Copyright 2002 Globe Newspaper Company The Boston
Globe
March 13, 2002, Wednesday ,THIRD EDITION
SECTION: BUSINESS; Pg. D5
LENGTH: 781 words
HEADLINE:
EARTHLINK, AT&T AGREE TO ACCESS DEAL ATLANTA ISP TO OFFER BROADBAND SERVICE
ON GIANT'S NETWORK
BYLINE: By Peter J. Howe,
Globe Staff
BODY: After three years
of talking about offering its cable modem subscribers "open
access" to other Internet service providers, AT&T Broadband
yesterday announced a deal to let Atlanta-based ISP EarthLink offer services in
Greater Boston over AT&T's high-speed network this year.
Wall Street hailed the deal, sending EarthLink's shares up 89 cents to
$10.58. EarthLink has about 4.7 million subscribers, close to 90 percent of whom
use dial-up connections instead of faster cable modems or telephone digital
subscriber lines.
With a deal already
in hand to offer services over AOL Time Warner cable modem systems in 24 US
cities, with 15 more to be added this year, EarthLink is seen by analysts as
poised to boost its subscriber base and move thousands of customers up to
higher-priced broadband connections.
Seattle will be
the first AT&T Broadband market where EarthLink will be able to sell its
services over AT&T Broadband wires, probably this summer, followed by Boston
sometime before the end of the year, executives said. EarthLink would move into
other AT&T Broadband markets in 2003.
As of last
evening, EarthLink had no details on what it will charge for cable modem service
or whether it plans to offer a discount from AT&T's $47-a-month standard
residential package.
AT&T Broadband cable modem
service offers an "always-on" Internet connection that AT&T claims can reach
download speeds of up to 1.5 megabits per second, or 30 to 50 times as fast as a
dial-up connection.
Under terms of the deal, EarthLink
would market broadband access under its own brand, with AT&T providing the
actual service and billing for it.
EarthLink spokesman
Kurt Rahn said the company will focus more on getting its existing dial-up
customers to migrate to broadband connections than taking business from
AT&T. It also sees a big opportunity to better market the service to the
hundreds of thousands of customers who have access to broadband Internet
service, but have balked at paying the premium price.
"Our objective is not to walk in and try to take AT&T's customers.
The market is not well-penetrated enough in the first place that we should be
talking about the market-share game," Rahn said.
Broadband services such as cable modems and DSL are estimated to be
available to more than 70 percent of US homes, but only 10 to 12 percent have
signed up.
While not criticizing AT&T Broadband
specifically, Rahn said, "Broadband as an industry has been too fixated on
technology and speed and being always on. We need to move into a mass market and
explain to people what having broadband can do for them," such as making
Internet-based information and entertainment sources far more accessible and
useful, Rahn said.
Jennifer L. Khoury, a spokeswoman
for AT&T Broadband's New England operations, said, "Both parties feel that
this agreement will increase the customer base for both AT&T Broadband and
EarthLink."
For years, smaller ISPs and consumer
advocates have been clamoring for open-access deals to allow
third parties to use AT&T Broadband and AOL Time Warner cable
modems to sell Internet access in the same way that ISPs can use Baby Bell phone
lines to sell their services. AT&T predecessor MediaOne Group fended off a
threatened state ballot question in 2000 mandating open access by promising to
pursue such arrangements.
Paul Trane, a principal with
the Telecommunications Insight Group in Somerville, which has advised
open-access advocates, praised the AT&T deal with EarthLink as a good step.
But Trane said he thought the main factor driving it was AT&T's pending $45
billion merger with Philadelphia-based Comcast and a desire to try to defuse
open access concerns as it proceeds with getting hundreds of towns to move
franchises over to the new AT&T Comcast.
EarthLink
has signed access deals with AOL Time Warner covering 24 markets, with 15 more
to be added in coming months, taking advantage of strong political pressure the
cable giant faced to open its network when America Online and Time Warner
consummated their $106 billion merger last year.
EarthLink reported having 471,000 broadband customers as of the end of
December, along with 4.2 million conventional dial-up customers, Rahn said.
AT&T Broadband, which controls cable franchises in
more than 200 Bay State cities and towns and southern New Hampshire, has 13.6
million cable television customers, about 1.5 million of whom also subscribe to
its high-speed Internet services. AT&T chairman C. Michael Armstrong said
the company is pursuing discussions with other ISPs for open-access deals to its
network.
Peter J. Howe can be reached by e-mail at
howe@globe.com.
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