SBC Communications, as part of its effort to compete head-on with the cable industry for television subscribers, plans to announce today that it will pay $400 million to Microsoft for software used to deliver TV programming over high-speed data lines.

It would be a crucial move into unproven territory for SBC, which like the other regional telephone giants wants to grow by expanding beyond phone and Internet services and into entertainment. To do that, SBC expects to spend more than $4 billion over the next three years on its fiber optic network to offer faster Internet connections able to carry digital video programming.

Microsoft’s Canadian and Indian TV-over-IP tests must have gone pretty well! Not only have they revived the nearly extinct WebTV service, but now comes this deal with SBC.