Microsoft co-founder and billionaire Paul Allen is piecing together a cable television empire with an L.A. nucleus and a sharp focus on the future of telecommunications.

With his recent deals to buy Marcus Cable Co. and Charter Communications Inc., Allen now owns the third-largest cable operator in Los Angeles County, behind Century Communications and MediaOne Group. But he may soon be No. 1 Allen has been in talks with both the local leaders regarding a possible acquisition.

“Los Angeles is a critical gateway into the cable industry, and either (Century or MediaOne) would guarantee Allen a prominent position in the cable market,” said David Goldsmith, an analyst for the Buckingham Research Group. “Also, he could finally consolidate the Los Angeles cable market and benefit from an economy of scale.”

But Allen isn’t simply interested in cable TV and its burgeoning array of food channels, sports channels and other special-interest programming. His goal is to create a wired world a broadband network capable of simultaneously carrying television, Internet and even telephone services into homes, technology analysts say.

“L.A. is traditionally an early adopter of technology, which makes it a strategic starting point for Paul Allen,” said Ben Bendre, managing director for TD Securities. “Allen gets a distribution system through the cable companies, and then will work to change what the system can bring into our homes. He’s going to be a driving force in bringing a plethora of entertainment and transaction services, and some services we can’t even imagine yet, over cable modems.”

Although Allen is based in Seattle and has indicated that he will headquarter his growing cable company in St. Louis, his largest concentration in cable subscribers is in Los Angeles.

He first got into the cable industry last April with the $2.78 billion purchase of Dallas-based Marcus Cable. Marcus has about 120,000 subscribers in L.A. County concentrated in the Glendale-Burbank area.

In late July, Allen announced that he would buy St. Louis-based Charter Communications, which has 1.1 million subscribers nationwide and about 230,000 in the San Gabriel Valley and Riverside areas.

Allen, who has been selling off some Microsoft stock in order to raise capital, will pay $2.5 billion in cash to acquire Charter. He also agreed to assume the company’s $1.9 billion debt, pushing the total price tag to $4.4 billion.

Allen now has his eye on New Canaan, Conn.-based Century Communications, whose septuagenarian Chief Executive Leonard Tow is expected to retire soon. Although talks have broken off more than once, Century is considered the jewel in the L.A. cable crown because it includes the affluent, tech-savvy Westside of Los Angeles making it a perfect beachhead for Allen’s broader ambitions.

As for MediaOne, which mostly serves the South Bay area, Allen already owns a 2.5 percent stake in the Englewood, Colo.-based company. The profits he would see from the sale of the company through his ownership stake would help finance his purchase.

MediaOne, which is the nation’s third-largest cable operator, has already begun upgrading to broadband, is valued at around $35 billion, compared to $4 billion for Century.

Cable television is not Allen’s first venture in L.A.

He recently increased his ownership stake in DreamWorks SKG to a reported 24 percent. He also owns stakes in Brentwood-based Internet consultant company U.S. Interactive Inc. (formerly Digital Evolution) and children’s entertainment development company Storyopolis in Los Angeles.

Those companies reflect Allen’s avid interest in content, in which he has heavily invested over the years. Through his Seattle-based venture capital group Vulcan Ventures Inc. he has invested in almost 50 companies that are involved in bringing creative content to the Internet.

Allen is now creating a network that can deliver the creative content he has helped nurture.

“He’s not building a classic vertically integrated company, but it is certainly a nice arrangement,” said Abhi Chaki, senior analyst for Jupiter Communications. “While the broadband technology is at least five years away from widespread usage, his investment is by no means a gamble. Allen is bringing his expertise and cash to his vision of convergence.”

According to Jupiter research, about 20 percent of U.S. households will use broadband services by 2002.

With Allen upping his profile in Los Angeles, he is likely to become at least a part-time Angeleno. Last year, Allen bought a 120-acre estate at the top of Benedict Canyon for $19.5 million. However, the long-time Seattle enthusiast and owner of the NFL’s Seattle Seahawks is unlikely to completely relocate from Washington.

Allen remains good friends with co-Seattle resident Bill Gates, living only minutes away from him. Allen also retains his seat on the Microsoft board and is the company’s second-largest stockholder.

Allen left the software giant in 1983 when diagnosed with Hodgkin’s disease. It later went into remission, but Allen has said his illness caused him to re-evaluate his life and strike out into new ventures beyond Microsoft.