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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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>>Portland-area residents could select the ISP of their choice once the company begins offering IP (Internet protocol)-based telephony, AT&T-TCI said.<<

Ahh, but would it have the speed of a cable modem, or would it be just a matter of plugging your old POTS modem into the cable telephone link, with no speed upgrade?
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Ahh, but would it have the speed of a cable modem, or would it be just a matter of plugging your
old POTS modem into the cable telephone link, with no speed upgrade?


KendallMCox,
Darn good question. I think much depends on the nature of the device forming the connection. Since it is IP-based, however, I suspect it might not have the constraints we see with POTS. I can't believe, though, that it will rival cable modem throughput.

Perhaps we should keep an eye on AT&T's development of this service, especially the data aspect. From ATHM's perspective, we might hope that AT&T "de-emphasise" data over cable telephony.
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Ahh, but would it have the speed of a cable modem, or would it be just a matter of plugging your
old POTS modem into the cable telephone link, with no speed upgrade?

KendallMCox,
Darn good question. I think much depends on the nature of the device forming the connection. Since it is IP-based, however, I suspect it might not have the constraints we see with POTS. I can't believe, though, that it will rival cable modem throughput.

Perhaps we should keep an eye on AT&T's development of this service, especially the data aspect. From ATHM's perspective, we might hope that AT&T "de-emphasise" data over cable telephony.


You guys are on top of it for sure. This is the very question that I had after reading the link! Here is the way I see it. AT&T/TCI will open the telephony over cable (TOC) to AOL. That way Portland can't say that open access is an issue. What they will do is rollout ATHM cable internet services first, then add the TOC. That would still mean that ATHM would be first in. Once in with great service and content AOL will have a tougher time converting subscribers.

Of course you have to think that T will control the speed limit on TOC as well, making ATHM the premium service. The speed over TOC will be the key issue. If the speed on TOC is the same as internet over cable why did AT&T buy TCI with the caveat that the deal must include ATHM? There in lies your answer.

Long ATHM
LuxSit
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LuxSit,
Spot on again.

Outside Portland, though, I see T leading with telephony, at least in those franchises that are not already ATHM partners. This introduces the idea of integrated VAS, and leads both consumers and cable cos. to ATHM.

Even in Portland, T could lead, for example, in those neighbourhoods with less promising demographics for ATHM. Remember the 48% of homes without any desktop. T is after these too, and may be able to offer substantial economies over the RBOCs.

T's CLEC play is the real news of the day, and to me it looks good for T and for the consumer.
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The speed over TOC will be the key issue. If the speed on TOC is the same as internet over cable why did AT&T buy TCI with the caveat that the deal must include ATHM? There in lies your answer.

Another thing we need to take into account is will you be able to have telephone and internet similtaneously with telphony over cable? What good is internet over TOC if it means you can't have the telephone free?

I know that with DSL they are talking about multi-functions similtaneously. What about Cable?

LuxSit
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<<Ahh, but would it have the speed of a cable modem, or would it be just a
matter of plugging your
old POTS modem into the cable telephone link, with no speed upgrade?>>

<< KendallMCox,
Darn good question. I think much depends on the nature of the device forming
the connection. Since it is IP-based, however, I suspect it might not have the
constraints we see with POTS. I can't believe, though, that it will rival cable
modem throughput.>>

Athm "owns" the bandwidth above 128K per their contracts with cable partners.
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The local phone access T will offer won't be IP based.
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The local phone access T will offer won't be IP based.

Can you tell us more?

Do you mean in the initial phases, or for the life of the deals?

How do you explain the quote from AT&T-TCI in the Portland dispute? This seems a firm and reliable source.
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Athm "owns" the bandwidth above 128K per their contracts with cable partners.

tgillette,
Can you fill in more information? What you say rings true, and could explain why T's current targets are TCI and TWX franchises, but seems a little ambiguous. Can you explain what the available bandwidth is at present, and how this is divided in the partner contracts?

Thanks.
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The local phone call will go over the cable line, but not using standard TDM not internet protocol.
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