Verizon Buys Intel’s Cloud TV Business to Expand Online Video Services

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In an effort to strengthen its video delivery services, US telecom Verizon has purchased the assets of Intel’s little-known, 350-person Intel Media division which has been working on an internet TV service called OnCue.

Verizon has been offering fiber optic internet, TV, and VoIP services under its “FiOS” brand, hopes to expand the depth, breadth and scope of its video offerings with the addition of Intel Media. The company said this will also include mobile in the future.

In a joint press statement between Intel and Verizon, the companies say they hope to “accelerate the availability of next-generation video services, both integrated with Verizon FiOS fiber-optic networks and delivered ‘over the top’ to any device.” This would essentially circumvent traditional cable, which seems to be losing ground compared to “on-demand” alternatives and streaming video services.

While the issue of net neutrality in the US is still under legal and political discussion, a decision by the DC Circuit Court last week ruled that the FCC has no authority to enforce neutrality rules on service providers, who it said did not qualify as “common carriers”.

This could mean that network operators like Verizon will have the ability to prioritize traffic from their own cloud-based services. A lower priority could be assigned to competing TV services like Netflix, driving out competitors in an internet TV market that some say is about to heat up.

In 2012, Verizon had attempted to create a set-top-box for digital TV called “Nuon” in cooperation with cable company Comcast. The actual hardware was built by Chinese network and telecom hardware maker Huawei. This project was effectively killed in August 2013 when Verizon pulled out of the partnership.

Terms of the transaction were not disclosed, and the transaction is expected to close early in the first quarter of 2014.

About the Author

David Hamilton is a Toronto-based technology journalist who has written for the National Post and other news outlets. He has covered the hosting industry internationally for the Web Host Industry Review with particular attention to innovative hosting solutions and the issues facing the industry. David is a graduate of Queen’s University and the Humber College School of Media Studies.

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