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Wednesday, November 15, 2006

Microsoft Pokes Cable And Telecoms


Microsoft has decided to set up free wireless internet in Portland. For everyone. The whole city. Google has looked at a similar initiative in San Francisco.

Since Microsoft is providing its IPTV platform to a number of telecoms like AT&T and Verizon, the move could eventually put it at odds with some of its largest customers.

Microsoft's free wireless broadband will be supported by advertising that will run at the top of the browser page. The big software company understands the process well since online advertising is already a large source of revenue for its MSN division.

But, free wireless broadband does not exactly help cable companies and telecoms who are selling broadband access over their networks. AT&T, Verizon, Comcast, and Time Warner Cable bring in a large portion of their revenue from broadband-to-the-home. It is always hard to compete with "free" expecially if the product is good.

While it is too early to tell whether Microsoft can turn a profit with ad supports wireless broadband, if it works in Portland traditional broadband suppliers could find that they have a new, very well funded competitor.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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