For more than two years, Fairfax County Supervisor Thomas M. Davis III tried to prevent Skyline Plaza, one of the biggest condominium projects at Baileys Crossroads, from signing a contract with a pay-TV service.
"I kept saying, 'Hey, don't do it--the county's going to get cable any day now,' " recalls Davis.
But sign Skyline did, with a small group antenna service promising to bring residents of large apartment buildings pay sports, movies and entertainment programming long before countywide cable TV arrives.
Skyline's decision to go with Washington Cable Inc. illustrates the promise--and the pitfalls--of alternate pay-TV technologies at a time when the District and Fairfax and Montgomery counties are in the process of awarding cable TV franchises.
Although the local TV entrepreneurs can bring viewers some pay TV fare, Davis and other governmental officials worry that they will jeopardize the area's chances of getting full-fledged cable TV systems, which could bring far more channels of programming and earn revenues for localities.
"This kind of thing ultimately hurts the county because it eats away at the market that's left for a cable operator," Davis says. "With the cable bids we have, I'm afraid some of the cable operators are going to be running out of cash before too long."
What Davis is grousing about is called "cream-skimming" by the cable industry, and it's happening all over the Washington area. Local viewers hungry for premium movies and sports already can choose among Super TV of McLean, Marquee Television Network of Rockville and a host of smaller pay TV operators who offer one or more channels of programming. Together, Super TV and Marquee serve almost as many subscribers as the 74,000 homes served by all five area cable systems combined, and they're picking up another 6,500 customers each month.
But the biggest potential competitive threat to cable is still waiting in the wings. Later this year, the Federal Communications Commission is expected to approve high-frequency transmissions by Direct Broadcast Satellites to individual homes--a development heralded by industry experts as the greatest communications advance since the advent of television.
Here's what Washington area viewers can expect to get for their TV dollars now and in the future--and what they can expect to pay for the privilege.
If you ever happen to tune to Channel 50 in the evening and find only a blurred mess, what you're seeing is Super TV--a subscription television service that transmits a scrambled UHF signal to some 35,000 local subscribers.
In order to watch Super TV--one channel of premium movies, children's shows, concerts and sports--a subscriber pays a $49.95 installation fee and a $19.95 monthly basic service charge. That rents a television-top decoding device that unscrambles Channel 50. For another $4.95 a month the subscriber can watch adult (R-rated) late-night films on Thursday, Friday and Saturday.
Super TV also can beam extra programming such as sporting events or entertainment specials to subscribers for an additional fee. Super TV has been picking up about 5,500 subscribers monthly since it began last fall. "I think we're going to be a very potent competitor throughout the entire area," says Super TV president Tom Thompson. It is on the air from 7 p.m. to around midnight on weeknights, and from 3 p.m. to about 2 a.m. on weekends.
Marquee Television Network Inc. of Rockville has been in business here since 1975, but only recently did it begin the rapid growth that has brought it 35,000 subscribers. Unlike Super TV, which assembles its own programming package, Marquee offers 24-hour transmission of programming by the national Home Box Office network--mostly recent movies and specials.
Because Marquee employs a microwave signal to transmit its programming, rather than a UHF signal, it is limited to what are called "line of sight" transmissions--those unbroken by obstructions such as trees, buildings and hills. As a result, the company concentrates its efforts on high-rise apartments, condominiums and hotels, although it also serves some private homes.
Subscription rates run about $14.95 a month, although they can be lower if an entire apartment building or condominium signs up. Installation charges range from $20 to $99.95. Like Super TV, federal regulations limit Marquee to one channel of programming.
A host of smaller jobbers also is busily wiring up area apartment buildings and condominiums. Satellite TV Services Ltd. of Rockville, which serves eight apartment complexes in Washington and Maryland, brings its customers up to seven channels of premium programming via a satellite-fed master antenna TV system for prices ranging up to $30 monthly. O.D. Page, the company's president, says his firm has access to 5,500 residential units, and he expects to double that number by year's end.
Washington Cable Systems Inc. of Southwest Washington, the company that won Skyline Plaza's business, is operating a satellite-fed cable system that serves 80 customers for fees from $8 to $30 monthly. Recent contracts, including the Skyline agreement, will boost that figure to some 1,000 customers in area apartment complexes within a year, says Perry I. Klein, the group's general manager.
Direct Broadcast Satellites
Later this year, the FCC is expected to launch a still more potent cable competitor, approving high-frequency transmissions by Direct Broadcast Satellites (DBS) to individual homes. Those satellites could bring area residents up to a dozen pay and nonpay channels of sports and entertainment, beamed direct from a satellite to a dish-shaped antenna on their roofs by 1985 or 1986.
"We will be primarily marketing in areas that don't have access to cable TV," says Irving Goldstein, president of Satellite Television Corp. (STC), a subsidiary of the Communications Satellite Corporation. STC is presently considered the leading DBS contender.
Because DBS can offer many of cable's services at a fraction of cable's capital cost, these new high-power satellites are thought to pose the biggest potential threat to the spread of cable television systems into new areas.
Wilbur Pritchard, a Bethesda communications satellite consultant who has filed one of the eight DBS applications pending before the FCC, estimates it will cost about $675 million to provide satellite television service nationwide, compared with about $500 million to provide cable television service to the city of Washington alone.
Satellite proponents are confident that their cheaper capital costs will translate into a lower cost to the consumer, although that ultimately will depend on the number of subscribers and the programming. STC is predicting it will attract some 650,000 subscribers in each of its first three years of operation. Under STC's plans, each subscriber would pay $100 for a dish-shaped antenna and then lease an electronic receiver and decoder for $9 a month. Program fees would run about $16 a month. Eventually, consumers could receive between 26 and 40 channels.
Added to this dazzling technological menu may be another choice: Cable experts say there is a good possibility that the FCC may move soon to deregulate the transmission of TV signals by microwave. Such an action by the panel, which under the Reagan administration has encouraged competition in the communications industry, would allow the transmission of 14 channels of programming to urban-area viewers through the airwaves via multi-point distribution systems (MDS). (Marquee is an MDS operation.)
As with Marquee and Super TV, a consumer would need only an antenna and a television-top channel selector leased monthly to receive the MDS signals.
Microband Corporation of America, a subsidiary of the California-based Tym- share Inc., is attempting to win approval for what it calls a "wireless cable system" by capitalizing on the FCC's procompetitive stance. In its proposal, Microband maintains that a broad range of microwave broadcast channels will provide greater diversity of programming and services to urban residents than would be possible through a cable system alone--and at less cost to subscribers than cable.
"We're just asking to compete with cable on an equal footing," says Don Franco, Microband's president. "Cable is a monopoly now.