Bell Atlantic Details DBS Rollout


Bell Atlantic Corp. last week rolled out its
direct-broadcast satellite video offer to apartment buildings in four top East Coast
cities, and to single-family homeowners in two of its service regions.

The regional Bell operating company will deliver
programming from DirecTv Inc. and U.S. Satellite Broadcasting to the
multiple-dwelling-unit market in New York, Boston, Philadelphia and Washington, D.C.

According to Dick Beville, president of Bell Atlantic
Video, the company has chosen two of its best markets for the single-family-home rollout:
metropolitan Washington (which stretches from northern Virginia to Baltimore) and all of
New Jersey.

Beville said Bell Atlantic hopes to piggyback on
DirecTv's and USSB's consumer advertising in those markets by weaving in Bell
Atlantic tag lines. And starting Jan. 1, the Baby Bell will promote its DBS offer through
kiosks at its Bell Atlantic Mobile retail stores. In the meantime, Bell Atlantic will use
direct mail and billstuffers to play up the strong brand names that its DBS partners have

Bell Atlantic's phone customers will also hear the DBS
pitch as soon as they move into the service area and call up to have their telephones
turned on.

In some ways, it's not unlike moving into an area that
is wired for cable.

"As customers come and go through moves, the
infrastructure and the ability exists to serve those new customers" with DBS, said
Eddy Hartenstein, president of DirecTv, at last week's SkyForum in New York.

While Beville would not release Bell Atlantic's
market-penetration targets for the new video service, the rollout is expected to be fairly
aggressive because of its large service footprint and the ubiquity of the service. Telco
overbuilders typically must roll out more slowly as they build out each neighborhood with
new plant.

Bell Atlantic service technicians have been installing
Digital Satellite System hardware in employee homes to make sure that they were properly
trained in time for the rollout, Beville said.

"If the demand is overwhelming, we'll add and
train new technicians," he added.

That's good news for DirecTv, which, at press time
last Wednesday, was expected to announce that it had reached the 4 million subscriber
mark, and which is looking forward to maintaining its momentum during the holiday selling

Some industry analysts have said that the DBS industry
could have sold even more systems last holiday season if there had been more product
available and more installers in the field.

Beville said Bell Atlantic has already learned that video
customers demand flexibility in scheduling installation appointments. Dual-income and
single-parent families often require Saturday installs, for example, he said.

"The only reason why Bell Atlantic got into this
business was to provide a cable-replacement product," Beville said at SkyForum.

With its one-stop shopping, after-sale service and
single-bill solution, Bell Atlantic's offer mirrors a cable or PrimeStar Inc. model
more than a typical DBS sale. The telco sees it as alternative to retail for potential DBS
subscribers who are put off by the need to research hardware options, negotiate
installation and figure out how to receive local channels.

Bell Atlantic provides installation (self-installation is
not an option) and an off-air antenna for $199. Customers can have a second TV set wired
for local signals at no additional charge. Beville said the company will charge nonphone
customers the same for the DBS service as its phone users, but the telco will not actively
target noncustomers.

Homeowners and apartment dwellers will pay $5.99 per month
for each of up to four DSS receivers that they rent. The installation, equipment-rental
fee and programming fees from both DirecTv and USSB are bundled on a single bill from Bell
Atlantic Video.

DirecTv and USSB have been called to task for their
dual-provider plan since DSS was launched four years ago, leading to recurring suggestions
that the companies should merge their operations. Doing so would make the services easier
to purchase at retail and easier to pay for each month, industry analysts have said.

At SkyForum, USSB president and CEO Stanley E. Hubbard
defended the two-provider system, saying that it allows USSB to focus its attentions on
selling premium-movie services. He also said receiving two smaller bills each month gives
the average American household more flexibility in determining which bill gets paid when.

Still, Hubbard seemed intrigued by the RBOC's plan to
bundle both programming services on a single bill.

"We'll have a lot to learn from Bell
Atlantic," he said.