HSAC Cannot Afford AOL Access

One of three ISPs named to satisfy the FTC requirements of the AOL Time Warner merger cites financial difficulties and cancels plans to provide Internet service over AOL TW's cable lines.

by Roy Mark of dc.internet.com [September 6, 2001]

High Speed Access Corp. (NASDAQ:HSAC), an Internet service provider targeting markets of fewer than 100,000 people, is pulling out of its deal to provide Web access over AOL Time Warner's (NYSE:AOL) cable television network. The Littleton, Colo.-based High Speed is one of three partners announced by AOL TW to satisfy the terms imposed by the Federal Trade Commission's conditions for approval of the America Online and Time Warner merger.

The ISP, which has approximately 176,000 subscribers, said it was unable to come up with the money necessary to be an AOL content partner or to market the proposed cable Web service. As part of the government's approval of the $112 billion merger between AOL and Time Warner, the FTC required the new company to make its cable network available to at least three rival ISPs.

AOL TW's other two partners are Earthlink, Inc. (NASDAQ:ELNK), and Juno Online Services (NASDAQ:JWEB). Atlanta-based Earthlink will debut later this month over AOL TW's cable system in Columbus, Ohio, and Juno is scheduled to begin service later this fall after AOL launches its services over Time Warner-owned cable systems.

Although it declined to name them, an AOL Time Warner spokesperson told the Washington Post, "We look forward to announcing more deals in the future."

High Speed has been experiencing financial difficulties and is considering selling some contracts and assets at close to book value to Charter Communications Inc. (NASDAQ:CHTR) of St. Louis for $73 million in cash.

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