arthLink: Forget DSL, Give Us Cable! (Posted by Jim at 7:50AM)
EarthLink plans to nudge its broadband customers toward cable Internet access instead of digital subscriber line services in a move that could boost its future profit margins. But there's a catch. In an ironic twist, EarthLink is going head-to-head with its chief Internet service provider rival, America Online, on its home turf--AOL Time Warner's cable networks. "You will see a significant percent of new subscribers on cable," said EarthLink Chief Executive Garry Betty on the company's third-quarter conference call Tuesday. "If a customer calls and is not specific, we will lead with cable where it's available because of its economic benefit to us." As a condition of the AOL-Time Warner merger, the Federal Trade Commission required AOL Time Warner to let a rival, such as EarthLink, offer high-speed services over its cable networks. Before the union, AOL had lobbied heavily for regulators to force the cable industry to open cable lines to competitors. Now the regulations could result in its biggest competitive threat. EarthLink made it clear in its conference call meeting Tuesday that it plans to take full advantage of AOL Time Warner's cable network in another slight to DSL service. Most of EarthLink's broadband customers to date use DSL services, but executives prefer cable access because it has better profit margins--a measure that indicates a company's ability to turn sales into profit. ZDNET
Facebook
Twitter