Microsoft In Negotiations To Link To AT&Tís Cable Properties
Microsoft is reported to be in talks with AT&T to invest as much as $5 billion in a deal to put Windows CE software on the digital set-top boxes of millions of households that will be linked to AT&Tís extensive cable properties. The deal, if green lighted, could play an important role in helping Microsoft make the tough transition from the computer desktop to the consumerís living room, giving Microsoft a platform in the home. AT&T is the nationís largest phone company and with the announcement of AT&Tís successful $57.2 billion for cable operator MediaOne Group the company would strengthen its network of cable properties to use cable lines to provide local phone service to more than 60 million homes. This could be problematic for America Online, the nationís largest Internet service provider with 17 million members, if AOL is shut out of cable systems controlled by AT&T, leaving AOL behind in the move to provide high-speed Internet access to consumers. AT&Tís cable network aided with its potential partner, Microsoft, would be positioned to leapfrog over AOLís older system of low-speed modem connections in the world of high-speed access with offers of video, music and other forms of next-generation Internet entertainment. AT&T is moving fast to establish itself as the leader in high-speed Internet access via cable to the home and has announced ventures with cable operators Comcast, its competitor in the bidding war for MediaOne, and Time Warner. With this vast network of connections, AT&T plans to offer local and long-distance telephone, video and Internet services. AOL has already launched its own high-speed access initiative in partnership with regional Bell telephone companies employing DSL or ADSL high access speed telephone lines. Other means to provide high-speed Internet access are wireless and satellite. Industry insiders say that the whole issue of high-speed access is something for the distant future and in the short term will represent a small portion of the market for many years.