Service Electric Cable TV of New Jersey will eliminate one of the hurdles that most consumers must clear to enter the digital age. When the operator begins deploying its digital-cable offering in June, it won't charge a box-rental fee and will provide some digital content for no extra charge.
The company serves 100,000 homes in the state and neighboring Pennsylvania. Its president, Ed Walson, said he's decided to follow the cellular-phone model in attracting analog customers to digital cable.
"You give people a free phone, and, lo and behold, they start making calls," Walson said. With respect to digital content, he added, "I'm hooked on the on-screen guide myself. I'm sure consumers will love it, too."
Service Electric has already announced its plans to consumers, but Walson said he does not anticipate deployment before June. The company is still in negotiations for both the set-tops and content.
"Technology and pricing are changing by the day," said Walson of the hardware. He said he wants the most advanced box that is financially feasible.
Content is also still subject to negotiations. Because he intends to offer some digital networks to all customers, the programmers must develop a different rate card for him that's more reflective of analog basic-cable pricing.
Walson also continues to wrestle with the method of deployment. He's confident that video-on-demand and interactive services will eventually make up for the loss of up-front, monthly box-rental revenue, but he doesn't want to deepen the short-term loss by ponying up for a truck roll.
Service Electric won't be the first operator to waive digital-basic fees or deal with the truck-roll issue. CableOne Inc. launched digital service last summer with an offer that included no installation fee if consumers agreed to pick up the box at a local office and receive a tutorial on its use. In return, upgraded customers received 12 free months of digital service.
Other operators also are analyzing the retail sale of boxes with complimentary programming, but have not finalized their plans. And direct-broadcast satellite providers EchoStar Communications Corp. and DirecTV Inc. have recently used hardware discounts, rebates and free installation offers to help drive satellite systems into new homes.
Service Electric will offer a lease or purchase option for second set-tops. Ultimately, "we want to get as many channels on digital as possible," he said. "People with better TVs will really appreciate the shift."
Monica Hogan contributed to this report.
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