AOL gets out of the broadband access biz

AOL officials confirmed today that it will no longer resell cable modem and DSL access, refocusing its broadband efforts entirely on content and services. While AOL will continue to package its service with Time Warner cable and maintain its current access customers indefinitely, ISP officials said it stopped taking orders for new service last month through its cable and DSL partners.

Since AOL launched its broadband portal, the company has enjoyed enormous success, announcing 3 million AOL Broadband customers--buying access from AOL directly or from another carrier--at the end of 2003. Those numbers put it in the top tier of broadband ISPs though those customers are divided among its partners’ subscriber numbers. While AOL wouldn’t release any specific breakdowns, a spokeswoman for the ISP said that most of those subscribers paid for AOL’s $15- per-month broadband portal package but received their access from another provider.

"We’re phasing out connectivity because what we do best are services and features," the spokeswoman said. "We’re focusing on what broadband users want, and we can offer a lot more of those things if we’re not aggregating these different access services."

AOL had resale agreements with Covad and several RBOCs and cable companies, which gave it a significant, but by no means complete, footprint to market its broadband access package. By eliminating access from the bundle, AOL is able to go truly nationwide, offering the same service to anyone capable of getting a broadband connection, the spokeswoman said.

AOL is also not ending its relationship with its access partners entirely. The company has entering into marketing deals with several providers to promote the AOL service, including both MCI and Covad. Covad officials confirmed that the CLEC has stopped taking new wholesale orders for AOL Broadband, but carrier officials said they are now working with AOL to sell DSL directly to customers as part of an AOL promotion.