Microsoft Leads Effort to Deliver High-Speed Internet Access to Consumers

Microsoft Corp. has announced that is joining forces with 35 media and technology companies in an effort to prod consumers into adopting broadband Internet connections.

High-speed access will enable consumers to more quickly receive multimedia content over the Internet, including full-motion video. Mass deployment of broadband access will also facilitate more powerful marketing initiatives by e-commerce sites, which will enable online stores to transcend “static” advertisements and deliver dynamic, multimedia marketing messages to consumers.

In addition to the consumer-oriented benefits of high-speed Internet access, the newly-formed alliance is seen by some industry observers as a back-door attempt by Microsoft to eclipse RealNetworks, Inc., the current industry leader in streaming software. In fact, one of the outcomes of this new alliance is that cable Internet companies such as RoadRunner — which services giants Time Warner and MediaOne — will increase its use of Microsoft’s streaming content technology.

Broadband Is The Key

At the Digital Hollywood conference held in Los Angeles Wednesday, Anthony Bay, general manager for Microsoft’s streaming media division, predicted that this new initiative would play a key role in doubling consumer broadband adoption within the coming year.

“We believe streaming media is the application that brings broadband to mainstream consumers and will fundamentally change the way people experience the Internet,” Bay said. “We’re gratified that so many industry leaders share our vision and joined together to make broadband a reality.”

In addition to cable TV companies, content developers such as Digital Entertainment Network, Inc., MSNBC and the World Wrestling Federation are joining forces with Microsoft to promote the proliferation of broadband service.

DSL access providers Rhythms NetConnections, Inc., Northpoint Communications and Covad Communications will also participate in the initiative.

Next Battleground For Dominance

Some analysts feel that by forming the broadband alliance, Microsoft is once again thinking many moves ahead of its competitors in the chess game of e-commerce. The consensus among many industry observers is that high-speed access to the Internet is not just the next battleground for streaming software– but also the arena where e-commerce dominance will ultimately be decided.

The rumors surrounding high-speed Internet provider Excite@Home Corp. this week underscores the growing importance of broadband access.

Some news stories and Web message boards speculated that the company was about to be sold to America Online, Inc., while others suggested that Excite@Home would be splitting its content and access business into separate companies.

Since then, Excite@Home has issued a statement stating that while it is continuously assessing various forms of strategic relationships, “there is no certainty any transaction will occur.”

Meanwhile, a tumultuous political battle still looms on the horizon over whether companies without broadband access have a right to tap into the abundant broadband infrastructure of an AT&T.

Nonetheless, analyst Jae Kim of Paul Kagan Associates, a media research firm based in Carmel, California, feels that Microsoft’s broadband collaboration makes sense for a more immediate reason.

“By working simultaneously across multiple fronts, streaming media alchemists are collectively better positioned to turn red ink into black,” he said.