AOL, Excite Expected to Debate 'Open Access' at N.Y.
Conference
Bloomberg News
August 13, 1999, 4:11 p.m. PT
AOL, Excite Expected to Debate 'Open Access' at N.Y. Conference
New York, Aug. 13 (Bloomberg) -- Rivals America Online Inc.
and Excite At Home Corp. each will take center stage at a
conference next week where they're expected to debate whether
''open access'' to high-speed cable-TV lines is a good idea.
Both companies will have a chance to make their case at Paul
Kagan Associates' Digital Household Summit in New York. Keynote
speeches will be given by AOL President Robert Pittman and Excite
At Home Chief Executive Thomas Jermoluk.
The conference's theme, ''How Media Will Change at the
Millennium,'' is largely dependent on the ultimate reaction of
the U.S. government and marketplace to the issue of open access.
One side, which includes AOL and some local communities, argues
that AT&T Corp. and other cable operators should be forced to
share their lines with Internet service providers such as AOL.
Others contend that companies should work out the access issue
among themselves.
''There's a lot of uncertainty on this,'' said Janco
Partners Inc. cable analyst Theodore Henderson, who's also
speaking at the conference. ''At the beginning of this year, we
downgraded the broadband cable operators in part because we
believed open access would be a regulatory cloud that would hang
over the group for the whole year.''
AOL, the No. 1 online service with more than 19 million
members, is fighting for room on the cable-TV systems of AT&T,
soon to be the biggest cable U.S. company. That poses a threat to
Excite At Home, which has an exclusive agreement to sell its
Internet service over AT&T's cable systems until 2002.
AT&T owns 26 percent of Excite At Home and has a 58 percent
voting stake in it.
Broadband Products
The Kagan conference, which runs from Tuesday to Thursday,
also will discuss the types of products and services that will be
available on broadband networks, such as interactive television,
telephone service, videos and music on demand, and electronic
commerce through the TV.
''The whole idea of the conference is to move beyond just
computer-based Internet access and ask, 'What's the next step?'''
said Douglas Shapiro, analyst at Deutsche Bank Alex. Brown.
The gathering also follows an important decision by the
Federal Communications Commission to allow a single company or
person to own two TV stations in large markets.
There will be discussions on how this new rule may affect TV
broadcasters' shift to digital TV from traditional analog
technology. Digital TV will provide a sharper, wider picture as
well as capacity for many more channels than currently available.
The conference will look at whether the FCC ruling will
''change broadcasters' digital strategies and what they end up
doing with the extra bandwidth,'' said Larry Gerbrandt, an
analyst at Kagan.
New Video Recorders
A third big issue will be the implications of so-called
personal video recorders, new machines from companies such as
TiVo Inc. and Replay Networks Inc. that allow users to store
programs and customize a lineup of their favorite shows. They
also let users replay or pause during live programs as well as
skip through commercials.
One panel, which will include executives from TiVo and
Replay, will discuss how big a threat these new devices are to
broadcast and cable networks. The presentation will come a week
after five of the world's largest media companies threatened to
sue TiVo and Replay unless they agree to obtain licenses to use
network programming.
''The copyright owners are rattling their sabers,'' said
Gerbrandt.
Kagan prides itself on relatively small conferences that
include heavyweights from companies and the investment community.
The ''Digital Household'' conference was co-founded by Gerbrandt
in 1997 to explore how digital technologies will transform
consumer products and everyday households.
''We've got a number of industries that are facing pressure
points, and we've got a ringside seat,'' Gerbrandt said.
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