FCC approves GTE's applications to construct video-dialtonenetworks in four markets; company will begin offering video servicesby the end of this year.

IRVING, Texas. GTE said today it will move quickly to deploy video-dialtone networks in three initial markets, following approval late yesterday of its construction plans by the Federal Communications Commission (FCC).

The networks will use fiber-optic and coaxial-cable transmission, and will deliver up to 248 channels of broadcast and cable programming (168 digital and 80 analog) to customers in Ventura County, Calif.; Pasco and Pinellas counties, Fla.; and, Honolulu. Manassas, Va., is targeted for later deployment.

"GTE is delighted with the FCC's action and we are eager to get our networks up and running so that consumers can benefit from the broader choice of programming, services and pricing that a truly competitive marketplace will bring," said William D. (Rick) Wilson, vice president-Video Services for GTE Telephone Operations.

"We will begin delivery of video services by the end of this year. The FCC did not rule on our proposal for the allocation of channels among programmers. We look forward to expeditious resolution of that issue," said Wilson.

The first phase of GTE's aggressive plans includes delivery of video programming to about 500,000 homes in 1995-96, and to a total of about 900,000 homes by the end of 1997.

Now that its "Section 214" applications have been approved, GTE will submit tariffs that set the rates for use of its video-dialtone systems. The plan and tariffs must also be approved by the FCC. Ultimately, GTE will deliver video programming nationwide to some seven million residents in 66 markets in the next 10 years.

Construction Vendors Selected

In March, GTE selected AT&T; Network Systems as the system integrator for the video-dialtone networks. The company also selected General Instrument to provide analog and digital set-top terminals and head-end equipment for the networks. The first phase of construction will cost approximately $200 million.

In its 1992 Video Dialtone Order, the FCC determined that local-telephone companies could participate in the video marketplace and defined video dialtone as "the provision by a local telephone company of a basic common-carrier platform with sufficient capacity to serve multiple video programmers on a non-discriminatory basis."

As the result of a ruling in January by the United States District Court for the Eastern District of Virginia, GTE Telephone Operations also has the right to offer its own video programming to customers in its existing telephone-service areas. The court's decision also allows the company to operate closed cable-television systems in those same areas.

Video Deployment Based on Experience

"This action by the FCC is a significant step forward in the evolution of America's television sets from passive entertainment to delivery of an interactive experience of on-demand movies and television programs, games, education, shopping, banking, travel, investment and video-telephone services. GTE intends to play a major role in this evolution," Wilson said.

"In fulfilling this role, GTE will draw on the experience it gained as the first telephone company to offer video services in the United States," Wilson added. "We began our technology trial in Cerritos, Calif., in 1988, testing the delivery and market demand for both interactive and traditional video services. Now that the FCC has given us the green light for construction of video-dialtone networks, we will translate our technology results into real-life benefits for our customers."

GTE is the largest U.S.-based local telephone company and the second-largest cellular-service provider in the United States, with the potential to serve almost

30 percent of the country's population. With net income of $2.5 billion and revenues of $20 billion in 1994, the corporation is the fourth-largest publicly owned telecommunications company in the world. GTE also is a leader in government and defense communications systems and equipment, aircraft-passenger telecommunications, directories and telecommunications-based information services and systems.