Cable TV, Unplugged : Pacific Bell Readies O.C. Wireless System
Pacific Bell’s ground invasion of Southern California’s cable television industry ended with a whimper months ago when the company beat a red-faced retreat from its ambitious effort to lay a $16-billion network of fiber optic cable.
But surrender is not an option in this age of telecommunications convergence, and Pacific Bell is readying itself for a new campaign, this time by air.
By the beginning of next year, the company said it will launch an unprecedented assault on the local cable television market through a system that goes by the oxymoronic name “wireless cable.”
From transmission towers already in place on Mt. Wilson and Modjeska Peak, Pacific Bell plans to broadcast a signal capable of reaching up to 3.5 million homes in Los Angeles and Orange counties. The service will later be available in the San Francisco and San Diego areas.
Pacific Bell said the service will offer compact disc-quality sound, crystal clear video and dozens more channels than most traditional cable services provide, all for about the same price.
There are questions about how many consumers will be willing to abandon a traditional cable system that has served them for decades for a new and largely unproven technology. And there are drawbacks to wireless cable--it can be disrupted by foul weather and can’t dip into canyons or penetrate buildings, to name a few.
But Pacific Bell is counting on wireless cable to carry its first foray into television, and secure a foothold until the company revives its fiber optic project.
The new service “is an important part of establishing the presence of Pacific Bell in the video business,” said Steve Harris, vice president at the San Francisco-based company. He declined to predict how many subscribers the service might attract in its first year, other than to say they expect “many, many thousands.”
Local cable companies, which have more than 2 million subscribers in Los Angeles and Orange counties, are already bracing for the entry of a powerful new rival with deep pockets.
“Any time a company like Pac Bell decides to expand into the video business, you have to look upon them as a serious competitor,” said Leo Brennan, general manager of Cox Communications, which has about 200,000 cable subscribers in Orange County.
Pacific Bell is offering the media a preview of the service today at the company’s central transmission facility in El Monte, and is expected to provide the service on a trial basis in August to Pacific Bell employees.
Wireless cable uses microwave signals instead of wires to transmit programs to homes, which must be equipped with a small antenna. The basic technology has been around for more than a decade, and there are about 170 wireless systems nationwide--mostly in rural areas where laying cable would be too costly--with about 700,000 subscribers.
Cross Country Wireless, which has about 45,000 subscribers in Riverside County, was acquired last year by Pacific Telesis, the parent company of Pac Bell.
The appeal of wireless cable has long been limited by the fact that it could carry only about 30 channels and suffered poor transmission quality. But recent innovations allow the signal to be transmitted digitally, improving the quality of the picture and sound, and boosting its capacity so that it can now carry more than 100 channels.
Those improvements caught the attention of Pacific Bell and other regional telephone companies that have been eyeing the cable television business for years, but until recently were barred by regulators from entering the industry.
Those barriers were cleared away earlier this year with the passage of the Telecommunications Reform Act, and Pac Bell’s wireless cable venture may offer a glimpse of the kind of frenzied competition consumers are likely to see now that long-distance phone companies, as well as cable television firms, are free to raid each other’s businesses.
A key piece of Pac Bell’s strategy is to call attention to what is perhaps the cable industry’s greatest weakness: customer service.
“Customers are very unhappy with their current cable service, and market research has shown that one-third of them would switch if they were given the chance,” Pac Bell’s Harris said. “We know how to do customer service.”
Cable executives acknowledge the industry still suffers from an unhappy legacy of missed installation appointments and unresponsive telephone representatives. But Brennan and others say they have made great improvements.
Continental Cablevision, for example, opened a $1-million customer service training center in Los Angeles last year as part of a broad attempt to improve relations with the company’s 490,000 subscribers in Southern California. And Cox now offers free installation or $20 credits when its service crews miss appointments.
“I’m not going to lose this battle on the customer service front,” Brennan said.
When it comes to comparing wireless cable with traditional cable or even satellite TV services that have emerged in recent years, consumers will have to weigh a number of trade-offs.
Wireless will offer more channels than most cable systems, but Pac Bell probably won’t carry city-run stations that broadcast school board meetings and other local fare. In fact, unlike traditional cable operators, Pac Bell probably won’t have to pay hefty franchise fees to cities, either, because its network is not buried under city streets.
Wireless cable does have a number of technological limitations, including the fact that it is a line-of-sight technology, meaning that its transmitters need a clear path to subscribers’ antennas.
Pacific Bell plans to use repeaters, or secondary transmitters, to reach households in the canyons of Laguna Beach or the Santa Clarita Valley, for instance. But company officials acknowledge that reception can still be affected by storms, and that there are some regions in Southern California that they simply won’t be able to reach.
DirecTV, a wireless television system operated by Hughes Electronics Corp. of El Segundo, doesn’t have that problem because its signal is transmitted by satellite. The service offers about 175 channels, at least 50 more than Pac Bell will deliver, and has lined up nearly 2 million subscribers across the nation since it was introduced two years ago.
But DirecTV subscribers have to spend about $500 to buy a satellite dish the size of a bicycle wheel, and don’t receive any local programming, including newscasts. The antenna needed for Pac Bell’s wireless cable is much smaller and comes at no extra charge, said Harris, who added that the company’s service will include all local programming except city-run stations.
But even Harris admits that wireless cable may not be the technology of Pac Bell’s future, let alone the future. It pales in comparison to the high-tech wonderland that consumers were promised just a few years ago when Pac Bell announced plans for a high-speed fiber optic network capable of delivering movies-on-demand, video telephone calls and on-line shopping.
Pac Bell insists that the company will revive the fiber optic project, a costly venture that was recently shut down except in the Bay Area and San Diego. But Harris said there is no timetable for construction to resume elsewhere.
Meanwhile, many cable operators are quietly planning counter-attacks of their own. Cox Communications, for instance, expects to have upgraded much of its network with fiber optics by the end of the year.
“We’ll be able to offer the interactive services, the high-speed data services that nobody else can touch,” Brennan said. “You can’t do that over a wireless network.”
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Cable Without Wires
Pacific Bell plans to launch an alternative to standard cable television. It will transmit digital programming through the air via satellite and microwave transmission towers. How wireless cable works:
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.
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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.
Source: Wireless Cable Assn. International; Researched by JANICE L. JONES / Los Angeles Times
