Why doesn the worlds largest Internet access provider just buy its own cable company?
A year ago, AOL–the world’s largest dial-up Net service provider–could have acquired a cable operator, or, like its recent $1.5 billion investment in Hughes Electronics, taken a stake in a cable firm to gain access to its high-speed, or broadband, networks. The company’s stock price was riding high and, at that time, several cable operators were on the block. Instead, AT&T, driven by a desire to circumvent the Baby Bells and tap into the $110 billion local telephone market, beat its communications competitors to the punch by snagging Tele-Communications Incorporated and MediaOne Group–potentially reshaping the local phone market, if not the entire communications industry. To a certain extent, there is a sense among industry watchers that the industry, following AT&T’s decisive moves, has ceded the high-speed cable Net market to the telecommunications giant. But industry observers believe AOL has not lost its chance to be a player in the expected cable-based Net access boom, choosing
