AOL Launches Cable Internet Service

With four cities now getting AOL cable services, the world's number one ISP is truly in the high-speed race. But now the rush begins to sign on two more non-affiliated ISPs.

by Jim Wagner of internetnews.com [October 5, 2001]

America Online laid out its broadband trump card this week, announcing the debut of its cable Internet services in four U.S cities.

AOL's launch began last week, with the start of high-speed cable Internet services in Syracuse, NY and Columbus, OH. The ISP announced Thursday afternoon that it had successfully launched cable modem access in two more cities—Tampa, FL and Raleigh, NC.

Cable-only connections are available to subscribers for $44.95 a month, while cable plus dial up Internet access is available for $10 more, or $54.95 a month.

Open season
Audrey Weil, AOL Broadband president, said that its high-speed services open up a whole new realm of Internet applications for AOL users.

"No matter how consumers connect to it, AOL's High-Speed service redefines convenience by combining broadband's faster connections and always-on capability with the valuable features and ease-of-use that have made AOL the world's most popular online service," she said.

The number one dial up Internet service provider (ISP), with more than 31 million customers worldwide, has offered digital subscriber line (DSL) and satellite broadband access in limited service areas for more than a year, but cable services offered over its own cable system has long been AOL's ultimate broadband goal.

It's uncertain how its cable Internet service is set up. AOL 7.0, which isn't due until later this year, is configured to include broadband Internet services. AOL 6.0 doesn't have similar configuration settings.

Content with content
AOL plans to incorporate some of its existing holdings into its high-speed package. Through its ownership of media giant Time Warner, officials can immediately offer live programming like CNN, HBO Sports and the Weather Channel.

Glenn Britt, Time Warner Cable chairman and chief executive officer, said the launch of EarthLink Inc. cable Internet services at the same time as AOL's release is proof-positive of its commitment to provide open access on cable networks.

"By offering AOL High-Speed Broadband and other ISPs over Time Warner Cable systems, we are taking a major step in fulfilling our commitment to enhance choice, convenience and value for consumers," Britt said. "The ability to offer AOL and other choices to our customers—a first among the country's cable systems—is just the latest demonstration of Time Warner Cable's technological leadership."

Regulatory obligations
Of course, it wasn't all just goodwill that made AOL and Time Warner Cable share its cable systems with other ISPs. Questions remains as to the company's fulfillment of conditions set by federal regulators when the merger was approved earlier this year.

When AOL acquired Time Warner, both the Federal Communications Commission and the Federal Trade Commission required that AOL share its cable systems with rival ISPs before it could offer an AOL brand of cable modem access in select markets.

The FTC took open access a step further than the FCC, spelling out merger conditions that needed to be fulfilled within 90 days of the company offering high speed Internet access on its cable system. In its ruling, the FTC mandated that at least one competing ISP must offer service on its cable system before AOL could offer its own service, and two other ISPs must be added within 90 days.

After agreeing to the terms of the merger, Time Warner Cable immediately penned a deal with EarthLink. After nearly another year of talks, Juno Online Services penned a similar deal. Since then, NetZero merged with Juno and formed United Online. There is no word as to which brand would be riding Time Warner Cable's coaxial wires, Juno, NetZero, or UOL. Juno's inclusion is still pending at the FTC.

Also, the agreement with Paul Allen's High Speed Access Corp. (HAS) broke down after concerns over its financial status and questions about whether the company was truly non-affiliated with AOL Time Warner, or not.

As it stands, AOL has met FTC restrictions so far simply by allowing RoadRunner to continue to be carried over Time Warner Cable systems, and by adding EarthLink services in select markets across the U.S. by providing RoadRunner and EarthLink are offered in all four U.S.

Regional cable access
Mike Luftman, AOL/TW spokesperson, said announcements in other cities are forthcoming.

"We have filed agreements at the FTC with New York Connect.Net (for New York City), with Internet Junction (for Tampa and Orlando), and with South Texas Internet Connections (for Houston, San Antonio and Austin)," Luftman said. "We are in active discussions with a number of other national, local and regional ISPs and look forward to announcing additional deals."

A comment wasn't available at press time over AOL/TW's decision to include Road Runner as a non-affiliated ISP. Time Warner Cable largely owns Road Runner, the second-largest cable ISP in the U.S. However, it seems the FTC has given the green light to AOL's cable launch, for the time being. Regulators were not available for comment.

— End