ISPs complain they're shut out of cable ads

After pressing the AOL Time Warner cable sales manager, Lindberg says she was finally told, "We both know why" the ISP's ads were being rejected. Time Warner also runs the RoadRunner cable Net access service, which competes with DSL (digital subscriber line) services like Infinity's.

"He didn't say it was a company policy," Lindberg said. "He just said they had the right to refuse any kind of advertising on their local channels."

AOL Time Warner, like other cable companies, said in response that it leaves local advertising decisions up to local managers.

But Lindberg and several other small ISPs from around the country are complaining to federal regulators that AOL Time Warner is competing unfairly by closing media channels to the small companies' advertisements. The issue extends well beyond Time Warner and the small ISPs; even the giant phone companies that offer DSL services say they are routinely--although not universally--closed out of cable television advertising in areas around the country.

In a technology marketplace where DSL and cable are competing bitterly not just for individual customers but also for public awareness as the leading high-speed Internet alternative, this kind of correlation between the cable giants' media and Internet arms worries some. For the last few years, individual ISPs have tried hard to win the ability to resell cable Internet service to their customers, with only limited success. The marketing issue makes it that much more difficult for small ISPs to survive, they say.

To be sure, it is rare to find any media company that routinely accepts advertisements from its rivals. Ads for CBS television shows are not commonplace on NBC. CNET Networks, the parent of News.com, has accepted advertisements from other technology publishers in the past.

Spokesmen from AOL Time Warner and AT&T Broadband, the biggest cable companies in the United States, each said that advertising decisions were made individually in local markets.

"Our policy is that the decision to reject or accept advertisements is made on the local level," Time Warner Cable spokesman Michael Luftman said.

But following a piece in The New York Times on Friday, the companies are complaining that they are being held to higher standards than other media companies.

"We're not in violation of any law," AT&T Broadband spokesman Steve Lang said. "We're not put on the planet to make life easier for our competitors."

It is unclear whether the DSL providers and small ISPs have any recourse outside of publicity. Private companies are allowed to maintain their own advertisement policies, and as long as there are multiple other venues for reaching the public ear--such as broadcast TV, direct marketing or print advertising--the inability to advertise on a cable network is unlikely to cause legal problems for the cable operators.

The big telephone companies, which often are quick to file lawsuits against competitors when they feel it can produce some competitive advantage, say they aren't pressing the issue yet.

An SBC Communications spokesman said his company had seen the issue emerge with AT&T, AOL Time Warner and Comcast in Southern California, Texas and Connecticut, among other areas. But no immediate filings with courts or regulators were planned, he said.

"We would want to make sure that legislators and regulators in Washington, D.C., are aware of the issue," spokesman Selim Bingol said. "But (the legal questions) are something for the FTC to answer."