Re: AOL and Satellite Wireless Last Mile Solution
"If I remember correctly, AOL struck a deal with Hughes a few weeks ago."
Bernard,
Finally AOL does the right thing!
Well today they did more to enhance their relationship with Hughes to the tune of $500 million. To me this is a sure sign that Steve Case clearly sees the writing on the wall. All his cry-baby tactics aren't going to work with the FCC.
The best part about is the statement, "It certainly makes it a race between satellites, phone wire and cable access.'' Exactly what Last Mile investors want to hear.
I applaud Steve Case in this move. Instead of stifling competition using government regulations, he is now promoting competition. I think he came up with a heck of a good idea that should now cause the ILECs to really get their DSL rollouts going.
Not only do the ILECs have AT&T to worry about, but Steve Case obviously thinks satellite broadband will give the twisted copper pair a run for it's money.
MikeM(From Florida)
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AOL Fills A Gap With Hughes Deal
NEW YORK - America Online Inc. Monday said it would make a $1.5 billion investment in DirecTV owner Hughes Electronics Corp., , giving AOL a means to offer high-speed Internet services via satellite as it battles for access to high-speed cable lines.
The deal with Hughes, which offers digital TV and Internet access, represents the largest cash investment ever made by AOL, the leading provider of online services, officials said.
AOL Chief Executive Steve Case said the new partnership would allow the company to offer high-speed Internet access to the one-third of U.S. households, mostly in rural areas, that will not be wired for high-speed cable or phone lines by the year 2003.
''What this alliance does is give us a national footprint for high-speed Internet access,'' Case said in a telephone interview. ''Even if we had deals with all of the cable providers and telephone companies -- and we don't -- we would not have this national reach,'' he said.
AOL and other Internet service providers have complained to regulators that cable companies are locking them out of the market for high-speed Internet access to cable TV customers by bundling online access and other services into a single price.
Many analysts forecast that most U.S. consumers will use cable television links to receive fast Internet connections, versus high-speed phone lines and to a lesser degree, satellites.
AT&T Corp., the emerging powerhouse of the U.S. cable industry, requires customers who want high-speed Internet access to purchase the services of AtHome Corp., a cable-owned provider controlled by AT&T, for a single price.
''It is clear that by going to satellites, AOL is trying to cover its distribution bases,'' said Gary Arlen, president of Arlen Communications. ''It certainly makes it a race between satellites, phone wire and cable access.''
Arlen estimated that some 2 million to 5 million AOL subscribers could be satellite customers by 2003. AOL counts 17 million subscribers to its flagship AOL service and another 2 million to CompuServe, and millions more to Web-based services.
Hughes Electronics Chief Executive Mike Smith said in a conference call with reporters that the so-called ''AOL-Plus'' high-speed service would be offered as part of Hughes' DirecPC service, which currently counts 100,000 customers.
''We have not promoted DirecPC due to financial constraints,'' said Smith, adding that the AOL brand name and investment will help immensely.
''This is a way for DirecTV to catch up with cable,'' said Armand Musey, a satellite communications analyst at Banc of America Securities in New York.
''It's a race for the middle ground, as satellite TV is trying to upgrade and cable trying to roll out as fast as possible,'' he said.
The AOL-Hughes alliance builds on an earlier deal, announced in May, under which the companies will develop a ''combination'' set-top receiver to make DirecTV/AOL TV available to consumers next year. |
