Look to the Skies

While the debate rages in Washington over whether to slap rate ceilings on the cable-TV industry, new technology threatens to eliminate the source of cable's huge revenues—the monopolies enjoyed by virtually all local cable systems.

There are some 9,000 local cable systems in the United States, and all but a few dozen have been granted monopoly franchises by local governments. In cities with monopoly franchises, competing cable systems are forbidden by law.

Now a group of four communications powerhouses is gambling that they can get around those rules. Hughes Communications, NBC, Cablevision Systems, and Rupert Murdoch's News Corp. have announced the 1993 launch of Sky Cable, a "wireless cable" system relying on direct satellite-to-home transmission.

Thanks to a new satellite-reception system designed by Hughes, subscribers will be able to pick up Sky Cable's signal with a 12-inch reception dish. (Most dishes now on the market measure at least six feet across.) The price is also small. Sky Cable will market its receiver for $200 to $300, compared to $1,000 or more for existing dishes.

Sky Cable will initially offer 27 channels (the average cable system offers 36), including Bravo, American Movie Classics, Sportschannel, and CNBC. It plans eventually to expand to 108 channels.

Cable operators don't think Sky Cable has much of a future. James P. Mooney, president of the National Cable Television Association, says, "It could be a way of losing a lot of money." Maybe, but it could also be a way of taking a lot of money from the cable operators.