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AT&T, AOL In Talks To Merge Cable Systems

Posted by ryuzaki0 on from the plural-of-juggernaut dept.

Paintthemoon writes: "The deal of the week: ATT & AOL are in talks to merge their cable systems, with each company owning shares of the other but AOL being in control of the joint venture. Coming on the heels of the AOL-TimeWarner-Amazon announcement, this just shows the further consolidation of broadband & information systems."

14 of 109 comments (clear)

  1. One potential Good Thing out of this could be... by jht · · Score: 5

    AT&T's "native" ISP is @home - generally considered sucky and clueless by most. The AOL/TW ISP is RoadRunner - who runs a very solid ship by comparison, and is, as far as I can tell, the most homenet/geek friendly cable ISP out there.

    If the two companies merge their cable operations, AOL would certainly be the driver (I hope - the article was already slashdotted when I clicked it - a new speed record for sure!). If so, then @home would probably get the boot and RoadRunner would be the default ISP - a much better situation for the average broadband customer.

    - -Josh Turiel

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    -- Josh Turiel
    "2. Do not eat iPod Shuffle."
  2. Re:AOL vs. Comcast? by lizrd · · Score: 3

    The deal with Comcast was an unsolicited offer. As such, it probably didn't do enough to make the big shots at AT&T get a lot of money for doing nothing so they said no thanks. The long and the short of it just seems that the offer was a bit too low and AT&T isn't going to spend a lot of time trying to hammer out a deal since they didn't ask for bids in the first place.

    ________________________

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    I don't want free as in beer. I just want free beer.
  3. Meet the new Borg, same as the old Borg... by smirkleton · · Score: 3

    ...which reminds me. You guys need to replace the Bill Gates borg pic with a Steve Case one.

  4. Which means... by Wind_Walker · · Score: 3
    That everybody will get their first 1000 hours of long distance free for the first month!

    Go AT&T!!!

    ------
    That's just the way it is

  5. Re:One potential Good Thing out of this could be.. by pongo000 · · Score: 3

    Currently, @home "looks the other way" when it comes to running mail servers, nameservers, web servers, etc. on their service (even though their rules expressly prohibit this). I wonder what AOL's stance will be in this regard? Will they attempt to "corner the market" by blocking, say, outgoing port 25 traffic, or incoming port 80 traffic?

  6. slow down by Nastard · · Score: 4

    Slow down cowboy!

    The U.S. Government requires you to wait 2 minutes between each monopoly.

    It's been 120 seconds since your last merger!

  7. AOL Time Warner... by mrBlond · · Score: 5

    AOL - Time - Warner - Castle Rock Entertainment - New Line Cinema - Fine Line Features - CompuServe - Netscape - AOL MovieFone - Digital City - MapQuest.com - Spinner.com - The Atlantic Group - Rhino Records - Elektra Entertainment Group - London-Sire Records Inc. - Warner Bros. Records - Warner Music International - Time Life Music - WB Television Network - HBO - Cinemax - Time Warner Sports - CNN - CNN/fn - CNN/SI - CNN Headline News - TBS - TNT - Cartoon Network - Turner Classic Movies - HBO Independent Productions - New Line Television - Turner Original Productions - Warner Brothers Television - Warner Brothers Animation: Looney Tunes, Hanna-Barbera - Time Warner Cable - Time Life Books - Book-of-the-Month Club (managed by Bertelsmann) - Little, Brown & Co. - Bulfinch Press - Back Bay Books - Warner Books - Oxmoor House - Time Magazine - Life Magazine - Fortune Magazine - Sports Illustrated - Money - People - Entertainment Weekly - In Style - Southern Living - Cooking Light - The Parent Group (Parenting, Baby Talk, Baby on the Way) - This Old House - The Health Publishing Group - Real Simple - Golf Magazine - Popular Science - Ski - Yachting Magazine - DC Comics - MAD Magazine - Atlanta Braves - Atlanta Hawks - Atlanta Thrashers - Turner Sports - World Championship Wrestling - Goodwill Games
    --
    mrBlond (I don't email from Malaysia)

    --
    CowboyNeal for president!
    "Hit any user to continue."
  8. Networks MUST be public utilities by Sydney+Weidman · · Score: 3
    • As with any service which is essential to the economy, leaving network infrastructure in the hands of private companies doesn't work.
    • Since networks have a negligible marginal cost structure (the cost of adding one user) centralization and concentration bring huge benefits.
    • Therefore, in almost every case, the profit motive works to diminish competition rather than increase it.
    • The bigger you are, the lower your overhead and the greater your profit. Yes, this applies to other businesses, but the marginal cost in manufacturing is much higher. The incentive to form conglomerates isn't as strong.
    • But the corporations driving the media and broadband concentration aren't stupid. They know a good thing when they see one. The benefits of these kind of monopolies (the ones where massive cost savings can be achieved) are huge. Consumers stand to benefit through lower prices.
    • But wait, why would a monopoly lower it's prices? Well, actually, it wouldn't.
    • So there's this dillemna -- monopolies can reduce overhead, which can be good for consumers, but monopolies are very unlikely to pass these cost reductions on to consumers.
    • So what should we do? Either nationalize network infrastructure (like we do with roads) or regulate the private monopolies so that they can only increase prices where such increases are justified by rising input costs.
    • Either way there are probably efficiency trade-offs that would be made, but in the end, if you really want some service to be there for you whether it's profitable or not, you need to think about nationalizing, not privatizing, some parts of the essential infrastructure.
    1. Re:Networks MUST be public utilities by Sydney+Weidman · · Score: 3
      You mention software platforms. So you're saying you want the government to own Linux? Uh, which government? And that would be good how?

      Why have such a limited view of ownership? You could create cooperatives (as one previous poster suggested) which would own property that the community required to conduct its business. It would be good because it would prevent any entity from utilizing market power to reduce consumer surplus for its own gain. It doesn't matter so much in manufacturing where network effects aren't quite so strong, but in areas which require common ground, it would enable the lowest possible transaction cost.

      So we have to file a "codebase impact statement" before we can write code? Will there be permits, approved contractors, minimum minority ownership requirements?

      Why not? We put up with these forms of red tape and bureaucracy because even private works such as buildings (which often require municipal approval) make a significant impact on the surrounding area. If you decide to build a pig barn in the middle of a residential neighborhood, how do you propose to deal with the complaints of your neighbors? With a shotgun?

  9. Market Power or just saving face by hillct · · Score: 3

    This deal is as much about saving face for AT&T as it is about market power. AT&T was humiliated when in the face of it's aborted spin-off of it's cable business, it suffered first from market pressures then recieved an unsolicited low-ball bid for that unit. This would be a good deal for AOL-Time-Warner not only because it expands their reach, but they can snap up the asets at bargain prices, since AT&T is desperate to find another suitor other than Comcast to get them out of this situation.

    --CTH

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    --

    --Got Lists? | Top 95 Star Wars Line
  10. Re:Absolutely no way by pgpckt · · Score: 3

    I tend to agree with you. As people who read my prior posts might know, I am a pretty happy-go-lucky free trade kinda guy. However, I do not like monopolies for the very reason they were outlawed: they tend to eliminate competition and discourage innovation. Free trade is good, and so is free competition.

    AOL already had the ISP market. Then they took TW cable. The regulators we worried this would prevent other companies from competing. So, the government said AOL-TW had to allow other companies to access their cable lines, sort of like the deal the regulators made when they made AT&T share all their wiring with competitors.

    If you throw in AT&T's cable, you have one huge cable company. Who is left to compete? AOL already has so much of the market. It will be a hard sell for AOL-TW to convince the regulators that getting a bigger share of the market will not tend to make AOL-TW a monopoly or stifle competition.

    --
    Lawrence Lessig is my personal hero.
  11. Scary, not just for Americans... by octaFish · · Score: 3

    This is the first time one of these American mega-mergers has truly frightened me. I am currently a customer of Rogers Cable in Canada. ATT owns a large share of Rogers (whatever the current rules allow a foreign company to own.)

    Just the thought of AOL owning any part of Rogers doesn't sit well with me. Now, when the contract with @home expires, we can look forward to Rogers@AOL.

    And then, when the CRTC allows for another round of digital TV channels, we can look forward to AOLTV.

    Come to think of it, Rogers also owns the Blue Jays, and Sportsnet too. Start selling tickets now for the 2005 AOLJays.

  12. Re:Monopoly? by Paintthemoon · · Score: 3

    Actually, such a merger probably would make a difference to you. That's because with the clout that the combined company has, it will be able to dictate what cable channels have access, possibly even what the content on those channels would be. Sure, there's still the 'freedom' to surf through all the channels provided, but with the lowest-common-denominator of mass culture, it'll just continue to be all dreck.

    And I believe the same principle will apply to information systems, as one company has the ability to determine what the prevailing technology will be. This is the underlying principle behind anti-trust legislation in this day and age.

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  13. Unstoppable!! Bwahahaha! by OverDrive33 · · Score: 3

    What bothers me the most about the mega megers, is that it doesn't seem like anyone can stop them. I mean Microsoft just seems to have beaten the US government! Can't you just see these two companies finding some way around the law (is there a law?) just to get their own way!?

    I guess our only hope is a little penguin named Tux.
    :)

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