To: Frank A. Coluccio who wrote (465 ) 7/20/2000 5:17:23 PM From: Stephen L Respond to of 46821 Kewl Videos. Bricks, clicks and flicks Blockbuster deal sends video over Enron backbone BRIAN QUINTON Video retailer Blockbuster has signed a 20-year exclusive deal with Enron Broadband Services to deliver an online, on-demand entertainment service to the TV screens of consumers’ DSL-equipped homes. The content--initially movies, although games and other software eventually will be added--will be transported over the Enron Intelligent Network and travel the last mile over the DSL networks of local carrier partners. SBC Communications, Verizon, Qwest Communications, Covad Communications, Telus and ReFlex are the first high-speed distribution partners to take part in the service. Enron and Blockbuster plan to launch the service in multiple U.S. cities by the end of the year and to extend it to other domestic and international metro areas in 2001. The new broadband service will be directed by a new division of Blockbuster, Blockbuster Digital networks. It will be marketed through the U.S. portion of the company’s 7200-store chain, which also will sell DSL service from its partners. The company has a customer base of 65 million households worldwide. “Broadband availability is exploding and will continue to explode for quite some time,” said Kenneth Lay, chairman and CEO of Enron. “With that availability, customers now have the capability to get different types of entertainment services, customized to their own wishes and needs. What we’re announcing today is one of those ultimate services customers will want--being able to watch full-length, high-quality video movies any time they want in their homes, starting and stopping them just as though they’re watching them on a VCR.” The local carriers involved expressed hope that the service will increase the market demand for broadband connections in their territories and provide the kind of value-added differentiation that will help them fend off high-speed competitors of all kinds--cable, satellite and other DSL providers. “This announcement is good for DSL,” said James Gallemore, executive vice president of marketing for SBC. “This announcement also leverages SBC’s industry-leading investment in Project Pronto, an investment in fiber optic networking that will extend the capabilities of DSL to more than 80% of our customers.” Project Pronto is SBC’s $6 billion initiative to spread DSL service by moving DSL access multiplexers into 20,000 remote terminals in its territory. The strategy currently is under review by the FCC for its compliance with the conditions imposed on SBC in the Ameritech merger. “DSL is a superior technology for delivering movies to consumers’ homes,” said Fred D’Alessio, Verizon’s president of advanced services. “This new service will enhance the value of Verizon DSL. This is the next wave in the DSL marketplace: the delivery of value-added services, made possible through the broadband pipe to the tens of millions of homes served by Verizon.” Blockbuster has flirted with broadband services before. In January, the company signed a deal to download its top 10 titles directly into TiVo personal video recorder units. In May, the video chain agreed to offer pay-per-view movies to subscribers of the DirecTV broadcast satellite service. Blockbuster also investigated the feasibility of permitting online reservation of movie titles; customers could reserve a movie over the Internet, then go into their local store and pick it up that night. However, that scheme appears to be on hold.