During the Federal Communications
Commission’s review of the America
Online Inc., Time Warner
Inc. merger, both chief executives swore that the companies are
committed to sharing its cable network platform.
Gerald Levin, Time Warner chairman and chief executive
officer, openly invited independent Internet services providers to strike
deals now for future transport over its high-speed Road Runner cable platform.
“Multiple ISPs are necessary for our revenue growth in every market we
compete with digital subscriber line services,” Levin said.
When the en banc commission pressed Levin for a timetable to open
access he hinted that there would be a new deal with a national ISP soon.
Time Warner and Juno Online Services,
Inc. Monday announced they have signed a binding letter of intent
that will allow Juno to offer high-speed Internet access over Time Warner’s
cable broadband network.
The two companies signed a letter of intent, akin to the deal that AT&T Corp. struck with MindSpring Enterprises earlier this
year. The only difference is that Juno will be one of the first ISPs to
reach a business agreement with Time Warner Cable for broadband Internet
access.
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.
The agreement is a direct result of Time Warner’s verbal commitment to
distribute the services of multiple Internet access providers on its
broadband network and gain regulatory approval of its marriage with America
Online .
The alliance with Juno allows the national ISP to offer complete Internet
access, content, applications, and functionality to Time Warner Cable
customers. Juno plans to offer its existing dial-up customers in Time
Warner’s service area the ability to upgrade to Juno’s high-speed service
program, marketed as Juno Express.
Juno will join Time Warner’s shared-cable experiment currently on trial in
Columbus, Ohio. Any future cable service rollout is dependent on the
results of the tests designed to identify and resolve implementation issues
among competitive carriers.
Time Warner currently has more than 12.6 million customers nationwide more
than 11.5 million homes capable of receiving high-speed Internet service
over the Time Warner Cable system.
A rollout schedule for the service will be announced in the future, subject
to Time Warner’s pre-existing obligations relating to Road Runner and Excite@Home, whose exclusive contract is
set to expire in less than two years.
The deal lends credibility to AOL and Time Warner’s commitment to open
access over its cable systems. It also means that the merged company may
move to eradicate exclusivity deals with Excite@Home
sooner, rather than allow the closed contracts to expire naturally.
Charles Ardai, Juno president and chief executive officer, said it is
committed to being a leader in the area of high-speed Internet access.
“This relationship is a major step in our plan to offer
subscribers
nationwide a wide range of options,” Ardai said, “We believe this
relationship with Time Warner will allow us to offer an attractive new
option for Juno subscribers who are ready to make the move to broadband.”
Glenn Britt, Time Warner Cable president said the agreement is a watershed
deal marking its commitment to competitive cable modem access nationwide.
“This groundbreaking agreement underscores Time Warner Cable’s commitment
to offer its cable customers a choice of Internet service providers and
will help expand the number of high-speed data subscribers on our cable
systems,” Britt said.
Echoing Time Warner’s commitment as stated before the FCC, Britt said
independent Internet service providers are welcome to join the cable
revolution.
“We look forward to reaching agreement with other ISPs as quickly as
possible and to offering our customers a broadening array of choices in how
they experience the Internet,” Britt said.
Under the agreement, both Juno and Time Warner Cable plan to market Juno
Express to their mutual customers and have the ability to price and package
the service independently. Time Warner will be responsible for installing
the service in customers’ homes. The agreement covers the full range of
functions relating to the provision of Internet service, including billing,
network elements, and privacy responsibilities.
Juno has exerted its marketing strategy to rival America Online as the
nation’s top Internet service provider. While AOL is built on a community
of more than 23 million subscribers, Juno provides services to about 10
million members.
Juno’s marketing strategy is based on up-selling members that utilize its
free e-mail and dial-up service programs to fee-based access. The firm
reported in March that of its 10 million members, about 700,000 use its
e-mail only free service offering. Juno also reports that more than 3
million active users of its 10 million-member base access the Internet
through its extensive service portfolio each month.
That makes Juno the second largest online community after AOL in total
membership, and the third largest base of active users in the U.S., after
EarthLink, Inc.
completes is acquisition of OneMain.com’s
subscribers to serve more than 4.2 million billable users.
