Again, we are in agreement, but the devil is in the details. By the time the cable industry has laid enough fiber, servers, routers, etc, to support 17M subs, 1M simultaneous (AOL's current capacity), at 3mbs, AOL and other ISPs might have some fairly rich content with DSL, though nothing comparable to what can be done at that speed. When will cable have that capacity? 2005? 2006? Let's be conservative and say 2003. That gives AOL three years, and by then they might have 50M subs and be taking in $4-$5B per quarter, again conservatively.
With AOL's management being loaded up with TV guys, and with their digging dirt on their new AOL-TV facility, I suspect they are not stupid enough to think they can compete in that market with DSL in the long term. And with the costs of laying infrastructure and providing content, I don't think the cable industry is stupid enough to think they can successfully pull off the entire TV/data convergence thing, even aside from the question of government regulation.
I also am not convinced that the future will totally belong to whoever can provide 3mbs feeds. Portable devices might play an increasing role, as indicated by their success in other countries. This summer's rollout of web-capable cellular phones will be interesting.
I think what we are seeing is a poker game right now, not necessarily being played very well, because the cards are semi-transparent.
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