Yahoo may join AOL's fight to open cable

Setting aside their rivalry in this instance, Yahoo's Jerry Yang said his company sees eye to eye with AOL's concerns over the potential "locking out" of Net service providers by the cable industry and is considering legislative avenues. So far the Web giant is still hedging its bets until a clearer picture develops for the potential of cable modems used for high-speed Net connections, but Yang's public words about the issue show the company is moving forward, however slowly, on the broadband front.

"Whether we will go down the same route they have, which is a heavily legislative route, I don't know yet," Yang said in reference to AOL's lobbying efforts after delivering his keynote yesterday at the Jupiter Communications Consumer Online Forum here. "We'd like to see how the landscape shapes out, and we'd like to see the marketplace-driven types of things shaped out before we decide."

In addition, he said Yahoo would and should begin talking to "potential legislators" to figure out its course of action. "We do think access ought to be open to where the users want to go," Yang said.

The issue is quickly moving to the fore for Yahoo, which remains the last major portal without a larger equity partner. Competitors such as Excite, Lycos, and Netscape Communications have already teamed with larger media or high-tech suitors. Yang said Yahoo would not rule out any kind of partnerships as long as the deal allows his company to grow.

Like AOL, Yahoo has begun to realize the importance of broadband--and the risk of being left out in the cold if it does not link up with some kind of high-speed service. The issue is becoming increasingly urgent as its portal competitors continue to partner up--especially Excite's acquisition by @Home--and large media companies are launching destination sites that threaten to take away market share.

As the portals team with other firms and the media companies launch destination sites, the question that arises is what Yahoo has that will keep it from losing precious market share as the Net evolves around it.

A move to open up cable, particularly if it means cooperation with rival AOL, could be Yahoo's signal that it is going to start making concrete moves in the broadband arena.

Yahoo president Jeff Mallett said in an earlier interview with CNET News.com that the company has instituted an initiative called "Turbo Yahoo," through which its services and features will be built up so that they can be supported on higher-bandwidth access services. But that doesn't solve the larger problem: What company will get those features into the homes of Net users?

In January, Mallett also said the company had talked to the regional Bell operating companies (RBOCs) but added, "It's clearly too early now to place a single bet, because we think that if it was the wrong bet, it basically could tie up an audience we couldn't reach to our ADSL or DSL partnership with the RBOCs."

The fight for access
Yang's comments also underscore an increasingly contentious issue that has pitted cable providers against primarily dial-up ISPs, such as AOL and MindSpring Enterprises. These Net service providers have fought for so-called open-access provisions to broadband cable networks.

Proposed open-access laws, still subject to a definitive ruling by the Federal Communications Commission, seek to open all cable networks to competitors the way local phone networks are open today.

Many of open-cable advocates also provide DSL technology, a competing high-bandwidth technology. But cable networks may have greater consumer potential because of the widespread deployment of cable television lines. These lines can be upgraded with high-speed Web access from providers such as @Home and Time Warner's Road Runner.

AOL knows that it must join the high-speed race to maintain its subscriber growth momentum or watch @Home and Road Runner shut them out. AOL had previously discussed an alliance with @Home, but talks have not produced any agreements. @Home has said that its subscribers can sign on AOL's "Bring Your Own Access" plan, which gives subscribers access to AOL content for an additional monthly fee.

AOL has been one of the leading critics of the $48 billion acquisition of Tele-Communications Incorporated by AT&T. TCI is the largest cable partner and a shareholder in @Home.

Despite Yahoo's political leanings on this issue, Yang maintained that his company will remain open to any bandwidth and device technology that surfers desire.

In addition to the PC, people can now get to the Web "from mobile devices, from television, from PDAs," he noted. "I think it's clear in the future that people will get to choose how they want to use the Web."

Yang on Fox: Just advertising
Yang also emphasized after his address that Yahoo's recent deal with News Corporation's Fox Network will remain an advertising buy and nothing more.

"It's an advertising buy," he said. "We need to do advertising buys, we need to spend our advertising dollars, which are increasing every year. It doesn't mean that we're going to get into anything deeper. Everything for us needs to start with a good business deal first. That's what this is--a good business deal for them and for us."

News.com's Corey Grice contributed to this report.