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Technology Stocks : America On-Line (AOL)
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To: JayPC who wrote (14949)5/5/1999 3:07:00 PM
From: Lee Martin  Read Replies (2) of 41369
 
Jay,
You can already make long distance calls over the net for next to nothing. When AOL rolls out this service I'll give it a try. Isn't this why T is is trying to branch out from their core long distance business? In other words, since T knows long distance is a commodity with no pricing power, it needs to get into something that they can control ie: broadband.

All I'm saying is that if you lived next to me and pay more and more for the same lousy cable service that I have, and the cable co. called you up and said "we can now provide you with phone and internet service all for the low introductory price of $50 added to your current cable bill", you would have a really good laugh.
Heck, everybody is cancelling cable and going to satellite because they are fed up with cable. Silly me, I'm still sticking with cable because I want the local TV stations and am too lazy to put up an antenna!

In other words, what T is doing looks great on paper (let's buy all the cable co's and control broadband into the home) but to make their multibillion $ investment pay off they've got to sell it to the public, most of whom don't even know what broadband is and aren't about to pay a huge premium for it. What happens if broadband turns out to be like the latest high powered PC's; "real fast but what I've got works fine so I'm not going to pay for it. I'll wait until the price falls." How will T's investment look when 100M homes are passed with 2 way cable and 2% pay for broadband? I'm not saying this will happen I'm just asking a question. Only time will tell.
Regards, Lee
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