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Sprint in Blockbuster of a deal

Sprint and Blockbuster Entertainment are expected to announce a deal to distribute free branded software at the video store chain's outlets nationwide.

Sprint (FON) and Blockbuster Entertainment are expected to announce a deal to distribute free branded software starting next month at the retail chain's outlets nationwide, allowing users to surf the Net, buy music, and perhaps even purchase videos online from Blockbuster, CNET learned today.

The Net access and e-commerce deal, expected to be announced within weeks, will be one of the largest of its kind because of the extensive customer bases of both companies. Sprint is the nation's number-three long distance carrier, and Blockbuster is the largest video rental chain, with more than 4,000 outlets and 300 music stores. Both companies declined comment.

Sprint, which introduced its Passport Net access product in August, currently uses the Netscape Communications' Navigator browser. But as reported by CNET, it is soon expected to strike a deal to use Microsoft's Internet Explorer.

The deal will help both companies. Competition in the ISP business is becoming cutthroat as phone companies enter the fray, and the deal will greatly expand the exposure of Sprint's product. For Blockbuster, the agreement will help the company generate more revenue from electronic commerce. It already sells music online and expects to add videos to the offering as well. Ironically, the growth of telecommunications and interactive video technologies are, at least in part, a threat to Blockbuster, with new online and video offerings coming on.

Word of the pending deal leaked the same day that Sprint and Viacom, Blockbuster's parent, announced a pact to develop branded Internet access products. They provided no specifics, except to say that it "lays the foundation" for Sprint to develop and distribute Internet access products with Viacom subsidiaries Blockbuster, Simon & Schuster, and Macmillian Publishing. The deal with Viacom's book publishing arm could lead to a online bookstore, sources said.

"Sprint has great expertise developing Internet applications for the commercial marketplace," said Bruce Horowitz, senior vice president of technology at Viacom.

Added Robba Benjamin, president of Sprint's Multimedia Group: "Our relationship with Viacom marks an approach to the consumer marketplace that no other Internet service provider has taken."