'90S to Be Challenging Time for Cable Television Industry

By Haar, Steven Vonder | THE JOURNAL RECORD, December 25, 1991 | Go to article overview

'90S to Be Challenging Time for Cable Television Industry


Haar, Steven Vonder, THE JOURNAL RECORD


Cable television is at a crossroads.

After a decade of piping networks like CNN, MTV and ESPN into the homes of paying customers, monopoly cable franchises are seeing the storm clouds of competition gathering on their horizon for the first time.

The emerging competition, made possible by new technologies and probable changes in federal regulations, promises to make the 1990s the most turbulent era ever in the cable television industry.

Everyone from direct satellite broadcasters to local telephone companies wants to reach into your living room with video programming. In the process, they'll be reaching into your wallet, trying to grab a share of the fast-growing $18 billion market for pay television services.

For couch potatoes, the changes will likely bring a bewildering array of viewing options during the 1990s.

As the industry evolves, selecting a television program to watch will become more like buying a subscription to a magazine. Viewers will pay for what they want to watch. From new-release movies to key sporting events, more viewing options will be selected _ and billed _ on an a la carte basis, industry experts say.

Such a varied video menu may be several years away. But by the middle of next year, Tarrant County, Texas, at least will see the first competitor emerge that will try to differentiate itself from established franchise operators such as Sammons Cable Services and Arlington TeleCable.

American Wireless Systems of California has said it plans to spend $15 million to launch a "wireless" cable system in Fort Worth by mid-1992.

The company plans to beam a package of up to 25 cable networks from a microwave tower in downtown Fort Worth. The signal is expected to reach a 30-mile radius reaching west to Weatherford, south to Cleburne and north almost as far as Denton.

The microwave signal can be received through a 3-foot-wide dish antenna installed on subscribers' rooftops.

The American Wireless package of networks is smaller than that offered by most established cable companies. Arlington TeleCable, for example, offers 55 channels with plans to expand to 60.

However, the price for American Wireless' service is expected to be 10 percent to 20 percent less than that of franchised cable services, said Bryan O'Hara, the former general manager of Sammons Cable in Fort Worth. He is now heading up American Wireless' local venture.

Although the company has not completed contract negotiations with programmers, O'Hara said he expects that the system will carry virtually every major cable network, including HBO, CNN and ESPN. The only network absent from American Wireless is TNT, a Turner Broadcasting Corp. network that is shown exclusively on cable franchises, O'Hara said.

"We don't have 50 channels, and we don't claim to have 50 channels,"

O'Hara said. "But we will have the channels that you want to watch at a lower price."

Eighty wireless systems with a total of 400,000 subscribers operate nationwide, according to the Wireless Cable Association International in Washington. One particularly successful system, OmniVision, operates in Corpus Christi, Texas.

Most such systems do not attempt to establish themselves as the dominant cable provider in a region. Rather, they try to sell themselves in selected niche markets, said Robert Schmidt, president of the Wireless Cable Association.

Wireless systems draw a portion of their subscriber base from areas that have not been wired for cable, such as remote neighborhoods and new subdivisions deemed uneconomical for cable wiring, Schmidt said.

Other wireless firms try to capitalize on the reputation for monopolistic attitudes and poor service associated with some cable operators, Schmidt said.

Cable companies usually operate under municipal franchises granting them the exclusive right to wire a community for cable service. …

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