Time Warner Cable has received permission to add four unaffiliated
Internet-service providers to compete with the company's proprietary
high-speed-access service provided by America Online Inc.
Approval was granted Dec. 21 by the Federal Trade Commission. When the FTC
approved the merger between America Online Inc. and Time Warner Inc. last
December, the agency required the new company to add competing ISPs to its cable
Under the plan adopted Friday, AOL Time Warner gained approval of privately
negotiated carriage deals with New York Connect.Net Ltd., Internet Junction
Corp., Inter.net Global and STIC.NET.
The FTC transmitted its consent in a one-page letter to Robert D. Joffe, a
lawyer with Cravath, Swaine & Moore, who negotiated merger terms with the
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 that the companies kept their word, the FTC said that before AOL
Time Warner could provide its service to high-speed Time Warner Cable
subscribers, 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 Network Inc. effectively met
that condition. This condition did not interfere with Time Warner Cable's
ongoing provision of its high-speed ISP, Road Runner.
After introducing high-speed AOL, the company had 90 days to ink deals
requiring FTC approval with two more unaffiliated ISPs. Additional ISPs can seek
carriage, and AOL Time Warner is required to bargain in good