New York-based GiSCO is raising a
stink after having been turned away from buying TV advertising on Time Warner Inc. (TWX)
cable systems in its region because it wasn’t allowed to advertise in areas
where the media giant is rolling out the high-speed Road Runner service.
Time Warner says it’s not a corporate policy, but that regional offices are
free to reject such advertising.
“We typically do not accept advertising from companies that offer competing
products,” says Michael Luftman, vice president of corporate communications
for Time Warner Cable. Luftman noted that you’re unlikely to see, for
example, advertisements for satellite dishes on Time Warner cable systems.
The policy raises big questions about the future, since America
Online (AOL),
the nation’s biggest ISP, has agreed to acquire Time Warner. The deal would
effectively give Time Warner an Internet access business in every market,
making every other ISP a competitor.
“We first learned of the policy against ISP advertising when we attempted
to purchase ad spots in the Syracuse, New York, Market in the fall on 1999.
Time Warner refused to run our ads in that market because Road Runner is
being offered there,” says Paul Barton, president and chief executive
officer of GiSCO.
GiSCO charges that the policy inhibits fair competition in the market for
Internet service providers.
National ISPs like EarthLink (ELNKD) and MSN (MSFT)
are apparently not having the troubles
that GiSCO is encountering, evidently because they place their ads through
advertising agencies. Or it could be because they, seeking national buys,
can deal directly with the cable networks rather than the regional Time
Warner cable systems.
The advertising policy may actually become more to GiSCO’s liking as the
acquisition by AOL comes to fruition, say Time Warner officials. The merged
company is already committed to allowing open access to its system, AOL
being a founding member of the openNET coalition. That means
other ISPs would be able to offer access through Time Warner’s cable wires,
so, perhaps, every regional office would take advertising from these ISPs,
as well. Decisions on these matters are still being worked out.
