COLLAPSE OF A MEGA-MERGER : Wireless Cable Venture in O.C. Could Cut Bills

Competition might do what Congress has had trouble pulling off--lower cable television rates.

An Inland Empire company wants to offer so-called “wireless cable” programming of 150 channels by late next year in Orange and Los Angeles counties, a move that could cause cable operators to lower their bills.

Cross Country Wireless Inc., based in Riverside, has signed up 42,000 customers in Riverside and San Bernardino counties, which has prompted cable operators there to lower rates and improve service to compete.

The company transmits cable TV and broadcast channels into homes using microwave, rooftop antennas and in-home converter boxes. It charges $18.95 for 26 broadcast and cable channels. HBO costs another $7, while Showtime, Cinemax and the Disney Channel are $4 each. There is no installation fee.

Those prices undercut local competitors by $3 to $5 a month.

The biggest drawback to this wireless system is that its antenna towers cannot reach into some canyon areas or obstructed areas.

As it expands westward, Cross Country plans to offer 150 channels, with up to 40 of those offering interactive classroom programs by participating colleges in Orange and Los Angeles counties. And several stations would be devoted to non-English-language programming, said Peter Frank, Cross Country president.

Wireless cable, which has been around for 20 years, has been hampered by transmission technology and by limited access to programming. With the development of digital technology, which compresses data so that a single broadcast channel can be turned into into four or five, wireless is about to take off, its proponents say.

One of these true believers is Lowell Hussey, former senior vice president of marketing and programming for Time-Warner Cable TV. He had retired in 1990 at age 37, and had promised himself that he wouldn’t come back into the business until cable had a viable competitor.

He signed on eight months ago as operations director of Cross Country, which it says is the largest privately held wireless company in the nation.

“I said, ‘Aha! At last!’ It’s better than I thought it would be,” Hussey said from a hotel room. He is on the road a lot these days, setting up expansion deals throughout the country.

Until the 1992 Cable Act, Hussey said, the wireless industry was denied access to much programming. The act made it illegal to withhold programming. That former hindrance, which was encouraged by a powerful cable TV lobby, had made it difficult for wireless companies to attract investors.

Today, the six public wireless companies together have raised $500 million in the equity markets and are in the process of borrowing more, according to the Wireless Cable Assn. International in Washington.

Cross Country began offering service to the Inland Empire market by working with colleges and a church diocese in the area to apply to the Federal Communications Commission for a shared license. Some of the groups already had licenses to lease to Cross Country.

The procedure anticipated an April, 1992, freeze on new licenses issued by the FCC.

The company plans a similar strategy in Orange and Los Angeles counties, said Cross Country President Frank. He said the agreements are nearly completed, but declined to identify schools with which he is negotiating.

Digital television technology, which several companies are now competing to bring to market, will allow wireless cable operators to compress signals and provide more channels. A wireless cable system is made up of as many as 33 microwave frequencies. Cross Country plans to then use digital compressors to split them four or five times; thus, the 150-channel figure.

But other cable competitors may win the digital race. California’s telephone companies, Pacific Bell and GTE California Inc., said recently that they will wire homes and schools for interactive programming.

And DirectTV, a partnership between a division of Hughes Aircraft Co. and United States Satellite Broadcasting, said it will produce small-dish satellite TV service as early as April. The dishes are to be priced around $800. The companies said they are planning 150 channels, sold in two packages costing $8 to $35 per month.

On the proposed Cross County wireless system, the classroom programs from the schools would be interactive, according to Frank. In other words, a student could “raise” his or her electronic hand and be shown on a split screen with the teacher.

“This will be a major emphasis,” said Frank from his office in Washington. “It’s something we can offer that cable TV does not, for the most part.”

Jerry Gordon, media resources director at UC Riverside, said the association with Cross Country has been beneficial. Revenue from the agreement has allowed the school to purchase new broadcasting equipment, though the public programming is still in its infancy. The university broadcasts one course per quarter but is planning to expand.

“There was a lot of suspicion about whether it would come to pass,” Gordon said. “But it has proven to have been a very wise decision on the university’s part.”

Cross Country

Wireless

at a Glance

* Founded: April, 1991

* Headquarters: Riverside

* President: Peter Frank

* Employees: 135, and 60 contractors (mostly for installation)

* Business: Wireless cable television

* Areas of operation: Riverside and San Bernardino counties

* Subscribers: 42,000

* Service charge: $29.95 for 27 broadcast and cable channels, including HBO and the Disney Channel; free installation

* Technology: Transmits cable TV programming using microwaves and a converter box

Source: Cross Country Wireless;

Researched by ANNE MICHAUD / Los Angeles Times

Cable Without Wires

Wireless cable television could enter the Orange and Los Angeles markets by next year to compete with cable companies. It would start service with 33 channels, but with anticipated developments in digital and compression technology, could expand to 150. How wireless cable works:

Apartment building with MATV system.

Private homes.

Satellite receive station. 1. Programming is beamed via satellite to a receive/transmit station. 2. Signal is converted for multichannel, multi-point distribution. 3. Signal is transmitted via microwave. 4. Signal is picked up by antenna and converter and re-formed for TV reception. 5. Signal travels to a decoder box atop television, where it is unscrambled for viewing.

Advantages * Less downgrading of signal in transmission. * Less equipment to malfunction and increase costs.

Disadvantages * Microwaves travel in straight lines, so antenna must be placed in line of sight of transmitter. * Limited programming. Source: Wireless Cable Assn. International Researched by JANICE L. JONES / Los Angeles Times * RELATED STORY: D6