US cable giant Tele-communications Inc is planning to start up a leasing company for itself and other cable companies to pay for the next generation of set-top boxes indirectly, rather than have to make the investment themselves. The rumored $1bn investment being made in it this week by Microsoft Corp (CI No 3,318), is apparently to be used as capital for the venture. What this will buy Microsoft for its dollars is unclear, as its relationship with Comcast Corp, which itself began with the injection of $1bn, has apparently gone sour over Comcast failing to toe the line in supporting Microsoft hardware and software (CI No 3,267). TCI chief executive John Malone, also chief of the cable industry standards body Cablelabs, has already told Microsoft and Intel Corp that they are not going to be allowed to dominate the next generation of cable equipment (CI No 3,312). Confusingly, Malone has also said that the cable industry was looking for outside investment in return for exclusive rights to certain services, at the Cable industry show in Anaheim in December. Debt-laden TCI has already taken the step of swapping cable customers in an effort to group subscribers together in higher density, and reduce its $14,200m in debt. It has done swaps with US West Group Inc’s MediaOne, Gannett Co Inc’s Multimedia Cablevision, and Century Communications Corp for around 4m of TCI’s 14m customers.
