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(note: this was response to a post on the AOL board wondering if broadband was overrated. This is my response & the barebones to my FAQ contribution. They noted that AOL's network response times & download times were the best in the biz (ATHM & RR weren't included).

With the latest movement going on in this so-called "internet mania" is Broadband overrated?

Heck no! In fact I think its UNDERRATED!!!

I'm so sick of waiting for pages to load. I & millions of others who are impatiently waiting for a digital internet connection are eager to throw our money at the first opportunity we can get to upgrade our net connection. I should know I've been through 5 modems in the last 2 years (latest one is a Shotgun bonded modem, 2 56k modems) while I twiddle my thumbs waiting for someone, anyone (for the love of Pete), bring me a faster net connection. I'm beggins someone. Anyone! I don't care if I have to pay a premium to have faster net access. I think a lot of people on this board feel the same way. I'll be able to get a lot more done in the free time allotted to me if I don't have to wait around for the information I need to finish downloading.

Broadband is the future & AOL has to play catch up to ATHM. The good news for them is they may be able to catch up in 2-3 years unless they can come up with the necessary partnerships that artificially boost their numbers (such as somehow buying a 2nd place RR in a year or two).

Relevant numbers of broadband access (Current total broadband users using latest published figure & some rough estimates):

January 1999
-310,000 ATHM, 160,000 Road Runner + 50,000 ADSL = 520,000 broadband users in North America.

December 1999
-ATHM, through numerous partnerships extends reach of cable modem access to 20 million people up from 13 million in January. Should growth rate slow by half, subscriber base for ATHM should still surpass 1 million. Should growth rate increase by half, ~1000% growth, ATHM should have ~3 million subscribers.
-Road Runner...dunno this one. Assuming 1998 growth rates: ~450k - 900k.
-AOL, through Bell Atlantic, will be able to offer 7.5 million homes AOL ADSL access. Actual number of subscribers: TBA

December 2003 (depending on your sources):

-US broadband users numbering between 10-30 million. Meaning, this market is big enough for what look to be the two major players, AOL & ATHM. ATHM has forged itself into a formidable competitor with the partnerships its produced. One thing to worry about is what effect AT&T will have on ATHM since it looks like T CEO Michael Armstrong looks to be the net's new puppetmaster. Steve Case could be facing his most formidable adversary yet in the Jermolouk/Armstrong/Bell three headed hydra. Should they split this market between these two major factions (the other being AOL/NSCP/SUN) we'll still be seeing good numbers that will make shareholders happy from both companies. In this case, since Internet penetration seems to be on an S-curve (& fortunately for you ATHoMer Simpsons like me, its in the knee of the curve, which is the beginning of the real growth spurt), the pie will become bigger meaning that it won't be feast or famine for the major players.

Who knows, in a few years as satellite net access presents a threat to cable modems & ADSL, I think we'll see some sort of partnership between AOL & ATHM in the future, possibly as a mega-merger.

Launching in 2003 (discounting any major technical difficulties) Teledesic is promising to have broadband satellite wireless internet access on day one of operation. At what cost remains to be seen (it could be too expensive to be relevant to the consumer market, but I doubt it) but with the backing behind Teledesic (read Bill Gates & Craig McCaw), they will be a force to be reckoned with. Just wish I could invest in them right now but I don't think these billionaires need my chump change right now. :)

Also some other relevant numbers for e-commerce:
U.S. Sales 1997 $1.2 Billion
1998 $8 Billion
1999 $24 billion (expected to *at least* triple)

World e-commerce sales by 2003:
-$1.8 Trillion (without government help)
-$3.2 Trillion (with govt. help, at least that's what the govt says :))

For intelligent investors, it pays to pay attention & try to get the pulse of the future.

Disclaimer: long on AOL *&* ATHM & a bunch of other so-called "risky" stocks :) "Never bite off more than you can chew."
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