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To: kendall harmon who wrote (13901)	8/9/1999 11:16:00 PM
From: ahhaha	Respond to of 29970

The author has made some slight mistakes: The question is whether AT&T' galloping new offense is designed largely as smart defense or as something much broader -- an attempt to create a rival to AOL. Att has no interest in doing this and it isn't in their interest to do so. Why alienate a potential future partner? What makes the latter strategy risky is that American Online has 17.6 million customers and thus dominates the customer base that most desires high-speed Internet access. AOL has repeatedly asserted that and acts as though it isn't interested in cable because there isn't sufficient market yet for it. They also have expressed that there may never be a meaningful market. That may be true simply because technologies are coming which will completely supersede all models currently existing and Att, AOL, and ATHM may find themselves outside looking in. Further, what AOL has is a small base of Internet accounts. That is of tangential interest to Att, but the big interest is in the 200 million accounts potentially in the cable telephony market. Att is the only biggie exploiting it. That's what happens when companies like the RBOCs try to protect their monopolies. They get left out. And the Bells have begun a more aggressive rollout of their own DSL high-speed service (I got mine last week!). If spurned by AT&T, America Online has the brand, the customer relationships, and the partnerships to make it extremely difficult for AT&T to make its cable assets pay off as planned. This is completely false. The tail doesn't wag the dog and DSL can't compete at all with cable in telephony. You must have ubiquity in the telephony market which isn't so critical in the Internet market. DSL coverage has inescapable and unpluggable holes in it which makes it inadequate as a strategy against cable telephony. Att was well aware of this before they bought a pile of junk called TCI. Indeed, rather than AT&T locking out the Bells from telephony by way of gaining broadband Internet customers who then become local and long-distance customers, AOL could help the Bells lock out AT&T by marketing DSL to those 17.6 million customers. In short, AT&T needs AOL, and Armstrong seems smart enough to realize that. Today's Times article laid out the same argument. Why should Armstrong believe what isn't true? It is a re-assertion that the tail wags the dog as what was done in the previous paragraph. If the RBOCs had any chance in hell to do what this author thinks is possible with DSL, don't you think they would have done it two years ago? Why is DSL offered at a significant premium to cable? The author needs to study this thread in order to make accurate comments. We have addressed all these issues endlessly. Thus, the article only rehashes what is known and what has been reported here.