Tele-TV, the video joint venture formed in 1995 by three regional phone companies, announced the resignation of Chairman Howard Stringer and the layoff of about half its remaining work force.
After the layoffs are completed next month, about 100 employees will remain at New York-based Tele-TV.
The partnership has never delivered on its promise of developing interactive television programming that would compete with cable.
Conflicting agendas of the partners and technical difficulties hampered the effort, with both Philadelphia-based Bell Atlantic and New York-based Nynex indefinitely postponing their roll-outs.
Susan Petoletti, a spokeswoman for San Francisco-based Pacific Telesis, said it will start its video service before June.
Sources say Stringer is in negotiations to take a top position with Sony.