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AOL, SBC Team Up On Net Access

America Online, fresh from signing a high-speed access agreement with Southwestern Bell, said Thursday it's mulling similar deals with other Baby Bells, cable and wireless companies.

"We've held discussions and looked at or done technology studies on all of these" providers, AOL President Bob Pittman said in an interview with at Variety's Interactive Summit in Rancho Mirage, Calif.

The comment came just after the online company (AOL) said it will offer a premium upgrade this fall for subscribers in regions where Southwestern Bell (SBC) provides the so-called DSL service, also known in techno-terms as asymmetrical digital subscriber lines. (Editor's note: CBS News is the broadcast news provider for America Online.)

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The digital upgrade will give AOL members souped-up bandwidth for their personal computers over existing phone lines at a cost of $20 per month, which has been increasingly demanded, the companies said. The companies said the DSL service can zip up Net connections more than 50 times faster than a 28.8 analog modem.

Southwestern Bell already offers DSL service to about 2 million of its customers and plans to offer it to 8.4 million homes by the end of the year. SBC has customers in California, Texas, Missouri, Oklahoma, Arkansas and Kansas.

In addition to faster download times, the service gives customers "instant-on" access to AOL without the need to dial-in through a modem. SBC customers can continue to use their phone or fax over the same phone line.

Shares of America Online (AOL) rose 2 7/16 to a 52-week high of 95 1/4. SBC (SBC) edged up 9/16 to 52 1/4.

Together with a previous deal with Bell Atlantic (BEL), roughly half of AOL's customers now have at least the potential to high-speed service.

"Clearly, we're looking at other ways" to reach the remainder of AOL's customers with high-speed transmission, Pittman said.

"From what we know about the consumer, and our ability to upgrade the consumer, it probably makes us the critical ones to make broadband reach its potential," Pittman said.

America Online partnered with Bell Atlantic on a service that will be rolled out this summer. Currently, AOL's more than 16 million members don't have DSL service. Then again, less than 10 percent of the country can receive high-speed Internet access.

Asked whether AOL would consider being acquired by a large telecommunications company such as AT&T (T), Pittman replied: "No comment."

There's been long-running speculation that AT&T and AOL might be considering such a move, but AT&T Chairman C. Michael Armstrong said last week that his company is "not interested" in acquiring the online company.

Written By Bambi Francisco and Michael Stroud, CBS MarketWatch

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