Interactive television took a giant step toward the marketplace Oct. 13 when Bell Atlantic Corp., one of the regional Bell telephone companies, announced it would buy TCI, the nation's largest operator of cable systems.
The combined companies would have assets of $60 billion and would be able to provide telephone or cable service to 25 percent of American homes.
Industry analysts saw the merger as a significant indicator that the cable, telephone and broadcast industries are converging.
Among the services the joint Bell Atlantic/TCI company hopes to offer to consumers are news on demand, electronic banking, electronic shopping, and movies on demand as well as a host of other services.
Other companies are making similar moves. Time-Warner announced earlier in the year that it would build a state of the art cable system in the Orlando, Fla., area, offering interactive services and access to long distance telephone networks without going through the local telephone company.
Following the Bell Atlantic/TCI announcement, a number of telephone companies announced forays into cable and programming ventures. Among the largest was an agreement between Southwestern Bell and Cox Enterprises to merge Cox Cable into a new company to provide interactive services.
BellSouth Corp. announced a multi-billion dollar investment in the QVC shopping network. QVC said it would use the money in its attempt to buy Paramount Studios, a major programmer.
Late in the year, Vice President Al Gore, a strong advocate of the information superhighway, announced that the Clinton administration -- with appropriate safeguards -- would back legislation allowing all comers to provide communications services.
That would mean telephone companies would no longer be forbidden to go into the cable business in their home territories. Cable companies would also be allowed to provide local telephone service.
