EarthLink, Inc. and Time
Warner, Inc. struck a landmark agreement Monday, which allows the
Atlanta-based Internet service access the media giant’s cable
network.
Officials said the deal is a “sign of good faith” demonstrating
Time
Warner’s commitment to sharing its cable network with rivals. But
some
analysts believe that the agreement is simply a form of regulatory
appeasement
crafted to leverage the Federal
Trade Commission
into to getting Time Warner’s merger review back on track.
Last week, the FTC tabled its review of America
Online’s bid for Time Warner. The federal agency gave Time Warner
three weeks to come to terms with FTC demands. The result was, a
finalized
contract with EarthLink and an endorsement for open access.
Time Warner simply released a statement, which said “this
agreement puts
us in the position to move into the final stages of constructive
discussions
with the FTC.”
Both Time Warner and EarthLink executives declined to disclose
the financial
terms of the deal.
But Garry Betty, EarthLink chief executive officer, heralded the
agreement
as the first step toward fulfilling the vision of open access
nationwide.
“This agreement to offer EarthLink’s broadband Internet services
over
Time Warner Cable’s systems is an important advance in bringing
the benefits
of open access to our subscribers and all Internet users,” Betty
said.
“We look forward to working with Time Warner Cable, and we hope to
negotiate
similar agreements with other cable companies.”
EarthLink, the nation’s second largest Internet service provider
gains
access to a cable system that passes more than 20 million U.S. homes.
Mike McQuary, EarthLink president, said the contract is the first
step
in securing open cable access for independent ISPs nationwide.
“For the first time ever, there’s a signed contract with a cable
company
to provide high-speed services to customers who aren’t cable
subscribers,”
McQuary said. “We are guaranteed to be the first ISP in the
program after
the Road Runner contract expires, even before AOL.
“Time Warner will offer EarthLink services in addition to its
own on
a non-discriminatory basis,” McQuary continued. “Cable service by
ISPs
will be offered by Time Warner on a wholesale basis.”
McQuary also said his company will get equal billing when it
comes time
to market the product nationwide.
“We plan on having a staggered roll out, going market to market
around
the country,” McQuary said. The deal also calls for EarthLink to have
input in divisional marketing efforts, which gives them the authority
to put promotional flyers in Time Warner cable bills.
Although Juno Online Services,
Inc.
recently reported that it had “intensified” talks with Time Warner to
seal its deal for reselling cable services no agreement has been
signed
to date.
A Time Warner spokesperson said talks with Juno and other ISPs
are ongoing,
and proceeding as planned.
