AOL to offer Internet via satellite TV

Attention, cable and phone companies: Satellite operators are staking out their own piece of the high-speed Internet.

America Online Inc. and Hughes Electronics Corp. announced Tuesday that they will team up to combine satellite television with Internet access in a single service.

That would let consumers tune in Hughes's Direc TV and surf the Web with AOL from the same set-top box.

The alliance between AOL and Hughes, a unit of General Motors Corp., underscores the potential role for satellites in the broadband world and adds a twist to the hubbub over AT&T Corp.'s planned purchase of cable operator MediaOne Group Inc. Perched in orbit, satellites can beam down movies, Web pages and phone calls anywhere on the globe at lightning speed, without the need to lay cables or phone lines.

"We think satellite will be part of the mix," says Barry Schuler, president of AOL's Interactive Services Group and the company's point man for broadband.

Tuesday's move may also be a harbinger of broader cooperation toward interactive TV, a goal that has so far eluded every effort by giant telecommunications companies. "We've talked about it for a long time, but this gives it a jump start," says Hughes Chairman Michael Smith. He adds that the interactive features "open the door to the mass market" of customers who may not be well-versed in computers but want to surf the Internet or engage in electronic commerce using television screens.

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