Bell Atlantic Corp. is looking to the sky for its latest television venture.
In forging a marketing alliance with DirecTV Inc. and United States Satellite Broadcasting, the Northeast's dominant telephone provider is betting that direct broadcast satellite technology, or DBS, will continue to pluck off unhappy cable customers -- especially when it becomes as easy to get as calling the local phone company.
Since first appearing in the early 1990s, DBS dishes -- typically the size of a large pizza -- have proliferated with astonishing speed. In June 1994, there were 70,000 DBS customers.
Now, less than four years later, there are about 6.7 million, with 200,000 new customers being added monthly.
With that growth rate projected to continue, the Carmel Group, an industry analyst in Carmel, Calif., predicts 30 million DBS subscribers by the end of 2007.
Customers are signing up for DBS because of the wide array of channels -- delivered with reliable, high-quality digital picture and sound -- it offers.
If this sounds like a shot across cable television's bow, that's exactly what it is. The DBS industry thinks it has a rich potential market in dissatisfied cable customers, and it is going after that market with gusto.
"Now that they've got a good subscriber base, they're feeling aggressive and are going after cable subscribers," said Ted Carlin, assistant professor of electronic media at Shippensburg University in Pennsylvania and an expert on the satellite-broadcasting industry.
The DBS industry's newest partner is already talking tough. "What we're bringing to the table is a service that will compete with cable in the minds of consumers," said Larry Plumb, a Bell Atlantic spokesman.
The DBS services are trying to capitalize on cable customers' frustrations over rising rates and sometimes shoddy service. In December, the Federal Communication Commission reported that monthly cable rates rose by more than 8 percent in the 12 months that ended in July, an increase FCC Chairman William E. Kennard called "troubling." And in a recent J. D. Power and Associates survey, DBS companies outscored major cable providers for customer service.
Patrick Little, owner of Dish Doctor Electronic Services Inc. in Rosedale, said customers have told him they are looking for "anything to get them off of cable TV."
Comparing DBS and cable rates can be tricky, since channel packages vary so much. Jeffrey Flathers of the Carmel Group said that nationwide, DBS delivers its channels 8 percent to 10 percent less expensively than similar cable offerings.
Locally, a Baltimore County resident in an area with fully upgraded Comcast cable service can get a "full standard" $33.17 monthly package of 65 channels, with 10 pay-per-view channels thrown in if the customer pays an additional $2 per month for a converter box. Comcast's premium "maximum select" service offers nine additional channels plus the converter box for $69.95 per month.
By comparison, DirecTV, the largest of the DBS services, offers a package of 75 channels and access to 50 additional pay-per-view channels for $29.99 per month. DirecTV's premium package costs $47.99 per month and offers approximately 125 channels, with access to another 50 pay-per-view channels and 20 U.S. Satellite Broadcasting premier channels.
But DBS has one big drawback: For all their channel offerings, DBS firms in most cases are legally barred from carrying local broadcast stations. Customers have to either hook up an antenna or get basic cable to pick those up.
DBS customers must also buy or lease the satellite dish and other equipment needed for receiving signals, in addition to paying any installation fees. As the DBS market has grown, the cost of hardware has come down considerably, from about $500 in early 1996 to $250 or $300 today, plus installation.
L The cable industry is keeping close tabs on the rise of DBS.
"We take DBS very seriously. We're doing everything we can to meet that competition, " said Torie Clarke, a spokeswoman for the National Cable Television Association in Washington, D.C.
Cable, said Clarke, has taken the criticisms about service to heart. "Customer service for a long time was the cable industry's weakest link," she said. "Several years ago, the industry started to redress that. Everyone is saying that cable service has improved significantly."
As for the rate increases, she said, "The price of cable reflects the cost of giving customers the service they've told us they want."
Walter K. Frazier, a vice president of Stansbury Decker Satellite Systems Specialists in Baltimore and a satellite trade association official, agreed that cable companies are cleaning up their act.
"The cable companies have gotten a lot better because they've had to improve. They know they have a fight on their hands," he said.