MediaOne Adds Three Digital Markets

7/04/1999 8:00 PM Eastern

MediaOne last week added its first three digital-cable
markets since launching its initial digital-television market a year ago.

Last Wednesday, MediaOne Group Inc.'s cable arm
officially rolled out its "Digital NexTV" service in Atlanta and began a soft
launch of the service in Richmond, Va., and Cleveland among friends and family of MediaOne
employees who tested the service. The company's first digital market was Detroit.

The MSO plans to add other digital markets this year, and
it wants to offer digital "wherever possible," according to senior vice
president of video Judi Allen. The first markets were chosen to promote digital where
MediaOne faces video competition and where the plant has been upgraded for the service.

As in Detroit, MediaOne goes head-to-head against Ameritech
New Media in Cleveland. Atlanta offers video competition from BellSouth Corp. And MediaOne
already markets digital telephone and the Road Runner high-speed Internet service in

Richmond may also be of interest to MediaOne because of its
proximity to the headquarters of Circuit City Stores Inc. The retailer is helping to
promote Road Runner in Richmond, with plans to expand into additional markets later.

In its early digital-launch phase, MediaOne will avoid
mass-media marketing. Even in Detroit, MediaOne has kept its digital-marketing efforts
somewhat in check.

"We're still at the tail end of the second
marketing phase" in Detroit, vice president of video marketing Steve Bouchard said.
In its first digital market, the MSO has moved beyond direct marketing to include some
cross-channel spots. Phase three starts later this year, when it will add broadcast ads.

Premium and pay-per-view movies are still the primary focus
of MediaOne's Digital NexTV service, although that could change.

MediaOne also repeated its commitment to OpenCable
standards, although it announced that it would launch in the three new digital markets
with current technology from General Instrument Corp. -- its "DCT-2000" set-top

The company had previously stated that it would use Digital
Video Broadcast-compliant digital boxes in at least one market by the second quarter of
this year.

Allen said MediaOne is still committed to using digital
boxes from multiple vendors. She added that AT&T Corp.'s deal to buy MediaOne has
played no role in the MSO's choice of set-top vendors or the pace of its digital

A total of 70,000 homes in the Atlanta market are currently
ready for Digital NexTV. By the end of the year, that will rise to 350,000 homes.

In Richmond, 20,000 homes were capable of receiving the
digital service during the soft launch, and MediaOne will have more than 350,000 homes
ready by the end of the year.

The Cleveland market began its soft launch with 14,000
digital-ready homes. By the end of the year, 60,000 homes will be passed for digital.

Want to read more stories like this?
Get our Free Newsletter Here!