Cable Vet to Spearhead AOL Broadband Play
By Karen Brown
from the June 18, 2001 issue of Broadband Week
Louis Borrelli traded in his lofty 13th floor office with a view at a Dallas Internet firm for something in Reston, Va. that is a little more ... well, modest.
"I've got a great view of the first-floor loading dock," the former CEO of Marcus Cable jokes.
Borrelli may have come up short on office view, but he has a pretty big vision as the new senior vice president for broadband at AOL Time Warner. Borrelli's task will be to oversee AOL's cable broadband distribution initiatives as a time when that industry still is evolving.
"There's no real surprise here--my cable career spanned the whole issue of aggressive franchising to advanced technology, new services and new things," he says. "The next phase for cable is the digitization of the industry and this is the brand I think that is going to lead it."
Central to that will be expanding AOL's cable play beyond its AOL Plus service with Time Warner Cable to include other cable operators. Selling cable operators on the idea of opening their pipes to an AOL service won't be easy, but Borrelli argues he does have some bargaining chips as he makes the pitch to his former cohorts.
"I think it has tremendous opportunity for both of us," he says. "We're also talking to people that are already partners--between Home Box Office and Turner we have relationships with the cable community that are very long and deep. And so I look at this as another product line. And I think that it should be a no-brainer for cable operators that are serious about being a bona fide provider of high speed data broadband services in their communities."
Indeed, much of the relationship between cablers and AOL in an open-access broadband world should mirror that of pay TV channels in cable's traditional video business, according to Borrelli. There, the cablers want the best mix of programming to lure subscribers and that includes the most popular brands - even if those were not part of their native broadband ISP.
"This is an evolution. It's been happening, and frankly the investment in the networks, the investment in the technology, the people and the performance standards--all of this has been one big evolution," he says. "What would be hard for me to imagine is telling our customers, 'We are going to provide you the best high-speed choice of data services possible and not have AOL as part of that menu. That just does not compute. That would be like saying, 'We're selling premium television but we don't offer that HBO and Cinemax channel.'"
Meanwhile, AOL will continue developing similar relationships with providers of DSL and satellite broadband Internet service. Borrelli says it goes back to the company's well-worn mantra of AOL Anywhere.
"While it is true that my focus is primarily going to be on cable, I think that AOL and the broadband platform is going to be one that will be driven by consumer choice," he says. "If consumers want to buy their AOL Plus via DSL, they can do that. If they want to buy it via cable, they'll be able to do that. If they want it via satellite ... this is all about serving the consumer and being in a position that when the customer calls and says, 'Can I get that?' the answer should be yes."
Still unclear is what role Time Warner's Road Runner cable modem service will play within this expanding AOL broadband service initiative. Since AOL and Time Warner completed their merger early this year, there has been much speculation about the fate of the high-speed ISP. While Borrelli could not give specifics as to its status, he thinks Road Runner likely will continue to exist.
"Basically, you can look at the way AOL is structured right now--it has AOL, it has CompuServe, it has Netscape," he notes "There's no reason to believe we couldn't have a terrific Road Runner product and an AOL product in a broadband sense, just like we have on the narrowband side."
Change, too, is on the horizon for AOL-Time Warner, and much of that has to do with an inevitable transition of its 30 million members from dial-up narrowband to a broadband platform, Borrelli says.
"It is important to maintain the customer service built up through the narrowband business, but admittedly, it's all moving toward broadband," he says. "And of course all of the related issues of having a big company that is sort of used to doing things one way and having to move in a different direction--I think we are all preparing for that. It's all happening as we speak, because it's that important and the opportunity is that great."
Developing applications for broadband users will therefore come into play, and one area AOL likely will explore is home networking, a field already being attacked by rivals such as EarthLink and SBC Communications. Time Warner Cable already has worked on the technology to bring networking to cable modem service, and Borrelli says that will continue developing.
"It's a natural progression," he says. "It's sort of a waste if you think about it. You are going to put a broadband connection into the home and connect it to one device? Why bother?"
But for now, the top item on Borrelli's list of things to do is to get cable operators to return his calls. "It's going to be fun," he says. "The cable community are the biggest financial partners that AOL Time Warner has, if you look at the amount of money that we exchange in terms of value that we provide for Home Box Office and Turner Networks. We are already in this game together," Borrelli says. "And this is another opportunity for us to help them improve the lives of our customers. Their customers and our customers are the same.
"I think it takes a little bit of courage, it takes a lot of hard work but I think the objective is noble and I think it can work," he adds. "It's not quite turning an aircraft carrier in the harbor, but it is going to take a little bit of effort."
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