AT&T Message Board - Msg: 9432213

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Technology Stocks : AT&T

T 24.72

+0.7%

Jan 5 3:59 PM EST

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To: jhg_in_kc who wrote (2420)	5/10/1999 6:35:00 AM
From: Robert Scott	of 4298

"Getting out of the ISP business for AOL would probably be a greater psychological shift than their transition from hourly metering to flat-rate billing but my guess is that is exactly what will happen." You are missing several key points. 1. AOL is not going to give up perhaps over 40% of its revenues (the ISP portion of the 83%). There is no reason to do this and the stock would get crushed. 2. Continuing to be an ISP ESPECIALLY in the broadband world is where they are headed. Why? because a. The telcos MUST sell access to AOL at the same price as they sell it to their own internet subs, and b. It is extremely profitable. Consider this = mark up what they negotiate from the bells to us. Further, segment the pricing so that we pay more for more bandwidth. Believe me, its coming and will be hugely profitable for AOL and the bells and others. I believe eventually AOL will get access through cable somehow. Current law doesn't call for it except through analogy. In the meantime, most of AOL users use the service for chat and email that doesn't require broadband. However, broadband services are beginning to be developed and AOL knows this and will be there.

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