Qwest, AOL Trade Ads for DSL Access

Internet backbone provider Qwest Communications will be accepting ads from across AOL Time Warner’s media properties, in return for providing high-speed access for AOL users.

Through the deal, Denver-based Qwest will provide DSL and dial-up access to subscribers to AOL’s Dulles, Va.-based America Online service. The online service will purchase DSL lines, network transport, and other, unspecified network services, as part of what AOL spokespeople described as a long-held strategy of providing multi-platform subscriber access.

“We are extremely pleased that AOL Time Warner has decided to use Qwest’s world-class, 113,000-mile broadband network to help support the delivery of services to America Online’s members,” said Joel Arnold, Qwest’s executive vice president of global business markets. “By expanding our existing relationship, Qwest will also reach more customers through AOL Time Warner’s electronic and print media channels.”

Under the terms of a separate agreement, Qwest — through its European subsidiary KPNQwest — will provide America Online and its European ventures with additional bandwidth for content delivery.

The wholesale network and DSL agreements, as well as the European deal, build on an early 1999 contract between Qwest and America Online. That $13 million arrangement saw Qwest offering high-speed connectivity, private line and co-location services to AOL, as well as additional Internet bandwidth. As part of the new arrangement, Qwest will advertise via AOL Time Warner’s magazines (including Fortune and TIME), on its Turner Broadcasting stations, and via several America Online-owned brands.

Spokespeople declined to put a valuation on Thursday’s deal.

“We are pleased to extend and expand our successful relationship with Qwest, supporting our continued strategy of providing easy and reliable access to the AOL service for consumers through a variety of platforms,” said Bob Pittman, who is co-chief operating officer for New York-based AOL Time Warner. “We are also happy to work with Qwest to support their advertising goals. Taking advantage of the many platforms AOL Time Warner can offer will put Qwest in front of a wide audience of potential new customers.”

The move continues AOL’s efforts to use ads on its online, print and television properties as a currency of sorts, in exchange for technology services. Earlier agreements saw the media giant partnering with Hewlett Packard for servers, Cisco for routers, AT&T Wireless for a mobile product and service, and Philips and Samsung for manufacturing of enhanced versions of the AOLTV set-top device.

Qwest, too, has inked similar deals in the past. Microsoft in April signed a deal with the backbone provider to beef up bandwidth and broadband access to its MSN portal, which faced the prospect of losing high-speed subscribers when previous provider NorthPoint collapsed earlier this year. As in the AOL deal, Microsoft said it would advertise Qwest’s consumer and business products through online and direct mail promotions.

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