Copyright 2001 The Atlanta Constitution The Atlanta
Journal and Constitution
February 24, 2001 Saturday, Home Edition
SECTION: Business; Pg. 3F
LENGTH: 543 words
HEADLINE:
Small Net access providers wary of AOL Time Warner; Largest rivals
seen profiting
BYLINE: Marilyn Geewax
SOURCE: AJC
BODY: New York --- Internet service providers said
Friday the government agreement that allowed the creation of AOL Time Warner
Inc. could decimate their ranks, leaving consumers with only a few large ISPs to
choose from.
"There is not one scintilla of evidence"
that the Internet and media giant is giving many competitors access to online
customers over high-speed cable lines, said Stephen Heins, marketing director of
NorthNet, a Wisconsin-based Internet service provider.
"I would encourage everyone to start collecting examples of
anti-competitive contracts and behavior," he urged ISP executives at an Internet
convention here. "We can be outmanned and outspent, but we cannot afford to be
outwitted."
Access to AOL Time Warner cable systems
could be a matter of life and death for the nation's thousands of small ISPs.
Such companies typically offer a more sluggish service over telephone lines,
using access provided by local phone companies.
But in
coming years, more and more Americans are likely to want to reach the Internet
through high-speed cable connections.
In December, when
America Online and Time Warner were trying to win regulatory approval for their
merger, they promised the Federal Trade Commission they would allow
competition.
In the final agreement with regulators,
they said Time Warner cable customers would be given the option of subscribing
to high-speed "broadband" service from at least one other ISP before AOL
itself could begin offering such service. Then, within 90 days of AOL launching
its broadband service, Time Warner cable would have to provide at least
two additional ISP options.
In theory, that would
guarantee vigorous competition wherever broadband would be rolled out.
AOL completed its acquisition of Time Warner on Jan.
11.
But Don Howser, vice president of Socket Internet
Services, an ISP with about 50,000 customers in the Midwest, said he has little
hope now of getting access to the more than 12 million households that take Time
Warner cable.
Though his company does have customers in
Time Warner markets, he said he has not heard a word about getting a chance to
compete in the broadband world. He said he expects AOL Time Warner to
work with the minimum numbers of online competitors --- three --- and that those
would be big companies, such as EarthLink, not "mom-and-pop" ISPs such as
his.
As a small company, "we don't have the legal
horsepower" to negotiate a fair contract with an immense corporation like AOL
Time Warner, he said.
Unless the government guarantees
all ISPs "open access" to cable systems, the migration to
broadband will end the era of fierce ISP competition. "It's starting to
kill us already," he said.
The open-access debate is a political hot potato in Washington. It's
not yet clear where antitrust regulators in the new Bush administration will
stand on the issue.
In the final weeks of the Clinton
administration, the Federal Communications Commission opened a "notice of
inquiry" into the issue. That means the industry is facing the possibility of
federal regulations to force open their networks, as consumer advocates and ISPs
want. Cable companies argue they should be allowed to negotiate access deals
without government regulation.