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Firms to offer small-dish TV cable service

Four major media companies announced plans Wednesday to start a satellite service capable of beaming as many as 108 channels directly to viewers through a napkin-size reception dish. Sky Cable is scheduled to start in 1993. It is expected to be the first such service to be delivered in high-definition television technology, which provides sharper and clearer images than existing technology. It also will deliver compact disc-quality sound.

The partners in the project are General Electric Co.'s National Broadcasting Co.; Rupert Murdoch's News Corp. Ltd.; Cablevision Systems Corp., a cable system operator and programer based in Woodbury, N.Y., and General Motors Corp.'s Hughes Communications Inc., which is providing the satellites.

Consumers will be able to receive the programing by buying a flat, 16-by-18-inch dish at electronics stores for about $300 each. Currently, satellite dishes are much larger and cost $2,000 to $3,000.

Customers then must sign up for the service. The monthly cost of the service would be comparable to the cost of cable television.

It has not yet been determined where the partners will get Sky Cable's programing, but NBC President Robert Wright said NBC would not be carried on the service. Murdoch said neither would News Corp.'s Fox Broadcasting Network.

Fox and NBC are primarily involved in creating programs for their affiliated broadcast stations, and Wright said that his network would continue to concentrate mostly on providing NBC affiliates with programs.

The executives said that unlike the networks, which provide programs for a mass audience, Sky Cable would deliver programs aimed at specific viewers.

The partners say their aim is to reach the 20-million TV households in the United States that aren't served by cable systems. But in the long run, analysts think that direct-broadcast satellite (DBS) could compete directly against cable in some regions.

"DBS has been known to the cable TV industry as a long-term threat for many years," said Kenneth Goldman, an analyst with Hanifen, Imhoff, Inc. of Denver.

Peter Appert, an analyst with C. J. Lawrence, Morgan Grenfell, said Sky Cable poses "a significant competitive threat" to the cable industry. "If I can get 108 channels priced competitively, I don't see why I need cable if they can deliver as promised and the quality is as promised," he said.

The four companies involved in the venture said local cable operators will be given the opportunity to market Sky Cable's services and their own programing.

The partners in the $1-billion venture will each provide $75-million over four years, while satellite-technology suppliers of Hughes will provide $325-million. The remaining $375-million would be raised in 1993 through bank financing.

"Sky Cable is a major step forward into the 21st century for U.S. TV viewers," said Stephen J. Petrucci, president and chief executive of Hughes.

"For the first time, rural Americans will be afforded the opportunity to enjoy truly broad-based cable services like those available by cable in urban communities," he said.

While the Federal Communications Commission began licensing direct-broadcast satellites in 1982, the technology has only recently improved to the point where they can be profitable in the United States, Petrucci said.

The Sky Cable satellite will be a Hughes high-power satellite that Petrucci described as the most powerful commercial space-transmitter in the industry.

Direct-broadcast satellites are now in use in Japan and Britain, and companies in France and West Germany also have plans to deploy them.

In Britain, Murdoch is involved in another satellite program delivery system called Sky Television.

_ Information from the Los Angeles Daily News, New York Times and AP was used in this report.