Net Sector Up in Early Trading, Boosted by MindSpring News

The deal with AT&T has helped boost the Internet service provider's stock.
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The future of high-speed Internet access is becoming a little clearer on news that

AT&T

(T) - Get Report

will open access to its high-speed cable lines.

AT&T announced a deal to allow Internet service provider

MindSpring Enterprises

(MSPG)

to use its high-speed cable lines. MindSpring, which has announced plans to merge with

EarthLink

(ELNK)

, was up 5 1/16, or 16%, at 37 3/8. EarthLink was up 6 1/4, or 12%, at 59 5/8.

This news helped boost

TheStreet.com Internet Sector

index, which was up 2.2% in early trading.

America Online

(AOL)

, which also has a vested interest in AT&T's plans, was up 1 5/8, or 2%, at 80. Also,

Prodigy

(PRGY)

was up 3/8, or 1.5%, at 26.

The future is less clear for

Excite@Home

(ATHM) - Get Report

, which is partially owned by AT&T and currently has exclusive access to the high-speed lines. It was off 2 9/16, or 5%, at 49 1/2.

Merrill Lynch

analyst Henry Blodget put out a note on the news and indicated that regardless of the agreement's "exact" impact on Excite@Home, "it could represent another stop on a road to a market in which the cable operators sell access to the highest bidders -- a situation that would likely reduce the value of @Home's exclusive cable contracts

and stock."

Among

Red Hots,

Red Hat

(RHAT)

was leading the charge following news of an expanded agreement with

Dell

(DELL) - Get Report

. Dell said it would factory-install

Red Hat Linux

on its entire server line. Red Hat was up 14 7/8, or 7.4%, at 215 7/8.

In analyst actions, Merrill Lynch initiated coverage of

InfoSpace.com

(INSP) - Get Report

with an accumulate rating and a 12-month to 18-month price target of 160. Blodget wrote that Infospace.com was "the best-positioned player to benefit from the growth in Internet marketing and sales infrastructure with an addressable market opportunity of $100 billion by 2003." Blodget noted that InfoSpace.com stock has had a strong run "and valuation is a concern," but his call was based on the company's fundamentals. It was up 13 1/8, or 10%, at 144 1/2.

uBid

(UBID)

also was benefiting from kind words from Merrill. Blodget upped his 12-month to 18-month price target on the stock to 60 from 50. It was up 4, or 10.8%, at 41.

In other news,

RealNetworks

(RNWK) - Get Report

was up 3 3/4, or 2.5%, at 154 3/4 after making a slew of announcements. The company said that its new RealServer streaming-media system would deliver up to 250% improvement in server capacity. It also said it was teaming with

DoubleClick

(DCLK)

to provide new services for Internet broadcasters to provide targeted advertisements within their streaming-media content. Finally, it said it was partnering with

Intel

(INTC) - Get Report

to transform

Microsoft

(MSFT) - Get Report

PowerPoint

presentations and Web pages into live and recorded Internet broadcasts.