Time Warner, AT&T Broadband, Comcast or Cox? They all have field trials in the works to get independent ISPs on their cable networks. Unfortunately, progress is slow when it comes to opening up gateways to cable systems.

by Jim Wagner of internetnews.com [December 17, 2001]

Only one cable carrier is urgently trying to share its coaxial connections with independent Internet services providers—AOL Time Warner.

Surprised? You shouldn't be.

In order to fulfill regulatory requirements the company has to allow a few ISPs on its system before America Online can provide its own brand of broadband access. Right now, AOL Time Warner is your ISP's best bet for offering cable services in the foreseeable future.

Cable cultivation
Slowly, like watching grass grow, independent ISPs around the country are getting signed on as local cable Internet service providers. The irony is that these ISPs usually have to go to their largest local rival to provide cable broadband services. Nothing like knowing your enemies well, is there?

In the ultimate marriage of old media with new, AOL Time Warner became the largest entertainment company in the world about this time last year. Fortunately, due to aggressive advocacy by concerned ISPs, both the Federal Communications Commission and the Federal Trade Commission came down with competitive strictures that forced Time Warner Cable to allow competitors access to cable Internet services before AOL could enter the local marketplace.

Since then, in order to get AOL out and churning up broadband customers, Time Warner Cable has been relatively diligent in getting deals penned with local, regional, and national ISPs to offer broadband services via its cable systems.

"The hard work done in the first half [of 2001] in testing and preparation for this has really born fruit and the launch took place virtually glitch free," said Mike Luftman, a Time Warner Cable spokesperson. "We will continue launching in our smaller operations as we move into next year."

Currently, 14 ISPs have inked deals with Time Warner. Nine of these contracts await FTC approval, while the remaining four have signed up with the cable operator, but the contracts haven't been sent to Washington, D.C. for approval just yet.

So far, EarthLink is the only ISP approved by the FTC to start offering cable services, which the independent ISP launched last month. But this will change quickly as a raft of other agreements receive regulatory blessings.

"I think both companies would agree our partnership with them is working very smoothly and we both look forward to building a vibrant business together," Luftman said of the arrangement between Time Warner and EarthLink thus far."They have been very easy to work with and the level of cooperation between the two companies has been excellent at both the national and local levels.

Package deal
Andrew Coren is the chief executive officer of regional ISP New York Connect.Net, with 5,000 dialup, digital subscriber line (DSL), Ethernet and dedicated/shared T-1 subscribers. Coren said he is close to getting approval from the FTC to provide "a complete package" to his customers that includes cable Internet services.

It's the culmination of a long process that started back in 2000, when AOL Time Warner rumors started percolating throughout the Internet.

"Even before the government started making open access a requirement, I had already given Time Warner a call and made my offer," Coren said. At the time, it seemed like a deal that was in their best interest."

Still, it took six months to get a return phone call—right about the time advocates started raising a stink about particulars in Time Warner Term Sheet. Still, said Coren, he expects to start offering cable services next quarter and doesn't find the terms he signed particularly onerous.

"I'm not sure I subscribe to the idea that the cable companies are trying to drive me out of business," Coren said. "They're reaching out and offering me an opportunity to participate in offering broadband services. So I don't start with the premise that they're trying to run me out of business, but trying to do business with me."

Fair broadband play
ISPs can thank the FTC and FCC for mandating an approval process before AOL begins its high-speed romp across America. Now, instead of signing up ISPs as business lackeys swallowing nearly any terms and rates just to gain access to local cable networks, independent ISPs are finding they can receive reasonably fair contracts that let them maintain control over their customer contact.

"What the client wants is to be properly handled—that's what separates a mediocre ISP from a good one, providing good customer support and addressing their needs," Coren said. "To that extent, New York Connect has total control over customer support. In terms of solving the technical issues, we'll obviously be reliant on TW Cable and their support people to resolve any technical problems on their network."

That's a sight better than giving up "face time" with subscribers who would see Time Warner bills, Time Warner customer support, and Time Warner home pages—all of which the cable company originally tried to force down the ISP industry's gullet last year.

Bandied about
According to The Television & Cable Factbook, Volume 69, there are more 10,243 cable systems in world. Of those 10,243 systems, only one is required to open up its cable network to the competition. Outside of AOL Time Warner, the remaining cable companies have adopted timetables that suit their own needs—not those of consumers. Of course, these companies are not under regulatory restraints to deploy access at all, let alone share it with rival ISPs.

Both Comcast Communications and Cox Communications, the third- and fourth-largest cable operators in the U.S. respectively, have adopted trials that will have ISPs joining the fold a year down the road—if they're lucky.

Currently in "technical trials," Cox and Comcast have sedately conducted tests around the U.S. to determine whether it's technologically possible to put more than one ISP on its networks—despite the fact Time Warner is already doing just that. "Technically feasible" are two words that have been bandied about for years, although cable networks in Canada have been operating as "open access" systems for nearly six years.

Comcast, which is in the middle of a possible buyout of the largest cable network in the U.S., said early this year it had entered field trials in Philadelphia with EarthLink and Juno—now a part of United Online. Cox is also conducting technical field tests with Juno and EarthLink for potential shared systems—sometime down the road.

Laura Oberhelman, Cox spokesperson, said that these tests are merely to determine the technical validity of putting competing ISPs on its network—not commercial tests. She said Cox doesn't even have a rough estimate of a date when the cable company would offer contracts to independent ISPs.

Deliberate plodding
Which brings us to AT&T Broadband, the company that sits in the middle of a controversy over its governance of Excite@Home at the same time its board of directors consider bids for a possible sale—or muse over Microsoft's offer to help keep them afloat until the company an spin-off and go public sometime next year.

Ma Bell's cable arm, like Comcast and Cox, has adopted a glacial timetable for open access—called "ISP Choice." Tests concluded in Boulder, CO had paved the way for limited commercial field trials in Boston at the end of this year, or early next year. Because of the @Home muddle, these commercial tests have been postponed at least six months, if not longer.

Sarah Eder, AT&T Broadband spokesperson, said a limited commercial trial in Boston with EarthLink and Juno has been delayed but the timetable for its ISP Choice program has not changed.

"[Limited commercial testing] was delayed because of what happened with the @Home situation," Eder said. "We thought we only had to build one network, not two. It's going to take time. By no means is there any change in our strategy or timing in rolling out ISP Choice, it's a matter of the delay in the trial."

Unfortunately for independent ISPs, there's no announced deadline for ISP Choice going "live." It's just one of the many spins cable operators put out to the public in order to avoid looking like they are stonewalling the open access process.

An interesting result of the @Home shutdown proved one thing—consumers don't want to change ISPs once they start getting the service. Even though Internet connections were lost for several days, the biggest complaint AT&T Broadband customers voiced was their unhappiness over losing their @home.com e-mail address and having to switch to an @attbi.com derivation.

Switch hits
Shortly after I wrote a story about AT&T's migration process, a frustrated e-mail by one former @Home customer proved just how needed e-mail has become.

"Well I suspect that ATT is now telling you that they met their self-imposed deadline," Basil Mattingly said. "Are they also telling you that the e-mails still do not work? Well it seems none of the e-mail servers work yet, but that will likely be at least 14 days and this is only day 8 of the outage. What a crock—successful migration when the most basic function of the Internet does not work and won't for several days at least."

Just think how hard it will get them to switch, once they're settled in, when your ISP starts offering cable services in the theoretical future that includes open access.

It's not going to get any better any time soon. ISPs looking to get their service running on a nationwide cable network need to sign a deal now with AOL Time Warner, not wait for some supposed open access date from the others. With no regulatory incentive, it's not going to happen anytime soon.

Want to get on AT&T, Comcast, Cox, or any of the other 10,239 cable systems out there? Grab your nearest regulator or legislator and press them to contract the FCC about the slow deployment of broadband access in your area. As it stands, a final policy from the FCC concerning open access could take more than a year, just enough time for in-country cable operators to grab a lion's share of the cable modem customers out there.

Until then, think about getting the ball rolling with AOL Time Warner if you really want to see cable access in your ISP's business mix anytime soon.

— End