US West joins cable network

NEW YORK - The telephone and media businesses took another step towards each other yesterday, with a large American phone utility, US West, agreeing to invest dollars 2.5bn ( pounds 1.6bn) in a national cable communications system planned by Time Warner, writes Larry Black.

The two companies will jointly develop what they call 'full service networks' to customers in 25 urban areas across the United States over the next five years, offering telecommunications, entertainment programming, on-line information, home- shopping, electronic games and other interactive multimedia. The networks will be linked by an 'electronic super-highway', the companies said in New York yesterday.

The deal, the first of its kind, will combine Time Warner's experience as an entertainment programmer and cable TV operator with US West's expertise in network switching and computerised databases, which are needed to deliver, manage and store the vast amounts of information the full service networks will provide.

US West will take a 25 per cent stake in Time Warner Entertainment, the Time Warner subsidiary that owns its cable television company, the Warner Brothers studio in Hollywood and its TV production unit.