Time Warner Denies Advertising
To Regional ISPs

If you were in any doubt as to the effect of huge cable monopolies on Internet service competition, the experience of one Time Warner 'competitor' should help clarify the picture.

by Beth Conlon Director of Marketing and Communications, GiSCO courtesy of HowToSell.net [March 17, 2000]

The Time Warner merger is not yet complete, yet regional ISPs are already being affected by the media giant's unfair advertising policies. GiSCO, an ISP based in Northern New York, which serves 22 states across the U.S. has been denied the opportunity to advertise on Time Warner cable. An established T-W advertising client, GiSCO was told in November that its ads would no longer be welcome on cable networks carried by Time Warner.

What's going on?
Road Runner, Time Warner's cable Internet product, is just being rolled out in Northern New York, and according to Time Warner; ISPs will be permitted to run ads promoting their Internet service only until Road Runner becomes available. Time Warner has told GiSCO that its ads will be barred from Time Warner Cable's networks as of April 1, 2000. Once Road Runner is available Time Warner will not allow GiSCO or any other ISP run ads on cable in the areas served by Road Runner.

Actually, GiSCO has already been denied ad spots in the Syracuse Market. "We first learned of the policy against ISP advertising when we attempted to purchase ad spots in the Syracuse, NY Market in the fall on 1999. Time Warner refused to run our ads in that market because Road Runner is being offered there," said Paul Barton, President and CEO of GiSCO.

Customer one day; competitor the next
GiSCO contacted the regional Time Warner office in November 2000 to contest this policy. Time Warner representative Steve Myron confirmed and upheld the policy, stating that GiSCO would be unable to advertise in areas where Road Runner was available because "GiSCO is a competitor of Road Runner, and consequently a competitor of Time Warner." Myron said ISPs like GiSCO would be able to run ads only until the territories they are advertising in are equipped with Road Runner. Once Road Runner becomes available GiSCO's and all other ISPs' ads would have to be discontinued.

National ISPs such as AOL, MSN, EarthLink, are able to circumvent this policy by placing their ads through national advertising agencies. According to Myron, Time Warner can't stop ISPs represented by ad agencies—but would if it could. He added that it was "perfectly legal for Time Warner to refuse GiSCO's advertising."

Different strokes . . .
GiSCO is currently running advertisements with two other cable companies, Falcon Cable and Adelphia Cable. GiSCO runs the ads in the northern regions of New York and Vermont. Neither Adelphia nor Falcon has policies against ISPs advertising on their networks. Time Warner is the only company GiSCO has encountered which currently has a policy in place that will end advertising rights for ISPs.

Adelphia currently offers a cable Internet product in some areas of the market where GiSCO's ads for Internet Service run, and GiSCO is running ads at this time. According to GiSCO's Paul Barton, "Our representative at Adelphia has not indicated that we will be denied advertising with them at any time. The same is true for Falcon Cable." Although cable Internet products are not yet available in all the regions in which GiSCO advertises, "we are not aware of any policy that will prohibit us from advertising once cable Internet service is available," Barton said.

GiSCO finds Time Warner's policy unfair and believes that discriminatatory policies such as these will become more prevalent once the Time Warner/AOL merger is complete. Policies of this kind inhibit competition in the ISP market, and it seems likely to us that other industries will face similar policies as the media giant continues to merge with other corporations.

Beth Conlon
GiSCO
1-888-GO-GiSCO

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