AOL is basking in the limelight for its $350 billion takeover of Time-Warner, but Orange County’s emerging broadband sector could be long-term beneficiaries as the deal brings high-speed data streams into the consumer mainstream.
The area,already establishing a reputation as a broadband powerhouse with the presence of industry dominators Broadcom Corp. and Conexant Systems Inc.,is poised to cash in on high-speed Internet connections becoming as much a part of everyday life as the telephone and TV.
“It could definitely accelerate broadband,” said Chuck Cortright, general manager for SRS Labs’ Internet operation, WOWcast.com. The venture produces hardware and software that enhances sound over the Internet, an area expected to grow as connections get faster.
While Cortright said the merger doesn’t guarantee anything, he added that AOL has done a good job simplifying technology for the masses. And what AOL did to make e-mail and web sites part of everyday life, it could do for high-speed connectivity.
For years, industry observers have predicted an explosion in broadband connections, the high-speed Internet access that allows consumers to do everything from download new CDs, order movies online or place free phone calls over the Internet. But despite inroads by the likes of cable modem provider @Home and regional telephone companies’ digital subscriber line service, high-speed connections have remained primarily in the realm of the technically inclined.
With consumer-friendly AOL now in control of Time-Warner’s cable operations and committed to its vision of universal high-speed Internet service, observers expect the pace of broadband adoption to accelerate.
“People like Grandma and Grandpa have always been more comfortable with something like AOL,” says Armond Hairapetian, founder of NewPort Communications, which designs chips used in optical networking equipment used for super-fast connections. “It’s good for the industry in general.”
Terry Holdt, chief executive for Irvine chipmaker Entridia, agrees. His company makes chips that help prioritize and route data, useful for broadband applications such as video and voice-over-Internet applications.
“We won’t benefit directly, but it’s positive for the industry,” he said. “It opens up a portion of the marketplace that broadband hasn’t gotten into. And that’s always good for companies like Entridia that focus on hardware and software used to make that transition.”
The AOL deal could ratchet up the competition for companies like Ryan and Chad Steelberg’s Broadband Digital Group, which hopes to take on AOL in the consumer marketplace. Although BDG’s high-speed DSL service is free, AOL could offer a familiarity that appeals more to non-technical users.
On the other hand, analysts are quick to point out, AOL’s acquisition legitimizes the broadband market. And that, they say, is good for everyone. n
