AOL Eyes TV Without Broadband

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America Online is preparing to bring what it calls
"AOL TV" to market on the dialup access platform, betting it can do better than
Microsoft Corp.'s WebTV without waiting for broadband.

AOL has been planning to deliver content to TV sets ever
since it acquired startup NetChannel last May but wants to make sure it has the right mix
of hardware and services before going to market, officials said. Among the planned
ingredients is a navigational tool that would assist users in choosing TV channels as well
as Web sites.

"We don't think the TV is going to replace the
PC," said AOL spokeswoman Tricia Primrose. "But we see an opportunity for a
TV-oriented service if it's done right."

AOL is watching the fledging Web-over-TV market closely
and, so far, hasn't seen anything "that has seized the day," Primrose added.

"We don't want to rush into this if what we have to
offer isn't compelling, easy to use and priced right," she said.

Nonetheless, Primrose made clear AOL isn't waiting for a
broader base of high-speed online access to open the market to a higher quality TV data
feed than is possible over today's slow dialup links.

"Broadband is not a gating factor," she said.

WebTV, which is now positioned to be used with set-tops
supplied by General Instrument Corp. and Scientific-Atlanta Inc., has around 500,000
customers in North America, leaving open the question of whether dialup-based TV access
has mass market appeal. But WebTV sees a way to enhance its appeal via higher-speed
access, said Allen Yates, director of platform marketing for WebTV.

S-A and Microsoft are collaborating on design of a
next-generation set-top that will run the Windows CE operating system and be based on the
WebTV software platform, he said. The combined technologies will enable delivery of
existing cable system services, the WebTV service and features supported by the WebTV
software.

AOL sees broadband as a long-term opportunity that will
lead to new generations of hardware and software supporting access to high-speed connected
TV sets, Primrose said. But the company's ongoing work with focus groups has convinced it
there's a strong market in dialup access, if it can create the right service environment,
she said.

"We see functionalities tied to community interaction
as important to what we do [in TV access]," she said. Such capabilities would support
online viewer discussions about TV programming, including programs in progress as they are
being watched.

One of the big hurdles to be overcome is finding a way to
do all this through something simpler than a typical remote control, Primrose said.

AOL isn't ready to say when it will launch AOL TV. Nor is
it ready to say when it will proceed to commercial launch of high-speed service over DSL
(digital subscriber line) technology, which it is testing in several markets with GTE
Corp. and in one market with MCI WorldCom's UUNet.

But both events could come soon. AOL TV isn't waiting for
broadband, and DSL launches aren't waiting for the implementation of the consumer-oriented
DSL standard, G.Lite, Primrose said.

The Washington Post last week reported AOL was in
negotiations with Bell Atlantic Corp. to make use of that telco's DSL platform, now in
operation in several markets. Primrose declined to comment on the report.

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