AOL-TW PUTS A PRICE
ON "OPEN ACCESS"

With approval from the European Commission nearly a sure thing, approval from U.S. regulators can't be that far behind… or can it?

There may be a deal-breaker in the pipeline for the proposed $183 billion America Online-Time Warner merger.

According to the Washington Post, TW is requiring some Internet service providers to pay up to 75% of their revenue and relinquish some control of content to gain access to TW's high-speed network. Which kinda, sorta contradicts the position TW took with federal regulators that it would open its pipeline to competitors.

According to unnamed sources quoted by the Post, the Federal Trade Commission is examining the terms of many of the deals proposed to smaller Internet service providers (ISPs). Term sheets obtained by the Post indicate that Time Warner is requiring nearly 40 Internet companies in Texas to give up 75% of their subscriber fees and 25% of revenues from other sources such as advertising in order to gain access to its cable TV network. Time Warner's cable network reaches 18.8% of all cable customers nationwide.

Time Warner would also get approval control over ISPs' home pages.

Dave Robertson, vice president and general manager of Stic.net, an Internet service provider in San Antonio with more than 10,000 subscribers called the deal totally ridiculous. "The bottom line is, they don't have a desire to open their network," Robertson said.

Time Warner has denied the charge, saying it and AOL are committed to open access.