EarthLink Doubles Deals

Why wait for AOL-Time Warner to get its cable reselling act together for dialup service providers? EarthLink and Comcast move into the shared cable access groove.

by ISP-Planet Staff [March 28, 2001]

EarthLink is set to test Comcast Communications ability to share its broadband cable network.

EarthLink announced its high-speed broadband Internet services will be offered on a trial basis in the Philadelphia, PA area during the second quarter of this year. The companies expect to sign a definitive agreement—if all goes well.

The Atlanta-based ISP is the second non-affiliated firm to test its brand of high-speed Internet access using Comcast's cable network. Juno Online Services completed similar beta tests of Comcast's system last November.

One smart cable company
Steve Burke, Comcast president of cable services, said the company is interested in learning more about which value-added relationships with ISPs.

"Based on what we learn from this and other trials, we are eager to move ahead with plans to offer our high-speed Internet customers a choice, which ultimately can benefit our business and that of our ISP partners," Burke said.

Comcast operates the third-largest cable company in the U.S., EarthLink provides broadband services to some 215,000 customers nationwide.

Garry Betty, EarthLink chief executive officer, said that by working aggressively with EarthLink and other unaffiliated ISPs, Comcast has demonstrated the vision and savvy of an industry leader.

"This trial is the first step in what we hope will be a mutually beneficial partnership with Comcast," Betty added. Financial terms of the deal were not disclosed.

Earth moves, again
In related news, Denver-based Inforum Communications, Inc., formerly known as SkyLynx Communications entered into an agreement to sell its dial-up ISP subscriber base to EarthLink. The sale is part of Inforum's previously announced plan to address the challenge of raising needed capital by generating cash from the sale of certain non-core business assets.

Inforum is one of many firms that originally subscribed to a growth by acquisition business model—working aggressively to acquire ISPs and take its company public on the stock market. Known as an ISP-Rollup, Inforum acquired 10 different ISPs between January 1999 and February 2000. Unfortunately, integration expenses and network costs quickly adjusted the company's fortunes—along with Wall Street's shift from focusing on growth to growing profits.

The sale represents approximately 60 percent of Inforum's year 2000 recurring revenues. Inforum began notifying its subscribers of the transaction last week and will be working closely with EarthLink to ensure a integration of email, dialup, billing and support systems as subscribers are transitioned.

Jeffery Mathias, Inforum president and chief executive officer, said this is the first step in its plan to raise capital.

"By generating cash from the sale of non-core assets so that the company can focus on its higher-margin, enterprise-oriented ISP business," Mathias said. "We are confident that EarthLink will continue to provide quality service to these presidential subscribers.

Cliff Bryant, EarthLink director of acquisitions said the nation's second largest Internet service was happy to welcome Inforum subscribers to its fold. "We're committed to a seamless transition," Bryant said.

—End