TELECOM Digest OnLine - Sorted: Increasingly, the Bells See Their Future on a Screen

Increasingly, the Bells See Their Future on a Screen

Monty Solomon (monty@roscom.com)
Mon, 4 Apr 2005 01:45:20 -0400

By MATT RICHTEL and KEN BELSON

SAN FRANCISCO, April 3 - The telephone companies are desperate to be
seen, not just heard.

In the coming months, the Bell telephone companies, including SBC and
Verizon, will start selling television programming in their most
recent effort to crack a market in which they have had almost no
presence.

The cable industry, meeting here this week for its annual trade show,
is already bracing for the assault on its prime turf.

To offer paid TV services, the Bells are spending billions of dollars
to expand their superfast fiber optic networks and improving
technology that can send video to their phone and Internet customers.
SBC alone is expected to spend about $4 billion over three years to
install fiber lines to reach neighborhoods where half of its 36
million customers live.

But in addition to laying new fiber lines, the phone companies also
must acquire expensive programming rights, go through the tedious
process of getting permission from municipalities to sell television,
and master the Internet-based technology that sends video programming
over the same crowded network that now delivers voice and data
streams.

And even after making these gargantuan investments, the Bells will
face formidable challenges to break into the saturated market for pay
TV. To lure customers from the cable and satellite providers,
analysts said, they have to offer better programming and features at
a lower price compared to cable.

They have little choice but to take the gamble.

Cellphone carriers are chewing into the Bells' traditional landline
business. And cable companies -- leaders in the high-speed Internet
access business -- are fast entering the phone market with
Internet-based services. To compete with cable's offerings, the phone
companies are pushing to sell an array of services -- Internet
connections, wireless and television -- in a bundle.

http://www.nytimes.com/2005/04/04/business/04iptv.html?ex=1270267200&en=d0a786872bb8af85&ei=5090

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