Ride to the Future : It’s the Dawn of On-Line Era in O.C.; Array of Information Services Will Come Piecemeal
In an age of hypermedia and media hype, the information superhighway promises us movies any time we want them, tomorrow’s newspaper today and virtual amusement parks in our living rooms.
Like a freeway system, the information superhighway will take years to build, and on-ramps will be scarce at first. But as early as next month, Orange County will begin its journey into the future as new services begin coming on-line neighborhood by neighborhood.
This year, homes in some parts of the county will get access to hundreds of TV channels carrying video games, home shopping services, vintage TV shows and movies, plus recent box-office hits, local and national news, sports and education shows. Other customers will be able to order pay-per-view programs on the spot with their remote controls.
Orange County is an important market because it has a large population of affluent, well-educated people with the interest and the means to buy services such as electronic encyclopedias and customized video programming. And they are eager to subscribe.
Russ Sipe, publisher of Computer Gaming World magazine in Anaheim Hills, says he may rent a house in Orlando, Fla., later this year just to try out a new interactive games system being test-marketed there by Time Warner Inc.
“I can’t wait to get wired,” Sipe said.
Ironically, the phone company rather than the cable-TV industry has the most ambitious superhighway itinerary here. Anticipating that the demand for services like video-conferencing, electronic mail, game networks and customized news shows will skyrocket, Pacific Bell is spending $16 billion on a statewide network of fiber-optic cable--the conduit for two-way communication, or interactive service.
Starting in May, the company will begin laying cable in the historic circle of the city of Orange and will spiral outward to reach 75,000 homes within a year. The first new service on the lines, which will carry thousands of times more electronic impulses than regular phone wires, will be scores of TV channels: 70 in 1995, as many as 370 by 1996.
In another twist, the new technology will come to the oldest areas of Orange County first, the company said, because the aging copper phone lines there are expensive to maintain.
“We have heard from a number of folks who wish they were in the initial development areas,” said Steve Harris, a vice president of in charge of interactive services for Pacific Bell. “We’re building it as fast as we can.”
Competition will surface as cable- and satellite-TV providers, as well as “wireless” entities such as cellular-phone companies, TV and microwave radio operators, explore what services consumers will be willing to pay for.
“We’re not promising anything until we know whether some of the services will be profitable,” said Barbara Lukens, a spokeswoman for Comcast Cablevision, which serves Buena Park, Fullerton, Santa Ana and Newport Beach.
Other so-called information distributors are also proceeding cautiously.
“We’re joking that they’re going to build a super toll road,” said Linda Brill, spokeswoman for Hughes Aircraft Co.’s DirecTv, an El Segundo-based satellite system that aims also to compete with cable television. “There is demand for quality entertainment but not things like (home) banking or pizza-ordering.”
Even Pacific Bell is “not betting the business on the service taking off like a rocket ship in the next four years,” Harris said. “It’s not going to revolutionize your life in 1995.”
But the information highway is nonetheless inching its way forward. Here is an overview of what the information distributors--from well-established corporations like Pacific Bell to start-up companies like DirecTv--will offer.
PHONE COMPANIES
By the year 2000, Pacific Bell aims to extend fiber-optic cable to every home in California.
In Orange County, the initial rewiring will include the Orange historic circle, Chapman and Glassell streets. Next will come parts of Villa Park, Anaheim, Garden Grove, Cypress, Buena Park and Stanton. The next phase--Yorba Linda, Santa Ana and Tustin--will be completed by 1996.
What happens after that will depend largely on consumers. If they request videophones, movies on demand, and computer networks that offer information on specific topics such as travel or sports, then service providers will offer them.
The cost of wiring each house is expected to be less than $1,000, which will mean low-priced basic service, Pacific Bell officials say. The extras, however, may be another story.
“I think we’re in for sticker shock” for specialized services, said David Lundeen, an executive at Blockbuster Entertainment Corp. The company, based in Fort Lauderdale, Fla., is investing in superhighway services. “Your cable and telephone bill could be $200 a month.”
CABLE TV
Dimension Cable Services, Orange County’s biggest cable provider, is spending $71.7 million to increase its channel capacity and pave the way for new services.
By this summer, Dimension’s 43,000 customers in the Irvine area will have 62 channels instead of the 40 they now get. By year’s end they will have 80 channels, and by the end of 1995 that will increase to 110. The company, owned by Times Mirror Co., said that the monthly fee for its basic service will not change but that some of the new channels may cost extra.
The company’s 138,000 customers in South Orange County will have the same 62 channels and 110 by the end of 1996.
Dimension, based in Irvine, is adding programming such as CSPAN2, TV Food Network, the Nashville Network, and education and government-access channels. Three new pay-per-view channels represent the company’s first venture into interactivity.
“The toughest part for us as cable operators to answer,” said Dimension spokeswoman Susan Ritchie, “is what do we do with all this (technology)? The application side hasn’t revealed itself yet.”
One of the unknowns, she said, is “how willing the market is to pay.”
Paragon Cablesystems, which with 95,000 customers is Orange County’s No. 2 cable company, is also upgrading its equipment. The company said it is spending more than $17 million for fiber-optic lines in the cities it serves: Fountain Valley, Garden Grove, Huntington Beach, Los Alamitos, Midway City, Rossmoor, Stanton and Westminster.
When the new lines begin operating on May 1, customers will receive a clearer picture, said Don Weddle, a Paragon spokesman. Also, the 76% of Paragon’s Orange County customers who now get only 46 channels will have 75. (The remaining 24% receive 104 channels now.) The basic-service fee will not change.
Paragon subscribers in Garden Grove and Los Alamitos can already fashion a channel lineup that suits the tastes of the individual household. And later this year, the company will phase in “smart” converter boxes that can accommodate two-way signals.
With the new interactive boxes, the customer will be able to order pay-per-view movies by pointing a “smart” remote control at the box and pushing a “buy” button. Paragon calls the service, which doesn’t require a phone call to the cable company, “near video-on-demand.”
The service represents not only convenience for the customer but also savings for the company, General Manager Janet Spatz said.
“Rolling a truck out at 9 p.m. so someone can watch a movie and rolling it back out again at 11 p.m. to turn it off--that’s not cost-effective.”
Spatz said she will move cautiously, however, into the interactive future: “I don’t want to throw a bunch of new applications at my customers and have them turn around and say, ‘I don’t want to pay for this.’ ”
WIRELESS CABLE
This new service is gaining popularity because of its low prices.
In Riverside, for example, where wireless cable became available in May, 1992, Cross Country Wireless Cable Inc. has signed up 43,000 subscribers who pay about $30. Many of those customers were lured from the area’s cable-TV operators, who charge about $50 a month.
Wireless cable, which uses microwave radio signals to beam TV programming into homes that have receiver dishes, has a technological disadvantage. It can offer 31 channels at most, and the signal can be blocked by hills or tall buildings.
Cross Country is counting on the technology, however, to allow it to eventually offer four or five times as many channels.
Company President Peter Frank said that 40 of the channels would be devoted to interactive classroom programs by participating colleges in Los Angeles and Orange counties. Several other stations would be devoted to programming in Spanish and Asian languages, he said.
Cross Country has yet to acquire a license to operate in Orange County, however, so all plans are still tentative.
Wireless cable won’t give a subscriber access to worldwide services, said George Ring, chief executive of Cross Country, but it will provide the most popular ones--such as recent movie hits--at a low price.
SATELLITE TV
Hughes Aircraft Co.’s DirecTv, which will provide 150 channels by satellite, will be operating nationwide by year’s end.
The satellites do not actually provide interactive capability. But they are often mentioned as a serious contender in the coming information age, especially by those who are unhappy with the program lineups offered by cable-TV stations.
Said Jim Peters, a 38-year-old Fullerton resident: “I’m going to buy a satellite as soon as it’s available.”
DirecTv decoder boxes and satellite dishes will sell for $699 each beginning in May in a limited number of markets, and in Orange County by the third quarter. Subscriptions will cost $21.95 to $29.95 a month for 70 channels.
Its interactivity will be limited to what cable TV already offers: pay-per-view shows and custom programming. But compared to cable’s current services and prices, DirecTv could seem like a bargain.
Premium networks such as The Disney Channel, which sells for an extra $12.95 a month on most cable systems, will be available free on DirecTv. But the service will not feature some local options such as news, government and educational programs.
For now, analysts say, DirecTv will do best in areas that cable TV doesn’t reach.
Bruce Ryon, analyst at market researcher Dataquest Inc. in San Jose, said, “Satellite and wireless could do well in dense areas like New York City or rural areas,” where laying cable is impractical. “That’s going to be their stronghold.”
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JOURNEY ON THE INFORMATION SUPERHIGHWAY Just what is the information superhighway and what will it bring to Orange County? It’s the road to the future of on-line services. As early as 1995, telephone companies and cable-TV firms will offer an array of interactive entertainment, educational and consumer programming by television and, eventually, a personal computer. In most cases, a converter box placed on top of the TV set will be required. Phone and cable companies will compete for subscribers, each vying to determine what consumers want and how much they are willing to pay. A look at some of the services available in the not-so-distant future: *
Video conferencing: ACE Widget Co. arranges a meeting by television with its business associates in Seattle and Bellflower. It cuts down on commuting and travel costs. *
Tele-education: At a middle school in Laguna Beach, Tran wants to explain to his eighth-grade class the importance of Martin Luther King Jr. Day. He orders from a video database King’s “I Have a Dream” speech. Meanwhile, in another Thurston classroom, students who went through the October fires share advice by television with Elmira, N.Y., students, whose school was also damaged by fire.
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Video games: Pamela wants to play a video game with her friend, Tiffany, on the East Coast. They can play by long-distance television and watch each other’s moves and reactions on screen. *
Home shopping: Alex, still on crutches from a recent injury, takes delivery of his new refrigerator, ordered through an on-line catalogue that includes video demonstrations of several brands. To order, he simply pushed a button on his remote control for automatic credit-card payment and arranged for delivery. The service allowed him to comparison-shop without leaving home. *
Community information: The Gallardos want to know what permits are required for them to add a second story to their home. They browse electronic community bulletin boards and communicate electronically with city officials. They order and receive the required forms from the city, fill them out and return them--all by cable. *
Video database: David wants to prepare Thai food for a dinner party. He scans his on-screen menu for cooking shows featuring Thai recipes. He selects a previously aired program and follows along in the kitchen. *
Time-shifted TV: Blanca works the night shift and misses David Letterman’s show. At 10 a.m., she can watch the Late Show without having to tape the program. *
Movies on demand: George wants to rent an Academy Award-winning film he missed at the theater. Without getting in his car, he can select a movie on his TV screen menu. He can also see previews before making his selection.
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Researched by JANICE L. JONES / Los Angeles Times
