Michael Henry of Tonawanda recently went up on his roof and pointed a dish-shaped antenna at the sky. Then he climbed down and unplugged his television cable, saving $18 a month.
"Adelphia just keeps creeping up and up," he said of his cable television bills. "The only drawback I find is I have to have an outdoor antenna to get the local channels."
That drawback may disappear, heating the competition between direct broadcast satellite services and cable television companies.
This year, satellite television providers are considering adding Buffalo stations to their channel lineup, eliminating a significant competitive disadvantage. Congress in November passed a law allowing satellite services to retransmit local signals, after getting approval from the local broadcasters.
Satellite television services are already gunning for cable customers with low-cost offers, like the $20 a month package that Michael Henry took. That, coupled with new competition from communications companies and from a second cable system being constructed in Kenmore, appears certain to intensify pressure on cable systems like Adelphia Communications Corp.
In response, the region's dominant cable provider is pushing to roll out new services while improving customer care, officials said.
"We're looking at other businesses to get into," said Tom Haywood, Adelphia general manager for the Buffalo area. "Our network has a lot of flexibility to provide services for customers."
He wouldn't say whether the company's local telephone service, now being tested, might debut in 2000. Its high-speed Internet service, previously available in Amherst, should be available throughout 90 percent of Erie County by year end.
Having spent $75 million upgrading its regional cable network, Adelphia will spend millions more marketing new services, Haywood said. Expect to see many more ads about communications services aimed at businesses and consumers.
Throughout Western New York, Adelphia connects 67 percent of the 740,500 homes its lines pass, according to its May, 1999 annual report. More than 90 percent of Adelphia's customers opt for the premium package of cable service, priced about $30 to $35 a month. Its telephone unit, Adelphia Business Solutions, offers business-oriented telecommunications to area companies.
Intertech, which supplies Lockport's cable service, plans to offer head-to-head competition with Adelphia in Kenmore this year, officials said. The company plans to begin connecting customers this summer to its cable television service, said Noel Dill, vice president of market development. The company, which already provides cable to some multiunit buildings in Adelphia's service territory, expects to offer a lower-cost cable package, Dill said.
But the larger source of competition is beaming in from major satellite services like Direct TV and Dish Network. Capitalizing on cable rate increases averaging 7 percent a year, they're targeting cable customers with plans starting at $20 a month plus discounts on equipment and installation. Intertech, in addition to providing cable, is a sales agent for satellite systems.
Both of the major satellite services are offering local stations in major television markets like New York and Los Angeles, representatives said. The additional channels typically cost subscribers less than $10 a month.
Buffalo isn't yet targeted for local stations, a service that's limited by satellite capacity. But representatives of Dish Network and Direct TV said both companies are contemplating offering local stations in the Buffalo market.
"Right now there are 30 cities under consideration . . . Buffalo is on that list," said Marc Lumpkin, spokesman for EchoStar Communications Corp., the owner of Dish Network.
In markets where Direct TV already offers local stations, the rate of calls and subscriptions has gone up, spokeswoman Gina Scalise said.
However, without a break on reception equipment, the up-front costs for satellite can be substantial. Receiver equipment costs $150 to $200.
Echostar recently launched a free installation deal on its 500-channel digital system, but the per-month cost is nearly $40 with a one-year contract.
For Adelphia, competition is nothing new, Haywood said.
"Satellite is competition for us as going to the movies is competition for us," he said. "We've just got to keep serving the customer better."
Cable's two-way communications capability, providing high-speed Internet and eventually telephone service, is an advantage that Adelphia is moving to exploit. Its Power Link fast Internet service costs $35 a month for cable subscribers. Satellite broadcasters are several years from making their systems viable for two-way communications.
However, competition on that front is heating up from another direction. Local phone companies including Bell Atlantic are beginning to roll out high-speed Internet services over existing copper wires. Using a technology called "Digital Subscriber Line" or DSL, low-tech phone wires can transmit high-speed Internet, on a residential budget. The service is already popular for businesses as an alternative to high-capacity connections such as T1 lines.
Bell Atlantic plans to offer its "InfoSpeed DSL" service, now being tested in the area, to consumers by April 1. The service, costing $50 a month, provides high-speed nternet access without tying up the phone for regular voice calls. Some other phone companies and Internet providers are already selling DSL in the area.
At least so far, Adelphia hasn't seen any impact on demand for its high-speed Internet service, Haywood said. Despite complaints from some existing customers about service outages, subscribers are signing up for Power Link faster than crews can install it.