Jake Bishop
Article 5
Article: EarthLink, Time Warner Work Together
Source: PC World Magazine, Nov. 2000 Issue
http://www.pcworld.com/news/article.asp?aid=35401
Summary:
EarthLink, one of the largest ISP’s in the nation has made a deal with Time Warner to offer Internet access over Warner’s existing cable network. This is the first deal of its kind, motivating both excitement and skepticism at the same time.
The contract is not yet official, waiting for acceptance of Time Warner’s merger with AOL from the Federal Trade Commission. If the merger does not go through, Time Warner may yet be unwilling to open its cable network to the growing Internet provider.
The deal would offer cable Internet access to over 20 million homes across the nation if successful.
Response:
At first glance, EarthLink and Time Warner would be collectively a huge competitor in the high-speed Internet market, which could effectively lower prices in the long run for consumers. The hidden issue is the possible conflict of interest if AOL merges with Time Warner, or the monopoly threats that may be posed as well.
In technical terms, utilizing the existing cable network for data as well as television purposes would be an efficient use of resources, an inexpensive solution for speed-hungry consumers, and yet another step in the evolution of modern technology in America.
I rate this article 3 out of 5 for complete content on the story, and 3 out of 5 for usefulness as a quick reference.
EarthLink, Time Warner Work Together
Agreement will allow EarthLink to offer broadband access over Time Warner's cable lines.
Monday, November 20, 2000
EarthLink and Time Warner have struck a deal. Earthlink, the country's second largest Internet service provider, will become the first major ISP to be able to provide Internet access over the cable systems of Time Warner's cable division, the companies announced Monday.
"For the first time ever, a major cable company will allow consumers to choose from Internet service providers, not just the one the company has chosen," says Mike McQuary, EarthLink's president. "It's been an arduous battle....We applaud Time Warner for its progressiveness," he says.
Under the agreement, approximately 20 million homes will gain access to EarthLink's high-speed Internet package through Time Warner Cable's system.
EarthLink anticipates it will begin to provide its broadband Internet services over Time Warner Cable's systems sometime in the second half of 2001. Service is expected once Time Warner Cable completes a restructuring of its contract with its affiliate Road Runner.
Pricing for cable modem service through Earthlink has not been determined, McQuary says. A staggered rollout of service is expected, he says.
Government Intervention?
Neither Time Warner nor EarthLink disclosed any specific terms of the agreement. The agreement is contingent upon the U.S. Federal Trade Commission's approval and closing of Time Warner's merger with America Online.
In announcing its agreement with Earthlink, Time Warner also announced that it will extend its federal review period deadline by two weeks with AOL so the Federal Trade Commission can review the impact of the EarthLink agreement, says Time Warner spokesperson Scott Miller. The merger is now expected to be completed by the end of the year or shortly after the start of 2001.
Time Warner has been under pressure from legislators, policymakers, and consumer groups to open its network to ISPs to spur competition. In late September, Time Warner signed a binding letter of intent with Juno Online Services to grant the company cable access.
As of now Time Warner Cable has only begun trials of software and hardware to allow ISPs to utilize the company's cable system in Columbus, Ohio. Time Warner has previously said it would take until mid-2001 before ISPs could be on the company's cable network, the same timeframe as the EarthLink announcement.
Earthlink is expected to join Time Warner's trials immediately, McQuary says.
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