The City of Palo Alto Utilities (cpau) has agreed to allow WebTV Networks Inc. to use its fiber-optic backbone to interconnect five buildings in downtown Palo Alto, CA, and establish a direct fiber link to the Digital Equipment Corp.`s Palo Alto Internet Exchange. The agreement is expected to allow WebTV to cost-effectively establish high-speed connections between the computer networks in each of its five buildings and link the telephone systems within three of the buildings, according to cpau. WebTV is the first end-user to license fiber directly from cpau to provide for its own telecommunications needs.