The market is home BB Internet and what that supports. Don't get distracted by the business market. That's not what all this is about. Certainly in the future that will be significant, but what is learned about an extensive heavily loaded cable network serving the home market can then be applied to the business market.
AOL doesn't need cash. Their stock is terrific collateral. They've got a locked in, growing cash river. It's what banks drool over or they did when banks actually were in the loan business instead of in the financial business whatever that is (some Glass-Steagall violation).
When it comes to upgrading or building a cable network, it is only a matter of investment. If the wires were there, in six months there would be a cheap and easy way to roll your own. This is all being addressed now, but it can't go anywhere without the last mile infrastructure. That's why they have a thread by that name. It may be the most important factor in modern communications.
Maybe half the installations need an installer. So, you cut a deal with the US government to supply manpower via the military, the national guard. Those guys in general are plenty smart and don't need much training. You learn by doing anyway. Internet communications are a matter of national security so use of GI is justified.
As far as fine-tuning agreements I'm sure there are plenty of pencil pushers available to get that all straight. No places haven't been cabled because it was deemed that the return wasn't there. Armstrong paid a load for a dog which proves it's there just about anywhere. The RBOCs are in the same position AOL is. They must upgrade their MSO plants or eventually disappear like the dinosaur. They don't have MSO's? They better start getting them. I've been predicting for a year that they would. It is understandable that they have a lot of copper business to tend to, but they're running out of understanding time. Once the cable network was substantially built, it wouldn't matter who did what for free. Why doesn't MSFT have a problem about providing free IE? If AOL cuts an agreement to fund infrastructure, surely they should never need to pay more than for its maintenance. An agreement can take other forms too, including amortization clauses, extensions, alternative statuses; it is up to the negotiators. Right now no such are happening nor planned.
The extra charge plan would constrain or reduce AOL's existing or future market. You are asking them to tie one hand behind their backs for you when you should be willing to tie two of your fingers together for them. Instead, you offer them a way to expand their market faster than they would already and you ask them what more you could do to help them go forward. This doesn't compromise ATHM. At the very least it identifies where both have common interests. When the system is built, then they can try to outdo each other by giving us better and better stuff. I strongly believe it will end up like the tv broadcasters, the that arena needed the tv distribution system in place first to grow to its maturity.
I don't agree that AOL is invoking government for such a crass purpose. It's easy to appear to find the evil of others, but "honi soit qui mal y pense". What they are doing is trying to ensure that they won't be cut-off by exclusion from preferred access. It isn't necessary or wise to appeal to government. They need to go make a deal with T or with some RBOC who gets the lead out and buys some cable MSO.
There is also the possibility of stringing your own wire. This is the best course, but that strategy would take a motivated MSFT. MSOs would have to relinquish their ROWs to anyone seeking to original string. Riparian Rights, my boy, Riparian Rights. |
