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BellSouth Hits Big Easy
By KENT GIBBONS
BellSouth Corp. launched its first digital wireless cable service last week in New Orleans, with plans to follow up in Atlanta and elsewhere.
"New Orleans is not a test market," said John Hartman, BellSouth Entertainment's vice president of business development and customer marketing. "It's a full-blown launch of this product."
In New Orleans, the BellSouth Americast service has about 130 video channels, including 50 pay-per-view channels, 31 music channels and the StarSight interactive guide. It combines local and national channels in a digital format, in a range of packages that run between $15 and $80 per month. The installation charge is about $99.
The telco unit is building a similar system near its home base in Atlanta for a 1998 launch, and it owns multichannel multipoint distribution service frequencies in Orlando, Daytona Beach, Jacksonville and Miami, Fla.; and in Louisville, Ky., he said.
Cox Communications Inc. is the New Orleans cable incumbent, with some 270,000 subscribers in the region, and it has been expecting the BellSouth onslaught for some time. Cox spokesman David Andersen said the MSO has faced telco competition before, in Omaha, Neb., and he is confident that it will do well. The wireless cable product requires clear "line of sight," which excludes many homes, and many others may not want rooftop antennas, he said. Finally, Cox plans to eventually offer its "voice, video and data" package in New Orleans.
BellSouth isn't the first telco to try digital wireless cable. Pacific Bell, now owned by SBC Communications Inc., launched a service with limited distribution in Los Angeles last summer. But SBC has scaled back its video plans, and it considers the Los Angeles launch a testbed. Bell Atlantic Corp. and Nynex Corp. shelved plans for digital MMDS last year. GTE Corp. owns wireless cable frequencies in Hawaii, and it has said that it plans a digital MMDS launch there.
Hartman said BellSouth would market the service -- largely through direct mail, and not with advertising yet -- as a one-stop shop for extensive national video programming, along with local channels.
"It gives you everything in one package, in a digital format backed up by the service and quality of BellSouth," he said. "That's the offer, in a nutshell."
The service will be the first by an Americast partner to use the Zenith Electronics Corp. digital set-top converters that the consortium ordered in 1996. The boxes are designed to run on multiple platforms, including hybrid fiber-coaxial cable networks, with the use of interchangeable modules.
The other Americast partners are Ameritech Corp., GTE, Southern New England Telecommunications Corp. and The Walt Disney Co. SBC dropped out of the partnership after completing its purchase of Pacific Telesis Group. Ameritech and SNET offer analog cable services, and GTE has analog and digital wired cable operations, but none of those features the Zenith box.
Zenith Network Systems president William Luehrs said set-top supplies won't be a problem in New Orleans. "We're cranking up production at compatible rates" with BellSouth's demand, he said.
BellSouth will charge customers $7 per month, per set-top.
The lowest-priced package -- $15, with one box -- includes eight local-broadcast affiliates, WGN-TV, QVC, TBS Superstation and six educational services that share the local wireless cable frequencies with BellSouth, a company spokeswoman said. It also includes the StarSight guide, music channels and access to PPV movies and a la carte services.
The $40 package includes a 60-channel expanded-basic lineup that contains some new services, such as BET on Jazz, that scored high in local surveys, Hartman said. The $80 package buys all of the video and audio channels, including multiplexed versions of the Home Box Office, Showtime, Encore and Starz! services.
The Express Cinema PPV movies cost $3.99 each. BellSouth is also selling a $6-per-month Cinema Club service that knocks $1 off the movie price and offers Encore's themed channels.
BellSouth has been offering cable and cable-modem service in Chamblee, Ga., in what the company still considers a trial. The telco also has some 18 wireline cable franchises scattered around its Southeastern territory, but it is building them out mostly in the Atlanta area, where it plans to offer a combination of wired and wireless cable services, Hartman said.
Hartman added that BellSouth would aggressively market its wireless cable services, but "we haven't made a decision on the aggressiveness of the wireline builds." In New Orleans, BellSouth will offer local, cellular and wireless cable service, and it hopes to offer long-distance calling services one day. Hartman said customers will be offered the option of getting cable and phone charges on the same bill "in the near future," adding that BellSouth plans to try different ways of "leveraging the relationship with the customer" to sell additional services.
The telco has been testing the digital wireless service in "a few hundred" employee homes over the last couple of months, Hartman said. Overall, the service quality and reliability have been better than expected, he added. |
