Intel, which had been planning a service to provide TV over the internet, announced that it sold its TV division, Intel Media, to Verizon. The deal, and the fact that Intel couldn't get its Cloud TV off the ground, suggests that the future of internet TV may not be able to cut ties with companies already offering television services.

Intel announced its sale of Intel Media, which includes the 350 employees and intellectual property of the internet TV division. The so-called "over-the-top" television service, one of several that attempt to offer live and on-demand television delivered over internet connections, will rest firmly with Verizon FiOS -- the company's fiber-optic network that delivers both internet and digital "cable" TV -- if the deal is approved by regulatory commissions.

Intel announced it was working on an over-the-top TV service, which it eventually called OnCue Cloud TV, early in 2013. Plans included an intuitive user interface, a set-top box that enabled live and on-demand television programs, and a video camera and microphone with face-recognition, à la the Xbox One, to enable "social viewing," as well as user paranoia about being watched while they watch TV.

But late last year, Intel's new CEO, Brian Krzanich, gave up on OnCue Cloud TV, calling it a "distraction," after Intel Media failed to get the content side off the ground. Media companies that own and sell cable channels have been wary about over-the-top internet television, as it threatens to break up the bundles that cable companies force users to pay for in order to spread out content costs (you want ESPN? Here's fifty other channels you'll never watch).

And even though Intel Media explicitly said they were open to bundling, the company couldn't get the content it needed in order to really compete as a live and on demand television service. Said CEO Krzanich to Re/Code early this year: "When you go and play with the content guys, it's all about volume. And we come at it with no background, no experience, no volume." 

Verizon, which has a preexisting relationship with the "content guys," for its FiOS TV service, may be able to develop that all-important missing piece for over-the-top internet TV. Owning the OnCue platform will also benefit Verizon on a technical level.

Lowell McAdam, chairman and CEO of Verizon said of the deal, "Verizon already has extensive video content relationships, fixed and wireless delivery networks, and customer relationships in both the home and on mobile. This transaction provides us with the capabilities to build a powerful, capitally efficient engine for future growth and innovation. We will have the opportunity to enhance, expand, accelerate and integrate our delivery of video products and services to better serve audiences on a wide array of devices."

It will help differentiate FiOS from cable TV, but Verizon is still planning to "integrate" the service with their FiOS and wireless services, meaning the hope for a non-bundled, cable (or fiber)-carrier-independent source of streaming live television over the internet is stalled. At least for now.