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AOL, IBM team up to sell electricity and gas

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AOL and IBM are jumping into the deregulated US utility market. The pair are both allies in what they've called - with more than a nod to Prince - The New Power Company, created today with Enron, an energy wholesaler and broadband comms provider based in Houston Texas.

Enron is building a national fibre optic network stateside based on IP, EIN (Enron Intelligent Network) and has inked a deal with Sun to provide infrastructure suitable for serving up broadband ASP services. It has spent much of this year talking up what it describes in its SEC filings as "the marketing and management of bandwidth" Bandwidth trading, in other words, using the same techniques it uses for gas or electricity to create say peak/off peak pricing for ISPs.

The company also sees a business in "the delivery of high-bandwidth media rich content such as video streaming, high capacity data transport and video conferencing" although revenues for this are so far negligible. And among the four senior Enron VPs joining the NPC is its erstwhile Veep of Risk Management.

We can't be sure if AOL is an investor - although there's a pretty strong hint in the launch statement - but the NPC has said it will promote the service to AOL customers and AOL will also offer billing services, with IBM the exclusive back-office billing provider.

It's too early to tell whether Enron can tame the nascent trading market by bringing AOL onside - it's the largest ISP and as such, one of its biggest customers. But the benefits for AOL, assuming further vertical bandwidth alliances can escape regulatory censure, are obvious enough.

Enron has a short, but intriguing history in the UK.

The company is entering the retail energy business too and owns Wessex Water and what used to be ICI's Wilton gas plant on Teesside. It also bought space at New Labour fund-raising jamborees. In 1997 Amnesty International censured the company for beating women protesters at a joint venture between Bechtel, Enron and GE in India's Maharashtra state. ®

Register Fact No. 857

ICI's Teesside headquarters are known locally as the Wilton Hilton, and Teessiders known colloquially as smog-monsters. If you've been there, you'll know why. Prominent smog-monsters include comedians Vic Reeves, Bob Mortimer, Roy "Chubby" Brown and Brian Clough; Oracle's Mark Jarvis, and our own Annie Kermath.

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The New Power Company

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