EarthLink (Nasdaq: ELNK) improved 1 13/64 to 8 11/32 Monday after the Internet service provider (ISP) announced an agreement with Time Warner (NYSE: TWX) to offer broadband services over the media giant's cable systems.
Atlanta, Georgia-based EarthLink said its high-speed Internet services will be available to about 20 million homes with access to Time Warner's systems. The company said the alliance is "groundbreaking" because it provides customers with a choice of high-speed services, and marks the cable industry's most far-reaching partnership with an unaffiliated ISP.
"Building on our alliances with DSL, satellite, fixed wireless, and other cable operators, this partnership will significantly expand our ability to provide subscribers with always-on, high-speed Internet access," said EarthLink chief executive officer Garry Betty.
Glenn A. Britt, president of Time Warner Cable, called the alliance "a good business agreement" for both companies.
"We believe it will serve as a model for future broadband agreements between ISPs and cable companies across the country," Britt said.
Time Warner is "in productive negotiations with additional ISPs" about similar arrangements, according to Britt.
EarthLink will begin offering services over Time Warner's cable lines after the media company completes the restructuring of an existing contract with its Road Runner affiliate. The services will likely be available "sometime in the second half of 2001," the companies said.
The EarthLink-Time Warner agreement is also conditioned on approval from the U.S. Federal Trade Commission (FTC), and on the completion of Time Warner's planned merger with America Online, Inc. (NYSE: AOL).
AOL and Time Warner, meanwhile, said they delayed their planned merger
closing to allow the FTC more time to consider details of the EarthLink
arrangement. They said they now expect to complete the merger this year or
"very early" in 2001.
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