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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: Ron Dior who wrote (12943)	7/26/1999 12:01:00 AM
From: VICTORIA GATE, MD	Read Replies (1) \| Respond to of 29970

dailynews.yahoo.com As a result, the Forrester study predicts that over the next four years, AOL's market share will drop from 44 percent of U.S. Internet users to 36 percent as more customers move to broadband. ''The risk is pretty huge " Sunday July 25 7:53 PM ET Cable Access Battle Key to Net Biz By MICHAEL WARREN and MICHAEL WHITE Associated Press Writers In several years, AT&T intends to make high-speed Internet access so easy and affordable that millions of Americans will be able to enjoy dinner with relatives thousands of miles away, through live TV hookups between their homes. New technology that combines Internet, telephone and cable TV ''will provide a foundation for a whole new generation of communications, information and entertainment services,'' AT&T chairman C. Michael Armstrong promised a Senate committee earlier this month. With innovations such as these dazzling consumers, will they care if AT&T and a handful of other giant cable companies dominate the high-speed Internet business? AT&T, which is spending $100 billion this year to become the nation's biggest cable TV company, is betting that they won't - and federal antitrust watchdogs have so far kept hands off. But America Online and other Internet companies that now reach consumers through slow dial-up phone connections see danger in creating a new Ma Cable and her sisters. They want government regulators to force AT&T, Time Warner, and other companies to sell them access to cable customers at wholesale prices, so competition in the Internet business remains healthy. ''Right now, people like the Internet because it's full of choices. What AT&T is saying is, if you want a faster Internet, you lose all your choices. And I think people will care a lot about that,'' said Greg Simon, co-director of openNET, a lobbying group AOL formed with other Internet providers and regional phone companies. The contest between these two sides will help determine who profits the most from the billions of dollars in new subscriber fees, online commerce and advertising that will come with this next generation of Internet services. The fight is now being played out at the national and local levels - from Congress to municipal cable regulators. On Monday, San Francisco's city supervisors will take up the issue and Los Angeles is also considering it. Cable companies want to keep their wires to themselves, saying there will be a variety of alternative methods that rivals can use to deliver high-speed communications. The digital subscriber line, for instance, is a fledgling technology that works through ordinary copper telephone lines. In a few years, satellite TV services like DirecTV will offer Internet and phone hookups. Other wireless systems that beam signals between earthbound towers, dishes and cell phones are also in the offing. While none of these technologies is as fully developed as cable, AT&T argues that it is making major investments in upgrading cable systems and should be allowed to profit from this work without others horning in. ''What AOL is suggesting is that it can sit on the sidelines and let someone else spend hundreds of billions of dollars and then reap the gains with no investment cost,'' said AT&T general counsel Jim Cicconi. ''Our response is if AOL wants a cable network, it can go invest in one itself.'' Internet service providers (ISPs) that use dial-up modems stand to lose big money as computer users switch to high-speed systems, which the industry classifies under the umbrella term ''broadband.'' Some smaller providers fear the change could put them out of business. AOL and other ISPs like Prodigy and Mindspring also argue that if they are denied access to a broadband connection, it will cost their customers plenty. One scenario: AOL members who now pay roughly $20 a month will face an additional bill of $40 or $50 to AT&T. Currently AOL dominates the Internet access market with about 17 million subscribers. AT&T has so far attracted only about 1.5 million, according to a report by Forrester Research. But, AT&T's purchase of cable companies Tele-Communications Inc. (Nasdaq:TCOMP - news) and MediaOne Group, along with related deals, will allow it to offer bundles of Internet, phone and cable service to 25.5 million homes, about one-quarter of the nation. As a result, the Forrester study predicts that over the next four years, AOL's market share will drop from 44 percent of U.S. Internet users to 36 percent as more customers move to broadband. ''The risk is pretty huge. AOL and the other ISPs need a broadband play,'' said Sajai Krishnan, an analyst with Booz Allen and Hamilton in New York. As a fallback position, AOL has cut deals with other companies to offer high-speed service within two to three years, using digital subscriber lines and satellites. The Federal Communications Commission has so far declined to regulate Internet access. While Congressional committees are debating it, the fight for cable wires is being waged before local governments, which have leverage over cable franchise agreements. Already, Portland, Ore., and Broward County, Fla., have voted to force open AT&T's cable lines. The Portland ordinance was upheld by a federal judge and AT&T has appealed. This past week FCC chairman William Kennard announced it will file a legal brief supporting AT&T. OpenNET and AT&T have mounted intense lobbying campaigns, creating slick Web sites and buying full-age newspaper ads. In San Francisco, city Supervisor Tom Ammiano supports open access, but has been bombarded by people trying to change his view. ''I do get orchestrated e-mails from all over the country. They're very similar in verbiage telling me why AT&T is God's gift to the millennium,'' said Ammiano. Even if AOL fails to win access to cable systems, its existence won't be threatened. But its dominance of the industry may be, said Bruce Kasrel, an analyst with Forrester Research. ''It becomes a threat to their ability to drive the industry if they're not a cable broadband player and cable takes off,'' he said. ''Broadband is going to begin to really define the Internet experience over the next few years.'' -------------------------------------------------------------------------------- @HOME