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Tale from two cities: Comcast opens system to second ISP

Mon, 02/25/2002 - 7:00pm
Anne Kerven

Following AOL Time Warner's lead, albeit without a Federal Trade Commission mandate, Comcast Corp. struck a deal with NetZero and Juno owner United Online to offer high-speed Internet services on two Comcast cable systems. It's Comcast's first move toward opening its system to multiple ISPs.

Financial terms were not disclosed. A Comcast spokeswoman could not be reached by CEDaily's deadline.

The service will launch within 90 days, in Nashville and Indianapolis, and "provides a template for a subsequent national rollout of United Online's Internet service to anyone who can get Comcast cable," United says.

Comcast President Brian L. Roberts says in a statement that contracts kept the company bound to one ISP until about two months ago. United has a strong track record in the market, he added.

For its part, costs kept United out of the broadband market, says Chair, President and CEO Mark R. Goldston. "To date, United Online has been reluctant to enter the broadband marketplace," he says in a statement. "Many of the ISPs … incurred large capital expenditures while generating gross profits per user much below their dial-up business. … We believe (the Comcast deal) will provide a turnkey solution that should require little to no capital expenditures by United Online."

As part of the deal, United will advertise its NetZero and Juno units on Comcast's cable systems and via Comcast.net.

United notes that NetZero and Juno users can get the high-speed service without relinquishing their e-mail addresses and will get the same start page.

Comcast has about 467,000 cable subscribers and 77,000 high-speed Internet users in the two cities. It's the country's third largest cable operator with more than 8.4 million subscribers; its own ISP, Comcast High-Speed Internet, claims more than 950,000 customers nationwide. Comcast says it will continue to provide service through Comcast High-Speed Internet in the two cities, and left the door open to add ISPs in the other regions it serves.

As of the end of 2001, NetZero and Juno Online had 5.6 million active dial-up users, including 1.46 million billable subscribers, United Online says.

The FTC required Time Warner Cable to open its systems to other ISPs as part of AOL's merger with Time Warner.

Separately, Comcast Cable Communications promoted Julie Nelson to director of recruitment and James J. Sullivan Jr. to VP of labor and employment law. Nelson was manager of recruitment and Sullivan was VP of human resources in Comcast's eastern division.

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