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AOL, extend long-distance alliance

America Online broadens its agreement to offer as its exclusive long-distance telephone service and adds its wireless and local phone services.

America Online today said it has broadened its agreement to offer as its exclusive long-distance telephone service.

With the extension, will provide its service to AOL members until June 2001. The original deal was set to end in July. will also provide wireless and local phone services to AOL members but in a nonexclusive capacity.

The company, formerly called Tel-Save, has marketed its services through the online giant since 1997. Its AOL Long Distance service had sold more than 1.4 million accounts to AOL members as of the end of last year.

In March, the company acquired Access One Communications for $208 million to offer local phone service. will provide a bundled local and long-distance service to AOL members beginning later this week, according to Ed Meyercord, chief financial officer.

"This provides us with a continuation of highly successful marketing channels in AOL," Meyercord said in an interview.

Today's contract extension does not change the existing economics of the marketing agreement between the companies. is expected to pay AOL more than $150 million as part of the deal.