October 4, 2002 12:49 PM PDT

AOL 8.0 drops satellite subscribers

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America Online is sending a new message to subscribers using broadband satellite connections: It's not good enough for you.

The Web giant will no longer support one-way satellite connections for broadband subscribers who use AOL 8.0, the forthcoming version of its online service, CNET News.com has learned. AOL members with 7.0 installed will still be able to use the one-way satellite service, which is sold as a broadband-quality offering but, according to AOL, fails on that promise.

"We will continue to support current members who are accessing AOL 7.0 via one-way satellite connectivity," the Dulles, Va.-based company wrote in an e-mail to CNET News.com on Friday. "However, we have made a decision not to support this connectivity method with AOL 8.0 as the one-way nature of satellite connectivity doesn't provide the optimal broadband experience for members."

AOL, the digital arm of AOL Time Warner, said satellite subscribers comprise a "nominal" number of its nearly 35 million members. Most members of the satellite service, which sells for about $55 a month, are in rural parts of the country where people are unable to pay for high-speed Net connections through cable or DSL (digital subscriber line). Those members who wish to upgrade to AOL 8.0 will have to switch to dial-up service.

With its release of AOL 8.0 due Oct. 15, the company is making a renewed commitment to the AOL experience, which includes exclusive entertainment programming, better customization of the service, and new interactive chat rooms. A major piece of this puzzle is providing broadband connections that deliver quality content at high speeds. Jonathan Miller, the newly appointed CEO of AOL, this week said that the company is focused on improving broadband service.

Satellite broadband, which aims to improve the clip of Net connections by combining a one-way satellite feed with dial-up, fell short of its hopes. Analysts said the cost likely outweighed its benefits for AOL. In addition, the service failed to match the speeds that consumers typically expect under the label "broadband."

"Satellite broadband has not taken off the way many have hoped," said analyst Bruce Leichtman of LRG Research. "The speeds just are not there."

AOL offers its satellite service in partnership with Hughes Electronics. The company said it will continue to work with Hughes on various projects in the future. AOL is notifying members via e-mail about the upcoming changes.


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