FCC mulls new airwaves technology Microwaves emerge as cable, phone rival

December 11, 1992|By Los Angeles Times The New York Times News Service contributed to this article.

WASHINGTON -- The Federal Communications Commissio proposed yesterday opening the nation's airwaves to a breakthrough technology that could provide a lower-cost alternative to existing cable television, fiber-optic and telephone services.

Recently introduced on an experimental basis in a New York City neighborhood, the new technology uses super-high frequency microwaves previously thought to be too weak and volatile for significant commercial applications.

A Freehold, N.J., company called Cellular Vision of New York Inc. patented the new technology, which mimics the operation of cellular phone systems. Like cellular, it uses an array of 'u transceivers that can provide, simultaneously, 41 or more channels of cable television, local telephone service, video conferencing and even interactive, two-way video communications.

"This is basically giving you fiber-optics to the home, and it is interactive," said Shant Hovnanian, a founder of Cellular Vision.

The commission signaled its intent yesterday to authorize full-scale development of the technology by summer in 489 local service areas around the nation.

Recognizing Cellular Vision as the pioneer, the commission tentatively gave it the chance to choose between a license for the metropolitan New York or Los Angeles areas. Licenses for every other market will probably be issued through a lottery process, perhaps as soon as summer.

In the Brighton Beach area of Brooklyn, N.Y., for example, the company began offering a package of several dozen cable television channels, including Cable News Network, ESPN, M-TV and two movie channels, for $29.95 a month.

The FCC invited industry officials to comment on the potential impact of the plan.

Experts say the new system could pose a significant competitive threat to cable -- as well as to even newer video technologies, such as direct broadcast satellite. It can be delivered to homes that can't be reached by cable. And its compact disc-sized antenna is much smaller than those of many other video services.

"This could be significant competition to the cable industry," said Cheryl Tritt, chief of the FCC's common carrier bureau, which is overseeing the new technology.

"It's a technology worth watching," added John J. Sie, chairman of Encore Media Corp., a Denver-based cable program supplier. "It seems to have a much lower cost" of operation than cable and other video technologies.

A cable industry spokeswoman, nevertheless, seemed unfazed.

"Cable television developed and legitimized the concept of subscription television, so it's no surprise to us that we would face competition from a variety of sources," said Peggy Laramie, a spokeswoman for the National Cable Television Association.

The new technology is known as "local multipoint distribution system," or LMDS. It is so little known that few industry officials understood it well enough yesterday to speculate how it might affect the communications industry, which has erupted with a number of new technologies in recent years.

But among those willing to hazard an opinion, several had reservations about how the microwave technology would fare in inclement weather or amid tall buildings that might interfere with the transmission signal. Others said it would take more than superior technology to crack cable's video juggernaut.

The developers of the technology assert that they can reach almost every location in a metropolitan area, in part by bouncing signals off buildings and other objects in order to reach their ultimate destination.

Company officials contend that the new system approaches the capabilities of fiber-optic cables, the hair-thin strands of glass that relay vast quantities of data in the form of high-speed pulses of light.

"It sounds like it's a better mouse trap. . . ," said John Reidy, a media analyst with Smith Barney, Harris Upham & Co. "But new technology doesn't make an entertainment business. It's what you are offering on that technology."

The technology itself was invented and patented by Bernard B. Bossard, an electrical engineer and entrepreneur who specialized in microwave communications equipment. Mr. Bossard had teamed up in the mid-1980s with Mr. Hovnanian and his father, Vahak Hovnanian, a large real estate developer in New Jersey. The Hovnanians, who were already offering offer cable service to homes they built through big satellite dishes, provided financing for Mr. Bossard's research.

The Cellular Vision system transmits television signals at frequencies of 28 gigahertz, or 28 billion cycles of radio energy a second, which is so high on the radio spectrum that almost no one uses it.

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