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AOL (AOL) apparently doesn't need government help to craft deals with BellHeads. It's following the groundbreaking Bell Atlantic (BEL) DSL partnership with a similar arrangement with SBC (SBC) that will pass 8.4mln HHs by the end of the year. Both partnerships provide AOL with a competitive footprint comparable to current cable- modem availability. The partnerships, which cover Bell Atlantic's territory from ME to VA, and SBC's territory covered by it, Pac Bell, Nevada Bell (and potentially Ameritech (AIT)), will be targeted to current AOL subs and potential DSL customers in 21 states. The deals are a clear marketplace reaction to threats from the @Homes (ATHM), RoadRunners and other cable-based Internet services, yet AOL and its public policy partners still insist on the need for government- mandated access to cable's pipe. AOL's deal, however, demonstrates the existence of a competitive market, as it aligns directly against cable's competitive pipe. Moreover, AOL's insistence that cable- modem subs would be ill-inclined to spend an additional $9.95/month for its service on top of a cable-modem service rate is losing credibility. AOL conceded that its SBC-provided service will cost AOL members an extra $20 month, totaling around $40 if people choose unlimited access. Cable-modem services, with an additional AOL buy, would cost around $50. So either AOL has a competitive, cheaper offering for people to get access to its service, or pricing will react to marketplace conditions, and AOL subs will be able to buy access via cable-based Internet services at similar prices to DSL- package deals. Just like the over-the-airheads, who are finally getting called on their contradictory antennas-work-with-satellite, but do not on digital must carry, the ISP/OSP community should soon be confronted with their public policy contradictions and hypocrisies.