Global Telephony / September 1995
By Larry Luxner
Reston, Virginia -- a Washington suburb of 57,000 located in upscale Fairfax County -- is home to the U.S. Geological Survey, Molson Breweries, the General Services Administration, the Defense Mapping Agency and certain branches of the CIA.
Now Reston has a new claim to fame: it's the site of the nation's largest video-on-demand market trial.
Bell Atlantic, in conjunction with Reston-based Tele-TV Inc., began its experiment May 24 and currently has 700 customers -- a number that should rise to 1,000 by the second week of August. Neither entity will say how much the trial costs, but Marco Rustici, project director for Bell Atlantic Video Services Inc., says he's optimistic the investment will pay off.
"Ours is the biggest trial of its kind in the nation, and the only one that actually works," he said. "In northern Virginia, we're soliciting a universe of between 16,000 and 20,000 households. Right now, we have identified 1,000 people who want to be on the system. Our customers pay per transaction. There's no subscription fee. With their remote-control, they can call up movies, even if it's 12 midnight. If they want to watch Batman Returns, it will cost them $3.29 to $4.75, depending on what cell they're in."
Bell Atlantic -- which serves telephone customers in the District of Columbia and Virginia, Maryland, Pennsylvania, West Virginia, Delaware and New Jersey -- says it picked the Reston area for its video-on-demand trial because, as one spokesman said, "it gives a fair cross-section of demographics. Besides, we had done a technical trial of ADSL with a number of employees' families in that area."
Technically, the experiment is a venture of Tele-TV, a $300 million entity created by the three "Baby Bells" most active in video-on-demand: Bell Atlantic, Pacific Telesis and Nynex. Headquartered in a Reston office building about 10 minutes' drive from the actual trial market and run by former CBS executive Howard Stringer, Tele-TV creates and distributes the content programming through Asymmetrical Digital Subscriber Line (ADSL) technology.
According to Bell Atlantic, the ADSL central office unit works with an ADSL remote terminal located at the customer's premises. The remote terminal separates the ISDN telephone signal from the compressed video signal and transports the ISDN signal over standard customer-premises wiring, while the video signal is delivered via standard twisted-pair copper wires to a set top terminal.
"We wanted something we could go to market with right now, and ADSL allows us to do that," said Bell Atlantic spokeswoman Ginger Fisk. "We don't have to construct anything. We can use existing copper."
Video programming over the system, on the other hand, must be pre-encoded, digitized and stored on a video server. For this, Tele-TV depends on Oracle Corp. Frank Chen, a "technology deployment manager" at the San Francisco company, says the Oracle Media Server meets MPEG-1 standards.
"It is a high-end, very large repository for storing multimedia data and serving it to thousands of clients at the same time. It allows you to store movies -- everything from feature releases to old TV shows --- in digital form," he said. "One digital copy can be served over phone lines to thousands of customers who are subscribers."
Bell Atlantic's network has a capacity of 1,000 homes, while Bell Atlantic Video Services Inc. -- a non-regulated subsidiary -- is only one programmer riding that network (under FCC law, an affiliated programmer can have no more than 50% of the capacity of that system). The other two are Reed Telecommunications of Silver Spring, Md., and Interactive Training Online of Indianapolis.
Rustici said the Reston trial logs 400 to 700 transactions within a typical 24-hour period, which translates into 40,000 minutes a month of movies, old TV shows, documentaries and children's programming. "That has surpassed our expectations," said Rustici, adding that Tele-TV refreshes about 25% of the content every month.
In addition to video-on-demand, customers in the Reston trial will have access to some hope-shopping services; retailers JC Penney, Land's End and Nordstrom's are expected to come on-line in mid-September.
Rustici says he's encountered a few problems -- and surprises -- along the road to the interactive age.
"One thing people didn't realize when they signed on is that the service was available truly any time they wanted," he said. "Many people called the service center wanting to know when a particular movie was on. Other calls were from customers who needed education on how to use the remote control. Even though they read the literature, they didn't realize they could freeze the movie or fast-forward it."