Look, Ma No Cable: It's Video By Phone

After next summer, television may never be the same at Arthur A. Bushkin's McLean (Va.) home. No more running out to rent the latest video. No more waiting for cable's newest offerings. Instead, if all goes as planned by Bell Atlantic Corp., the Bushkins will be watching videos whenever they want to, brought to them over their phone line. Their take on being test-market targets? "My nanny has volunteered to watch all the movies," quips Bushkin, president of information services for the Philadelphia-based phone company.

Bell Atlantic and other phone companies ache to steal a piece of the $25 billion-a-year cable-TV business and the $8 billion video-rental business. The road was paved in July, when the Federal Communications Commission allowed them to provide "video dial tone"--that is, to deliver movies and TV to homes much as they now deliver phone calls.

FIBER-FREE. The $5.4 million Bell Atlantic experiment that includes the Bushkin home is intended to topple a major technical hurdle: how to send video over "twisted pair," the old-fashioned copper wiring still used for most local phone service, instead of waiting for high-tech fiber-optic lines. The basic technique, called Asymmetric Digital Subscriber Line, was developed by Bellcore, the research arm of the seven Baby Bells. ADSL blasts video signals over wires at rates far above what voice traffic requires. Such high frequencies lose energy quickly, but a box in the home will pick up and amplify the signals (table). Phone service won't be affected.

If all goes well, Bell Atlantic plans to roll out a commercial service within its six-state territory in 1994 that will make existing pay-per-view cable service look as quaint as a '48 Philco. Bell Atlantic hopes to offer between 30 and 100 videos with no wait. Eventually, it would add hundreds of titles--even thousands--as well as video material for education, home banking, and shopping.

Of course, Bell Atlantic still faces some big technical hurdles. One vital gadget doesn't even exist yet. Called the "video server," it's a kind of jukebox that will store movies in digital form and transmit them within seconds of a viewer's request. In a demonstration for the FCC on Oct. 28, Bell Atlantic faked it using a personal computer, two TV sets, and just 20 minutes of digitized videos--including snippets of Spartacus.

Aside from that, the quality of an ADSL picture is closer to VCR level than to cable or broadcast TV. And critics say about 25% of American homes wouldn't be able to get it because they live too far--more than 3 1/2 miles--from their phone company's nearest switch. ADSL could be subject to interference. And for now, it can't be used for live broadcasts. "Customers will find that it's not as friendly as cable," says Richard R. Green, chief executive officer of Cable Television Laboratories Inc., an industry research consortium.

Bell Atlantic officials shrug off such cavils. They say the critics haven't seen their closely guarded technology. Moreover, this test is designed to refine the technology--not merely showcase it. Says Bell Atlantic's Bushkin: "We're comfortable running an employee trial to help us continue the development."

Bell Atlantic is hardly alone. Big cable operators are experimenting with video on demand and similar services, as are other phone companies. GTE Corp. has been conducting a long-running trial of video on demand via fiber in Cerritos, Calif. U.S. West Inc. is testing the market in the Denver area with cable giant Tele-Communications Inc. And in early October, Nynex Corp. announced plans to offer video on demand next year in some Manhattan apartment buildings in cooperation with Liberty Cable Television, which transmits over microwaves.

LONG WAIT. In the long term, the biggest splash of all may be made by Bellcore itself, which has invented a video-on-demand setup for all seven of its Bell owners that will let viewers fast-forward and rewind--features that Bell Atlantic says it's only "looking at" offering now. Bellcore's system, jointly developed with Northern Telecom Ltd.'s Bell-Northern Research, is also probably more suited to large-scale use than Bell Atlantic's. But it will take longer to roll out.

Bell Atlantic's trial is bound to attract attention because it involves two promising technologies: the video jukebox--instead of, say, a bank of manually operated VCRs--and video over twisted pair. It's still not clear who will win the coming war between the phone and cable TV industries, or even whether the rivals will become partners, as TCI and U.S. West already have. A successful test by Bell Atlantic could help sort things out. Clearly, Art Bushkin's nanny won't be the only one tuning in.