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Article

Title: Uneasy Convergence

Author: Engebretson, Joan Article Type: Product Analysis
Source: America's Network, v109 n5 p22(6) Publication Date: May 2005
  ISSN: 1075-5292
  Illustrations: Graphs
URL of Publication: http://www.americasnetwork.com

Richard Parsons, CEO of Time Warner and AOL, has overseen a recent agreement between AOL and Time Warner Cable regarding broadband content. The deal will allow the two large business units to gain from the growing Voice over IP (VoIP) market. AOL and VoIP are regarded by Parsons as two of the layers that give the companies an advanced distribution platform that now can provide whole generations and new products in many layers. AOL is still the leading Internet Service Provider (ISP), but has been less successful in broadband. Only about 5 million of AOL's customers have broadband connections. In contrast, Vonage and many other competitors to AOL, including AT&T CallVantage, have successively obtained more customers paying between $20 and $40 per month, atop other broadband costs, to have unlimited domestic phone service. AOL's pricing for its VoIP service undercuts that of Time Warner Cable for unlimited domestic service if customers also buy high-speed data and video service. Time Warner Cable's price goes up if only of the two other services is purchased and up again for voice service alone. AOL also has an increase after six months. Because of the differences in AOL and Time Warner offerings, some say they can both do well, and that AOL service could be a separate tier of Time Warner Cable's offering. However, high-speed portal offerings are not as well staggered, since Time Warner will probably get less revenue from the new service than Time Warner would get from its proprietary Road Runner offering. Among topics covered are the future of cable companies, leadership issues, and the possibility of a cable unit.

Special Features: Graphs

Companies:
AOL LLC TecTerms
Time Warner Inc

Products:
Cable Telephony Communications Convergence
VoIP (Voice over IP)

TecTerms:


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