MediaOne Express, U S West Compete

8/30/1998 8:00 PM Eastern

MediaOne will launch its MediaOne Express Internet-access
service this week in Minneapolis -- a market where the competition will include its former
parent, U S West.

The MSO plans to begin offering a telco-return version of
MediaOne Express on September 1st to the 585,000 homes that it passes in 89 communities in
the Twin Cities area.

The service will allow consumers to download information
from the Internet at speeds of up to 1.5 megabits per second -- some 50 times faster than
conventional telephone modems, but slower than two-way cable modems, which require system

Ironically, the arrival of MediaOne Express sets up a
showdown against U S West, which began offering its "MegaBit" Internet-access
service in Minneapolis in May.

That service, based on asymmetrical-digital-subscriber-line
technology, allows consumers to surf the Internet while talking on the same phone line. U
S West officials said MegaBit is currently available to 700,000 homes in the area.

However, Scott Calloway, MediaOne's vice president of
Internet services, wasted no time in drawing the battle lines between the two offerings.

"The difference in speed between a telephone modem and
our MediaOne Express service is like night and day," Calloway said in a prepared
statement. "What takes three minutes to download using a telephone modem takes three
seconds with a cable modem."

U S West, meanwhile, is courting consumers by touting
MegaBit as a "dedicated-line" service that doesn't require customers to
"share bandwidth."

"That's important because high-bandwidth applications,
like games and entertainment, are going to reduce the performance of the network,"
said Matt Rotter, U S West's executive director of MegaBit services.

Calloway countered by arguing that MediaOne Express is a
scaleable system, where additional nodes can be added to serve fewer homes, thereby
preventing a reduction in performance.

"We have the option of splitting those nodes," he
said in an interview, "but very few people are going to be hitting the enter key at
the same time and contending for that data stream."

MediaOne originally planned to launch two-way service to 15
percent of its Twin Cities cable customers, but the system altered its plans because a
telco-return version would reach all of its 350,000 Minneapolis customers over the
company's coaxial plant.

"We can offer the service over our existing
infrastructure because most people use the Internet to download information, rather then
to send information," MediaOne spokeswoman Tammy Snook said.

The service -- which sells for $39.95 per month for
MediaOne customers and $49.95 for noncustomers -- includes a cable modem, an
Internet-service-provider fee and unlimited access time.

Customers who sign up for the service within 30 days
receive $50 off the $99.95 installation fee, as well as $10 off their monthly bill for the
first three months.

MediaOne Express is expected to evolve even further under a
joint venture between MediaOne and Time Warner Inc.'s Road Runner that will develop
additional content for the service, Calloway said.

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