10 Oct 2000 | By Mike Robuck
For Immediate Release
OSHKOSH – Stephen A. Heins, Director of Marketing for NorthNet, has filed a written copy of the Terms Sheet that Time-Warner Cable has been offering to unaffiliated Internet Service Providers over the last two months in an ex parte filing today. “In the midst of the FCC’s inquiry into Open Access for cable operators, l thought the FCC should have a better sense of the anti-competitive nature of Time-Warner’s Term Sheet and how it is contradictory in spirit to their Memorandum of Undemanding issued on February 29, 2000,” stated Heins.
The Term Sheet begins with a clause that places Time-Warner under no “obligation to negotiate “in good faith.” Combined with an onerous three step pre-qualification process, Time-Warner has created an insurmountable barrier for ISP’s of any size for entry to their High Speed Access service over cable.
Heins cites, in his Open Letter to FCC, the following provisions as examples of the barriers to entry:
- $5O,OOO non-refundable deposit
- T-W has total discretion over which ISP’s can have access without review
- ISP’s are subject to T W’s approval of their homepage
- T-W to receive 25% of all revenues generated from ISP’s home page
- T-W to receive 75% of all subscription revenues from High Speed Access through ISP’s
- T-W would have ultimate control over affiliated ISP customers’ relationship
- T-W would not provide Quality of Service (QoS) which is necessary for video streaming
- T-W keeps access to set top box/TV set to themselves
- T-W maintains final control over important billing and customer service issues
- T-W sets iron clad minimum subscriber levels for all ISP’s
“When you calculate the enormous monetary commitment (with as much as $700,000 in infrastructure, Internet transport, and backbone service) an ISP must make at each head-end, Time-Warner’s Term Sheet must be viewed as monopolistic pricing, at its worst,” says Raymond Williams, President of Cyberzone, a Marinette, WI ISP.
Several other ISP’s including Earthlink’s David Baker have begun to voice their displeasure with Time-Warner/AOL’s delaying tactics and the take-it-or-leave-it tone to their uneconomic terms for access. Equally important, consumer groups point out, is the fact that a combination of Time-Warner/AOL will have total control over their cable lines and the content carried over them, which raises First Amendment concerns. Unless the merger approval contains a condition stating that approval includes nondiscriminatory open access provision, the potential for freedom of speech abuses will exist. In closing his Open Letter to the FCC. Heins opines, “I am asking you to re-orient the industry toward the same type of open competitive market that has created the remarkable success of the Internet.”