In another sign of the accelerating clash between the telephone and cable television industries, Bell Atlantic Corp. announced yesterday that it would team with a small New Jersey company to provide 60 channels of television over new high-capacity lines to 38,000 homes in Dover Township, N.J.
The venture will be the first in which a telephone company has
competed head-to-head against a cable TV service. The deal comes as the biggest cable companies begin to install technology that allows them to provide a much broader array of information and entertainment.
Telephone companies are barred by federal law from owning cable television systems in the markets in which they provide telephone service. But earlier this year, the Federal Communications Commission adopted rules allowing them to offer what it called "video dial tone" services for other companies that want to distribute television programming.
Under the New Jersey deal, Bell Atlantic will install a combination of optical fibers and coaxial cables that will carry both telephone and video services to homes in Dover Township.
The Future Vision of America Corp. of Downingtown, Pa., will offer a selection of 124 channels of television programming, customizing that into packages of 60 channels apiece for particular neighborhoods.
Bob Schema, president of Future Vision, refused to say what the company planned to charge for the new service, but he said prices would be competitive with the average $33 a month charged by Adelphia Cable, the local cable franchise.
"We're trying to put much more control into the household," he said."We think people ought to be given the opportunity to watch what they want to watch."
John Rigas, president of Adelphia Communications Corp., which owns Adelphia Cable, said he was prepared for greater competition.
"This is not a surprise to us," he remarked, noting that cable companies have already been bracing for competition from new satellite and microwave services. "We also personally feel that RTC we have the best technology to bring video services to the marketplace."
Prospects for the new service are uncertain. Existing cable companies now routinely offer more than 50 channels, and they are using fiber optics and digital transmission technology that could increase that number to several hundred.
The biggest advantage telephone companies have is highly sophisticated switching networks, which provide communications between virtually any two places. By incorporating that flexibility with the high capacity of fiber optics, telephone companies hope to let customers eventually send and receive everything from large volumes of data to old movies over their cable systems.
But that is the future. Initially, the Bell Atlantic service will consist primarily of bread-and-butter cable TV offerings, like Cable News Network, MTV and the movie channels.
Officials at Future Vision said customers would have new flexibility, however, because they would be able to order particular channels for as little as a day at a time.
The company also plans to offer a menu of information listings and advertisements from local schools, businesses and government agencies.
Officials of Bell Atlantic, the Philadelphia-based regional Bell company that serves the mid-Atlantic region, including most of New Jersey, said they hoped to forge similar deals with programming partners in other cities and towns.