The two firms signed an agreement in February, which set
the framework for Time Warner
to offer consumers a choice
of rival Internet service providers, including America Online
and Road Runner access,
over its broadband cable systems.
In a letter to the Federal Communications
Commission responding to questions about their merger, AOL and Time
Warner said they are cooperating in a technical and operational trial
conducted using Time Warner’s Columbus high-speed data cable facilities.
The Ohio trial represents a big first step by the two companies to provide
details about how competitive cable access on an “open access” platform
could be transformed into a viable broadband system.
When the two companies signed the original deal, Steve
Case, AOL chairman and chief executive officer said the agreement was a
testimonial of its support for open access in the marketplace.
“Choice, competition and innovation have been the factors driving the
Internet’s explosive growth to date,” Case said. “With this framework, we
are poised to make it easier, more attractive and more affordable than ever
for consumers to sign up for high-speed, always-on Internet service, with
all of the benefits that has to offer.”
Gerald Levin, Time Warner chairman and chief executive officer, echoed
Case’s commitment to competitive cable services.
“We know Time Warner consumers want choice and innovation in cable Internet
service, and we are going to deliver it to them, access to AOL as well as
to a variety of other ISPs,” Levin said.
The FCC scheduled a public hearing on the proposed merger, currently valued
at about $133 billion. Open access is one of the subject’s set to be
discussed at the July 27 meeting.
Analysts cited AOL’s desire to gain access to the media giant’s cable
pipeline as one of the primary reasons for the merger, because it provides
AOL with access to a nationwide broadband pipeline.
Critics of the merger originally believed that AOL and Time Warner
statements only give lip service to open access. The Ohio tests have forced
the groups to modify their opinion of the deal, but the groups still
caution that open access has a ways to go before it is a competitive reality.
Baker urged Congress to quickly establish an enforceable national open
access policy to ensure consumers have a choice of multiple ISPs
regardless of whether they use digital subscriber line or cable broadband
Baker said that a national policy was critical to ensure that consumers
have the same competitive choices in broadband Internet access as they have
in narrowband services.
“The bottom line is that competition in ISP services drives innovation and
improves quality,” Baker said. “If consumers are able to choose the ISP
they want, not the one that cable wants to force them to use, the Internet
will remain a vibrant source of information. If not, the Internet will
stagnate under cable companies’ anti-competitive grip.”