Nice story:
AtHome eyes broadband nation
CEO Jermoluk sees Road Runner as ally
By CBS MarketWatch
Last Update: 7:30 PM ET Apr 26, 1999
Video interview
NEW YORK (CBS.MW) -- AtHome (ATHM: news, msgs) has been
blazing a trail on Wall Street in the wake of the battle between Goliath's
AT&T (T: news, msgs) and Comcast (CMCSK: news, msgs) for
MediaOne (UMG: news, msgs). See related story.
Regardless of the fate of the battle, AtHome's business model of providing
broadband services through cable TV lines has gotten a big boost.
AtHome CEO Thomas A. Jermoluk chatted with
CBS.MarketWatch.com's Steve Gelsi about the future of the Redwood
City, Calif.-based service, which bought search portal Excite for $5.5
billion earlier this year.
There's been a big reaction on Wall
Street to AtHome's stock in the wake of this
deal between AT&T and MediaOne.
MediaOne owns part of (broadband service)
Road Runner, and AT&T is gonna own Road
Runner if it buys MediaOne. Meanwhile,
AT&T also owns a 40 percent stake, through
TCI, of AtHome. And at the same time, AT&T
rival Comcast (CMCSK: news, msgs) owns
part of AtHome. How does this all work?
Jermoluk: Well, the good news for us is, they're
both our partners (AT&T and Comcast).
Obviously this is a step toward us working with
Road Runner in some form. And that's a good thing
for us because cable does need to be united to
have the full power of this technology brought out.
Comcast started with a play for MediaOne; they
own 14 million shares of us. We thought that was
much better than one of the other potential partners
that were seeking them. Then AT&T comes in and
they own 40 million plus shares of us. It's an even bigger stake. We're not
here to take sides, but we're glad it's both our partners that are expressing
this interest. The fact that the valuation of these subscribers clearly reflects
the need for the new services to be brought out. It's obviously a good
thing for us.
That's what we've seen. AT&T's possible grab of
MediaOne is sort of a further validation of your business plan, that
this is the way services are going to be delivered, through cable
TV, through cable modems.
Jermoluk: That's right, through cable modems or their telephony
equivalent of cable modems. It's obvious that people don't pay $4,000 or
$5,000 per subscriber to just broadcast analog video. It makes it that
much more incumbent upon Comcast or AT&T to get out there, get the
homes upgraded, and get these new services delivered.
So would you see an AT&T/TCI customer having the
choice between Road Runner and AtHome at some point?
Jermoluk: No, those are two different systems. Road Runner is in the
Time Warner (TWX: news, msgs) system and MediaOne systems, and
we're in ours. So we don't actually compete that way. We used to
compete for signing up new affiliates. But now almost all the affiliates now
have signed up with one or the other service, so we really don't compete
there any more. So it gives us the opportunity to figure out what's the best
way for us to work together. There could be lots of ways to do that to
provide a better experience.
So there may be some common standards that you can
work on together?
Jermoluk: Exactly. The AtHome service and Road Runner, together by
advocating the same common standards -- whether it's a modem,
common set tops for the television environment, whether it's common
software standards for how you do telephony. Those are all good things
for the industry so we should cooperate on them.
What are the first things people do when they sign up for
AtHome broadband service (through their cable TV company)?
Jermoluk: They usually go to their favorite Web sites and it comes up so
much faster. That's the problem with the Web today, just the level of
technology that's out there. There isn't enough out there to keep up with
all this great content. Very quickly, they figure out that they can get a new
software application and download it off of the Web in ten seconds, or
maybe even a minute, but not two hour or five hours. When they look at a
news story, they can look at a video clip of it at the same time that they're
seeing text, or a sports highlight. Our usage has been going up and up on a
page per user per month in our own service, because people like the
broadband, the media-rich aspects of the service.
If current narrowband was a 1-inch water pipe, how wide
would a broadband pipe be?
Jermoluk: We're 100 to 300 times faster than your telephony
narrowband connection is today on a modem service. If you had water
flowing through something with a one inch diameter, then that says we'd
have about a 30-inch diameter equivalent flow. The nice thing about our
service is, we deliver that on one channel of a cable system. These new
systems have 150 channels. We've only cracked the tip of the iceberg
here. The new capabilities consumers are going to see in the home are
going to be unbelievable: the ability to have your telephony integrated in;
video on demand when you want to watch the videos, or time shift
programming, or integrate that with your advertising or shopping. It's all
going to seamlessly blend together. And you're going to do it in ways that
are different than today. It's not typing on a keyboard. You'll speak to it.
It'll speak back to you. |
