AOL plans high-speed access
January 15, 1999
by Tom Spring
(IDG) -- America Online announced plans Wednesday for an affordable high-speed Internet service. AOL inked a deal with telco giant Bell Atlantic to offer Digital Subscriber Line access as a premium upgrade to AOL's standard Internet package.
For about $20 extra a month, AOL users will be able to surf the Web nearly 20 times faster than with a dial-up connection. The service launches this summer and will be available to AOL users in the Bell Atlantic service area from Maine to Virginia.
This deal marks AOL's first foray into offering consumers high-speed Internet access. Bell Atlantic had previously announced plans to roll out DSL service, but the agreement with AOL has accelerated its launch timetable, says Amy McIntosh, president of Bell Atlantic Consumer Data Services.
DSL technology gets a boost
AOL, with 15 million subscribers, is making a big statement in support of DSL technology, says David Eiswert, consultant with the Strategis Group in Washington D.C. He believes the announcement will push other Baby Bells to offer DSL services; Southwestern Bell also disclosed plans earlier this week.
This is a huge boost for DSL technology, says Eiswert, giving cable modem companies like @Home and MedioOne a run for their money.
"We have always been strong supporters of competition," says Mark Reilly, spokesperson for MediaOne. MediaOne offers 1.5 megabits-per-second cable modem access to the Internet for $39.95 a month. "We feel very confident that when the consumers analyze what they get for the money they'll choose MediaOne."
Fast and cheap
DSL technology allows existing phone lines to be used for a combination of high-speed Internet and traditional phone service. Depending on the customer's distance from the so-called central office and the kind of technology employed, DSL can offer download speeds of up to 6 megabits per second. AOL plans to offer average speeds of about 640 kilobits per second.
The upgrade is expected to cost AOL members less than $20 extra per month, in addition to the current $21.95 monthly service charge.
AOL users can also plan on purchasing special DSL modems if they want to take advantage of the higher speeds. AOL gave no prices, but other DSL modems cost between $100 to $200.
"This marks an important day for AOL and its users," says AOL spokesperson Wendy Goldberg. "We have seen an explosive demand for high-speed access and we are glad to be able to finally offer it to our customers."
AOL says that it also plans to create new multimedia "broadband-enhanced" content and other value-added DSL services as users sign on. AOL members will be able to use their computer and telephone or fax simultaneously on a single telephone line.
Goldberg says AOL is in talks with other Baby Bells and cable companies to offer DSL and broadband cable access. Currently AOL is conducting DSL trials with MCI WorldCom and GTE, Goldberg says. She declined to say when or if these trials would move beyond initial test stage.
Bell Atlantic plans to market its own Infospeed brand DSL service separately for $59.95 a month. Currently the Infospeed service is available to 2 million of its customers, McIntosh says. Within the year, 7 million of Bell Atlantic customers will be wired for DSL service. By 2000, McIntosh says, that number will double.
Bell Atlantic says it is in talks with 45 Internet service providers besides AOL to offer DSL services within the Bell Atlantic service area. Eiswert estimates there are about 475,000 cable modem customers in the U.S., compared to 60,000 DSL users.
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