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Technology Stocks : AT&T -- Ignore unavailable to you. Want to Upgrade?

To: Catcher who wrote (2406)	5/8/1999 10:14:00 AM
From: Robert Scott	Read Replies (1) \| Respond to of 4298

All T has to do is ensure that programming is fair - this is the main issue. May have to do something with Liberty Media. How can this otherwise be a problem? Cable already is a monopoly so combining legal monopolies is not a problem (30% rule is not a rule yet). There is no competition for residential phone service without T's cable investments and if FCC and Congress really want competition (which is a stated objective of the 1996 Act), this is by far the quickest path. Finally, if you read the comments and decision with the TCI merger you would know that an objection to this merger on the basis of broadband internet access concentration or open cable access won't fly because 1) open cable access is a separate issue (exists without this merger), and 2) there is nationwide competition with DSL. The FCC recently issued its 3 year report on broadband and they concluded that there was no need to do anything to spur deployment and that it was coming along on a reasonable basis. They know, however, that the RBOCs really do not want to deploy DSL because it depletes their highly profitable and grossly overpriced T1 service. The only way to get them moving is to permit cable to deploy without obstruction. These 2 reasons (get broadband out there and local phone competition) are the real reasons TCI was approved. I believe these reasons are as much in place now as they were a few months ago. Of course, the politians could get into the mix and claim to protect consumers from a "potential" problem but I'll bet the ones that do have their pockets lined with Bell dollars. You see what the Bells want is to get into long distance without giving up local monopoly which is contrary to 1996 law. T's moves bring them closer to long distance but they will fight it anyway. They know that if they can get into long distance before T has a fighting chance in local, they will win big. It is imperitive to remember that he who controls the local loop will get most of the long distance customers. We're probably not going to have more than 2 competitors in the residential local loop for some time - afterall there can only be 3 types = cable, wire, and wireless. It seems to me that even if we only have 2, it's certainly better than 1 and seeing as how the RBOCs will be able to offer local, long distance, wireless and broadband internet, the only meaningful competition may be T in any event and the only meaningful advantage they have is cable. Perhaps Armstrong is signaling with the sale of 2M cable customers to Comcast that cable services do not interest him that much.

To: Catcher who wrote (2406)	5/8/1999 11:24:00 AM
From: Frank A. Coluccio	Respond to of 4298

Interesting comments that got me to thinking what the psychographic profile of the AOL subscribership looks like in contrast to those who are jumping to cable. Chatters don't need MPEG2 downloading right now. They are intently involved in what they are doing for the moment. What percentage of AOL fits this mold? How much, in other words, would go for the additional 20 bucks per month for fast flash, when all they want to do is their legacy thing of typing fast, and reading messages in chat groups. This is what millions of teeny boppers are doing after school, after all. And downloading digital audio... and playing interactive games with one another... and sending each other sweet sixteen GIFs [and other 8 x 12 glossies as in Guthrie's Alice's Restaurant, we wont even mention here]. Come to think of it, they could use fatter pipes, too. smiles

To: Catcher who wrote (2406)	5/9/1999 5:32:00 PM
From: jhg_in_kc	Read Replies (2) \| Respond to of 4298

I received this excellent post about AOL and T. Any thoughts anyone? To: jhg_in_kc (22337 ) From: Bill Fischofer Sunday, May 9 1999 10:29AM ET Reply # of 22399 Re: Utilities and ISPs This is a somewhat belated response but is topical given the recent T/UMG deal. Read AOL's recent 10-K (available at aol.com on the AOL webite) and it shows the following: America Online, Inc., including its subsidiaries ("America Online" or the "Company"), is the global leader in the interactive communications and services medium, with approximately $2.6 billion in revenue during fiscal 1998, including $2,161 million of online service revenues and $439 million of advertising, commerce and other revenues. In other words, over 83% of AOL's revenue last year came from its ISP business, and less than 17% was from advertising and related "placement" fees. As a result, their fundamental problem is clear: Over 80% of AOL's revenue is generated by a wire over which it has no control. As long as data traffic represented a small portion of overall telephone usage, the telcos were prone to ignore it. But as residential data usage grows and eventually overtakes voice traffic, it stands to reason that the companies that actually own those wires and are responsible for their maintenance are going to want an increasing share of that business. Thus to survive in the ISP business over the long haul involves owning and maintaining the physical wiring that reaches each home. The only entities positioned to do that are the phone companies, cable companies, and (possibly) electric utilities. It is irrational to assume that these utilities will allow another entity to indefinitely profit from their infrastructure without being able to participate in this revenue stream. Thus over the long haul the ISP business is just another utility with all the characteristics of a utility. In fact, it represents a fabulous growth opportunity for existing telco and cable utilities, which is why they are now moving with increasing determination in this direction. But as I stated earlier, the ISPs are just providing the access ramps. The real value is where you go and what you do once you're on the net. The real difference between AOL and MSN is that even though both today are trying to be ISPs, AOL is also a destination. AOL allows me to access it via the net (even though it would prefer that I access the net via AOL) whereas MSN does not. Therefore unlike the MSN model, which is fatally flawed, AOL is technically able to deal with the emerging reality even if the adjustment will involve some wrenching transitions. Getting out of the ISP business for AOL would probably be a greater psychological shift than their transition from hourly metering to flat-rate billing but my guess is that is exactly what will happen. I'm not aware of any data which would indicate what percentage of AOL's subscriber base is using their "bring your own access" plan, but this is the key number to watch going forward. If AOL is adjusting to the new realities that number should grow over time.