Gatekeepers of Cable TV Try to Stop Intel

As Intel tries something audacious — the creation of a virtual cable service that would sell a bundle of television channels to subscribers over the Internet — it is running up against a multibillion-dollar barricade. That barricade is guarded by Time Warner Cable and other cable and satellite distributors, which are trying to make it difficult — if not impossible — for Intel to go through with its plan.

The distributors are using a variety of methods to pressure the owners of cable channels, with whom they have lucrative long-term contracts, not to sign contracts with upstarts like Intel, that way preserving the status quo. Intel, however, is undeterred, and its executives intend to begin its TV service by the end of the year. They are ready and willing to pay more than existing distributors do for channels. But to date the company has not announced any deals with channel owners. To Intel, and to some analysts, the behavior by the existing distributors — in some cases giving financial incentives to friendly channel owners, in other cases including punitive measures in contracts — has an anticompetitive whiff. The antitrust division of the Justice Department is looking into the issue as part of a broad investigation into cable and satellite company practices, according to people contacted by the department, who spoke on condition of anonymity because they were not authorized to speak publicly.