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Tele-TV, the video venture formed by regional phone companies Bell Atlantic, Nynex and Pacific Telesis, said Thursday that it has awarded Thomson Consumer Electronics a contract that could
be worth more than $1 billion over three years to supply set-top boxes to deliver TV programs and movies via microwave signals. In a separate industry development, sources said Capital
Cities/ABC Inc. executive Stephen A. Weisswasser, who heads ABC’s multimedia efforts, is in discussions to be named to head the rival phone company video venture to Tele-TV. That project
involves regional phone companies Ameritech Corp., BellSouth Corp. and SBC Communications. It also involves Walt Disney Co., which is buying Capital Cities/ABC. The box to be designed and
manufactured by Thomson for Tele-TV is a cornerstone of its efforts to quickly build a system to deliver programs--initially through a wireless microwave system--to rival cable television
and direct satellite systems. Using the Thomson box, viewers would receive cable channels, local stations and what is being called near video-on-demand, in which a menu of movies could be
available. Full video-on-demand, in which viewers will be able to call up an unlimited number of movies through what amounts to an electronic video store, is expected to be available
eventually as interactive television through wires is developed and installed. To develop its programming, the company has hired former senior CBS executive Howard Stringer, who is chairman,
and former Fox television programmer Sandy Grushow, the president of the venture and developer of the system’s marketing efforts. The venture was initially advised by former Creative
Artists Agency Chairman Michael Ovitz, but that relationship ended soon after Ovitz announced he was leaving the agency to join Walt Disney Co. Tele-TV plan to install the boxes with its
system in up to 3 million homes. Each box will cost the company less than $400. Sources said there are no plans to charge consumers a separate fee for the box or make them buy the box
outright. Tele-TV plans to roll out the system in late 1996 on the East and West coasts and will make a big marketing push in early 1997. In a conference call with reporters, executives said
Thomson will be making from 80,000 to 100,000 of the new boxes by mid-1997 in Mexico and that the boxes may eventually be built into television sets by manufacturers. MORE TO READ