Bells may shutter Tele-TV
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December 6, 1996: 12:50 p.m. ET
Bell Atlantic, Nynex, PacTel may roll closing credits on interactive venture
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NEW YORK (CNNfn) - Bell Atlantic Corp., Nynex Corp. and Pacific Telesis Group are reportedly close to shuttering Tele-TV, an interactive-television venture in which the companies have invested about $500 million over the past two years.
The venture, envisioned as a developer of original interactive programming, is run by former CBS Inc. broadcasting chief Howard Stringer.
The Baby Bells had planned to offer Tele-TV content to their telephone customers, but technical problems, rising costs and changes in the market are forcing them to abandon the project, The Wall Street Journal said Friday.
Tele-TV also had a variety of other problems, the Journal said. First, the venture was hyped in great anticipation of the introduction of interactive television, but Internet wave began to crest, drawing attention away from the fledging technology. Then, Bell Atlantic and Nynex planned to merge and PacTel agreed to be acquired by SBC Communications. On top of that, Hollywood superagent Michael Ovitz, who advised the Baby Bells on the project and was slated to be Tele-TV's programming advisor, left to become president of The Walt Disney Co.
Tele-TV's demise could affect others in the industry, such as Thomson Consumer Electronics, which was contracted to supply the venture with set-top boxes, and CAI Wireless Systems, Inc., which was supposed to provide video programming.
The Baby Bells are now negotiating multimillion-dollar separation packages for top Tele-TV executives, including Stringer, the Journal said.
Bell Atlantic and Nynex are expected to shift their effort to direct broadcast satellite, a television service currently available through companies like DirecTV and Prime Star.
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