The retiering will result in telephony subscribers being given three cable channels "free" - Sky One, UK Gold and music station VH-1, the sister station to MTV. Thereafter, consumers will be able to choose from a range of cable TV packages. The offering is radically different from the usual large basic package that cable companies provide.
Channel One and Carlton Select are offered to all CableTel TV subscribers as part of its basic tier. But the radical retiering will mean many customers will be able to choose a far narrower range of channels, leading to fears that some broadcasters will find it difficult to build audiences.
CableTel is expected to argue that its "free" tier will be offered to those who elect to take telephony only, and that these customers are not, in fact, cable TV subscribers.
CableTel's retiering follows last week's announcement by Nynex CableComms that it would offer a range of telephone and cable TV packages as part of its own attempt to target its products more effectively.
The industry is in the midst of an inventory of its channels, in order to retier and to make way for new services. Many broadcasters are concerned that niche channels will suffer if too many cable operators move toward a la carte or so-called "small basic" packages.
Further rejigging of cable TV offerings is expected in the wake of the four-way merger last week of Nynex, Bell Cablemedia, Videotron and Mercury, creating the nation's largest cable company.