How the Line Between Cable, Phones May Blur : Communications: A GTE experiment in Cerritos is providing families with a combination of their own movie theater and modern-day picture-phone.
Jack Jakubic is the TV viewer of the future. The Cerritos businessman and his family practically live around the TV set, a video hearth in their suburban home. It doubles as both a neighborhood movie theater and modern-day picture-phone.
He can order one of 20 different movies at the push of a button from his TV set and use it like a VCR--stop, fast forward, rewind. Jakubic also has access to a 27-channel pay-per-view system but prefers the versatility of “video on demand” from the source of all this technological power--his phone company, GTE.
“I’m a moviephile,” he admitted. “The convenience is overwhelming.”
If a decision Thursday by the Federal Communications Commission unleashes the changes some analysts expect, every telephone customer in the country could have a mega-cable-TV system like Jakubic’s.
Cerritos is the site of a one-year experiment by GTE that combines local telephone and cable TV service into a single, fiber-optic system. Users can do everything from obtaining movies at the push of a button to shopping at home. For now, Jakubic can only call GTE on his videophone, but one day such service could be widespread.
“We are testing various types of technology and comparing them,” said Mike Morrison, project manager of the GTE Cerritos system. “The overwhelming feedback is that customers like the quality and choice that fiber-optic systems provide.”
High-tech, hybrid telecommunications systems that combine traditional telephone and cable TV service with other data and information services could become commonplace under a plan by the FCC to allow local telephone companies to provide cable television to their customers.
The commission Thursday proposed that local telephone companies be allowed to transmit cable TV programming into homes by providing a “video dial tone” to outside companies.
But the proposal stopped short of allowing the phone companies to package and produce their own programs, as is done by the broadcast and cable TV networks.
The plan is the boldest attempt yet by the Bush Administration to deliver on its promise to introduce more competition into the powerful cable TV industry, which has a virtual monopoly in the overwhelming majority of the areas it serves.
The 1984 Cable Act barred phone companies from owning cable TV systems or transmitting programs over their lines.
But that prohibition is crumbling. Earlier this month, a federal appeals court cleared the way for regional Bell companies, such as Pacific Telesis in California, to get into information services.
It is likely to be years before the regulatory and policy issues are resolved. The newspaper, cable and broadcasting industries all oppose the phone companies’ entry into their businesses.
Observers said the FCC’s proposal skirts the issue by simply allowing the phone companies to become passive “pipelines” into customers’ homes. Programming on the pipelines would be produced and packaged by other companies.
“Frankly, we don’t think too much of this,” said Richard Roll, a spokesman for Pacific Telesis in San Francisco. “If you could package programs and get additional profits, then there is some incentive for us to put fiber optics into the home. But just to have the pipe, we don’t get any money out of that.”
The telephone industry is divided, however, about how far it wants to go into the $16-billion cable TV business and the best ways to meld telephone and cable TV service.
One issue is who will pay the projected $100 billion that it would take to wire the fiber optics needed to carry high-quality video images into the homes of phone customers across the country. Most of the country is still dependent on copper “twisted-pair” wiring.
Telephone industry officials are also unsure what kind of ventures may evolve as a result of phone companies getting into the cable TV business.
At the same time, the cable TV industry itself is casting a covetous eye at providing phone service to its subscribers.
Rather than fighting each other, however, the telephone companies and cable industry may eventually find it to their advantage to cooperate on ventures.
In partnership with US West and American Telephone & Telegraph, Denver-based Tele-Communications Inc.--the largest cable TV operator in the country--is testing a high-tech cable TV system in Englewood, Colo. The system allows viewers to choose at the push of a button from more than 1,000 movies stored in a video library.
That project and two Orlando, Fla., systems operated by BellSouth are among the only such experiments outside GTE’s trial in Cerritos.
Programming ‘Pipeline’
GTE’s experiment in Cerritos with delivering information and entertainment services over home telephone lines is among the most advanced in the nation. Highlights of the project:
* Over 4,300 customers have access to a 30-channel pay-per-view television system.
* More than 200 customers receive their telephone service over a fiber-optic system.
* About the same number of households are equipped with an interactive TV system that lets them shop at home and obtain financial, travel, educational and civic information along with entertainment services.
* A dozen customers receive both a 39-channel television system and two phone lines through the fiber-optic network.
* Two households and two schools have picture-phone service (GTE calls it “point-to-point switched video”) that allows them to use camcorders and TV screens to transmit and receive video and audio signals.
* The same four customers have access to a video-on-demand system that lets them select electronically from a video library and then lets them control their viewing with VCR-like functions, including fast-forward and reverse.
