Ameritech Corp., the slowest of the Baby Bell telephone companies to get on the infopike, announced plans Thursday to spend $ 4.4 billion to bring digital video to 6 million customers by the end of the decade.
Though smaller in scope, the plan mirrors Pacific Bell’s announcement last November that it would spend $ 16 billion developing an information superhighway for California.
Both companies are developing a high-tech infrastructure to offer interactive multimedia to customers within their regions. And unlike their other Baby Bell siblings, Ameritech and PacBell are developing the networks without cable company partners.
Rather than rewiring its current phone network, Ameritech plans to lay a second set of wires — higher capacity fiber-optic and coaxial cable. The company may integrate the two as technology improves to transmit phone signals over the same lines as video.
The company didn’t disclose where it plans to start the service but said it would likely begin in the six biggest cities of its five-state Midwest region — Chicago, Cleveland, Columbus, Detroit, Indianapolis and Milwaukee. One problem may be access to programming. Since most big cable companies own pieces of cable channels, they may be reluctant to sell those channels to competing cable systems. That’s one reason why other phone companies have partnered with cable operators.
All Ameritech will say is that it is pursuing alliances and partnerships with others in the business.
But Bill Deatherage, an SG Warburg analyst, said the programming issue is one that looms large as new operators move into the cable business.
“The issue is huge and it’s not addressed,” Deatherage said. “One by one, all the (Baby Bells) will do something in programming expertise and then in ownership, and that includes Ameritech.”
W. Patrick Campbell, hired away from Columbia TriStar Home Video earlier this month, starts with Ameritech Monday and will head up the vid operation.
The move is seen as somewhat defensive. As cable companies partner with other telcos and make louder noises about offering competing local phone service, Ameritech needed to protect its turf.