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Folks,
I think some of us might be confusing T's role with that of ATHM.

As I see it, there are three distinct and separate services that are provided by the new cable paradigm:

1. TV. This is the core distribution business of the cable companies. The US market is highly fragmented geographically. It is of no real interest to us, except that cable companies owned c.80% of ATHM before all the dilution started with XCIT. Note that TCI actually owned c.70% of the voting rights, prior to the dilution. Apart from that, ATHM relies on partnerships with the cable companies for rollout of its service.
TV is the most basic cable service, in the sense that it can be provided without the others.

2. Cable telephony. A previous Fool has pointed out that TCI already offers telephony in some areas. In this situation, the cable company acts as a CLEC. Again, this service can be provided without a cable modem, although I am not sure what device sits between the handset and the phone line. Anyone?

3. Cable internet. This is where ATHM comes in. Through either a PC/Mac or a set-top box, ATHM provides broadband internet access.

The deal between AT&T and TWX extends the geographic reach of AT&T for Service 2 above, and to me seems to have relatively little effect on the other services at present.

Regarding AOL, there still exists the possibility for AOL and TWX to strike a deal for broadband internet.

AOL could also sign up with some overbuild competitors of ATHM's cable partners.

And finally, AT&T's own cable IP telephony services could be used to connect consumers with AOL, even in the absence of ATHM on the desktop. If anyone doubts this, they should check out the Portland situation, in which AT&T/TCI have themselves advanced this argument to demonstrate that the merger is not "closed" to AOL:

AT&T-TCI said Portland officials' concerns that the companies' cable modem customers would not have access to the ISP of their choice was misguided. Portland-area residents could select the ISP of their choice once the company begins offering IP (Internet protocol)-based telephony, AT&T-TCI said.
This is taken from one of OurFoolishPride's links, http://brp.com/newsletters/vcr/sample.html.

FWIW, I see both advantages and disadvantages to the deal. On the one hand, a higher profile and increased subscription base for cable IP telephony will help penetration of the "integrated services" approach to cable. On the other, IP telephony represents a certain measure of threat, although it is not yet well developed.
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