Southwestern Bell, the telephone utility based in Texas, was to have contributed dollars 1.6bn in cash to the joint venture with Cox, which controls 21 local cable franchises across the country.
But serious disagreements about the value of the Cox properties have emerged since February, when the US Federal Communications announced new controls on cabletelevision subscriber rates.
The two companies are already partners in Britain, and said they would continue to aggressively pursue their business here. The new partnership in the US was intended to offer similar joint cable and telephone services in the territories the two companies serve.
But Southwestern Bell said yesterday it was unlikely that the cable industry could generate the cash flow that had been expected.
The negotiations, announced in December, have been complicated by the high price Southwestern paid last autumn for two cable franchises from another operator, Hauser Communications, in Washington, DC.
The new regulatory environment in the US has been blamed for the collapse or renegotiation of several big telephone-cable deals, the most spectacular being the abandonment in February of the dollars 33bn merger of Bell Atlantic and Tele-Communications, the largest cable operator in the US. Only last week, Bell Canada Enterprises and Jones Inter-Cable put a new price on their joint venture arrangement.Reuse content