CBS Inc. and the American Telephone & Telegraph Co. are close to agreement on a joint venture that would bring the two communications industry giants together for the first time in a major test of home computer information technology, sources said yesterday.
The venture, which could be announced within the next few weeks, would be the most recent and perhaps the most significant in a series of tests of two-way home and business information systems.
The venture also could represent a major turning point in AT&T's efforts to conduct a test of home information retrieval systems, a program that could ultimately include types of advertising and shopping programs brought into the home by the Bell System.
Sources said the two companies are likely to test their joint program in New Jersey. Other sites being considered include jurisdictions served by AT&T in California and New York.
The proposed system would bring CBS' news and publishing resources into the home via AT&T's telephone network. AT&T is considered the world's largest company with assets of $125 billion. CBS, with assets of $2 billion, is the nation's 94th largest industrial corporation and one of the nation's biggest communications concerns.
AT&T would bring to the venture the capacity to bring information, through an existing network, to video screens in more than 80 percent of the nation's homes.
CBS, in addition to controlling a vast worldwide news gathering network through its broadcast holdings, owns a variety of "consumer" magazines, such as Woman's Day and Mechanix Illustrated, part of a corporate unit consisting of 60 newsstand magazines and six book lines. In addition, the company publishes a variety of textbooks. All of this information could be part of the two firms' system.
In addition, CBS has considerable experience in bringing the printed word into the home on screens, operating teletext experiments over CBS-owned television stations in St. Louis and Los Angeles.
Spokesmen for both companies admit talks are going on. "No agreements have been signed," said AT&T Washington spokesman Pickard Wagner. The AT&T official refused to specify where the data experiments might take place. "A lot of things can happen in the final decision stages," he said. Other sources said the partnership was "inevitable."
AT&T has been negotiating with a number of communications companies in an effort to develop similar partnerships. The company made a major effort to begin another test in Austin, Tex., of an electronic data delivery system, but a legal challenge to the plan, spearheaded by the Texas Daily Newspaper and American Newspaper Publishers associations, forced the telephone company to drop the plan in July, citing "protracted regulatory and legal proceedings."
In Coral Gables, Fla., AT&T began a program with Knight-Ridder Newspapers Inc. to supply just 160 homes with a variety of data, such as shopping guides and educational material assembled by the newspaper chain. That experiment, however, is on a far smaller scale than those being studied by AT&T and CBS.
A senior CBS official stressed that the company is interested in such a joint venture only if CBS has "complete" control over the data bases AT&T would transmit.
In these and other experiments designed to assess the market for the so-called home information revolution, AT&T's role has become the subject of intense debate, particularly on Capitol Hill where Congress is attempting to rewrite the nation's communications laws redefining the role of AT&T in the communications business.
The leadership of the Senate Commerce Committee and the American Newspaper Publishers Association worked out a compromise agreement in a bill approved by the panel on July 16 that limited AT&T's home information role to bringing a limited version of the Yellow Pages electronically into the home and to simply transmitting data assembled by other concerns into the home.
The newspaper industry's earlier opposition to the legislation was based on the premise that a company with the vast resources and control over the local and long distance telephone network of most of the country should be barred from also controlling the content of the information flowing into the home via new technology.
But AT&T officials have repeatedly charged that the ANPA's primary concern was with possible losses of vital advertising revenues to AT&T, which has proposed programs, such as the Austin effort, that would permit the phone company to electronically and regularly update the Yellow Pages, putting AT&T into direct competition for the advertiser's dollar.