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

To: Annette who wrote (29040)	8/10/1999 12:25:00 AM
From: puborectalis	Read Replies (1) \| Respond to of 41369

AT&T Acknowledges Past AOL Talks, Denies Internet Deal on Table August 9, 1999 NEW YORK -(Dow Jones)- AT&T Corp., responding to reports Monday that it is in talks to open its vaunted high-speed cable systems to America Online Inc., said it has met with the leading Internet-service provider in the past but there is no specific proposal under discussion. The telephone and cable giant (T) said it will honor its contract with its current Internet-service provider, Excite At Home Corp. (ATHM), which exclusively provides Internet access over AT&T's high-speed, or "broadband," cable networks through the year 2002. The New York Times reported earlier that executives close to AT&T and AOL (AOL) said the two companies are considering an arrangement that would give AOL - and perhaps other Internet providers - access to AT&T's cable systems, a move that could allow AT&T to avoid brewing legal battles over access to its vast, high-speed network. Such an arrangement could undermine Excite At Home because it would allow Internet users to bypass communication systems and Web services developed by the Redwood City, Calif.-based company, which provides high-speed Internet access over cable lines and is backed by many cable players, notably majority stakeholder AT&T. Such a deal would also let New York-based AT&T and Dulles, Va.-based AOL each tap the technical and marketing strengths of the other, the Times reported. Although AT&T said Monday afternoon it would honor its current contract with Excite At Home, including exclusivity provisions, the telecommunications giant said it remains open to discussions with other Internet service providers about possible commercial relationships upon the expiration of the long-term contract with Excite At Home. AT&T also said it expects to have a long-term relationship with Excite at Home. Cable systems lie at the heart of the Internet debate, since they are widely believed to hold the future of high speed, broadband Internet access and potentially could deliver reams of data, and video and audio communications much more quickly than conventional telephone lines. The lack of a broadband strategy has dogged AOL, which has concentrated on developing a different type of high-speed connection - asymmetric digital-subscriber-line, or ADSL, technology - while simultaneously lobbying for "open" access to cable systems. ADSL is designed to enable high-speed Internet service over existing copper telephone wires. Right now, the most successful broadband providers are companies like Excite At Home. Because cable-modem services are typically partnered with or controlled by cable-television companies, AOL's supporters have feared that it would be shut out of broadband unless it could cut deals with AT&T, Time Warner Inc. and others to use their cable lines. AOL wants cable companies to sell the high-speed connections to AOL, which would then resell both the connection and membership in AOL's service in one package. The cable companies say customers of the cable-modem services are free to link to AOL - if, that is, they want to pay for an AOL membership on top of the monthly fee from a service like Excite At Home. Last month, San Francisco's Board of Supervisors approved the transfer of the local cable system to AT&T and passed a resolution that supports the principle of opening access to cable-modem lines. However, it stopped short of forcing the huge telecommunications concern immediately to unlock its high-speed system to rival Internet-service providers. The board also passed an amendment to the city's franchise agreement that could make the city's regulations conform to those of Portland, Ore., which called for AT&T to open its network to competitors such as AOL. That ordinance is being challenged in a federal court by AT&T. San Francisco's supervisors voted to follow the court's ruling. The steps taken in San Francisco are weaker than the open-access reqirements passed by Portland and other communities, such as Broward County, Fla. While the fate of those regulations is being decided by the courts, AT&T is under no obligation to open its network in San Francisco. The San Francisco resolution calls for the board to revisit the issue of open access in December, leading some observers to predict months of additional lobbying by AT&T, AOL and others. Both sides so far have undertaken well-financed lobbying campaigns. While AOL and its supporters call the issue open access, the AT&T side uses the phrase "forced access." For AT&T, the San Francisco ruling seemed to halt a local movement toward open access that had been gaining steam. AT&T has said that it would be impossible to recoup its investment in upgrading cable lines to accommodate broadband communications if it were forced to grant access to those lines to other Internet-service providers. AOL, meanwhile, has spearheaded the OpenNet coalition, which was launched earlier this year. Though the coalition's operations are tiny relative to the huge government-relations teams at the cable companies, AOL has brought in some experienced political operatives and recruited telephone giants GTE Corp. (GTE), MCI WorldCom Inc. (WCOM) and U S West Inc. (USW) to join the battle.