top boxes to get them.
Day, the Warner Cable manager, said Bell Atlantic will be a formidable competitor for his and other traditional cable operators. Warner plans to spend $16 million over the next three years to build a fiber-optic backbone for its systems in Hampton, Poquoson and Williamsburg. ``This may spur us to do it faster,'' Day said.
GTE Corp., the other local phone company in Hampton Roads, hasn't yet said when it plans to start offering video services in the region.
{KEYWORDS} VIDEO BELL ATLANTIC
by CNB