AOL aims to continue open access fight

AOL executives maintain they'll still fight to open high-speed networks for use by ISPs, despite solving its own access dilemma with the Time Warner deal.

John Borland Staff Writer, CNET News.com
John Borland
covers the intersection of digital entertainment and broadband.
John Borland
5 min read
In the middle of the madness yesterday over America Online's merger with media giant Time Warner, the Internet giant's chief legal counselor took time out to make a call to Capitol Hill.

In a bold move for a firm that had just agreed to purchase one of the nation's largest cable companies, AOL's George Vradenburg assured congressmen that AOL still supports legislation aimed at opening high-speed cable networks for use by independent Internet service providers (ISPs).

It was a necessary call. You've got Time Warner With speculation rampant that AOL planned to pull out of the expensive fight for open access, the firm needed to show it was still willing to push for national legislation to give ISPs access to broadband cable networks.

"We are going to want to offer broadband access across the country," Vradenburg told CNET News.com today. "We are going to want to offer our complete services on other platforms."

Cable operators like AT&T have spent billions of dollars to upgrade their networks to support advanced services like high-speed Internet connections. Companies like AOL, GTE and other telephone and Internet firms have fought to gain access to these channels, fearing they would be left behind as more consumers clamor for fast and inexpensive Net access.

For the most part, the company seems to have put its compatriots' fears to rest.

"They told us that AOL is still committed to the OpenNet (Coalition)," said Brianna Gowing, a spokeswoman for GTE, AOL's largest ally in the cable access battle. "They are committed to open access in the new company."

The OpenNet Coalition is a lobbying group made up of ISPs and telephone companies that are pushing for equal access to high-speed cable networks owned by cable giants like AT&T, Time Warner and others.

A number of questions still remain, including whether AOL will even be able to follow through on its promises to open up its own new cable network. Until those questions are answered, the megamerger has thrown the hard-fought battle over cable networks into flux.

Along with GTE, MindSpring Enterprises and others, AOL has spent millions of dollars fighting to open AT&T's high-speed cable lines for use by outside ISPs. Currently, only affiliates of cable companies like Excite@Home or Road Runner are allowed to offer Net service over high-speed cable networks.

The war over open access has been waged in Congress, in the courts and at the local government level. So far, ISPs have won only a handful of battles at the local level, but have yet to win actual access to any large cable network.

Nevertheless, AT&T has said it would open its own cable systems for use by outside ISPs as soon as its exclusive contract with Excite@Home runs out in 2002.

Details on how this transition will work are few, but open access proponents still welcomed the news as a step in the right direction to increase the spread of broadband Net access.

But following the merger announcement yesterday, many open access opponents thought the protracted battle was essentially over.

"I think you will see AOL go away as an agitator in the regulatory arena against us," Excite@Home chief executive George Bell said in the aftermath of the merger.

Excite@Home, the cable Net affiliate of AT&T, Cox and Comcast, has borne the brunt of the open access battle. Investors have shied away from the company's stock during some of the more contentious open access debates, and regulatory battles have slowed the deployment of its high-speed services.

That optimism may be misplaced, however--at least in part.

High speed pipe dreams? Conflicting views have emerged from the new AOL Time Warner camp. At a press conference yesterday, Time Warner CEO Gerald Levin said the partners would try to end attempts to bring government power to bear on cable companies.

"Essentially…we're going to take the open access issue out of Washington and out of City Hall, and put it into the marketplace and into the commercial arrangements that should occur to provide the kind of access for…multiple ISPs," Levin said.

But AOL has since amplified that statement, saying that it will only retreat from the regulatory battle if all other cable companies join to open networks for use by other ISPs. Otherwise, it will continue with its push for national legislation, and perhaps--but not certainly--for local regulations.

"AOL is committed to staying on as a member of the OpenNet Coalition," said Rich Bond, one of the directors of the Washington-based lobbying group that has led the ISPs' charge on Capitol Hill. "They know full well what our mission is, which includes a local, state and federal approach. They had a chance to say they were uncomfortable with that, and they did not."

Part of the ambiguity may lie in America Online's difficulty in delivering on promises to open up Time Warner's networks immediately to other ISPs.

Time Warner's high-speed cable Net service is provided by Road Runner, a semi-independent company in which the media giant owns just a 36 percent stake. MediaOne--which is now merging with AT&T--owns another 35 percent, with the remainder controlled by Microsoft, Compaq Computer and Advance/Newhouse.

To open its high-speed networks to ISPs, AOL Time Warner would need a coalition of support from all its partners. None of the companies so far have voiced an opinion in favor of open access, however.

Nevertheless, the company has significant bargaining power. AT&T badly wants to provide local phone service through Time Warner's cable lines. The new AOL Time Warner could use that leverage to make a deal with Ma Bell, analysts say.

"The AT&T-Time Warner agreement has not been resolved," noted Michael Harris, an analyst with cable research firm Kinetic Strategies. "I expect the new AOL Time Warner would push AT&T for carriage of AOL-branded broadband services as a condition."

The other Road Runner partners are largely concerned with boosting use of broadband Internet service, and may well approve open access as a result, analysts added.

GTE said it will continue with its own antitrust battle against AT&T, lobbying at the national and local level. The OpenNet Coalition as a whole is still behind the battle, representatives say.

But until AOL turns yesterday's talk into tangible action, its partners and opponents will still be left with an uncertain view of their broadband future.

"At this point we're still waiting to see what happens," GTE's Gowing said. "There's still a lot of things we don't know."