How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 511.36

+0.5%

Nov 12 3:59 PM EST

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To: t2 who wrote (25778)	7/9/1999 5:54:00 PM
From: RTev	Read Replies (2) of 74651

Can anyone have ideas on whether MSFT would gain by the cable operators being forced to open up the cable internet service? Microsoft has been quiet on the issue, but I suspect they'd side with the cable operators in which they've invested so heavily. After all, Microsoft is one of the major partners in RoadRunner, one of the cable-ISP services that would be forced to open their lines to others. Nearly everyone who looks at it seems to agree that cable open access will eventually be mandated in the US (as it was this week in Canada), but the big problem is timing. If it's mandated now, then the rollout of cable broadband will slow down significantly as MSOs rework their systems to handle the new requirements. It would probably slow down not only introduction of cable modems, but of other parts of the upgraded systems as well. Although the open-access proponents currently focus on cable modem services, the same debate is likely to crop up when the MSOs introduce more sophisticated set-top box interactive TV features. Microsoft's deals on that front might become far less valuable if the new rules forbid preferred providers. Microsoft also benefits from any system that's open as a true ISP since its web properties are available on any such system and benefit from the "e" on IE which takes users to MSN.com no matter what setting they've chosen as their home page. Other programs like Outlook and even the Office suite work best on an open internet connection. If a semi-closed gatekeeper system like AOL gains dominance on cable, then those advantages for Microsoft disappear since the gatekeeper controls the software needed to access the net. On the other hand (and there seem to be several hands given Microsoft's array of investments), Microsoft has also invested in DSL providers (Covad, for example) and in systems to provide DSL service as an ISP. DSL will benefit from the slower adoption of cable (which is one reason that DSL providers like US West and GTE have joined AOL in paying for the open access lobbying).

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