IS THIS NEWS GOOD FOR CMTO???
AOL gets favorable open access ruling Excite@Home shares reel
By Bambi Francisco, CBS MarketWatch
Last Update: 4:38 PM ET Jun 4, 1999 Internet Daily
Net headlines
NEW YORK (CBS.MW) -- A federal judge Friday ruled in favor of opening up coveted high-speed cable networks for Internet service providers, sending shares of America Online surging and shares of ExciteAtHome reeling.
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Updated:
6/4/99 4:51:02 PM ET
Shares of ExciteAtHome (ATHM: news, msgs) dropped 11 1/4, or 11 percent, to 94 while AOL (AOL: news, msgs) jumped 10 7/8, or 10 percent, to 116 7/8.
U.S. District Court Judge Owen Panner in Portland, Ore. ruled in favor of state officials who want AT&T (T: news, msgs) to open up its cable lines to competing Internet access providers, such as America Online.
AT&T recently bought cable giant Tele-Communications Inc., giving it a controlling stake in Excite@Home.
"The damn is cracking (for AtHome)," said Anthony Stoss, an analyst with Southeast Research Partners, referring to the ruling which only applies to the Portland area. "The stage is set for other Internet service providers to lobby for open access as well."
AT&T had argued that opening up its cable network removed its incentive to invest in expensive upgrades. Analysts had hoped Ma Bell's initiatives to upgrade the cable plants would help accelerate Excite@Home's subscriber base.
But critics, such as America Online, have said AT&T could effectively hold a monopoly on broadband access with its proprietary cable modem service. The Federal ruling surprised some analysts who thought AOL would partner with cable operators.
"We thought AOL would eventually find its way into the cable territory by signing deals with the cable operators themselves," Stoss said.
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