RealTime IT News

AOL Adjusts Open Access Efforts

America Online, Inc. is backing away from its commitment to open up access to proprietary cable networks.

Prior to its January proposal to buy Time Warner, Inc. America Online (AOL) had been a longstanding proponent of open access to cable networks. According to the Wall Street Journal, AOL recently instructed its lobbyists to stop pushing state legislation that would require open access in Virginia, Michigan, Maryland and Pennsylvania.

Before the Time Warner (TWX) deal was reached, AOL lead the campaign for open access nationwide. Its lobbyists went head-to-head with AT&T Corp.(T) in an effort to compel cable operators to share their lines with Internet service providers.

At the time of the deal, Steve Case, AOL chairman, said the company first started reviewing open access to cable platforms several years ago and that it still believed market forces should prevail.

"We started raising the issue of open access a couple of years ago, we really were focused on the fact that for the Internet to continue to flourish, we need consumer choice," Case said. "To have consumer choice we needed to have competition among ISPs and access, that continues to be our view."

Case also said the combined company would continue to promote open and competitive access to cable networks.

"This company will be leading the charge, we are looking forward to being on the cable platform and we expect to have many competitors on that platform," Case said.

Peter Arnold, Hands Off the Internet executive director, said it was obvious Steve Case was adjusting AOL's approach toward open cable access last year.

"During investor meetings in November, Case said negotiated deals with cable companies were clearly the means to obtain access to cable networks," Arnold said.

Rich Bond, openNET Coalition co-director, said he did not think AOL would abandon the open access cause.

"I don't think that they [AOL] would deceive us and I truly believe that they are committed to open access," Bond said.

"The morning of the merger they told us that this is going to change the world, but its not going to change our goal and its not going to change our commitment," Bond said. "We're just going to have to get there a different way at this point."

AOL and AT&T have proven that the most effective way to obtain open access to cable networks is to buy the firm or contract for access.

AT&T made a radical departure from its closed access policy when it struck a deal with MindSpring Enterprise Inc. in December. AT&T agreed to share access to its cable systems with MindSpring (MSPG) when its exclusive contract with Excite@Home. (ATHM) expires in mid-2002.

Utilizing the deal as a springboard, AT&T declared that it was in favor of shared access to cable networks and that other independent Internet service providers should start negotiating for access immediately.

National consumer organizations including the Consumers Union, and the Consumer Federation of America, Media Access Project, and <