Time Warner Opens Lines to Earthlink

Time Warner Cable (www.timewarner.com) announced that they have signed an agreement with EarthLink ( www.earthlink.com) that will allow EarthLink to offer its broadband Internet services over Time Warner Cable systems. The agreement is contingent upon the approval of the AOL/Time Warner merger by the FTC, and was pushed through to appease the FTC's concerns regarding lack of competition in this sector.

AOL and Time Warner also jointly announced that they are extending the FTC's review period for two weeks beyond the original deadline of November 30. The extension is to provide the FTC with time to consider the technical and other details of the EarthLink-Time Warner Cable agreement.

Assuming that the FTC finds the agreement satisfactory, the companies state they expect to close their merger by the end of the year or in the very early days of 2001. The FTC previously stipulated that Time Warner open access to its high speed networks as a condition for approval.

The agreement with EarthLink, the nation's second largest ISP, is significant for consumers because it will allow them to choose their cable ISP and theoretically open up the broadband cable arena to more competition and lower prices. When the companies first announced their merger back in January, they stated that they would be committed to choice and hoped that other broadband providers would follow suit. The comment at the time indirectly referred to the AT&T practice of bundling its Excite@Home ISP with its broadband service.

Amid continuing regulator concerns, the companies reiterated their intent to open access to other ISPs on the Time Warner broadband cable systems in February, with a joint statement. In this statement the two companies promised consumer choice, diversity of ISPs, a direct relationship with the customer for ISPs, and complete access to video streaming for all consumers. Nonetheless, the first relationship with an unaffiliated ISP was not announced until the end of July -- when a letter of intent to open was signed between the companies and a trial was announced in Columbus, Ohio.

AOL had lobbied extensively to open access to all cable lines; however, they ceased this initiative once the merger with cable-giant Time Warner was announced. Time Warner Cable's broadband-capable cable networks pass by approximately 20 million homes.

Time Warner Cable's previous obligations to Road Runner were often cited as one of the prevalent reasons that unaffiliated ISP rollouts were slow in progressing. However, Time Warner announced its intention to restructure its existing contract with its affiliate Road Runner prior to the EarthLink agreement.

EarthLink will begin offering broadband Internet services over Time Warner Cable's systems after this restructuring and technological modifications are complete. EarthLink anticipates providing its broadband Internet services over Time Warner Cable's systems sometime in the second half of 2001.

Specific terms of this agreement between EarthLink and Time Warner Cable were not disclosed.