Internet access is big business. It commands more than double the revenues of the flashier Internet portal and content companies that grab most of the headlines. So far, however, providing Internet access to residential customers in the United States has been a money-losing proposition.

Players are competing in two battlegrounds defined by the fundamental economics of Internet access. Over the past year, winners have emerged in each.

First, there is a battle for customer relationships, in which Internet access is only one element in the broad array of content, products, and services that players deliver to consumers. America Online is the clear leader in the customer relationship battle: its 13 million subscribers account for more than 50 percent of all Internet traffic. Exploiting its early entry into the online marketplace and its ownership of both backbone network and content, AOL built a unique stronghold in narrowband Internet services, combining a critical mass of subscribers with a depth of relationship that will be difficult for others to emulate. It has since sold its backbone network to WorldCom and outsourced backbone services to GTE and WorldCom, and now focuses exclusively on managing content.

Internet gateways such as Yahoo! and Excite, delivering...