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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: David E. Taylor who wrote (24186)	6/27/1999 4:04:00 PM
From: Glenn Petersen	Read Replies (1) \| Respond to of 41369

Serman's thought process is probably still evolving, as is mine. The economics do not appear to make sense unless the free access is bundled with other services. But let your mind wander. Even if T offered free dial-up access, they could still charge for premium broadband access. After all, they do control a good chunk of the pipe. Presumably, DSL providers and the other cable companies would also be happy to charge premium pricing. And we have all heard the rumors about AOL teaming up with T/ATHM to become their content provider in exchange for access to broadband. This makes a lot of sense from T's point of view as content is not one of their strong suits. What if T took it one step further and subsidized AOL's line charges? This is where the economics break down. Where's the benefit for T, other than control. The most logical thing would be for a combination of AOL and T and I don't know of if that could survive an anti-trust review. One thing we do know is that dial-up access is a commodity and the pricing structure is being degraded on a daily basis. Given the evolution of the past few years, it is not inconceivable for free dial-up to become the norm, or at least grab a significant chunk of the market. Did AOL ever think that a flat fee would become the norm? AOL was challenged on the flat fee issue, made the switch and rolled over everybody. My guess is that this time AOL will be more proactive. We may wake up some morning and hear about a AOL/? deal that will knock our socks off. Sorry for the ramble. I don't know how the pieces are going to be rearranged, but rearranged they will be.