News

Pa. Op Under Fire Over Adult Service

5/31/1998 8:00 PM Eastern

Pennsylvania-based Verto Communications is running into
opposition from local clergymen over its launch of an explicit adult pay-per-view service.

The MSO, which is rebuilding several of its systems in the
Wilkes Barre/Scranton, Pa., area, plans to offer New Frontier Media Inc.'s explicit
adult service, Extasy, on a PPV basis to its 66,000 subscribers in the next few months.

The service goes well beyond the parameters of PPV-adult
programming set by traditional adult networks Playboy Television and Spice, and it even
exceeds the more relaxed boundaries created by new services Spice Hot and Frontier's
own The Exotic Network, which it is currently pitching to cable operators.

But the service -- which Frontier purchased in February,
and which is mostly offered on C-band dishes -- has drawn the ire of the Scranton Catholic
Diocese, which has publicly spoken out against its launch. In a letter to the
Diocese's more than 200 area member churches, Bishop James Timlin encouraged
parishioners to launch a letter-writing campaign against Verto for distributing
pornography, which the church considers immoral and a "grave offense."

"Verto Cable TV must come to realize that very many of
its subscribers are genuinely offended by the company's decision to bring X-rated
programming into our area," the Bishop said in a prepared statement read to the
parishes during services two weeks ago. "If letters expressing outrage over this
policy are received in great numbers, I feel sure that Verto Cable TV will respect its
subscribers enough to change its policy."

But Mark DeStefano, chief operating officer for Verto, said
the privately owned MSO will launch the service as it completes its technological
upgrades. He added that the operator has taken all necessary precautions to make sure that
the channel is not seen by anyone without authorization.

The upgrade from a 550-megahertz system to a 750-MHz,
interdiction-based operation provides for complete audio- and video-signal blockage, as
stated in Section 505 of the Telecommunications Act of 1996, DeStefano said. The law
called for operators to effectively scramble adult product or to abandon 24-hour carriage
of adult programming for distribution only during "safe-harbor" hours -- between
10 p.m. and 6 a.m.

He added that the MSO, at press time, had not received many
negative responses from its subscriber base.

"There aren't a large number of people who are
against the move, but the opposition is amplified because the church has taken the
position that it should not be offered," DeStefano said. "But it's PPV, and
they can't get the service without authorization."

To get the service, subscribers not only have to physically
call to order the programming, but they also have to fill out and sign authorization forms
that stay on file at the system.

"We also provide PIN numbers and traps for further
security," he added.

Verto, which has never offered adult product, decided to
take Extasy over the less-explicit adult services because it's more attractive to
subscribers.

"This type of product tends to sell better, and it
seems to appeal to more people," DeStefano said.

Indeed, explicit adult programming has proven to outdraw
traditional, watered-down product. Operators offering Spice Hot, for example, have doubled
buy-rates compared with the performances of Playboy, Spice, AdulTVision and Adam &
Eve.

Yet operators have been reluctant to offer such programming
for fear of exactly the kind of backlash that Verto faces. But DeStefano said subscribers
should have the ability to order adult programming in their own home.

"It boils down to choice and First Amendment rights to
watch a product in the privacy of their own homes," he said. "It sets a
dangerous precedent for the industry if we start censoring product."

Verto marks the first operator to license Extasy (not to be
confused with Home Dish Satellite Network's American Exxxtasy service, which was
discontinued in 1990). Neither Verto nor Frontier would reveal Extasy's licensing
fees.

Frontier, however, is marketing to operators a
less-explicit adult service in TEN, although that service still goes beyond what Playboy
and Spice show.

"Our primary focus is on TEN, but there have been
operators that have shown interest in Extasy," said Matt Cohen, director of marketing
for TEN. "We don't have a problem offering Extasy as long as the operators are
adhering to the government's [adult-programming] standards."

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