AOL Launches Cable Internet Service

AOL Time Warner laid out its broadband trump card this week, launching cable Internet services in four cities throughout the U.S.

But, to keep government regulators off its back, the company needs
to sign two more unaffiliated Internet service providers (ISPs) in the next
90 days.

AOL Time Warner officials aren’t talking about which independent providers they are
talking with, according to AOL spokesman Mike Luftman.

“We can’t comment on which other ISPs we may sign up with or which we are
negotiating with,” he said, “but we are highly confident we will have three
independent ISPs signed up within 90 days of launch in any location.”

AOL’s began rolling out the service last week, with the start of high-speed cable Internet
services in Syracuse, NY, and Columbus, Ohio. On Thursday, the ISP announced the launch of two more cities: Tampa, Fla., and Raleigh, NC.

The service costs $44.95 for a cable-only connection
and $54.95 for a cable and dial up Internet connection.

Audrey Weil, AOL Broadband president, said the new broadband service
opens up a whole new realm of Internet applications for AOL users.

“No matter how consumers connect to it, AOL’s High-Speed service redefines
convenience by combining broadband’s faster connections and always-on
capability with the valuable features and ease-of-use that have made AOL
the world’s most popular online service,” she said.

The number one dial up Internet service provider (ISP), with more than 31
million customers worldwide, has had limited digital subscriber line (DSL)
and satellite broadband services for more than a year, but cable
services on its own cable system has long been its ultimate goal.

It’s uncertain how its cable Internet service is set up. AOL 7.0, which
isn’t due until later this year, is configured to include broadband
Internet services. AOL 6.0 doesn’t have similar configuration settings.

AOL plans to incorporate some of its existing holdings into its
high-speed package. Through its ownership of media giant Time Warner,
the company can immediately offer live programming like CNN, HBO Sports and
the Weather Channel.

Glenn Britt, Time Warner Cable chairman and chief executive officer, said
the launch of EarthLink Inc. cable Internet services at the same time is
proof-positive of its leadership position to provide open access on cable
networks.

“By offering AOL High-Speed Broadband and other ISPs over Time Warner Cable
systems, we are taking a major step in fulfilling our commitment to enhance
choice, convenience and value for consumers,” Britt said. “The ability to
offer AOL and other choices to our customers — a first among the country’s
cable systems — is just the latest demonstration of Time Warner Cable’s
technological leadership.”

Of course, it wasn’t all just goodwill that allowed AOL and Time Warner
Cable to share its ISP services with other ISPs, and there are questions
whether the company isn’t stepping over regulator conditions set on its
merger earlier this year.

When AOL merged with Time Warner earlier this year, it was required by both the Federal
Communications Commission and the Federal Trade Commission to open up its cable network to the competition before offering the AOL service on that system.

The FTC took open access a step further than the FCC, spelling out merger
conditions that needed to be fulfilled within 90 days of the company offering high speed Internet access on its cable system. In its ruling, the FTC mandated that at least one competing ISP must offer service on its cable system before AOL could offer its own service, and two other unaffiliated ISPs
must be added within 90 days.

After merging, Time Warner Cable immediately penned a deal with EarthLink and, after nearly a year of talks, with Juno Online Services Inc. An agreement
with Paul Allen’s High Speed Access Corp. (HAS) later that year broke down
after concerns over its financial status and questions about whether
the company was truly non-affiliated
with AOL Time Warner emerged. Juno’s inclusion is still pending at the FTC.

Here is the break down of cable ISPs in each market:

  • Columbus: AOL, EarthLink and Road Runner
  • Syracuse: AOL, EarthLink and Road Runner
  • Tampa: AOL, EarthLink, and Road Runner
  • Raleigh: AOL, EarthLink, Road Runner.

Mike Luftman, AOL/TW spokesperson, said announcements in other cities are
forthcoming.

“We have filed agreements at the FTC with New York Connect.Net (for New
York City); with Internet Junction (for Tampa and Orlando); and with South
Texas Internet Connections (for Houston, San Antonio and Austin),” Luftman
said. “We are in active discussions with a number of other national, local
and regional ISPs and look forward to announcing additional deals.”

Time Warner Cable largely owns Road Runner, the second-largest cable ISP in the U.S.

However, it seems the FTC has given the green light to AOL’s cable launch,
for the time being. Regulators were not available for comment.

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