AT&T-Comcast deal could create broadband powerhouse

ITworld.com |  Networking

However, Laszlo predicted that of the two rivals, Microsoft is most likely to win access to AT&T Comcast customers through its MSN Internet service. This is because the software titan will have a more high-profile stake in the new company, and is not as strong a network competitor.

"Companies get scared of other companies owning their customers ... and I think AT&T Comcast would be more likely to cede their customers to MSN, which seems like a safer partner," Laszlo said.

Microsoft's motive for backing AT&T was clear, however.

"Microsoft wants to have their foot in the door of every possible threat," Kagan said.

And while the creation of AT&T Comcast would announce a new era in the broadband and Internet market, it is also expected to affect digital services such as voice over IP (Internet Protocol), video and data services.

Under the approaching footsteps of this new cable and broadband giant, the industry landscape is expected to shift, analysts said. To compete, industry players may have to broaden their reach as well.

"This may trigger a string of other mergers and acquisitions in 2002," said Kagan, "from companies in cable and wireless to even local and long-distance telephone service providers."

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