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AOL's Case still seeks deal with Excite@Home

Amid speculation that cable modem service provider Excite@Home may split into two companies, the CEO of the world's largest Internet service provider said he continues to covet an alliance with the Net-over-cable firm.

NEW YORK--Amid speculation that cable modem service provider Excite@Home may split into two companies, America Online's top executive said the world's largest Internet service provider continues to covet an alliance with the company.

"We have a continuing dialogue [with Excite@Home], and we'd like to do something that makes sense to everybody. And if it takes a while, we'll be patient," AOL chief executive Steve Case said today in an interview with CNET News.com.

"We just haven't been able to agree on what the deal should be."

Case's statements mark AOL's first public comments following Wall Street rumors suggesting that Excite@Home could sell its Web content business to AOL. AT&T, Excite@Home's largest shareholder, confirmed it is considering possible business deals, although AOL, Yahoo, and Microsoft all have been mentioned as possible partners, according to sources.

Case refused to discuss specifics of AOL's talks with Excite@Home, or whether AT&T indeed wants to spin-off the Excite Web portal.

But the executive said the cable industry has warmed to AOL, despite its ongoing push for regulations requiring equal access to high-speed cable networks by unaffiliated Internet service providers (ISPs).

"[Cable companies] seem to be more interested in talking to us than they were before. And hopefully at some point we'll be able to work something out," Case said. "But it's got to be good for them, it's got to be good for us, and it's got to be good for consumers."

Slower-than-expected deployments of cable modems may be behind the change of heart, Case suggested, along with the draw of AOL's 18 million members.

"Early on, the cable companies generally felt like it would be in their interest not to have AOL as a partner and instead try to replicate AOL. And now I think there's a shift in their thinking, and they are more eager to have our support, partly because their growth has been slower than some might have thought in terms of cable modems," Case said.

"And partly because we have lots of customers and we'll have to upgrade customers to broadband. And they started to say, 'I guess we'd rather have them go to cable, than to phone or satellite.'"