In a sign of the continuing consolidation of the cable industry, Comcast Corp. struck a complicated, multi-layered deal Sunday that by 2001 will give it control of a smaller rival, Jones Intercable Inc.

The transaction, the first part of which is valued at more than $500 million, will give Philadelphia-based Comcast, the nation's fourth largest cable concern, 1 million more subscribers at a time when operators are racing to expand and provide new services, such as high-speed connections to the Internet, digital television, and telephone.

In the transaction, Comcast will purchase both common stock and options to buy controlling shares in Denver-based Jones that are currently held by BCI Telecom Holding, the Canadian Bell operating company, over the next 3 1/2 years.

Comcast will pay $400 million for most of BCI's interests in Jones and later $100 million for the rest, assuming BCI exercises an option to buy a block of control shares from Jones founder Glen Jones. The Canadian company will exercise its control option in 2001 and sell it to Comcast at a cost based on the stock price at that time.

Combining operations of Comcast and Jones will ultimately result in the largest cable "cluster" in the Baltimore-Washington area, with nearly 900 million subscribers.

Pub Date: 5/26/98