TOP OF THE WEEK t said the impact of the CRT's action would that cable should pay for the use of pro- they can get away with it -for originating be minimal -at least as far as United graming it imports. or terminating the long- distance traffic." Video is concerned. Although WGN -TV Carolyn Chambers, an executive vice He said MCI now pays the local telephone would be dropped by a few systems, he president at Liberty Communications, companies $200 million a year to dis- said, most cable operators faced with drop- Eugene, Ore., said Liberty is looking at tribute its long- distance calls. ping signals would dump signals imported paying $4.50 per subscriber per year in McGowan said MCI will launch a major from nearby cities and towns rather than royalty payments for a distant signal on a public relations campaign bound to stimu- any of the superstations. $10 basic tier. Liberty is taking a long hard late interest in cable television. He said The executives at Turner Broadcasting look, she said, at the signals it intends to MCI will demonstrate the potential of ca- System, owner of superstation wTBS(TV) keep. While 1.5% of its revenue now ble systems as a means by which Atlanta, were not as sanguine as Bliss. TBS goes to pay for distant signals, under the customers can reach the company's net- head Ted Turner called the CRT action a new rates the figure would jump to 7 %. work without having to go through "the "devastating decision." Unless the CRT uneconomic networks of the monopoly decision is modified or overturned, said held by local phone companies." TBS Vice President Terry McGuirk, wTBs MCI hopes At present, he said MCI customers "are may lose 100,000 to 200,000 viewers subjected to unnecessary expense and has- across the country. And, he added, WGN- to link telephones sle" in going through the local telephone Tv and Eastern Microwave's WOR -TV New companies' networks. He noted customers York could lose millions. with cable TV must dial 22 digits to make an MCI call Both McGuire and Bliss agreed other and cannot use rotary phones, which con- distant signals would be dropped before McGowan tells Western Show stitute 62% of the market. The system he any of the superstations. But Greg Liptak, of hook -up idea he says will envisages, McGowan said, would permit executive vice president, Times Mirror benefit operators, public "one -digit access, from any phone" Cable Television, suggested they might be as well as his company McGowan said MCI has agreements overly confident in making that assump- with a number of cable operators besides tion. In some systems, programing, partic- MCI Communications Corp. Chairman Cox to experiment with the concept. But ularly sports, brought in by microwave William G. McGowan, always determined he made it clear the concept is not yet from a station in a city in the same region to go one up on AT&T, last week invited ready for the market. Although "no new is far more valuable to local subscribers the cable television industry to join MCI technology needs to be invented," he said, than that brought in from Atlanta, New in that effort in a partnership he said "We have found that substantial develop- York or Chicago. would pay off for both. He proposed plug- ment work needs to be done." He said the The superstations and some cable ging the nation's cable television subscri- cable industry and MCI must band operators still hope they can successfully bers into MCI's long- distance telephone together to develop the necessary equip- appeal the CRT action and reduce network -though he conceded the union ment. copyright fees to permit the operators to is not now technically possible. "Substan- In Omaha, the test will involve the use carry a full complement of distant signals. tial development work" remains to be of what McGowan said are "pre- produc- "The real solution is to beat the CRT," done. tion models of several very advanced pro- said McGuirk. The Washington regula- McGowan, in a speech at the Western ducts." One is a modem with a 1.5 megabit tors, he said, are now sending out conflict- Cable Show, in Anaheim, Calif. (see page capacity, which will work in the television ing "public policy" signals. The FCC, 23, said the partnership is "a natural." He band but cannot perform demand assign- under Chairman Mark Fowler, he said, is said cable systems would be able to reduce ments. As a consequence, McGowan doing all it can to encourage diversity and the cost of subscribers' long- distance bills said, the Omaha test will require use of an promote the development of a fourth net- to such a level as to make their entertain- entire television channel. But in time, work. Meanwhile, he said, the CRT has ment services "irresistable." For MCI, the McGowan expects the development of a undermined the FCC policy by taking an cable system would offer a way around the product that will scan for an empty chan- action that will force operators to drop networks of local telephone companies nel and transmit up to 240 simultaneous superstations, purveyors of some of that McGowan said make it difficult for voice conversations over each 6 mhz sought -after diversity. customers to reach any long- distance ter- television channel. If the CRT increases go through, the big minals but AT&T's. And while the tests of the concept will winners may be such cable services as McGowan said the company next involve major customers, McGowan said Daytime, ARTS, Cable Health Network, month will begin testing the idea in a joint MCI has its eye on small business and The Weather Channel and Black Enter- project with Cox Cable, in Omaha, using residential customers, as well. He said tainment Television that compete with the its institutional cable. He said the cable MCI's aim is to reach the mess market superstations for channel space on local passes several of MCI's "large "without the interference of the telephone cable systems. The CRT action, said customers" and added that one -which he companies." He said MCI is testing a Jeffrey Reiss, president of CHN, "bodes did not identify -will participate in the ex- single -line modem that would permit the well for the cable industry" as it "wakes periment. residential user to switch his telephone's up cable operators" to the other services. "We believe there is a major business connection from the local phone company The competitiveness among the different opportunity available to you," McGowan and reach the MCI network over a two -way services for carriage was also underscored said, by way of introducing the subject. cable system. by Turner, who used his seat on NCPC's "By providing your customers direct ac- For cable system operators thinking of we wrap -up panel to say: "If are unsuc- cess to MCI's long- distance network, you information services as a means of entic- cessful in overturning [the CRT decision], can quickly enjoy substantial revenues ing customers to the two -way systems he I hope stations other than writs will be from an existing service with proven and predicted would be serving 40 million dropped" enormously growing demand. This may let homes "in a few years," McGowan had a At a Western Cable Show panel session you achieve pay -back from your two -way word of caution, along with a sales argu- on copyright, Representative Robert plant investment more rapidly than by any ment. Voice communications "is likely to Kastenmeier (D- Wis.), author of H.R. other means." be the first, and fastest," means of enab- 5949, the House -passed copyright bill now And McGowan attempted to whet ap- ling an investment in two -way cable to pay awaiting Senate action, said that if legis- petites with some numbers: Americans off, he said. The market for such informa- lation was passed it would force the CRT will be spending more than $100 billion on tion services as electronic shopping and to modify the rates substantially. The bill long- distance calls by the end of the banking, remote data base access and would reimpose syndicated exclusivity to decade, with local telephone companies publishing, he added, will develop slowly. some extent, making moot one rationale "doing their best to get as much of that "The payback...may be as long as 15 the CRT used in setting the new rates- money as possible -tens of billions, if years."

Broadcastingn! Nov 22 1982