AOL faces threat from AT&T

The world's largest online provider, America Online, faces stronger competition from AT&T's planned purchase of MediaOne than any threat it has fended off previously.

AT&T has made a $54 billion bid to buy cable-television company MediaOne in an attempt to promote cable delivery of internet services.

AT&T claims that would give a quarter of American homes access to superfast internet connections via AT&T's AtHome service. But the Wall Street Journal doubles that to half of all American homes when all the other cable company deals and subsidiaries are added into the equation.