Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, October 14, 1993 TAG: 9310140191
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: Knight-Ridder/Tribune
DATELINE: WASHINGTON LENGTH: Medium
The merger of the Bell Atlantic phone company and Tele-Communications Inc., the nation's most powerful cable company, would create a media giant that is ready and eager to build the so-called information superhighway.
"This is the perfect Information Age marriage," said Raymond Smith, chairman and CEO of Bell Atlantic, who will run the new company if the merger is approved by regulators. "This will transform the way we work, we play and we learn."
Here is what the merger would mean to consumers, TV viewers and phone users.
Q: What is the information superhighway?
A: It's a term to describe a two-way communications network that will deliver telephone service, interactive TV programming, computer data bases, home shopping, educational software, video games and other, still-to-be-invented services into the home on a single wire.
Receiving the programming will be hardware that could perform all the functions of a TV set, telephone, VCR, personal computer and fax machine. No one has given a name to this new super-box, but William Gates, founder of the computer software company Microsoft, suggested that it be called a PC-TV.
Q: Who will control the superhighway?
A: That's what the TCI-Bell Atlantic merger is about. Until recently, cable and phone companies were expected to compete to own the wires running into homes. By combining forces, TCI and Bell Atlantic give themselves instant access to nearly 40 percent of all homes in America.
TCI already serves one in five homes with cable through systems in 48 states. Bell Atlantic provides phone services to six mid-Atlantic states and Washington, D.C.
Other cable and phone companies are also merging.
Q: How will TV viewers be affected?
A: They'll get more programming choices and, more important, be given control over their viewing schedule, without having to use their VCR. They'll also be asked to pay more for the privilege.
One example: Bell Atlantic is testing an interactive system called Stargazer in Northern Virginia that allows customers to order programs from an "electronic video store." TV viewers make a phone call to select a program which is sent over the wire to their TV set in minutes. Eventually, viewers would be given complete control over programs, so they could pause, stop or fast-forward, as if they had their own tape.
Bell Atlantic's Smith said the difference between the old TV and new TV will be like the difference between a railroad and a car. One operates on a fixed line and a fixed schedule. The other takes you where you want, when you want, along the route you want.
Q: What other services are envisioned?
A: Home shopping as you've never seen it before. Rather than watch a shopping network, a viewer interested in buying a new minivan could instantly obtain information including specifications, price comparisons and video of different models. Viewers also could arrange for a test drive at a local dealer by using the PC-TV terminal.
The superhighway also could deliver a video encyclopedia, financial advice or interactive games into homes. Users could interact with other users, exchanging information or competing in games, just as they do now on computer data bases like CompuServe or Prodigy.
The long-awaited picture phone will become a reality. "You'll be able to see how Grandma looks when you call her," said John Malone, CEO and president of TCI.
Q: What about competition?
A: The sheer size of the new TCI-Bell Atlantic company makes it a target for federal regulators, who will have to approve the merger. The fear? That the owners of the wire will refuse access or charge extremely high prices to those who want to deliver programs or services to consumers.
TCI not only owns cable systems but has a major stake in such networks as CNN, TBS, TNT, Discovery, BET and Court TV. TCI's Malone also is backing a bid by the QVC shopping network to buy Paramount, which owns a movie studio, cable properties and TV shows.
Malone says he won't prohibit competing programmers from traveling the superhighway. "We don't intend to set ourselves up as a gatekeeper," he said. But Malone already has immense power over which cable networks survive and what subscribers get to see.
Q: When will most viewers see changes?
A: That depends. Next year will be a year of testing and experimentation. Thousands if not millions more viewers will get a peek at the future in 1995. It could take a decade to wire the entire nation.
Q: Who loses when the superhighway is built?
A: People who can't afford cable. Providing sophisticated hardware, software and programming will be expensive. Those without the money to pay will be left out. Inevitably, programming that has been available over free television will move to pay services.
Businesses that will face new competition will the broadcast networks, video stores, newspapers, publishers and advertising agencies. Those who don't reserve space on the superhighway could be in trouble.
by CNB