Tele-TV Systems, the video joint venture of Bell Atlantic and two other regional Bell companies, has struck a deal with Thomson Consumer Electronics under which Thomson will provide it with 3 million "set top boxes" for the partners' planned "wireless cable systems" in Baltimore and other cities.
Under the contract, valued at more than $1 billion, Indianapolis-based Thomson will supply the digital devices at a cost of less than $400 per unit -- far lower than earlier versions of the technology.
The deal is a vital step toward bringing "wireless cable" on line as a competitor for traditional cable systems such as Baltimore's United Artists Cable.
"Wireless cable" is the shorthand term for a technology known as Multichannel Multipoint Distribution Systems (MMDS), which sends signals from a central broadcast tower to antennas mounted on customers' homes and businesses. The technology has been billed as a relatively inexpensive transitional step toward the fiber-optic interactive networks that the companies have identified as their ultimate goal.
Wireless cable systems have been in operation for more than a decade in some, mostly smaller, U.S. markets. Until recently, their popularity has been limited by their 32-analog-channel capacity, but recent advances in digital technology could allow wireless cable systems to deliver more than 100 channels.
Howard Stringer, the former CBS chief who now heads Tele-TV, hailed the agreement, saying in a statement that it "demonstrates that our consortium has not only passed the first toll booth on the information superhighway but is already in fourth gear."
Besides Bell Atlantic, Reston, Va.-based Tele-TV's partners are Nynex Corp. and Pacific Telesis Group.
Bell Atlantic announced in March that it had entered into an agreement with CAI Wireless Systems Inc., which owns the rights to operate a wireless cable system in Baltimore and Washington, to provide programming for the system.