THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, July 30, 1996 TAG: 9607300428
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: 70 lines
The first volley in the competitive war that's brewing for local cable viewers has Bell Atlantic Corp. crying foul.
MSNBC, the new news network from NBC-TV and Microsoft Corp., launches in South Hampton Roads on Thursday for subscribers of Cox Communications Inc.
But Bell Atlantic - whose chairman has predicted his company will bury cable operators like Cox when it starts fighting for local video customers next year - will have to march into battle without the much-publicized new channel.
That's because Cox has a clause in its recent contract with MSNBC that prevents Bell Atlantic from carrying the channel in Hampton Roads.
``To me, this is anti-consumer, anti-public interest,'' said Frank Pereira, president of Reston-based Bell Atlantic Video Services. ``If the Federal Communications Commission and Congress want competition, they're going to have to constrain monopolists from locking us out of programming.''
Pereira said Bell Atlantic plans to file a complaint with the FCC.
Ajit Dalvi, senior vice president-marketing and programming for the Atlanta-based Cox, said Bell Atlantic is double-talking. Given the chance, he said, the phone company will seek exclusive arrangements, too. What Cox did is expressly allowed under federal telecommunications law, he said.
``This is what competition is all about,'' Dalvi said. ``In any competition, you try to make your product a little better than your competitor's.''
Cox will make MSNBC part of the basic lineup it offers all 3 million of its subscribers nationwide, including, starting Thursday, 210,000 in Norfolk, Portsmouth and Virginia Beach.
Cox's exclusivity applies only to cable-TV carriage in its territory. It does not prevent satellite program providers from offering MSNBC locally.
Cox's Dalvi said Cox chose the network over a new news channel offered by Fox Broadcasting Co., which had offered $10 per subscriber - $30 million total.
Tele-Communications Inc. took Fox's offer. Its Chesapeake system will start carrying the Fox channel Oct. 7, and will continue doing so at least until Cox takes over the system. Cox announced last year that it will acquire the Chesapeake system, probably by the end of 1996.
A spokesman for Falcon Cable, which operates systems in Suffolk, the Eastern Shore and North Carolina's Outer Banks, said he wasn't sure which new news channel - if either - his company plans to offer.
Cox's Dalvi said he doesn't understand why Bell Atlantic's Pereira is so unhappy about being shut out of MSNBC, which is the first head-on challenge to Turner Broadcasting System Inc.'s Cable News Network.
``If they are taking a position that one little thing like MSNBC makes them nonviable in the market,'' he said, ``that is nonsense.''
Dalvi pointed out that Bell Atlantic plans to deliver more than 100 channels to local customers when it launches its service next year - dozens more than Cox now provides.
But Pereira said not having MSNBC is a ``concern, an undercurrent'' that could make his company's offering less appealing. ``Our focus will be to give the consumer more, let them choose.''
Indeed, despite the claims of its chairman, Raymond W. Smith, Bell Atlantic faces an uphill battle in cable TV.
Its Hampton Roads cable service, which will rely on an upgrade of a multichannel microwave-TV system now operated by a company called CAI Wireless Systems Inc., will offer CD-quality sound and videodisc-quality pictures. But it will require customers to put antennas on their homes - a large potential stumbling block.
Also, Bell Atlantic and CAI have been working on technologies that could enable their wireless cable subscribers to access the global Internet computer network.
If Bell Atlantic gets access to the TV network, MSNBC's complementary Internet service could give a boost to the phone company's computer venture. by CNB