Bell posts its itinerary on information highway

December 02, 1993|By Michael Dresser | Michael Dresser,Staff Writer

Racing to solidify its competitive position before its telephone monopoly disappears, Bell Atlantic Corp. outlined an ambitious timetable yesterday under which 1.25 million households -- some in Baltimore -- will be able to order up movies on demand and place video phone calls before the end of 1995.

In subsequent years, the regional phone company plans to add 1.5 million homes a year to its fiber-optic network, ensuring that some 8.75 million homes of the 11 million homes in its mid-Atlantic territory will be able to tap into advanced video and electronic services by the end of 2000.

Philadelphia-based Bell Atlantic, the parent company of Chesapeake and Potomac Telephone Co. of Maryland, has outlined these intentions in broad terms before, but yesterday's announcement was the company's first commitment to a specific timetable for paving the "information superhighway" all the way to the residential and small business customer's doorstep.

"It's a very significant move," said Rick Bean, a telecommunications specialist with Andersen Consulting in Washington. "It represents their appreciation of the whole information highway opportunity."

Raymond W. Smith, Bell Atlantic chief executive, said yesterday that "by the end of 1998, we will have wired the top 20 markets in our mid-Atlantic service region."

"That means we will be the first with services that customers can control, and that will give us the edge in what will be a highly competitive communications and entertainment marketplace," he added.

In fact, the superhighway could come to Baltimore even sooner than 1998. The company's announcement did not say when the new system would reach any particular area, but it specified the Baltimore area as one of the first locations for accelerated deployment.

Bell Atlantic spokesman Eric Rabe explained that Baltimore was a "critical area" where the company was already feeling competitive pressures. For instance, MFS Communications Co. Inc. of Omaha, Neb., has petitioned the state Public Service Commission, seeking to enter the local telephone business in Maryland. There is also a strong likelihood that Congress will act in 1994 to break down existing barriers to competition in local telephone markets.

"It seems to me extremely likely that there will be some of this in the Baltimore area by the end of next year," Mr. Rabe said.

Yesterday's announcement represented yet another aggressive push by Bell Atlantic to expand its scope beyond its original role as a quiet supplier of local telephone service.

vTC In October, Bell Atlantic announced plans to acquire Tele-Communications Inc., the nation's largest cable television company, in what would be the largest media merger to date. This latest announcement dealt only with the company's plan to upgrade its current phone system and was not directly related to the proposed merger.

But when Bell Atlantic's network is upgraded to accommodate video, it would likely provide some cable television programming of its own and sell off part of its capacity to other programmers.

Like the other six regional Bell operating companies, Bell Atlantic was prohibited under the 1984 Cable Act from offering television programming over its phone lines. But in August a federal judge in Alexandria, Va., struck down that bar as unconstitutional. The decision is being appealed but is widely expected to withstand the challenge.

Hooking into the advanced system would involve an undetermined cost to the consumer, Mr. Rabe said, adding that the company would have powerful incentives to keep the price as low as possible.

Mr. Bean said it was virtually certain that Bell Atlantic would keep the connection fee under $100 and probably closer to half that amount. Consumers who want to take full advantage of the services would also have to buy a "set-top box" that would route services within the home, the consultant said. That equipment would likely come on the market at about $300 but quickly sink to around $200, he said.

Under its development plan, Bell Atlantic and its subsidiaries, which serve a territory from Virginia to New Jersey, will run fiber-optic cable to a central point in each neighborhood, where it would connect to the copper wire or coaxial cable that would carry the signal the final yards into the customer's home.

The advanced fiberglass cables, which transmit digitized data through laser signals, will immensely widen the "pipe" through which information, including pictures, can be transmitted to the home.

Bell Atlantic said that as the fiber network is deployed, it will roll out what it called "killer applications" to its customers. In computer industry jargon, that means a program or service with such strong appeal that it prompts consumers to accept the underlying technology.

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