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Adelphia Sending L.A. Cable Customers a Digital Warning

Television: Subscribers will have to pay for upgraded service in order to receive premium movie channels.

November 17, 2000|JON HEALEY | TIMES STAFF WRITER

Adelphia Communications is giving its cable-TV customers in Los Angeles an unusual ultimatum: If they want premium movie channels, they have to sign up for digital cable service.

For customers who already have HBO or Showtime, the switch to digital means more channels at the same or lower cost. But these new digital-cable boxes also could limit viewers' ability to tape shows, and they render useless a TV's picture-in-picture functions.

An untold number of Adelphia customers already receive premium channels without paying for them because of lax security. By moving those channels to digital, Adelphia will cut off the freeloaders' "Sex in the City" episodes and other premium shows.

Within a few years, all basic-cable subscribers will have to sign up for digital service and the digital converter box, said Bill Rosendahl, head of Adelphia's western operations. Based on current rates, such an expansion to the basic service would add up to $8.45 more per month to their bills.

Every major cable operator is eager to make the jump to digital from analog signals because of the lucrative services the new converter boxes and related equipment enable, such as pay-per-view movies that can be controlled as if they were on tape, targeted advertisements and Web browsing via the TV. Digital technology also squeezes far more networks onto the cable, with 10 to 12 digitally compressed networks fitting in the same space as one transmitted the conventional analog way.

But most major cable companies have tried to coax their customers into embracing digital service, rather than forcing them to sign up. The typical approach is to present an optional tier with dozens of digital audio and video channels for about $10 a month, plus a few dollars for the digital converter box.

Adelphia, which is running behind most of its brethren in the shift to digital, isn't being so patient with its customers here. One reason is that digital helps solve some of the problems posed by the antiquated systems the company bought from Century Cable in 1999, which have limited capacity and are prone to delivering premium channels for free.

Most of the 250,000 customers Adelphia inherited in Los Angeles from Century didn't need converter boxes to watch premium channels. That meant consumers could install inexpensive cable splitters to run premium channels to every TV in their home without paying the $9.95 per set demanded by the cable company.

Analyst Thomas Eagan, a first vice president at PaineWebber, said the forced march into digital in Los Angeles is quite different from the voluntary transition sought by most other cable operators. The only one taking a similar approach is Cablevision in New York, which plans to put advanced digital converter boxes in each of its customers' homes for free, Eagan said.

Eagan estimated that only 8% of Adelphia's customers had switched to digital nationwide, compared with 10% to 14% for the rest of the industry. "It's pretty much at the bottom of the list . . . in terms of being competitive with [digital] satellite [TV]," he added.

On Aug. 1, Adelphia started sending letters to local customers telling them about the launch of digital services. In some cases, those letters also pointed out that premium subscribers would have to make the switch to digital in order to continue tuning in to HBO, Showtime and the other premium movie channels.

Rosendahl said the company hasn't started turning off the non-digital premium channels yet, and won't do so until each premium customer "has been contacted in a friendly way to explain what they will be getting."

The two main differences for customers are the channel lineup and the digital converter box. The digital lineup is much larger, with multiple versions of each premium movie channel. So instead of getting one premium channel for about $15 per month, subscribers get eight to 20 channels for the same amount.

The initial digital converter boxes chosen by Adelphia pose at least two problems for viewers, however. Because they have only one built-in tuner, they disable the TV's picture-in-picture functions.

And consumers with older videocassette recorders also may lose the ability to record multiple programs on different channels. They'll have to change the channel on the converter box manually between shows, which is tricky when they're away on vacation.

Once Adelphia's premium channels are shifted to digital, consumers won't be able to watch them on any set that doesn't have a digital box.

Rosendahl said the company plans to charge $6 for each additional set with a digital receiver. But it won't try to collect any back fees from customers who have been getting premium channels for free, he said.

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