RCNC Plug:
May 6 (The Boston Globe/KRTBN)--It's been only 14 months since Robert
Morse signed up for high-speed Internet access from his cable company,
MediaOne. But in that time, his home computer has been transformed from
an occasional tool to "an indispensible appliance," Morse said.
Morse and his wife, Jane, now rely on the Internet for a host of daily
chores, from checking the weather to catching up on Red Sox scores,
buying Amtrak train tickets, doing their banking, catching up with
friends via e-mail, perusing rowing and sculling news, and purchasing
books.
"Before when I used a modem, everything was tediously slow," said
Morse, a Cambridge resident. "Now the Internet is always there at home.
Getting information is much quicker."
Customers like the Morses are what the frenzied bidding for MediaOne
Group by some of the country's biggest companies was all about. Since
Philadelphia-based Comcast Corp. launched the auction in March by
offering $53 billion for the nation's fourth-largest cable provider,
AT&T Corp., MCI WorldCom, America Online, and Microsoft Corp. all took
a hard look MediaOne.
AT&T came away with the prize yesterday when it formally announced
that it had linked with Comcast to pay $58 billion in cash and stock
for the Colorado-based company. For agreeing to end the bidding war,
Comcast walked away with 750,000 AT&T cable customers predominantly
along the East Coast, for $3.5 billion, with a three-year option to
acquire another 1.25 million AT&T customers for $5.7 billion. The
option is based on AT&T completing its acquisition of MediaOne.
Comcast, which becomes the nation's third-largest cable company, after
AT&T and Time Warner, has also agreed to market AT&T local, toll, and
long-distance services to all of its cable customers.
AT&T agreed to give Comcast its most favorable terms, akin to a
similar arrangement AT&T is completing with Time Warner cable.
Among cable companies, MediaOne is the furthest along in building the
advanced infrastructure necessary to carry voice, data, and video over
the same wire.
It's also in some of the country's most affluent markets, where highly
educated consumers are eager to sigcurity and additional television
channels -- all on a single bill.
Already, 60,000 MediaOne customers in Massachusetts and southern New
Hampshire are paying around $30 a month for cable services (but not
including premium channels like HBO) plus $40 more for unlimited
Internet access. And some of those suburban customers are spending from
about $27 to $30 for local phone services which include caller ID, call
waiting, and other services that Bell Atlantic charges extra. The trio
of services from a single supplier -- MediaOne -- could easily surpass
$100 per month. Massachusetts is MediaOne's largest market, with about
20 percent of the company's 5 million customers.
Yesterday, AT&T chairman C. Michael Armstrong predicted that after
completing its acquisition of MediaOne, it would take on regional
telephone companies and other rivals with sharply lower prices. He said
AT&T will offer flat rates for customers using multiple services, such
as local and long-distance, Internet access, and wireless telephone
services, priced as much as 25 percent below competing services sold
separately by competitors. After the merger, AT&T will have 15.7
million cable television customers, according to the Yankee Group, a
Boston market research and consulting firm.
Armstrong said AT&T might, for example, charge residential customers
of its local telephone service $6 per additional phone line instead of
the $12 national average.
"As we go forward we want to offer more services and package them as
bundles for consumers, on the simple market theory that the more you
buy from AT&T, the less it will cost you," Armstrong said.
But the regional Bell phone companies, fearful of losing customers,
are not sitting still. Just last month, Bell Atlantic said it will
offer similar high-speed Internet access over standard telephone wires
already in people's homes. Initially available in parts of Cambridge,
Bell Atlantic will offer its Infospeed service later this year in
Boston and some suburban communities.
A major advantage Bell Atlantic has is its ability to reach a much
broader audience, since telephone lines are everywhere, compared to
cable companies that have pockets or clusters of subscribers in
different parts of the state.
Boston, for example, is served by Cablevision, which has yet to offer
high-speed Internet services to residents. Some parts of the city can
choose service from RCN Corp., the Princeton, N.J., company that has
teamed with Boston Edison Co. to provide cable television, Internet,
and phone services.
Still, compared to other parts of the country, Greater Boston and
southern New Hampshire remain the leading markets for both high-speed
Internet access and local phone services. Some real estate agents say
residential customers will pick one community over the another
depending on breadth of telecommunications services.
"If I moved somewhere else, the town better have have high-speed
Internet access," said Morse of Cambridge. "I will not go back to a
dial-up modem."
By Ronald Rosenberg |
