Time Warner To Open Cable Network To EarthLink

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November 20, 2000 (8:15 AM EST)

Time Warner To Open Cable Network To EarthLink

By Mary Mosquera,

EarthLink Inc. will offer its broadband Internet services over Time Warner Cable's systems, the nation's second largest online provider said Monday.

The agreement advances the AOL-Time Warner merger before regulators. The Federal Trade Commission indicated that it wants the two companies to finalize contracts with unaffiliated Internet providers before it will rule on the deal.

Under this agreement, EarthLink's high-speed Internet access, content, applications, and functionality, including video streaming, will be available, without discrimination, to the approximately 20 million homes served by the broadband-capable cable networks of Time Warner Cable. The cable unit's parent, Time Warner Inc. (stock: TWX), is awaiting a decision on its merger with America Online Inc. (stock: AOL).

"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," said Gary Betty, CEO of EarthLink, Atlanta.

"Our partnership with EarthLink demonstrates our commitment to offer Time Warner Cable customers multiple choices in broadband ISPs," said Glenn Britt, president of Time Warner Cable.

"The agreement marks the most far-reaching alliance yet between a cable operator and an unaffiliated ISP," he said. "We believe it will serve as a model for future broadband agreements between ISPs and cable companies across the country."

Time Warner said it is negotiating with other ISPs, based on the EarthLink agreement. It previously said it would restructure its current exclusive contract with affiliate Road Runner, which runs through year-end 2001.

EarthLink (stock: ELNK) will begin offering broadband Internet services over Time Warner Cable's systems after Time Warner's restructuring and technological modifications are complete. EarthLink expects to begin providing its services in the second half of 2001.

Specific terms of the EarthLink and Time Warner Cable deal were not disclosed. The agreement is contingent upon FTC approval and the closing of the AOL-Time Warner merger.

The FTC had postponed a final decision on the merger until mid-December to give Time Warner time to negotiate access with unaffiliated ISPs. Regulators will then be able to review contracts and set them as a model as part of merger conditions.

The merger of America Online, Dulles, Va., and Time Warner Inc., New York, would create a content and distribution behemoth, integrating high-speed Internet over cable, online music, programming, entertainment, instant messaging, and interactive TV. The $183 billion stock deal is now worth significantly less than when it was announced in January.