THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, January 23, 1995 TAG: 9501210102
SECTION: BUSINESS WEEKLY PAGE: 12 EDITION: FINAL
SERIES: Forecast '95
SOURCE: BY DAVE MAYFIELD
STAFF WRITER
LENGTH: Medium: 84 lines
Midway through the decade, the drive to poke into everybody else's business continues to dominate the communications industry.
Phone companies want to provide cable TV. Cable operators are pushing into phone services. Local phone companies and long-distance companies cross swords.
Some have figured out 'tis better to ally than fight. With every new alliance, it seems that movie studios, cable operators, TV and radio broadcasters, newspapers, magazines, phone companies and computer services are stringing together into one big techno/info/entertainment network.
But the net is a messy one, at best, and not always secure.
Early last year, irreconcilable differences killed Bell Atlantic Corp.'s planned $30 billion purchase of Tele-Communications Inc., the nation's largest cable operator. They played a part in squashing a couple of other big barrier-crossing telecommunications alliances in 1994.
The deal failures slowed down the conglomeration express. Partly that's because reality is overtaking hype on the information highway.
In spite of rapid growth in demand for advanced communications services, most of America isn't yet ready to go interactive. And providers aren't set to provide the panoply of interactive services they've promised.
Bell Atlantic's plan to provide video-on-demand services through its phone lines - in Hampton Roads and other major markets - is illustrative. BA blames federal regulators for delays in approving the service. Analysts say technical challenges and unproven customer demand are far-larger hurdles.
Still, BA vows to introduce some video services in Hampton Roads within six months of Feds' approval. It hopes for an OK within weeks.
Here are highlights for some Hampton Roads telecommunications players in 1995:
Telephone. Bell Atlantic's the leading player here.
After a record year for new line installations in Virginia in '94, ``we have absolutely no reason to believe that 1995 will not continue to be very strong,'' said Robert Woltz, a BA-Virginia vice president.
BA starts the year under a more flexible state regulatory framework, but is trying to fend off legislation in the General Assembly that it says could give cable operators and long-distance phone companies an unfair advantage in entering its monopoly businesses.
It's also keeping an eye on Congress, where barrier-breaking telecommunications reform that's more to its liking is high on the agenda.
BA's labor contract with the Communications Workers of America expires in August. It would like a new contract to give it more leeway in assigning work.
To cut costs, BA already plans slashing 5,600 jobs in the mid-Atlantic by '97, including some this year.
Demand for wireless phone services keeps exploding. New licenses for wireless Personal Communications Services licenses will be awarded in Hampton Roads in '95. AT&T, Cox Cable, Southwestern Bell, Continental Cablevision and a phone-company consortium including Bell Atlantic are interested.
Cable. Across the country, cable operators suffered their first decline in revenues last year because of federally ordered rate cutbacks.
This year they're looking for a rebound. Cox Cable, Hampton Roads' largest operator, says it signed more than 4,000 new customers in the '94 fourth quarter, its best quarter in more than five years.
That pushed Cox over 200,000 subscribers. Expect cable operators to offer a bunch of new programming packages and tiptoe into computer on-line services in '95. Cox is considering delivering Internet access.
By spring, Cox plans to close on the purchase of the TCI-operated Newport News system, making it the dominant cable provider in four of Hampton Roads' six largest cities.
Cable operators don't think they'll lose much business to Bell Atlantic this year, but worry about the longer term.
TCI's $1.5 billion purchase of Norfolk-based TeleCable Corp, the 19th-largest U.S. cable operator, is near completion.
Broadcasting. After an unusually robust year for ad sales last year, local TV and radio executives expect more modest gains in '95.
With the premier of two new broadcast networks locally - United Paramount on WGNT and Warner Brothers on WVBT - the TV ad pie will likely be cut in smaller slices.
Changes of ownership at WTKR-TV and WTVZ-TV could shift programming and staff. by CNB