Increasingly, the Bells See Their Future on a Screen


SAN FRANCISCO, April 3 - The telephone companies are desperate to be seen, not just heard.

In the coming months, the Bell telephone companies, including SBC and Verizon, will start selling television programming in their most recent effort to crack a market in which they have had almost no presence.

The cable industry, meeting here this week for its annual trade show, is already bracing for the assault on its prime turf.

To offer paid TV services, the Bells are spending billions of dollars to expand their superfast fiber optic networks and improving technology that can send video to their phone and Internet customers. SBC alone is expected to spend about $4 billion over three years to install fiber lines to reach neighborhoods where half of its 36 million customers live.

But in addition to laying new fiber lines, the phone companies also must acquire expensive programming rights, go through the tedious process of getting permission from municipalities to sell television, and master the Internet-based technology that sends video programming over the same crowded network that now delivers voice and data streams.

And even after making these gargantuan investments, the Bells will face formidable challenges to break into the saturated market for pay TV. To lure customers from the cable and satellite providers, analysts said, they have to offer better programming and features at a lower price compared to cable.

They have little choice but to take the gamble.

Cellphone carriers are chewing into the Bells' traditional landline business. And cable companies -- leaders in the high-speed Internet access business -- are fast entering the phone market with Internet-based services. To compete with cable's offerings, the phone companies are pushing to sell an array of services -- Internet connections, wireless and television -- in a bundle.

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Monty Solomon
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