c.2013 New York Times News Service

c.2013 New York Times News Service

Intel may bow out of its ambitious cable-television-via-the-Internet venture, known as OnCue, by selling it to Verizon, according to people with direct knowledge of the talks between the two companies.

It is possible that Intel will forge ahead with OnCue through a partnership with Verizon, but a purchase by Verizon appears more likely, according to the people, who insisted on anonymity because the talks were supposed to be private. A deal will most likely be struck by the end of the year.

For the team of roughly 350 people that invented OnCue, a deal with Verizon would be a disappointing end to an exciting but ultimately frustrating project. OnCue, as envisioned by Intel, would take the traditional cable television bundle and make it more consumer-friendly by transmitting it via the Internet. The company’s technology has impressed many who have seen it, but channel owners have been reluctant to make the necessary licensing deals, stirring speculation that Intel might not move forward with it.

Earlier this fall, after Brian M. Krzanich, Intel’s chief executive, directed the OnCue staff to find partners that could help ensure its success, people at the company privately acknowledged that they would fall short of their widely publicized goal of introducing OnCue to the public in time for the holiday season.

A takeover of OnCue could position Verizon to sell a cablelike television service across the United States through existing broadband pipes or through its Verizon Wireless business. Its current 8-year-old television subscription service, FiOS, has 5 million subscribers and is growing steadily, but it is available in only about 15 percent of U.S. homes because it is delivered over a proprietary fiber-optic network. Verizon said last year that it did not plan to expand that fiber-optic network much more.

But a Verizon television service could potentially reach many more people if it were not linked to the fiber-optic network and were made available through any broadband connection. Alternatively, it could be sold as an optional mobile TV upgrade for the Verizon Wireless unit’s roughly 100 million monthly subscribers.

Verizon is in the process of gaining full ownership of the wireless unit, having announced last month a $130 billion acquisition of Vodafone’s 45 percent stake. The companies expect the acquisition to close early next year.

“We don’t comment on speculation,” a Verizon spokeswoman said Wednesday after the online technology site AllThingsD published an article on the talks with Intel. An Intel spokesman declined to comment.