The companies said Telocity offers technology that allows consumers to easily access the Internet through telephone lines without costly installations. Telocity said its technology in many cases does not require a technician to complete the installation. The company boasts that its high-speed national network of regional servers offers a higher quality of broadband service than traditional DSL or cable modem Internet connections offered through most local providers.
This deal marks the first time an Internet access service will be backed by the NBC brand, allowing it to compete in the rising broadband tide against competitors like AT&T, America Online and Time Warner's Road Runner.
The transaction also brings Telocity greater exposure, giving it a currency that comes at a great expense for other broadband service providers: advertising time. Under the terms of the deal, Telocity will receive $33 million in NBCi and NBC television and online promotion and another $37.5 million in cash, for a 19.5 percent stake.
Telocity also gains access to the expensive content generated by NBC and NBCi.
"We are thrilled about our new relationship with NBCi, in which we will be able to provide our Telocity customers with the latest, most content-rich connection to the Internet," Patti Hart, chief executive of Telocity, said in a statement.
Today's deal will also create a new service--an NBCi Snap-Telocity co-branded broadband service--which is set to launch nationally next year. The companies said the service will feature entertainment, shopping, games, communications applications, search and community services. The service will also include features specifically designed for broadband--video, audio and other media-rich content.
The Snap-Telocity service will be backed by a national advertising campaign on NBC television and will be promoted regionally on NBC-owned TV stations and in other media.
NBCi and Telocity will share subscription, sponsorship, advertising and e-commerce revenues generated by the new service.
Edmond Sanctis, NBCi's president, has joined Telocity's board of directors.
NBC, a subsidiary of GE, holds a 47 percent stake in separately traded NBCi. GE also holds a 40 percent stake in ValueVision, a home-shopping network.
NBC holds equity stakes in CNET, the publisher of News.com.