Cisco, US West's Cable Unit in Internet-Access Venture

From Bloomberg News

Cisco Systems Inc. said Tuesday that it has signed a contract with US West Inc.'s MediaOne cable TV unit to sell existing equipment and develop new gear to let consumers access the Internet using cable modems.

The companies did not disclose the value of the contract. MediaOne, one of the largest U.S. cable companies, will spend several million dollars for Cisco computer-networking equipment so it can expand the Internet-related services it offers subscribers. The two companies will also jointly develop technology to link non-computer appliances, such as TVs, into networks.

The agreement marks Cisco's entry into the cable-networking equipment market. Using such equipment, companies such as MediaOne, AtHome Corp. and Time Warner Inc.'s Road Runner unit offer customers high-speed Internet services including e-mail and voice and video file transfers using cable lines.

"Cisco is delivering equipment that these companies can use to sell multiple services over a single network," said Brendan Hannigan, an analyst at Forrester Research Inc.

A spokesman for San Jose-based Cisco said MediaOne eventually will use Cisco's equipment to provide voice traffic over its cable network.

Cisco shares fell 75 cents to close at $64.50 on Nasdaq.

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