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Intel Sale of OnCue IP Cable Service to Verizon Looking More Likely

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intel-oncueIntel’s aggressive moves over the last year to establish an internet-based cable system fizzled a short while ago, as the company was unable to resolve carriage terms with the networks. Many suitors have come knocking at the door wanting to buy OnCue, the IP cable service that Intel created but couldn’t bring to market, and as we reported back in October it looked like Verizon was the likeliest buyer.

Such a move is looking likelier than ever according to a new report at Bloomberg. The evidence? The fact that Intel has now set a price ($500 million), plus the fact that Verizon has reportedly opened discussions with broadcast and cable channel owners about terms for a streaming TV service that sounds an awful lot like Intel’s OnCue.

It’s a sale that would make sense for both companies. Verizon has stopped expanding its FiOS service, for the most part, concentrating most of its coverage in the Northeast. The expense of laying fiber across the flyover states, and the more intense competition, has kept the service contained. It’s likely that Intel’s OnCue technology is pretty sound, given the company’s other products, but its lack of inexperience in the cable industry, combined with the squeamishness of the networks to do anything to piss off the heavyweights like Comcast or Time Warner, has kept them from agreeing to any game-changing terms, especially when Nielsen couldn’t guarantee accurate tracking for ratings, the lifeblood of the cable industry.

If Verizon purchases OnCue, it’s quite possible that its own existing carriage agreements will apply, and very quickly Verizon will have access to hundred of millions of new potential customers without lifting a finger to physically expand. This new service would likely place Verizon into direct competition with DISH and DirecTV, but would also present a conundrum. Many people have these services specifically because the cable company is unwilling to string lines to them, so broadband is not a viable option for a great many. Verizon does have an ace up its sleeve, however. DISH and DirectTV have been setting up cell towers to provide 4G broadband, and if Verizon were to do the same with its own wireless coverage, offering wireless cable without the data cap may be just the ticket to change the game very quickly. We’ll see what happens, but Deadline expects the Intel to name its bride to be by year’s end, at which point things could change very quickly in terms of rollout to existing app-based platforms like iOS or Xbox.

Via: [Bloomberg]

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