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AOL Expands Dial-Up Contract

While a bandwidth-hungry world clamors for more broadband access, America Online proves dial up is still king in the Internet world with a contact expansion for more lines Monday.

Adding to a substantial contract with Level 3 Communications , one of several wholesale dial-up POP providers it deals with, AOL increased its co-location presence around the U.S. and added more access numbers.

The deal is proof that while the company may have tro ubles in the high-speed access department, dial up is still a lucrative business.

Level 3 spokesperson Paul Lonnegren said AOL doesn't divulge the particulars in these types of contracts, but added the deal is huge for Level 3.

"AOL's already our biggest customer and one we've dealt with since 1999," he said, "and this (contract expansion) is one of the biggest contracts Level 3 has consummated in its history."

According to the press release, the expanded deal adds dial-up access in "hundreds" of U.S. cities.

Geraldine MacDonald, AOL senior vice president of global access networks, said Level 3 is one of several wholesale providers AOL depends on for nationwide coverage.

"Level 3's high-performance managed modem infrastructure plays an important role in helping us provide the best possible online experience for our more than 34 million members,'' she said. "Level 3 is a valued partner in our portfolio of providers, and continues to invest in its dial-up access platform, enabling us to cost-effectively expand our access coverage into new geographic areas."

According to Level 3, 80 percent of the roughly 100 million people on the Internet today use dial-up connections. The continuing popularity of dial up stands in seeming contradiction to the hype of broadband access via cable or digital subscriber line (DSL) modem.

Level 3 Chief Technology Officer Jack Waters said the popularity of dial up shows few signs of waning.

"We believe that dial-up access will continue to be a highly viable and growing business for Level 3 for years to come, and have continued to steadily increase our managed modem business while maintaining strong margins," he said.