Legislators accuse Time Warner of "gaming" the system

The company receives a lashing on Capitol Hill for offering employees cash to sign up and cancel a high-speed Internet service of a Texas rival.

WASHINGTON--Time Warner received a lashing on Capitol Hill for offering employees cash to sign up and cancel a high-speed Internet service of a Texas rival to learn more about the service, even as the company apologized.

Legislators on the House Commerce Telecommunications subcommittee, at a hearing on high-speed Internet services, accused the No. 1 cable-TV company of "gaming" the system for its Internet service over cable. SBC Communications, which sells Internet access over phone lines, asked the Federal Communications Commission to investigate Time Warner's "anti-competitive conduct" in giving Houston employees $100 to sign up then drop SBC's service to find out where it is offered.

When Congress revamped the telecommunications law in 1996, "we never guessed these kind of games would occur," said representative Billy Tauzin, a Louisiana Republican and panel chairman. "All we wanted was open and fierce competition."

The Texas episode comes as Time Warner tries to assure regulators that high-speed Internet services will remain competitive after America Online buys the company. Time Warner sent a letter to committee staff today, apologizing for the action--the second such apology in a month.

The company sent a letter to members of Congress on May 10, saying it "deeply regrets" blocking programs of Walt Disney's ABC television after the companies failed to agree on a new contract, leaving 3.5 million viewers in 11 cities without popular ABC shows.

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