Time Warner, Earthlink Strike Deal at FTC’s Demand

NEW YORK-Facing a government demand that it forge an agreement with a competing Internet-service provider, Time Warner Cable signed a deal to provide EarthLink Inc.’s broadband Internet servi ces over its cable system.
Terms weren’t disclosed.

Time Warner (TWX) said the agreement is contingent upon approval from the Federal Trade Commission and the closing of its merger with America Online Inc. (AOL).

Since AOL, Dulles, Va., agreed to acquire Time Warner on Jan. 10, the companies have promised to complete the deal by the end of fall, or Dec. 21. But the FTC recently demanded that the companies sign a cable-access deal with a competing ISP as a precondition of approval.

Within the past two weeks, the FTC delayed a vote on the AOL-Time Warner deal until Nov. 30 to give the companies more time to come up with an Internet-access deal.

Time Warner and AOL now say they expect to close their merger by the end of the year or “very early” in 2001.

Access to Time Warner’s cable systems has been at the center of a contentious debate. Time Warner owns the second-largest U.S. cable system, which, combined with AOL’s Internet dominance, has sparked fears that the combined company effectively could sh ut out the competition.

Under the agreement announced Monday, Time Warner will provide EarthLink’s (ELNK) high-speed Internet access, content, applications and functionality, including video streaming, over its systems.

EarthLink, Atlanta, expects to pr ov ide its service to Time Warner Cable customers in the second half of 2001.

Time Warner has also been in talks with another ISP, Juno Online Services Inc. (JWEB), since July, and the companies were still negotiating final terms last week.

Once the AOL-Ti me Warner merger receives FTC approval, it must still get approval from the Federal Communications Commission, which has said it will solicit public comment on the deal for 30 days.