BellSouth Brings Digital Cable to Atlanta

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BellSouth Corp. announced last Thursday that it has begun
its initial rollout of digital-wireless cable service in its home market of Atlanta.

The telco has offered a similar service in New Orleans
since November. While the company has not released subscriber numbers for the digital MMDS
service there, vice president of business and development John Hartman said the numbers
are exceeding company expectations.

The Atlanta launch last week follows several months of
beta-testing in a few thousand homes. In the first day following local media coverage of
the launch, "consumers reacted passionately" and on a grander scale than they
did initially in New Orleans, Hartman said.

BellSouth's overall video strategy includes both wireless and wireline technology,
depending on the logistics of the particular market. Hartman said that unlike some telcos,
BellSouth has been extremely consistent in following its proposed home-entertainment
strategy.

Using programming by the Americast consortium -- which also
feeds the video ventures of fellow telcos Ameritech New Media (Ameritech Corp.'s
cable arm), Southern New England Telecommunications Corp. and GTE Corp. -- BellSouth
offers Atlanta residents more than 160 digital channels. SBC Communications Inc. has
backed out of the Americast partnership.

BellSouth's packages include digital-quality local
broadcasts, access to Express Cinema pay-per-view and commercial-free audio-only channels.
Monthly programming for an expanded-basic package runs $39.99 for service to two hookups.
Price guarantees of up to three years are available on certain packages. Installation runs
from $65 to $199, depending on the job's complexity.

BellSouth will roll out the service in phases in Atlanta,
initially targeting more than 700,000 households, or about one-half of the local market.
To reach additional homes, the company will strengthen its system with signal repeaters.

Hartman said one of the benefits of entering a new market
with MMDS technology is that the company can blanket a city with the technical ability to
serve the market much quicker than would be possible with wireline technology.

"Clearly, the speed is very attractive with
MMDS," he said. "And you only have to invest in customer homes, not in every
home passed."

BellSouth's new service will offer competition to
local cable incumbent MediaOne, which is in the midst of a network upgrade in Atlanta.
According to spokesman Dave Wood, the rebuild is expected to be completed by late 1999.

"We welcome the competition," Wood said, adding
that MediaOne has been expecting BellSouth's entry into the Atlanta market.
"This is what the lawmakers and regulators intended with the Telecommunications Act
of 1996."

In addition to video, the two companies will also compete
for telephone and Internet customers in Atlanta.

Wood said the BellSouth service won't be universally
available to everyone in the Atlanta market because not everyone will have a good line of
sight.

"From a reliability standpoint, we feel that MediaOne
is superior," he added, pointing to the possibility of weather problems with the
wireless technology.

Hartman said that from a technical point of view,
digital-wireless technology exceeded the company's expectations. He added that the
service has not run into weather or atmospheric problems.

The Atlanta service uses a digital-wireless set-top box
from Zenith Electronics Corp., which faces serious financial problems. But Andrew Kreig,
president of the Wireless Cable Association, said, "It is my understanding that
Zenith's digital-wireless business is quite vibrant and healthy, whatever the larger
concerns might be with the television-manufacturing side of the business."

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