VENTURE CAPITAL POST

American telecom company Verizon Communications Inc. is reportedly close to an agreement to purchase Intel Corp.'s Internet-based pay-TV startup. Sources told Bloomberg that the deal could be announced as soon as next week.

Chipmaker Intel Corp. developed the cloud-based pay-TV service called OnCue. It began looking for a buyer this year rather than invest in the programming and bring it to market on its own. 

The report said Verizon will use OnCue to extend its pay-TV offering beyond the geographic footprint of its FiOS fiber optic service. FiOS is Verizon's bundled Internet access, telephone and television service, according to its website. 

OnCue is designed to provide pay-TV programming over any high-speed Internet connection. This makes it a threat to cable-TV services that deliver shows over dedicated lines restricted by territory, Bloomberg said. 

Intel decided to divest the business after its new management opted to focus on selling chips for mobile devices. Earlier this year, the chipmaker delayed plans to begin offering the service to subscribers by the end of 2013, the report said.

Bloomberg, citing sources, said that Intel is seeking $500 million for OnCue.