FCC Wants More Small ISP Input on AOL-TWX

The FCC is asking small-town and regional ISPs to help design tougher policies than were mandated by the FTC, so that there will be competition on the merged AOL-Time Warner network.

by Jim Wagner of internetnews.com [January 6, 2001]

The government is looking to local and regional Internet service providers for help to toughen up its open cable network access policy.

It's not a good sign for America Online Inc. and Time Warner Inc., which have been guaranteeing government approval to investors by the end of 2000 or the early days of January, 2001. While approval by the Federal Communications Commission (FCC ) is still expected soon, it means another delay, pushing AOL and Time Warner approval into the second week of January.

As it reviews what will be America's largest buyout, at approximately $109 billion, the Federal Communications Commission is asking ISPs what an AOL/Time Warner merger would mean to their business.

Steve Heins, director of marketing for Oshkosh, WI-based ISP NorthNet, is an advocate of cable open-access issues and a sharp critic of what he calls the anti-competitive practices displayed by AOL and Time Warner.

The FCC has tapped Heins and his group of 61 Wisconsin ISPs, dubbed WI-ISP, to help define terms it is putting together for an open-access policy that has more teeth than the one approved by the Federal Trade Commission last month.

Mom-and-Pop POPs
Where the Federal Trade Commission (FTC) is mandating that at least two ISPs share the new AOL Time Warner cable network, the FCC wants to ensure small-town providers have an equal shot on that network. Regulators are pushing for an open access policy that dictates one local and one regional ISP are also included in the network mix, in addition to a national provider, before AOL can offer its services.

"We've been working on this draft all morning and plan on having a draft sent up to the FCC later on this afternoon," Heins said. "We've been consulting with other state and individual ISPs on defining what local and regional should be. It's going through some revisions to what we originally thought, but should be worked out soon. I think it was a good idea for them to come to us; who better to figure out what a local ISP does than a group of local and regional ISPs."

Heins said the group originally treated the terms "local" and "regional" the same as in the telephone industry, where "local" meant serving one area code and "regional" meant three to 24 area codes. But, he said, that didn't take into account franchise companies like Time Warner.

Heins is confident the FCC will look at the draft's definitions as an industry standard for cable networks nationwide.

The ink with Earthlink, Inc.
It means Time Warner's agreement with national ISP EarthLink Inc., signed last month, is a good start towards open access, but not nearly enough to satisfy a possible FCC mandate.

Many fear the agreement struck between Time Warner and EarthLink makes it hard for smaller providers to afford inclusion on the network. EarthLink has not disclosed details of the term sheet contract it signed with Time Warner.

Joe Marion, executive director of the Federation of Internet Solutions Providers of the Americas, said his organization has been watching the merger drama unfold, and remains unconvinced when it comes to open cable access.

"Without knowing the specifics of the deal between EarthLink and AOL/Time Warner, for meaningful competition to occur amongst ISPs we must have non-discriminatory open access to the entire AOL/Time Warner platform."

It was reported that one of the terms in the agreement prevents unaffiliated ISPs, EarthLink included, from offering business services.

"What that means for second- and third-tier communities is that they aren't going to have a broadband choice when they look for services," Heins said. "Many businesses in rural areas are located close enough to a central office to use (digital subscribe line services). That means they are going to be underserved when it comes to broadband choices, with cable the only option."

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