
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, April 6, 1994                   TAG: 9404060117
SECTION: BUSINESS                    PAGE: B-7   EDITION: METRO 
SOURCE: Los Angeles Times
DATELINE:                                 LENGTH: Short

COX, SOUTHWESTERN BELL SCRAP CABLE PARTNERSHIP

Southwestern Bell Corp. and Cox Cable Communications on Tuesday scrapped an agreement to form a $4.9 billion partnership to exploit cable TV, telephone and interactive opportunities after failing to renegotiate the deal.

The two companies said the agreement collapsed after the Federal Communications Commission voted to cut cable rates 7 percent on top of a 10 percent rollback that went into effect last year. The decision, which will reduce cable company revenues, also threatens to unravel a flurry of other deals made between telephone companies and cable operators last year.

In February, cable TV giant Tele-Communications Inc. and Bell Atlantic Corp. scuttled a merger plan. A stock offering by Los Angeles-based Falcon Cable TV was suspended and an investment by Bell Canada in Jones Intercable is in renegotiation.

The new rate regulations also appear to have complicated other cable TV deals in the works, including the possible sale of Cablevision Systems Corp., which has been in conversations with Time Warner Inc., US West and GTE.

Analysts said the cancellation of the Southwestern Bell-Cox Cable deal is another blow to the vaunted information superhighway, which the companies touted as the reason for entering joint ventures at such a breakneck pace.

The joint ventures and mergers were designed to help facilitate the 500-channel future that would let TV viewers watch movies on demand, and shop and bank from home. Now it could be several years before those services are available.

by CNB