Open Net Access Plan For Time Warner

In a dramatic reversal of a long-standing policy, Time Warner said Wednesday it plans to open its high-speed cable network to competitors - allowing customers to decide which Internet provider to use.Based on competitive pressure caused by that move, other cable television systems are almost sure to follow. ""There will be multiple brands on all cable systems,"" says Gerald Levin, Chairman and Chief Executive of Time Warner, the second-largest cable TV operator.Levinís comments, made at a quarterly financial briefing with reporters here, marks a big shift in his position and the conventional wisdom of his industry.Cable operators have long considered their networks exclusive and proprietary. Theyíve resisted pressure that America Online, MindSpring Enterprises and other Internet providers get access to the new digital networks, which provide high-speed access to the Internet.In the past several months, that stand has begun to weaken as new players enter the industry. First, AT&T, which will soon become the largest cable operator, said it would negotiate to let AOL use its digital systems. Early in December, AT&T and Atlanta- based Internet service provider MindSpring delivered a letter to Federal Communications Commission Chairman William Kennard, saying AT&T planned to let its broadband customers choose providers beginning in mid-2002.No timetable has been set for Time Warner open-access policy, which probably will come after its merger with AOL is completed.Levinís change in stance comes in the wake of selling his company to AOL, the online service that led the fight to open digital cable systems to other Internet access providers. The companies will create a new entity called AOL Time Warner.Time Warner has been offering high-speed Internet access to its 12 million cable TV customers exclusively through its Road Runner branded service. So far, 500,000 subscribers have signed up for the service.Now that strategy of exclusivity will change. ""The current structures governing our Internet service wonít survive the merger,"" said Levin.The shift in Levinís position comes as the popularity of the companyís digital services, including digital television, are growing. Time Warner expects to complete the conversion of all its cable to digital technology by the end of this year, company officials said. Digital technology allows more advanced features, including high-speed access and interactive television.""We expect to quadruple the number of subscribers taking our digital services this year,"" said Levin. ""We install every set-top box we can get, and we canít get enough.""""We are adding 13,000 to 14,000 customers a month,"" added Richard Bressler, Head of the companyís Digital Media Unit.The strong demand has prompted Time Warner executives to reassess predictions on market penetration. In the past, they thought the upper range would be 30 percent. Now executives say 50 percent penetration is possible.The AOL merger is driving the higher penetration. Although it wont close for about a year, the two companies are already beginning to embark on partnerships. For example, Time Warner has begun offering AOLs free installation software in its flagship merchandise store in New York.Time Warnerís CNN cable news channel, based in Atlanta, offered some live Webcasts from the World Economic Conference in Davos, Switzerland using AOLs Netscape technology.""There are many, many meetings going on between Time Warner and AOL about synergy between the two companies,"" said Bressler. ""Were trying to see how we can make 2-plus-2 equal 5.""