The government is looking to local and regional Internet service providers
for help to toughen up its open cable network access policy.
It’s not a good sign for America Online Inc. and Time Warner Inc., which
have been guaranteeing government approval to investors by the end of 2000
or the early days of January, 2001. While approval is still expected by
the FCC soon, it means another delay, pushing AOL and Time Warner approval
into the second week of January.
In what will be America’s largest buyout, at approximately $109 billion, the
Federal Communications Commission is asking ISPs what an AOL/Time Warner
merger would mean to their business.
Steve Heins, director of marketing for Oshkosh, WI-based ISP NorthNet, is an
advocate of cable open-access issues and a sharp critic of what he calls the
anti-competitive practices displayed by AOL and Time Warner.
The FCC has tapped Heins and his group of 61 Wisconsin ISPs, dubbed WI-ISP,
to help define terms it is putting together for an open-access policy that
has more teeth than the one approved by the Federal Trade Commission last
month.
Where the FTC is mandating that at least two ISPs share the new AOL Time
Warner cable network, the FCC wants to ensure small-town providers have an
equal shot on that network. Regulators are pushing for an open access
policy that dictates one local and one regional ISP are also included in the
network mix, in addition to a national provider, before AOL can offer its
services.
“We’ve been working on this draft all morning and plan on having a draft
sent up to the FCC later on this afternoon,” Heins said. “We’ve been
consulting with other state and individual ISPs on defining what local and
regional should be. It’s going through some revisions to what we originally
thought, but should be worked out soon. I think it was a good idea for them
to come to us; who better to figure out what a local ISP does than a group
of local and regional ISPs.”
Heins said the group originally treated the terms local and regional the
same as the telephone industry, where local meant serving one area code and
regional meant three to 24 area codes. But, he said, that didn’t take into
account franchise companies like Time Warner.
Heins is confident the FCC will look at the draft’s definitions as an
industry standard for cable networks nationwide.
It means Time Warner’s agreement with national ISP EarthLink Inc., signed
last month, is a good start towards open access, but not nearly enough to
satisfy a possible FCC mandate.
Many fear the agreement struck between Time Warner and EarthLink makes it
hard for smaller providers to afford inclusion on the network. EarthLink
has not disclosed details of the term sheet contract it signed with Time
Warner.
Joe Marion, executive director of the Federation of Internet Solutions
Providers of the Americas, said his organization has been watching the
merger drama unfold, and remains unconvinced when it comes to open cable
access.
“Without knowing the specifics of the deal between EarthLink and AOL/Time
Warner for meaningful competition to occur amongst ISPs we must have
non-discriminatory open access to the entire AOL/Time Warner platform.”
It was reported that one of the terms in the agreement prevents unaffiliated
ISPs, EarthLink included, from offering business services.
“What that means for second- and third-tier communities is that they aren’t
going to have a broadband choice when they look for services,” Heins said.
“Many businesses in rural areas are located close enough to a central office
to use (digital subscribe line services). That means they are going to be
underserved when it comes to broadband choices, with cable the only option.”
