MSN high-speed plans delayed by Enron woes

NEW YORK: Microsoft Corp.'s Internet unit MSN said on Thursday its plans to

sell high-speed access to homes would be delayed due to the recent woes of

energy giant Enron Corp.

Enron's broadband services unit had signed a pact with the software giant

last summer to develop and provide network capacity and other services to

support MSN's high-speed service.

"While we hoped to deliver MSN Broadband to 90 per cent of DSL-capable

homes by the end of first quarter 2002, that will now most likely happen around

mid-year 2002 to ensure we deliver the best consumer experience worldwide,"

said Lisa Gurry, MSN product manager.

The energy trader, which has spiraled into the biggest bankruptcy in US

history amid questionable accounting practices, failed investments and the

impact of off-balance sheet activities, had been providing the technology

backbone for MSN's expansion of its high-speed access and services.

Last October, Enron had sued Microsoft claiming that the software company had

failed to live up to terms of its deal. According to the suit, Microsoft was

required to develop an electronic ordering and billing system for use with all

regional Bell telephone companies during the initial phase of the deal, but the

company had failed to do so.

Qwest Communications International Inc. also provides backbone for some of

MSN's customers, but Qwest chairman Joe Nacchio said in the company's earnings

conference call Tuesday that progress was slow. "The coordination of DSL

with MSN is off to a slow start," Nacchio said. "It's still not to the

level of customer satisfaction we'd like to see."

Broadband, or high-speed access, is becoming a central part of Internet

companies' growth strategies as dial-up access in the United States matures.

Companies are aiming to offer access over cable, satellite and digital

subscriber lines.

MSN, which currently offers high-speed access in 33 markets, was working with

other providers but did not have any specific information in terms of who may

replace Enron, Gurry said.

(C) Reuters Limited.