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Technology Stocks : AT&T
T 25.64-0.4%2:42 PM EST
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To: American Spirit who wrote (2659)7/17/1999 6:21:00 PM
From: FR1  Read Replies (2) of 4298
 
Personally I am long on T but we have to be realistic about the threats.

1) In order for T to succeed in its plan of delivering broadband media (internet and phone) to the American home, T has to control the delivery vehicle used to do this. That vehicle is ATHM.

2) Suppose AOL manages to get congress to force T to allow multiple ISPs on the cable. AOL with 16 million subscribers, deep pockets, and years worth of experience at developing user friendly interface, will quickly beat out T in the arena of delivering media over the cable lines. T will be reduced to being a tollbooth on the highway - not a content provider. Furthermore, with massive volume, AOL will quickly become the tail that wags the dog.

Basically, AOL is trying to hi-jack the cable by having congress both demand multiple ISPs and set the cable rates.

It's anybody's guess which way this will go but multiple ISPs = disaster for T. T needs to have a monopoly for at least a few years. That's why Armstrong stood up and told the FCC that T would not take over TCI and deploy cable if multiple ISP were to be allowed. The FCC agreed but the laws are fuzzy enough that you can read them either way (only a court can clarify them). AOL knows this and is spending a enormous amount of money to try and force multiple ISPs on T. If they succeed, you can bet that AOL will win the contest of broadband media provider (which is where all the money is). T will be relegated to being a utility whose every dollar has to be approved by congress.
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