PacTel Agrees to Join London Cable Venture

The parent of Pacific Bell announced Monday that it had agreed to be part of a joint venture to develop cable television and telephone service in London. Pacific Telesis Group said it is the first of the seven so-called Baby Bell companies to take such a step.

Phone companies are blocked from providing cable service in the United States. However, Pacific Telesis spokeswoman Susan Rosenberg said that the London experience could be a basis for U.S. cable operations if federal restrictions were lifted.

Jones Intercable of Englewood, Colo., a major international cable management firm, will join with San Francisco-based Pacific Telesis International as an equal partner in the venture. The deal is expected to be completed by year-end, Rosenberg said.

The two companies said they intend to acquire control of East London Telecommunications Ltd., which operates cable TV and phone service in an eastern section of London. The area includes the Docklands development zone, an 8-square-mile inner-city complex being developed with government help.

The parties declined to disclose financial terms of the deal, which is subject to United Kingdom regulatory approval.

Since the 1984 breakup of the American Telephone & Telegraph system, a federal judge in Washington has restricted activities of the regional phone companies.

Last September, he permitted the firms to provide hookups to companies that provide electronic information services but denied them the right to furnish the services themselves. Such services include cable television.

While saying that the London operation could help prepare the company for future U.S. cable operations, Rosenberg added that it is not possible to predict the future regulatory climate.

Under the agreement, both partners will jointly develop the London venture’s strategic direction and a Jones affiliate will provide management services.

Pacific Telesis said it believes that the London franchise area “offers excellent growth potential for both cable and telephone services.”

Separately, the company said stockholders of ABI American Businessphones Inc. of Irvine have approved a merger of ABI into a subsidiary of Pacific Telesis.