Time Warner Selects Second ISP Partner
November 25, 2008 nnyq.com editGerald Levin, Time Warner chairman and chief executive officer, openly invited independent Internet services providers to strike deals now for future transport over its high-speed Road Runner cable platform.
"Multiple ISPs are necessary for our revenue growth in every market we compete with digital subscriber line services," Levin said.
When the en banc commission pressed Levin for a timetable to open access he hinted that there would be a new deal with a national ISP soon.
Time Warner and Juno Online Services, Inc. Monday announced they have signed a binding letter of intent that will allow Juno to offer high-speed Internet access over Time Warner's cable broadband network.
The two companies signed a letter of intent, akin to the deal that AT&T Corp. struck with MindSpring Enterprises earlier this year. The only difference is that Juno will be one of the first ISPs to reach a business agreement with Time Warner Cable for broadband Internet access.
AOL and AT&T have proven that the most effective way to obtain open access to cable networks is to buy the firm or contract for access.
AT&T made a radical departure from its closed access policy when it struck a deal with MindSpring Enterprise Inc. in December. AT&T agreed to share access to its cable systems with MindSpring (MSPG) when its exclusive contract with Excite@Home. (ATHM) expires in mid-2002.
Utilizing the deal as a springboard, AT&T declared that it was in favor of shared access to cable networks and that other independent Internet service providers should start negotiating for access immediately.
The agreement is a direct result of Time Warner's verbal commitment to distribute the services of multiple Internet access providers on its broadband network and gain regulatory approval of its marriage with America Online.
The alliance with Juno allows the national ISP to offer complete Internet access, content, applications, and functionality to Time Warner Cable customers. Juno plans to offer its existing dial-up customers in Time Warner's service area the ability to upgrade to Juno's high-speed service program, marketed as Juno Express.
Juno will join Time Warner's shared-cable experiment currently on trial in Columbus, Ohio. Any future cable service rollout is dependent on the results of the tests designed to identify and resolve implementation issues among competitive carriers.
Time Warner currently has more than 12.6 million customers nationwide more than 11.5 million homes capable of receiving high-speed Internet service over the Time Warner Cable system.
A rollout schedule for the service will be announced in the future, subject to Time Warner's pre-existing obligations relating to Road Runner and Excite@Home, whose exclusive contract is set to expire in less than two years.
The deal lends credibility to AOL and Time Warner's commitment to open access over its cable systems. It also means that the merged company may move to eradicate exclusivity deals with Excite@Home sooner, rather than allow the closed contracts to expire naturally.
Charles Ardai, Juno president and chief executive officer, said it is committed to being a leader in the area of high-speed Internet access.
"This relationship is a major step in our plan to offersubscribers nationwide a wide range of options," Ardai said, "We believe this relationship with Time Warner will allow us to offer an attractive new option for Juno subscribers who are ready to make the move to broadband."
Glenn Britt, Time Warner Cable president said the agreement is a watershed deal marking its commitment to competitive cable modem access nationwide.
"This groundbreaking agreement underscores Time Warner Cable's commitment to offer its cable customers a choice of Internet service providers and will help expand the number of high-speed data subscribers on our cable systems," Britt said.
Echoing Time Warner's commitment as stated before the FCC, Britt said independent Internet service providers are welcome to join the cable revolution.
"We look forward to reaching agreement with other ISPs as quickly as possible and to offering our customers a broadening array of choices in how they experience the Internet," Britt said.
Under the agreement, both Juno and Time Warner Cable plan to market Juno Express to their mutual customers and have the ability to price and package the service independently. Time Warner will be responsible for installing the service in customers' homes. The agreement covers the full range of functions relating to the provision of Internet service, including billing, network elements, and privacy responsibilities.
Juno has exerted its marketing strategy to rival America Online as the nation's top Internet service provider. While AOL is built on a community of more than 23 million subscribers, Juno provides services to about 10 million members.
Juno's marketing strategy is based on up-selling members that utilize its free e-mail and dial-up service programs to fee-based access. The firm reported in March that of its 10 million members, about 700,000 use its e-mail only free service offering. Juno also reports that more than 3 million active users of its 10 million-member base access the Internet through its extensive service portfolio each month.
That makes Juno the second largest online community after AOL in total membership, and the third largest base of active users in the U.S., after EarthLink, Inc. completes is acquisition of OneMain.com's subscribers to serve more than 4.2 million billable users.
