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AOL strikes broadband provision deal

America Online is partnering with high-speed internet access provider Covad Communications Group to offer AOL content and services over Covad's broadband connections.

Under the deal, Covad is offering a stripped-down version of its Covad Broadband Connect connection service for $34.95 a month, and subscribers can sign up for AOL for Broadband at an additional cost of $14.95 a month.

The $34.95 broadband charge, which offers connection speeds of up to 1.5Mbps downstream and 256Kbps upstream, is a discounted rate from Covad's normal prices.

The agreement with Covad follows AOL's decision to back away from offering its own bundled broadband service in January. While AOL has not announced partnerships with other broadband providers, the spokeswoman said the deal with Covad is not exclusive and fits with the company's "bring your own access" strategy.

Jupiter Research analyst David Card said,  "The service targets AOL's existing dial-up base and they have proven that they are willing to pay for premium services."

While the $49.90 a month total price tag may cost more than other broadband offerings, AOL does offer comprehensive services, Card added.

Yahoo has a similar deal with SBC Communications and Microsoft MSN has an agreement with Verizon Communications.

Covad's Broadband Connect product is available across the US in 96 metropolitan areas. A higher-speed version of the connection plan, offering a downstream speed of 3Mbps and upstream speed of 384Kbps, will be available later this year for $39.95 a month, the companies said.

AOL has been working for some time to convert its wide base of dial-up users to broadband services. It added 1.2 million broadband members last year, bringing its total high-speed audience to three million users as of 31 December.

By partnering with access providers, AOL is free to focus on broadband-tailored content and services.

Scarlet Pruitt writes for IDG News Service


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