AOL and Time Warner said in talks with
Internet
rivals
WASHINGTON (Reuters) -
America Online and Time Warner are in talks with
some
big Internet rivals to give them access
to cable television lines in an attempt to win
government approval of their merger, the Washington Post reported.
The newspaper quoted
sources familiar with the negotiations as saying that Time
Warner
and AOL, the world's dominant Internet
service provider, have stepped up talks with
one- time nemesis EarthLink Inc., the nation's second-largest ISP.
The two companies were
also trying to put the finishing touches on a proposed
contract
with Juno Online Services Inc., the
third-largest ISP in the country, the Post said, quoting Juno's chief
executive
Charles Ardai.
Both deals would give the
AOL competitors access to Time Warner's extensive cable television network
for
Internet service.
The Federal Trade
Commission last week gave AOL and Time Warner up to three weeks to satisfy
concerns
about competition in the marketplace,
or else the government likely will go to court to block the $183 billion
deal.
Some at the FTC want the
companies to sign a cable-access deal with a competitor before the merger
is
approved, sources have said. By doing so,
officials could review the contract to make sure the terms are fair
and
non-discriminatory.
Under one scenario, the
FTC would require that the companies offer terms in any deal that are at least
as
favourable as those in their initial
contract with an ISP.
Such a benchmark would
free the federal agency from having to closely monitor the companies after the
merger is
approved. The two sides have
discussed a settlement in which the combined company would sign one
competing
ISP in each of Time Warner's cable
markets and eventually open up the lines to two more
unaffiliated
competitors, according to the
Post.
The Post said Time Warner
spokesman Edward Adler and AOL officials had declined to comment on the
report.
In July, Time Warner
announced that it had a letter of intent that would allow Juno to offer its
online service over
Time Warner's cable lines.
For months, negotiations moved slowly, but now a 30-to-40-page contract is close
to
being signed, Ardai told the
Post.
Ardai declined to discuss
the specifics of the agreement with Time Warner, but he said that "in rough
outline" the
deal is similar to Juno's
contracts with telecommunications vendors that provide Internet service over
telephone
lines.
Juno pays those vendors
fees for the use of their networks, based on the amount of time Juno subscribers
spend
online. In the case of Time Warner, the
fee would not be based on user time, but on the number of users on
the
cable line, he said.
Juno is slated to
participate in Time Warner's open-access trial run in Columbus, Ohio. The test,
which would
connect non-affiliated ISPs to
Time Warner's network, is expected to take place in the next 30 days, the
Post
said.
Meanwhile, EarthLink
officials declined to comment on their negotiations. But sources said the terms
being
offered are better than previous
proposals offered by Time Warner.
In September, EarthLink
had accused Time Warner of offering terms so onerous it called into question AOL
and
Time Warner's commitment to open
access.
AOL and Time Warner have
also pursued a cable-access deal with Denver-based RMI.Net, officials of
the
regional ISP confirmed yesterday.