News

FTC OKs Time Warner ISPs

1/06/2002 7:00 PM Eastern

Time Warner Cable has received permission to add four unaffiliated Internet service providers to compete with the proprietary high-speed access service provided by America Online.

The Federal Trade Commission approved the deals on Dec. 21. When the FTC approved the merger between America Online Inc. and Time Warner Cable parent Time Warner Inc. in December 2000, the agency required the new company to add competing ISPs to its cable network.

Time Warner Cable's privately negotiated deals with New York Connect.Net Ltd., Internet Junction Corp., Inter.net US. Ltd. and STIC.NET got the commission's nod. The FTC transmitted its consent in a one-page letter to Robert D. Joffe, a lawyer with Cravath, Swaine & Moore, who negotiated the merger terms with the FTC.

The FTC imposed open-access requirements on AOL Time Warner based on fears that the company would erect barriers and stifle competition in the broadband-access market.

When the merger was announced, AOL and Time Warner attempted to blunt government intervention by saying they were committed to a business model that incorporated carriage of multiple ISPs.

To ensure the companies kept their word, the FTC said that before Time Warner Cable could offer AOL's high-speed service, it had to first offer an unaffiliated ISP in any cable division with more than 300,000 subscribers.

Time Warner's prior agreement with EarthLink Inc. effectively met that condition. This condition did not interfere with Time Warner Cable's ongoing provision of its in-house high-speed ISP, Road Runner.

After introducing high-speed AOL, the company had 90 days to ink deals with two more unaffiliated ISPs that required FTC approval.

AOL Time Warner is also required to bargain in good face with any additional ISPs that may seek carriage.

September